## Facts

- California employees sued The Hertz Corporation in California state court in a putative class action alleging violations of California wage-and-hour laws.
- Hertz removed the case to federal court under CAFA, asserting diversity jurisdiction based on incorporation in Delaware and a principal place of business in New Jersey.
- Plaintiffs argued Hertz’s principal place of business was California because much of its business activity occurred there, defeating complete diversity.
- Hertz submitted evidence that its corporate leadership and core executive and administrative functions were based at its New Jersey headquarters, while operations were spread across many states.
- The district court applied Ninth Circuit precedent focusing on where business activity “substantially predominates,” found California to be Hertz’s principal place of business, and remanded for lack of diversity jurisdiction.
- The Ninth Circuit affirmed the remand under the same “place of operations” approach.

## Issues

1. Whether CAFA’s 60-day deadline for a court of appeals to decide certain remand-order appeals limits the Supreme Court’s certiorari jurisdiction to review the case later.
2. How to interpret “principal place of business” in 28 U.S.C. § 1332(c)(1) for corporate citizenship: the state of greatest business activity or the place where officers direct, control, and coordinate corporate activities.

## Decision

- The Court held it retained jurisdiction to review the case despite CAFA’s 60-day timing provision for courts of appeals.
- The Court construed “principal place of business” to mean the corporation’s “nerve center”: the place where high-level officers direct, control, and coordinate the corporation’s activities.
- The Court stated this location will usually be the corporate headquarters, if that headquarters is the actual center of direction and control rather than a nominal office.
- The Court rejected the Ninth Circuit’s business-activity-focused “place of operations” test as needlessly complex and prone to uncertainty.
- The judgment was vacated and remanded for application of the nerve-center standard to determine Hertz’s principal place of business.

## Legal Principles

- For diversity jurisdiction, a corporation is a citizen of its state of incorporation and the single state where it has its principal place of business under 28 U.S.C. § 1332(c)(1).
- “Principal place of business” refers to the corporation’s “nerve center,” meaning the place where officers direct, control, and coordinate corporate activities, typically the headquarters if it functions as that center.
- Tests requiring comparative measurement of multistate business activity risk producing extensive jurisdictional litigation and inconsistent outcomes and are disfavored in construing § 1332(c)(1).
- CAFA’s 60-day decision deadline for certain court-of-appeals remand-order appeals is a timing directive to the courts of appeals and does not, without clear statutory language, limit the Supreme Court’s certiorari jurisdiction under 28 U.S.C. § 1254.

## Conclusion

The Court established a uniform national rule that a corporation’s principal place of business for diversity purposes is its nerve center—where corporate officers direct and coordinate activities—vacated the remand order, and clarified that CAFA’s 60-day appellate deadline does not strip the Supreme Court of authority to review such cases.


Hertz Corp. v. Friend, 559 U.S. 77 (2010)