Corporate Citizenship (Civil Procedure question)

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mbutterfly
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Corporate Citizenship (Civil Procedure question)

Postby mbutterfly » Sat Dec 11, 2010 9:35 pm

Hi guys,

For federal court diversity, a corporation is considered a citizen of where it is incorporated and it's principal place of business. However, can't a company be incorporated in more than one state? Also, can a corporation have all 50 states as a principal place of business? I'm thinking of like gas stations, or Boeing where it may have multiple construction hangars, or even an airlines.

I believe my professor said that each corporation has 1 place of citizenship minimum (place of incorporation), and 2 (PPB + incorprated) maximum.

Thank you for your help.

pappyjohnson
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Re: Corporate Citizenship (Civil Procedure question)

Postby pappyjohnson » Sat Dec 11, 2010 9:41 pm

A corporation can only be incorporated in one state (most likely Delaware).

For the principal place of business, you should probably use the nerve center test, i.e. where the "nerve center" of the company is. That is, where are its main offices, where are final corporate decisions made, etc. You might also try the "muscle" test, where you consider where the bulk of, say, manufacturing and sales is done, but nerve center should be your default.

Oh, and a corp is only a citizen of at most two states.

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uwb09
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Re: Corporate Citizenship (Civil Procedure question)

Postby uwb09 » Sat Dec 11, 2010 9:43 pm

mbutterfly wrote:Hi guys,

For federal court diversity, a corporation is considered a citizen of where it is incorporated and it's principal place of business. However, can't a company be incorporated in more than one state? Also, can a corporation have all 50 states as a principal place of business? I'm thinking of like gas stations, or Boeing where it may have multiple construction hangars, or even an airlines.

I believe my professor said that each corporation has 1 place of citizenship minimum (place of incorporation), and 2 (PPB + incorprated) maximum.

Thank you for your help.

I think a place can only have one place of incorporation (where it was originally incorporated)

As far as principal place of business, if the exam throws at you stuff like "headquarters here, principal place of distribution here, principal place of manufacturing here"

Always go with the place that seems like it calls ALL of the shots, if you ever see the word "headquarters", then that should be a good signal. Mention the "nerve center test", and basically figure out which place of business, every other place of business basically has to rely on in order to perform daily operations

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evilxs
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Re: Corporate Citizenship (Civil Procedure question)

Postby evilxs » Sat Dec 11, 2010 10:42 pm

Under Diversity:

Corporation is a resident of the place of incorporation and the principal place of business (nerve center test).
Used to be a daily activities test but ignore that as it got killed by a court decision within like the past year.

Under Personal JX:

Corporation only needs substantial and continuous contacts.

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evilxs
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Re: Corporate Citizenship (Civil Procedure question)

Postby evilxs » Sat Dec 11, 2010 10:43 pm

If the muscle test is the same as the daily activities test that is no longer good law.

onthemoney
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Re: Corporate Citizenship (Civil Procedure question)

Postby onthemoney » Sat Dec 11, 2010 10:44 pm

evilxs wrote:Under Diversity:

Corporation is a resident of the place of incorporation and the principal place of business (nerve center test).
Used to be a daily activities test but ignore that as it got killed by a court decision within like the past year.

T'was the Hertz case, 2010.

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evilxs
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Re: Corporate Citizenship (Civil Procedure question)

Postby evilxs » Sat Dec 11, 2010 10:45 pm

onthemoney wrote:
evilxs wrote:Under Diversity:

Corporation is a resident of the place of incorporation and the principal place of business (nerve center test).
Used to be a daily activities test but ignore that as it got killed by a court decision within like the past year.

T'was the Hertz case, 2010.


That's the one! Both my Glannon study books have the DAT in them, but my professor told us don't put it on the exam.

Headybrah
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Re: Corporate Citizenship (Civil Procedure question)

Postby Headybrah » Sat Dec 11, 2010 11:01 pm

wat about foreign company? where that citizen of - can court have subject matter and personal over it?
k thx

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DoubleChecks
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Re: Corporate Citizenship (Civil Procedure question)

Postby DoubleChecks » Sat Dec 11, 2010 11:05 pm

Headybrah wrote:wat about foreign company? where that citizen of - can court have subject matter and personal over it?
k thx


diversity is diversity isnt it? and a court can def get PJ over a foreign corporation, but you'd have to look at a lot of factors like the state's long arm statute, minimum contacts -> purposeful availment, and reasonableness (i think for foreign entities this is esp. worth delving into)

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evilxs
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Re: Corporate Citizenship (Civil Procedure question)

Postby evilxs » Sat Dec 11, 2010 11:06 pm

Depends if it avails itself of the forum. for PJX

It can also be a foreign company with incorporation in the US or even a principal place of business in the US.

