August 04, 2016 Top Story

Officer's Residence Decides Corporate Citizenship

Circuit court applies Supreme Court's nerve center test for principal place of business

Candice A. Garcia-Rodrigo

A corporation's principal place of business for diversity jurisdiction purposes is determined by the key controlling officer's residence, not the location of the company's main office, according to the U.S. Court of Appeals for the District of Columbia CircuitCostCommand, LLC v. WH Administrators, Inc. In so deciding, the court adopted the nerve center test that the U.S. Supreme Court pronounced in Hertz Corp v. Friend. ABA Section of Litigation leaders point to new burdens placed upon attorneys in determining a company's principal place of business.

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