Last Tuesday, the US Supreme Court ruled in the case of Hertz Corp. v. Friend - for the purpose of diversity jurisdiction - what the words "principal place of business" mean. The Circuit Courts were split on this issue. The answer? See page 13-14 of the slip opinion.
This principal place of business should be distinguished from the place where the corporation is formally incorporated (although both can be the same).In an effort to find a single, more uniform interpretationof the statutory phrase, we have reviewed the Courts of Appeals’ divergent and increasingly complex interpretations. Having done so, we now return to, and expand, Judge Weinfeld’s approach, as applied in the SeventhCircuit. See, e.g., Scot Typewriter Co., 170 F. Supp., at 865; Wisconsin Knife Works, 781 F. 2d, at 1282. We conclude that “principal place of business” is best read asreferring to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities. It is the place that Courts of Appeals have called the corporation’s “nerve center.” And in practice it should normallybe the place where the corporation maintains its headquarters—provided that the headquarters is the actualcenter of direction, control, and coordination, i.e., the “nerve center,” and not simply an office where the corporation holds its board meetings (for example, attended by directors and officers who have traveled there for the occasion). (emphasis added BFA)
This made me think of the European situation, where two approaches exist: the place of incorporation and the real seat of the corporation (siege reele). The European Court of Justice acknowledges both, but does not state what the latter term means, as this is a matter for the individual member states to decide. Consequently, no single definition of the 'real seat' approach exists. Maybe the regulation of the European Corporation (SE) (No. 2157/2001) may help the court to clarify things one day. Section 7 of that regulation, that is subject to interpretation by the court (as it is an EU regulation), states in part that the registered office of an SE shall be located within the Community, in the same Member State as its head office. At that intersection, a sortlike question arises as the one addressed by the SCOTUS last Tuesday.
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