Tourism

The number of factors grew as courts explicitly combined aspects of the “nerve center” and “business activity” tests to look to a corporation’s “total activities,” sometimes to try to determine what treatises have described as the corporation’s “center of gravity.” Not surprisingly, different circuit courts of appeal (and sometimes different courts within a single circuit) have applied these highly general multifactor tests in different ways. This complexity . . . is at war with administrative simplicity.

 

And it has failed to achieve a nationally uniform interpretation of federal law, an unfortunate consequence in a federal legal system. In an effort to fi nd a single, more uniform interpretation of the statutory phrase, we have reviewed the courts of appeals’ divergent and increasingly complex interpretations. They now return to, and expand, Judge Weinfeld’s approach [in Scot ]. We conclude that “principal place of business” is best read as referring to the place where a corporation’s offi cers 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 normally be the place where the corporation maintains its headquarters—provided that the headquarters is the actual center 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 offi cers who have traveled there for the occasion).