Every once in awhile, even the polarized U.S. Supreme Court finds a case on which everyone can agree. Today, in a blow against jurisdiction-shopping trial lawyers, the justices ruled unanimously that lawsuits against out-of-state corporations should be filed in the state where the company's executives are headquartered.
As the AP story covering the decision (Hertz Corp. v Friend) pointed out, "The unanimous ruling likely will make it harder to sue out-of-state corporations in state courts, which are considered friendlier to class-action lawsuits than are federal courts."
The case involved Hertz Corp., which is based in New Jersey but had been sued in California state court by employees seeking unpaid overtime and vacation pay. The company had argued the case should be tried in federal court since the parties in the case were from two different states, but a federal judge and the 9th Circuit agreed that since the largest part of the company's business was conducted in California, the class-action lawsuit should be heard in state court here.
The Supremes disagreed. Writing for the majority, Justice Stephen Breyer wrote:
"We conclude that the phrase 'principal place of business' refers to the place where the corporation's high level officers direct, control and coordinate the corporation's activities.
"Lower federal courts have often metaphorically called that place the corporation's 'nerve center.' We believe that the 'nerve center' will typically be found at a corporation's headquarters."
You can read an analysis of the case (written before the decision was rendered) here.