The U.S. Supreme Court today resolved a debate over where a "corporation" has its "principal place of business". The ruling will add certainty to whether federal courts have jurisdiction over many cases invoking "diversity of citizenship".
The relevant statute, 28 U.S.C. 1332, empowers federal courts to decide cases that pit citizens of different states against each other. Section 1332(c)(1) 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."
The Court held that 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.'" Hertz Corp. v. Friend, No. 08-1107, slip op. at 1 (U.S. Feb. 23, 2010).