Source: http://avidanstern.blogspot.com/2009/11/
Timestamp: 2019-04-21 17:12:52+00:00

Document:
The U.S. Supreme Court heard argument yesterday in Hertz Corp. v. Friend, No. 08-1107 (U.S.), cert. granted at 129 S. Ct. 2766 (June 8, 2009). The case concerns the vexing question of which state(s) constitute a corporation's state of citizenship for purposes of federal diversity jurisdiction under 18 U.S.C. §1332. Section 1332(a)(1) specifies that diversity exists between "citizens of different States," and §1332(c)(1) expressly provides that for purposes of diversity "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."
The district court correctly applied the “place of operations” test to determine Hertz's principal place of business. Tosco Corp. v. Communities for a Better Env't., 236 F.3d 495 (9th Cir.2001); Industrial Tectonics v. Aero Alloy, 912 F.2d 1090 (9th Cir.1990).
Taking the facts as set forth in the Declaration of Krista Memmelaar, Hertz's relevant business activities are “significantly larger” in California than in the next largest state, Florida. Although the difference between the amount of Hertz's business activity in California and the amount of its activity in Florida is not as large as the difference deemed to be significant in Tosco, California nevertheless “contains a substantial predominance” of Hertz's operations. Tosco Corp., 236 F.3d at 500.
In contrast, the "headquarters" or "nerve center" test looks for the location at which the corporation operates its headquarters. Illinois Bell Tel. Co. v. Global NAPs Ill., Inc., 551 F.3d 587, 590 (7th Cir. 2008). Hertz argued that the headquarters test should be applied instead of the conglomeration method used in the Ninth Circuit. The question presented in its petition for certiorari was "Whether, for purposes of determining principal place of business for diversity jurisdiction citizenship under 28 U.S.C. §1332, a court can disregard the location of a nationwide corporation's headquarters - i.e., its nerve center."
The NLJ reported that at yesterday's oral argument, the Court appeared to be sympathetic to a "headquarters" standard. See their pair of interesting articles posted yesterday and today. Click here to download the Supreme Court brief of Hertz, the opposition brief of Friend, the reply brief of Hertz, and the amicus brief supporting Hertz.

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