Breaking News: Supreme Court holds that a corporation's "principal place of business" refers to the place where high level officers direct and control the company
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A unanimous United States Supreme Court held today, in Hertz Corp. v. Friend, 559 U.S. ____ (February 23, 2010):
The federal diversity jurisdiction statute provides that "a corporation shall be deemed to be a citizen of any Stateby which it has been incorporated and of the State where it has its principal place of business." 28 U. S. C. §1332(c)(1) (emphasis added). We seek here to resolve different inter-pretations that the Circuits have given this phrase. In doing so, we place primary weight upon the need for judicial administration of a jurisdictional statute to remain assimple as possible. And we conclude that the phrase "principal place of business" refers to the place where thecorporation’s high level officers direct, control, and coordinate the corporation’s activities. Lower federal courts have often metaphorically called that place the corporation’s "nerve center."
Opinion, at 1. In light of this holding, Tosco Corp. v. Communities for a Better Environment, 236 F. 3d 495 (9th Cir. 2001) is no longer good law. The result is likely to be fewer diversity-based suits but more CAFA-based removals for class actions.
It occurs to me that an amicus filing in support of the plaintiff would be a friend of a Friend. You see, the amicus filing is also called .... oh nevermind.
Other media commentary on Hertz v. Friend:
- Court Says Business HQ Is Where Executives Are (ABC News)
- Jurisdiction Hinges On Company's 'Nerve Center' (Courthouse News)
- U.S. top court: Companies are based where execs are (Reuters)
