U.S. Supreme Court Appears Set To Change Corporate Location Test

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WASHINGTON -(Dow Jones)- The U.S. Supreme Court appeared poised on Tuesday to overrule a test for determining a corporation’s principal place of business that effectively locates a majority of national companies in California.

Most members of the high court readily criticized the 9th Circuit U.S. Court of Appeals in San Francisco for basing its determination of a national company’s place of business – and therefore where it should go to state court – on where it performs the majority of its overall operations.

In the case before the court, Hertz Corp. v. Melinda Friend, lower courts deemed the national car rental corporation a California company. Friend and fellow defendant John Nhieu filed a class-action lawsuit against Hertz, a unit of Hertz Global Holdings Inc. (HTZ) in 2007, alleging the company had violated state wage and hour laws.

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