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Employment
Case Alert: Victory for
Businesses With Headquarters Located Outside the State of California
In Hertz v.
Friend, et al., the U.S. Supreme Court has given businesses new
leverage to determine where trials and other court proceedings take
place. The justices unanimously overturned a lower court’s ruling
that Hertz Corp. is a citizen of California,
rather than New Jersey,
where the car-rental company’s headquarters are located.
After some dispute concerning whether the case was
properly venued in state or federal court, the issue to be determined was
Hertz’s place of operations. The Ninth U.S. Circuit Court of
Appeals ruled the company was a citizen of California because it did
significantly more business in that state than any other. Both Hertz and
the Chamber of Commerce argued that the lower court test was uncertain
and companies should be allowed to presume they are citizens of the state
where their leadership works.
The U.S. Supreme Court disagreed with the lower
court’s analysis and decisions. Writing for the Court, Justice
Stephen Breyer said the determining factor is a company’s
“nerve center.” That location, he said, “should normally
be the place where the corporation maintains its headquarters –
provided that the headquarters is the actual center of direction, control
and coordination.”
This ruling is a victory for employers and employer
advocates throughout the United
States. After this decision, employers
operating in California, but with
corporate headquarters outside the State, no longer need to fear being
dragged into the state courts of California.
This document is intended to provide you with general
information about employment related decisions. The contents of this
document are not intended to provide specific legal advice. If you have
questions about the contents of this alert, please contact Ann Liroff at 415-281-7618 or aliroff@hbblaw.com or contact your
preferred Haight Brown & Bonesteel, LLP attorney. This communication
may be considered advertising in some jurisdictions.
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