Bristol-Myers Squibb Co. v. Superior Court of California

NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.

															SUPREME COURT OF THE UNITED STATES

															_________________

															No. 16–466

															_________________

															BRISTOL-MYERS SQUIBB COMPANY, PETITIONER v. SUPERIOR COURT OF CALIFORNIA, SAN FRANCISCO COUNTY,
et al.

															on writ of certiorari to the supreme court of
california

															[June 19, 2017]

															Justice Alito delivered the opinion of the
Court.

															More than 600 plaintiffs, most of whom are not
California residents, filed this civil action in a California state
court against Bristol-Myers Squibb Company (BMS), asserting a
variety of state-law claims based on injuries allegedly caused by a
BMS drug called Plavix. The California Supreme Court held that the
California courts have specific jurisdiction to entertain the
nonresidents’ claims. We now reverse.

															I

															A

															BMS, a large pharmaceutical company, is
incorporated in Delaware and headquartered in New York, and it
maintains substantial operations in both New York and New Jersey. 1
Cal. 5th 783, 790, 377 P. 3d 874, 879 (2016). Over 50
percent of BMS’s work force in the United States is employed in
those two States. Ibid. BMS also engages in business activities in other
jurisdictions, including California. Five of the company’s research
and laboratory facilities, which employ a total of around 160
employees, are located there. Ibid. BMS also employs about
250 sales representatives in California and maintains a small
state-government advocacy office in Sacramento. Ibid. One of the pharmaceuticals that BMS manufactures
and sells is Plavix, a prescription drug that thins the blood and
inhibits blood clotting. BMS did not develop Plavix in California,
did not create a marketing strategy for Plavix in California, and
did not manufacture, label, package, or work on the regulatory
approval of the product in California. Ibid. BMS instead
engaged in all of these activities in either New York or New
Jersey. Ibid. But BMS does sell Plavix in California.
Between 2006 and 2012, it sold almost 187 million Plavix pills in
the State and took in more than $900 million from those sales. 1
Cal. 5th, at 790–791, 377 P. 3d, at 879. This amounts to
a little over one percent of the company’s nationwide sales
revenue. Id. , at 790, 377 P. 3d, at 879.

															B

															A group of plaintiffs—consisting of 86
California residents and 592 residents from 33 other States—filed
eight separate complaints in California Superior Court, alleging
that Plavix had damaged their health. Id. , at 789, 377
P. 3d, at 878. All the complaints asserted 13 claims under
California law, including products liability, negligent
misrepresentation, and misleading advertising claims. Ibid. The nonresident plaintiffs did not allege that they obtained Plavix
through California physicians or from any other California source;
nor did they claim that they were injured by Plavix or were treated
for their injuries in California.

															Asserting lack of personal jurisdiction, BMS
moved to quash service of summons on the nonresidents’ claims, but
the California Superior Court denied this motion, finding that the
California courts had general jurisdiction over BMS “[b]ecause [it]
engages in extensive activities in California.” App. to Pet. for
Cert. 150. BMS unsuccess-fully petitioned the State Court of Appeal
for a writ of mandate, but after our decision on general
jurisdiction in Daimler AG v. Bauman , 571 U. S.
___ (2014), the California Supreme Court instructed the Court of
Appeal “to vacate its order denying mandate and to issue an order
to show cause why relief sought in the petition should not be
granted.” App. 9–10.

															The Court of Appeal then changed its decision on
the question of general jurisdiction. 228 Cal. App. 4th
605, 175 Cal. Rptr. 3d 412 (2014). Under Daimler ,
it held, general jurisdiction was clearly lacking, but it went on
to find that the California courts had specific jurisdiction over
the nonresidents’ claims against BMS. 228 Cal. App. 4th 605,
175 Cal. Rptr. 3d, at 425–439.

															The California Supreme Court affirmed. The court
unanimously agreed with the Court of Appeal on the issue of general
jurisdiction, but the court was divided on the question of specific
jurisdiction. The majority applied a “sliding scale approach to
specific jurisdiction.” 1 Cal. 5th, at 806, 377 P. 3d, at 889.
Under this approach, “the more wide ranging the defendant’s forum
contacts, the more readily is shown a connection between the forum
contacts and the claim.” Ibid. (internal quotation marks
omitted). Applying this test, the majority concluded that “BMS’s
extensive contacts with California” permitted the exercise of
specific jurisdiction “based on a less direct connection between
BMS’s forum activities and plaintiffs’ claims than might otherwise
be required.” Ibid . This attenuated requirement was met, the
majority found, because the claims of the nonresidents were similar
in several ways to the claims of the California residents (as to
which specific jurisdiction was uncontested). Id. , at
803–806, 377 P. 3d, at 887–889. The court noted that “[b]oth the
resident and nonresident plaintiffs’ claims are based on the same
allegedly defective product and the assertedly misleading marketing
and promotion of that product.” Id. , at 804, 377 P. 3d, at
888. And while acknowledging that “there is no claim that Plavix
itself was designed and developed in [BMS’s California research
facilities],” the court thought it significant that other research
was done in the State. Ibid .