Start thinking about cases like Asahi LOL

A corporation can also have enough generic contacts overall to have an appropriate relationship under the 5th amendment. Remember Jurisdiction is about the statutory requirements whether state or Fed and the constitutionality. Gotta have both.

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evilxs
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Re: Corporate Citizenship (Civil Procedure question)

Postby evilxs » Sat Dec 11, 2010 11:07 pm

DoubleChecks wrote:
Headybrah wrote:wat about foreign company? where that citizen of - can court have subject matter and personal over it?
k thx


diversity is diversity isnt it? and a court can def get PJ over a foreign corporation, but you'd have to look at a lot of factors like the state's long arm statute, minimum contacts -> purposeful availment, and reasonableness (i think for foreign entities this is esp. worth delving into)


Basically the holding of Asahi 8)

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mths
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Re: Corporate Citizenship (Civil Procedure question)

Postby mths » Mon Dec 13, 2010 1:58 am

I know that an unincorporated business is a citizen of the states where each member is a citizen, that way an unincorporated business could be a citizen of all 50 states. Maybe that's what you're thinking of?

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Borhas
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Re: Corporate Citizenship (Civil Procedure question)

Postby Borhas » Mon Dec 13, 2010 2:56 am

mths wrote:I know that an unincorporated business is a citizen of the states where each member is a citizen, that way an unincorporated business could be a citizen of all 50 states. Maybe that's what you're thinking of?


does that include partnerships? just curious

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mths
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Re: Corporate Citizenship (Civil Procedure question)

Postby mths » Mon Dec 13, 2010 2:59 am

Borhas wrote:
mths wrote:I know that an unincorporated business is a citizen of the states where each member is a citizen, that way an unincorporated business could be a citizen of all 50 states. Maybe that's what you're thinking of?


does that include partnerships? just curious

yes

irish017
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Re: Corporate Citizenship (Civil Procedure question)

Postby irish017 » Mon Dec 13, 2010 3:47 am

Can a court have jurisdiction over an LLC if they tagged the President of that LCC in a state where the LLC does not have any contacts?

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Sogui
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Re: Corporate Citizenship (Civil Procedure question)

Postby Sogui » Mon Dec 13, 2010 8:14 am

I hate jurisdiction questions, my exam had one where all the forum choices had a significant flaw in jurisdiction over all the parties involved and on top of that there were serious questions about just about every gray area of minimum contracts, like 3 variations of the borderline stuff that nobody knows about.

Not because it's particularly hard to answer, but because the answers are just you rambling about "traditional notions of fair play and substantive justice" and the factors discussed in Asahi and Burger King, and at the end of the day you wonder how the hell your rambling is going to stack up against the 100 other people who had the exact same notes in their outline telling them the exact same factors to consider and discuss for personal jurisdiction.

As for whatever is left of relevant discussion here, Asahi had no majority opinion for minimum contacts, but the majority did hold that it would be really "unfair" for a foreign component maker who doesn't control their stream of commerce to be held to litigate an indemnification dispute with another foreign manufacturer half-way across the world in a legal system that was completely foreign to their own. Since personal jurisdiction does require considerations of fairness and reasonability, the court held California had no personal jurisdiction over the case.

random5483
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Re: Corporate Citizenship (Civil Procedure question)

Postby random5483 » Mon Dec 13, 2010 6:55 pm

Corporation citizenship include: 1) State of Incorporation, 2) Nerve Center Test.

Prior to 2010 (Hertz v. Friend) the circuits were split on using three different tests (Nerve center, business activities/muscle test, total activities/combination test). Now, the Supreme COurt has clarified that the Nerve Center Test (decision making headquarters) is the appropriate test.

Therefore, the citizenship of a corporation includes: 1) State of incorporation and 2) State of decision making headquarters.

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ntugwater
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Re: Corporate Citizenship (Civil Procedure question)

Postby ntugwater » Tue Dec 14, 2010 5:43 am

irish017 wrote:Can a court have jurisdiction over an LLC if they tagged the President of that LCC in a state where the LLC does not have any contacts?

http://en.wikipedia.org/wiki/Burnham_v. ... California

saladfiend
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Re: Corporate Citizenship (Civil Procedure question)

Postby saladfiend » Wed Dec 15, 2010 2:28 pm

I don't believe Burham applies to corporate actors, just individuals--at least that's what my Civil Procedure professor said. If you mention Burham on an exam in reference to serving a corporate director in state caveat it.

saladfiend
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Re: Corporate Citizenship (Civil Procedure question)

Postby saladfiend » Wed Dec 15, 2010 2:29 pm

Also, people on this forum are saying the "muscle test" has been rejected in recent decisions. That may be true, but figure out what your professor is looking for. My professor wanted us to go through a "nerve test," "muscle test," and hybrid.




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