Industry Wire

TRALA Argues for "Nerve Center" Test in Brief Before U.S. Supreme Court

TRALA joined with the U.S. Chamber of Commerce, the American Trucking Associations and the Business Roundtable in petitioning the United States Supreme Court to establish that a nationwide corporation’s principal place of business is its corporate headquarters rather than any of its operational locations. In an amicus brief filed on August 17, 2009 in the case Hertz v. Friend, TRALA and its pro-business allies argue that the corporate headquarters or “nerve center” test is the most certain and stable method for determining questions of corporate citizenship and questions of jurisdiction. Conversely, operations-based determinations of a principal place of business involve statistical analysis of corporate operations and are based on constantly changing factors. In many cases, using operations-based tests to determine jurisdiction can result in companies with multi-state operations being deemed to be located in their largest markets rather than in their corporate home.

The amicus brief asks the Supreme Court to reverse the October 31, 2008 decision of the Ninth Circuit of the U.S. Court of Appeals in Hertz v. Friend. In that decision, the appellate court determined that Hertz’s principal place of business is the State of California due to it large volume of business in that state. To see a copy of the amicus brief submitted by TRALA and its allies, please click here.

For more information, contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.