															Three justices dissented. “The claims of
. . . nonresidents injured by their use of Plavix they
purchased and used in other states,” they wrote, “in no sense arise
from BMS’s marketing and sales of Plavix in California,” and they
found that the “mere similarity” of the residents’ and
nonresidents’ claims was not enough. Id. , at 819, 377
P. 3d, at 898 (opinion of Werdegar, J.). The dissent accused
the majority of “expand[ing] specific jurisdiction to the point
that, for a large category of defendants, it becomes
indistinguishable from general jurisdiction.” Id. , at 816,
377 P. 3d, at 896.

															We granted certiorari to decide whether the
California courts’ exercise of jurisdiction in this case violates
the Due Process Clause of the Fourteenth Amendment. 580 U. S.
___ (2017).[ 1 ]

															II

															A

															It has long been established that the
Fourteenth Amendment limits the personal jurisdiction of state
courts. See, e.g. , Daimler , supra , at ___–___
(slip op., at 6–13); World-Wide Volkswagen Corp. v. Woodson , 444 U. S. 286, 291 (1980) ; International
Shoe Co. v. Washington , 326 U. S. 310 –317 (1945); Pennoyer v. Neff , 95 U. S. 714, 733 (1878).
Because “[a] state court’s assertion of jurisdiction exposes
defendants to the State’s coercive power,” it is “subject to review
for compatibility with the Fourteenth Amendment’s Due Process
Clause,” Goodyear Dunlop Tires Operations, S. A. v. Brown , 564 U. S. 915, 918 (2011) , which “limits the
power of a state court to render a valid personal judgment against
a nonresident defendant,” World-Wide Volkswagen , supra , at 291. The primary focus of our personal
jurisdiction inquiry is the defendant’s relationship to the forum
State. See Walden v. Fiore , 571 U. S. ___,
___–___ (2014) (slip op., at 5–8); Phillips Petroleum Co. v. Shutts , 472 U. S. 797 –807 (1985).

															Since our seminal decision in International
Shoe, our decisions have recognized two types of personal
jurisdiction: “general” (sometimes called “all-purpose”)
jurisdiction and “specific” (sometimes called “case-linked”)
jurisdiction. Goodyear , 564 U. S., at 919. “For an
individual, the paradigm forum for the exercise of general
jurisdiction is the individual’s domicile; for a corporation, it is
an equivalent place, one in which the corporation is fairly
regarded as at home.” Id ., at 924. A court with general
jurisdiction may hear any claim against that defendant, even
if all the incidents underlying the claim occurred in a different
State. Id. , at 919. But “only a limited set of affiliations
with a forum will render a defendant amenable to” general
jurisdiction in that State. Daimler , 571 U. S., at ___
(slip op., at 18).

															Specific jurisdiction is very different. In
order for a state court to exercise specific jurisdiction, “the suit ” must “aris[e] out of or relat[e] to the defendant’s
contacts with the forum .” Id. , at ___ (slip op., at
8) (internal quotation marks omitted; emphasis added); see Burger King Corp. v. Rudzewicz , 471 U. S. 462
–473 (1985); Helicopteros Nacionales de Colombia, S. A. v. Hall , 466 U. S. 408, 414 (1984) . In other words,
there must be “an affiliation between the forum and the underlying
controversy, principally, [an] activity or an occurrence that takes
place in the forum State and is therefore subject to the State’s
regulation.” Goodyear , 564 U. S., at 919 (internal
quotation marks and brackets omitted). For this reason, “specific
jurisdiction is confined to adjudication of issues deriv-ing from,
or connected with, the very controversy that establishes
jurisdiction.” Ibid. (internal quotation marks omitted).

