Hertz Corp. v. Friend: Where Is A Nationwide Company’s “Principal Place of Business” For Purposes of Diversity Jurisdiction?

This Tuesday, November 10, the U.S. Supreme Court will hear arguments in Hertz Corp. v. Friend (08-1107), a case that will address how you determine where a nationwide company’s “principal place of business” is located for purposes of diversity jurisdiction under 1332(c).

The Court has not previously had an opportunity to address this issue because motions to remand granted by federal district courts are, generally, not subject to appellate review.  However, the Hertz case involves a class action filed in California.  Under the new 2005 Class Action Fairness Act (CAFA), remand orders are subject to appellate review and the Court will have an opportunity to address an issue that could have a sgnificant impact on where lawsuits can be filed and maintained in the future.

Hertz, a Delaware corporation with its corporate headquaters in New Jersey, argues its “principal place of business” is in New Jersery.  The Plaintiffs argue a “multi-factor approach” should be considered by federal courts and, when doing so, points to California as being Hertz’ “principal place of business” because California is far and away the state where Hertz conducts most of its business.  The federal disctrict court and the Ninth Circuit agreed with the Plaintiffs.  The U.S. Supreme Court granted Hertz’ petition for certiorari on June 8, 2009.

Sina Kina of the Stanford Law School has done a great job summarizing the case further, which can be reviewed by going here.