In cases removed from state court to federal court on the basis of alleged diversity jurisdiction, defendant corporations may erroneously assume, contrary to Hertz, that so long as their operations take place in a state, their principal place of business is in that state. Not so!
Since Hertz, the “place” of business does not refer to a state, but to a particular place within a state.
As the Hertz court explained: “Three sets of considerations, taken together, convince us that this approach, [i.e., “nerve center” being the “principal place of business”] while imperfect, is superior to other possibilities.” The first consideration is the statute’s language:
The statute’s text deems a corporation a citizen of the “State where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). The word “place” is in the singular, not the plural. The word “principal” requires us to pick out the “main, prominent” or “leading” place. 12 Oxford English Dictionary 495 (2d ed. 1989) (def.(A)(I)(2)). Cf. Commissioner v. Soliman, 506 U.S. 168, 174, 113 S.Ct. 701, 121 L.Ed.2d 634 (1993) (interpreting “principal place of business” for tax purposes to require an assessment of “whether any one business location is the ‘most important, consequential, or influential’ one”). And the fact that the word “place” follows the words “State where” means that the “place” is a place within a State. It is not the State itself.
Hertz, 130 S. Ct. at 1192-93 (italics by the court). So, even if a defendant corporation's operations are all within a single state, that state is note necessarily the corporation's place of business; rather, the particular place within a state where the corporation's "nerve center" is located is its "principal place of business," and that place could be in a different state.