															B

															In determining whether personal jurisdiction
is present, a court must consider a variety of interests. These
include “the interests of the forum State and of the plaintiff in
proceeding with the cause in the plaintiff’s forum of choice.” Kulko v. Superior Court of Cal., City and County of San
Francisco , 436 U. S. 84, 92 (1978) ; see Daimler , supra , at ___–___, n. 20 (slip op., at 21–22, n. 20); Asahi Metal Industry Co. v. Superior Court of Cal.,
Solano Cty. , 480 U. S. 102, 113 (1987) ; World-Wide
Volkswagen , 444 U. S., at 292. But the “primary concern”
is “the burden on the defendant.” Id. , at 292. Assessing
this burden obviously requires a court to consider the practical
problems resulting from litigating in the forum, but it also
encompasses the more abstract matter of submitting to the coercive
power of a State that may have little legitimate interest in the
claims in question. As we have put it, restrictions on personal
jurisdiction “are more than a guarantee of immunity from
inconvenient or distant litigation. They are a consequence of
territorial limitations on the power of the respective States.” Hanson v. Denckla , 357 U. S. 235, 251 (1958) .
“[T]he States retain many essential attributes of sovereignty,
including, in particular, the sovereign power to try causes in
their courts. The sovereignty of each State . . .
implie[s] a limitation on the sovereignty of all its sister
States.” World-Wide Volkswagen , 444 U. S., at 293. And
at times, this federalism interest may be decisive. As we explained
in World-Wide Volkswagen , “[e]ven if the defendant would
suffer minimal or no inconvenience from being forced to litigate
before the tribunals of another State; even if the forum State has
a strong interest in applying its law to the controversy; even if
the forum State is the most convenient location for litigation, the
Due Process Clause, acting as an instrument of interstate
federalism, may sometimes act to divest the State of its power to
render a valid judgment.” Id. , at 294.

															III

															A

															Our settled principles regarding specific
jurisdiction control this case. In order for a court to exercise
specific jurisdiction over a claim, there must be an “affiliation
between the forum and the underlying controversy, principally, [an]
activity or an occurrence that takes place in the forum State.” Goodyear , 564 U. S., at 919 (internal quotation marks
and brackets in original omitted). When there is no such
connection, specific jurisdiction is lacking regardless of the
extent of a defendant’s unconnected activities in the State. See id. , at 931, n. 6 (“[E]ven regularly occurring sales of
a product in a State do not justify the exercise of jurisdiction
over a claim unrelated to those sales”).

															For this reason, the California Supreme Court’s
“sliding scale approach” is difficult to square with our
precedents. Under the California approach, the strength of the
requisite connection between the forum and the specific claims at
issue is relaxed if the defendant has extensive forum contacts that
are unrelated to those claims. Our cases provide no support for
this approach, which resembles a loose and spurious form of general
jurisdiction. For spe-cific jurisdiction, a defendant’s general
connections with the forum are not enough. As we have said, “[a]
corporation’s ‘continuous activity of some sorts within a state
. . . is not enough to support the demand that the
corporation be amenable to suits unrelated to that
activity.’ ” Id. , at 927 (quoting International
Shoe , 326 U. S., at 318).

															The present case illustrates the danger of the
California approach. The State Supreme Court found that specific
jurisdiction was present without identifying any adequate link
between the State and the nonresidents’ claims. As noted, the
nonresidents were not prescribed Plavix in California, did not
purchase Plavix in California, did not ingest Plavix in California,
and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested
Plavix in California—and allegedly sustained the same injuries as
did the nonresidents—does not allow the State to assert specific
jurisdiction over the nonresidents’ claims. As we have explained,
“a defendant’s relationship with a . . . third party,
standing alone, is an insufficient basis for jurisdiction.” Walden , 571 U. S., at ___ (slip op., at 8). This
remains true even when third parties (here, the plaintiffs who
reside in California) can bring claims similar to those brought by
the nonresidents. Nor is it sufficient—or even relevant—that BMS
conducted research in California on matters unrelated to Plavix.
What is needed—and what is missing here—is a connection between the
forum and the specific claims at issue.

															Our decision in Walden , supra ,
illustrates this requirement. In that case, Nevada plaintiffs sued
an out-of-state defendant for conducting an allegedly unlawful
search of the plaintiffs while they were in Georgia preparing to
board a plane bound for Nevada. We held that the Nevada courts
lacked specific jurisdiction even though the plaintiffs were Nevada
residents and “suffered foreseeable harm in Nevada.” Id. , at
___ (slip op., at 11). Because the “ relevant conduct
occurred entirely in Georgi[a] . . . the mere fact that
[this] conduct affected plaintiffs with connections to the forum
State d[id] not suffice to authorize jurisdiction.” Id. , at
___ (slip op., at 14) (emphasis added).

															In today’s case, the connection between the
nonresidents’ claims and the forum is even weaker. The relevant
plaintiffs are not California residents and do not claim to have
suffered harm in that State. In addition, as in Walden , all
the conduct giving rise to the nonresidents’ claims occurred
elsewhere. It follows that the California courts cannot claim
specific jurisdiction. See World-Wide Volkswagen , supra , at 295 (finding no personal jurisdiction in Oklahoma
because the defendant “carr[ied] on no activ-ity whatsoever in
Oklahoma” and dismissing “the fortuitous circumstance that a single
Audi automobile, sold [by defendants] in New York to New York
residents, happened to suffer an accident while passing through
Oklahoma” as an “isolated occurrence”).

