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Corporate Citizenship Addressed in Hertz Corp. v. Friend

By FindLaw Staff on February 25, 2010 | Last updated on March 21, 2019

Hertz Corp. v. Friend, No. 08-1107, involved a wage and hour action in which a court of appeals affirmed the district court's order remanding the case to state court.

As the Court wrote:  "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."

The Supreme Court vacated and remanded, on the ground that the Court returned to the "nerve center" approach in determining a corporation's citizenship for diversity jurisdiction purposes, under which "principal place of business" is best read as referring to the place where a corporation's officers direct, control, and coordinate the corporation's activities.

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