In a unanimous ruling the US Supreme Court clarified the meaning of a corporation’s “principal place of business” for Federal diversity jurisdiction purposes in Hertz Corp. v. Friend, (No. 08-1107, February 23, 2010).
A corporation’s PPB is the “place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities.” To put in simply in the words of the Court, it is the corporation’s “nerve center.”
The Court recognized that even their test was not perfect, but was better than the general business activities test used in some Circuits. It also affirmed that the burden of establishing diversity jurisdiction lies with the party asserting it. The filing of a form with the SEC, for example, listing the corporation’s principal executive office would not by itself be sufficient proof that it was the nerve center of the corporation.
-Marc Ward
Comments