Tuesday, February 23, 2010

Corporate Principal Place Of Business Is Where Executives Are Located

In Hertz Corporation v. Friend (08-1107), the United States Supreme Court held that a corporation's principal place of business is where the corporations executives are located.  Writing for a unanimous Court, Justice Breyer stated:
The federal diversity jurisdiction statute provides that “a corporation shall be deemed to be a citizen of any State by 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 interpretations 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 as simple as possible. And we conclude that the phrase “principal place of business” refers to the place where the corporation’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.” See, e.g., Wisconsin Knife Works v. National Metal Crafters, 781 F. 2d 1280, 1282 (CA7 1986); Scot Typewriter Co. v. Underwood Corp., 170 F. Supp. 862, 865 (SDNY 1959) (Weinfeld, J.). We believe that the “nerve center” will typically be found at a corporation’s headquarters.
Articles can be found at: Reuters, ABC News, Wall Street Journal, and Business Week.

0 comments:

Post a Comment