Law School Discussion

place of incorporation vs. principal place of business?

place of incorporation vs. principal place of business?
« on: December 10, 2008, 09:05:42 AM »
can someone please explain the difference between these two in determining where a corporation's state citizenship is?

Re: place of incorporation vs. principal place of business?
« Reply #1 on: December 10, 2008, 09:15:31 AM »
state of incorporation = i'll let you figure that one out

PPB = look below at an excerpt from my outline (brief)

Under 28 USC § 1332(c)(1), a corporation is considered a citizen of the state where has its principal place of business.  There are three tests that courts use to determine a corporation’s principal place of business, and courts are split on which test ought to be used.  Under the nerve center test, a corporation’s principal place of business is the center of corporate decision-making.  Under the corporate activities or “muscle” test, a corporation’s principal place of business is the location of its production activities.  And under the total activity test, both of the above tests are compared. 

Re: place of incorporation vs. principal place of business?
« Reply #2 on: December 10, 2008, 09:57:57 AM »
Also remember that where a corporation "resides" regarding venue and §1391 is different for testing where it resides when analyzing subject matter jurisdiction.  In Subject matter Jurisdiction diversity cases, a corporation only resides in its state of incorporation (filing incorporation papers with the secretary of state) and in its principal place of business.  Remember that a corporation can have multiple states of incorporation, but only ONE principal place of business.  The principal place of business is discovered by the analysis that "That One" posted.

For venue, a corporation resides in any judicial district that would have personal jurisdiction over it.  This essentially means that venue may be proper in several judicial districts, and the court generally isn't in the business in deciding the "best" venue, but seems to be more concerned with finding out if a particular venue is improper.  They look at the different districts within a state as different "states", in that a corporation may have minimum contacts within the Northern District of New York but not with the Southern District of New York.  Therefore, even if a corporate Defendant would be subject to personal jurisdiction within the entire state of New York, venue would be proper in the Northern District but not in the Southern District.  Does that make sense?  Do you have the Glannon supplement?  He does a great job with it on page 148.  In fact, I credit any potential success/not failing in Civ Pro. to Glannon.  Good luck everyone!  I don't think I'll ever have an experience like that of prepping for the first set of law school of exams.  Probably the bar, oh well.

vap

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Re: place of incorporation vs. principal place of business?
« Reply #3 on: December 10, 2008, 10:16:29 AM »
... the court generally isn't in the business in deciding the "best" venue, but seems to be more concerned with finding out if a particular venue is improper.

I disagree.  Almost every time a party moves to dismiss for improper venue, it includes a motion to transfer to a more convenient venue under Sec. 1404.  Venue is not a constitutional issue and is more concerned with convenience of the parties.

Inquiry is like this: 
I.  Is venue improper?
  A. Yes.  Is there a district in which this action could have been brought?
    i. Yes. Transfer under Sec. 1406. (Usually - sometimes dismiss).
    ii. No. Dismiss.
  B. No.  Is there a district which is more convenient and the action could have otherwise been brought?
    i.  Yes.  Transfer under Sec. 1404.
    ii.  No. Motion denied, action stays where it is.

Re: place of incorporation vs. principal place of business?
« Reply #4 on: December 10, 2008, 10:41:28 AM »
can someone please explain the difference between these two in determining where a corporation's state citizenship is?

The OP asked about citizenship and not residence.  OP just make sure you know that citizenship can only be in the state(s) where the company is incorporated and the state where its principle place of business is located.  Residence for venue purposes is a different (albeit related to civpro) topic.

hbb

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Re: place of incorporation vs. principal place of business?
« Reply #5 on: December 10, 2008, 10:59:57 AM »
Quote
can someone please explain the difference between these two in determining where a corporation's state citizenship is?

There is no difference: as the above post points out, both the state(s) of incorporation and the state containing the PPB serve as the basis for citizenship for diversity purposes. Thus, Microsoft is a citizen of both Deleware, the state where it is incorporated, and Washington, the state where its PPB is.

Re: place of incorporation vs. principal place of business?
« Reply #6 on: December 10, 2008, 06:25:52 PM »
An important point to remember for (PPB) is where a corporation conducts a large amount of activities in multiple states be a careful to distinguish between the muscle and nerve center of the corporation. The muscle center is where a majority of the goods are produced while the nerve center is the primary office where the decisions are for the corporation. Often, the nerve center and muscle center are in the same state. When the nerve center and muscle center are in different states, the nerve center will be the (PPB). Of course if a corporation conducts a substantial amount of business in multiple state, they will generally be subject to general personal jurisdiction.

Re: place of incorporation vs. principal place of business?
« Reply #7 on: April 02, 2020, 02:38:55 PM »
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