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WASHINGTON- The Supreme Court's ruling that a company's principal place of business is where its officers "direct, control and coordinate" its activities - not where it has its largest volume of business - is a significant victory for companies, legal observers say.
That's because it provides clarity regarding the proper venue to hear cases involving parties that are residents of different states. The court's unanimous decision last week in Hertz Corp. vs. Melinda Friend et al. will make it easier for- parties in such disputes to move" the action to federal court from state court, legal experts say.
The federal Class Action Fairness Act of 2005, which was backed by businesses that held they had a better chance of getting a fair hearing in federal rather than state court if they were not a resident of a state, allows such a move under most circumstances.
The case involves a group of Hertz Corp. employees based in California. The employees brought a class action suit against Park Ridge, NJ. -based Hertz in California state court that alleged violations of state employment law. Hertz...