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February 23, 2010 11:45 AM Subscribe
The U.S. Supreme Court has ruled unanimously that a corporation's principal place of business is where the executive's work (HQ), not where the company does business.
posted by bearwife (45 comments total)
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The practical effect
of this ruling is that it will be harder to sue corporations in state courts, which are often more plaintiff-friendly than federal courts. For example, in this case Hertz employees sued the company in California, where they worked, for unpaid overtime and vacation wages. The company tried to move the case to federal court, but it was returned to state court on the basis that most of the company's business was done in California. The 9th Circuit Court of Appeals affirmed
. Justice Breyer, writing for the court, reversed. The Court's decision
(pdf format) essentially holds that a company's headquarters is where it is located.
This rule is easy for judges to apply, but the result is that companies sued in any state other than the one where they have put their headquarters may "remove
" those lawsuits into federal court.
are links to the briefs and argument transcript for this decision.