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Hertz Corp. v. Friend

Supreme Court of the United States

November 10, 2009, Argued; February 23, 2010, Decided

No. 08-1107

Case Summary

Procedural Posture

Respondent California employees sued defendant employer in California state court alleging violations of California's wage and hour laws. The employer removed, claiming diversity jurisdiction. Finding that California was the employer's "principal place of business" under 28 U.S.C.S. § 1332(c)(1), the district court ordered a remand, and the U.S. Court of Appeals for the Ninth Circuit affirmed. The employer's petition for certiorari was granted.

Overview

Contrary to the employees' argument, 28 U.S.C.S. § 1453(c) did not deprive the U.S. Supreme Court of jurisdiction to review a case. "Principal place of business" under § 1332(c)(1) referred to where a corporation's officers directed, controlled, and coordinated the corporation's activities, a "nerve center." It would normally be a corporation's headquarters--provided it was not simply an office for board meetings. The "nerve center" was a single place. A more general business activities test led to incorrectly measuring the amount of business activities in a state. The simple "nerve center" jurisdictional rule promoted predictability. The "nerve center" approach was simple to apply, comparatively speaking. Section 1332(c)(1)'s legislative history suggested "principal place of business" was not to be interpreted to be complex. The employer's unchallenged declaration suggested its center of direction, control, and coordination, its "nerve center," and its corporate headquarters, were one and the same, located in New Jersey. But, the employees would have a fair opportunity to litigate that issue on remand.

Outcome

A unanimous Court vacated the Ninth Circuit's judgment and remanded the case for further proceedings.

LexisNexis® Headnotes

 

 

Civil Procedure > ... > Diversity Jurisdiction > Citizenship > Business Entities

HN1  Business Entities

See 28 U.S.C.S. § 1332(c)(1).

 

Civil Procedure > ... > Diversity Jurisdiction > Citizenship > Business Entities

HN2  Business Entities

The phrase "principal place of business" in 28 U.S.C.S. § 1332(c)(1) refers to the place where the corporation's high level officers direct, control, and coordinate the corporation's activities. Courts have often metaphorically called that place the corporation's "nerve center." The "nerve center" will typically be found at a corporation's headquarters.

 

Civil Procedure > US Supreme Court Review > General Overview

Governments > Legislation > Interpretation

HN3 The United States Supreme Court normally does not read statutory silence as implicitly modifying or limiting Supreme Court jurisdiction that another statute specifically grants.

 

Civil Procedure > ... > Jurisdiction on Certiorari > Considerations Governing Review > Federal Court Decisions

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559 U.S. 77 ; 130 S. Ct. 1181 ; 175 L. Ed. 2d 1029 ; 2010 U.S. LEXIS 1897 ; 78 U.S.L.W. 4153; 22 Fla. L. Weekly Fed. S 130

THE HERTZ CORPORATION, Petitioner v. MELINDA FRIEND et al.

Prior History:  [1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.

Friend v. Hertz Corp., 297 Fed. Appx. 690, 2008 U.S. App. LEXIS 22592 (9th Cir. Cal., 2008)

Disposition: Vacated and remanded.