MEMBER ARTICLE: Supreme Court’s ‘nerve Centre’ Test Simplifies Corporate Citizenship For US Federal Court Jurisdiction

Author: Gilda R. Turitz


Summary: Ending 50 years of US federal courts’ disagreements over how to define a corporation’s ‘principal place of business’ in order to determine whether ‘diversity of citizenship’ exists between the litigants for jurisdictional purposes, the Supreme Court’s ruling in Hertz Corp. v. Friend, No. 08-117, 2010 WL

605601 (23 February 2010), will give corporations – particularly those with widely varied activities conducted in different states – more certainty and control in defining their corporate citizenship and exercising their preference for federal court as the forum to defend and prosecute lawsuits. Federal court

jurisdiction is often favoured because of perceived bias in state courts toward out-of-state corporations.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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