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Supreme Court Decision Will Affect Location of Many Business Lawsuits

Posted by Frank Steinberg | Nov 10, 2009 | 0 Comments

Hertz v. Friend, when decided by the US Supreme Court, will decide one of those issues — where is a corporation's principal place of business for jurisdictional purposes? — that seems almost silly from a common sense perspective.  That hasn't kept the federal courts from adopting different approaches that have led to vastly different results. 

The answer to the question has important consequences in the real world. It governs what federal courts will be available to plaintiffs in all kinds of cases.  This one happens to involve wage and hour issues, but it will apply to commercial disputes across the board.

Another problem, which (gratifyingly) a couple of Justices focused upon at oral argument, is the potential for catastrophic cost to plaintiffs, who in terms of financial resources play the role of David battling Goliath, if a simple rule to define "principal place of business" is not adopted.

Here's a report from Law.com that covers the case in more detail, and this link will take you to the transcript of yesterday's oral argument.  Justices Sotomayor and Ginsburg were particularly active in the discussion.  Justice Scalia, as usual, drew the best laughs.

How will the court decide?  My guess is that "principal place of business" will mean the corporation's headquarters, unless is can be proven that the headquarters is a sham or shell.

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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