Hertz Corp. v. Friend

130 S.Ct. 1181 (2010)

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Nature of the Case

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Facts

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). Friend (P) and John Nhieu, two California citizens, sued petitioner, the Hertz Corporation (D), in a California state court. They sought damages for what they claimed were violations of California's wage and hour laws. D filed a notice seeking removal to a federal court. D claimed that the plaintiffs and the defendant were citizens of different States. Ps claimed that D was a California citizen, like themselves, and that, hence, diversity jurisdiction was lacking. D submitted a declaration by an employee relations manager that sought to show that Hertz's 'principal place of business' was in New Jersey, not in California. It stated that the 'leadership of D and its domestic subsidiaries' is located at D's 'corporate headquarters' in Park Ridge, New Jersey; that its 'core executive and administrative functions . . . are carried out' there and 'to a lesser extent' in Oklahoma City, Oklahoma; and that its 'major administrative operations. . . are found' at those two locations. The court applied Ninth Circuit precedent, which instructs courts to identify a corporation's 'principal place of business' by first determining the amount of a corporation's business activity State by State. If the amount of activity is 'significantly larger' or 'substantially predominates' in one State, then that State is the corporation's 'principal place of business.' If there is no such State, then the 'principal place of business' is the corporation's '`nerve center,'' i.e., the place where '`the majority of its executive and administrative functions are performed.'' The court rules that D's 'principal place of business' was California, and diversity jurisdiction was thus lacking. The Ninth Circuit affirmed. The Supreme Court granted certiorari.