															B

															The nonresidents maintain that two of our
cases sup-port the decision below, but they misinterpret those
precedents.

															In Keeton v. Hustler Magazine,
Inc. , 465 U. S. 770 (1984) , a New York resident sued
Hustler in New Hampshire, claiming that she had been libeled in
five issues of the magazine, which was distributed throughout the
country, including in New Hampshire, where it sold 10,000 to 15,000
copies per month. Concluding that specific jurisdiction was
present, we relied principally on the connection between the
circulation of the magazine in New Hampshire and damage allegedly
caused within the State. We noted that “[f]alse statements of fact
harm both the subject of the falsehood and the readers of the
statement.” Id ., at 776 (emphasis deleted). This factor
amply distinguishes Keeton from the present case, for here
the nonresidents’ claims involve no harm in California and no harm
to California residents.

															The nonresident plaintiffs in this case point to
our holding in Keeton that there was jurisdiction in New
Hampshire to entertain the plaintiff’s request for damages suffered
outside the State, id. , at 774, but that holding concerned
jurisdiction to determine the scope of a claim involving
in-state injury and injury to residents of the State, not, as in
this case, jurisdiction to entertain claims involving no in-state
injury and no injury to residents of the forum State. Keeton held that there was jurisdiction in New Hampshire to consider the
full measure of the plaintiff’s claim, but whether she could
actually recover out-of-state damages was a merits question
governed by New Hampshire libel law. Id ., at 778, n. 9.

															The Court’s decision in Phillips Petroleum
Co. v. Shutts , 472 U. S. 797 (1985) , which
involved a class action filed in Kansas, is even less relevant. The
Kansas court exercised personal jurisdiction over the claims of
nonresident class members, and the defendant, Phillips Petroleum,
argued that this violated the due process rights of these class
members because they lacked minimum contacts with the
State.[ 2 ] According to the
defendant, the out-of-state class members should not have been kept
in the case unless they affirmatively opted in, instead of merely
failing to opt out after receiving notice. Id. , at 812.

															Holding that there had been no due process
violation, the Court explained that the authority of a State to
entertain the claims of nonresident class members is entirely
different from its authority to exercise jurisdiction over an
out-of-state defendant. Id. , at 808–812. Since Shutts concerned the due process rights of plaintiffs , it has no
bearing on the question presented here.

															Respondents nevertheless contend that Shutts supports their position because, in their words, it
would be “absurd to believe that [this Court] would have reached
the exact opposite result if the petitioner [Phillips] had only
invoked its own due-process rights, rather than those of the
non-resident plaintiffs.” Brief for Respondents 28–29, n. 6
(emphasis deleted). But the fact remains that Phillips did not
assert that Kansas improperly exercised personal jurisdiction over
it, and the Court did not address that issue.[ 3 ] Indeed, the Court stated specifically that its
“discussion of personal jurisdiction [did not] address class
actions where the jurisdiction is asserted against a defendant class. ” Shutts , supra , at 812,
n. 3.

															C

															In a last ditch contention, respondents
contend that BMS’s “decision to contract with a California company
[McKesson] to distribute [Plavix] nationally” provides a sufficient
basis for personal jurisdiction. Tr. of Oral Arg. 32. But as we
have explained, “[t]he requirements of International Shoe . . . must be met as to each defendant over whom a state
court exercises jurisdiction.” Rush v. Savchuk , 444
U. S. 320, 332 (1980) ; see Walden , 571 U. S., at
___ (slip op, at 8) (“[A] defendant’s relationship with a
. . . third party, standing alone, is an insufficient
basis for jurisdiction”). In this case, it is not alleged that BMS
engaged in relevant acts together with McKesson in California. Nor
is it alleged that BMS is derivatively liable for McKesson’s
conduct in California. And the nonresidents “have adduced no
evidence to show how or by whom the Plavix they took was
distributed to the pharmacies that dispensed it to them.” 1 Cal.
5th, at 815, 377 P. 3d, at 895 (Werdegar, J., dissenting) (emphasis
deleted). See Tr. of Oral Arg. 33 (“It is impossible to trace a
particular pill to a particular person . . . . It’s
not possible for us to track particularly to McKesson”). The bare
fact that BMS contracted with a California distributor is not
enough to establish personal jurisdiction in the State.

															IV

															Our straightforward application in this case
of settled principles of personal jurisdiction will not result in
the parade of horribles that respondents conjure up. See Brief for
Respondents 38–47. Our decision does not prevent the California and
out-of-state plaintiffs from joining together in a consolidated
action in the States that have general jurisdiction over BMS. BMS
concedes that such suits could be brought in either New York or
Delaware. See Brief for Petitioner 13. Alternatively, the
plaintiffs who are residents of a particular State—for example, the
92 plaintiffs from Texas and the 71 from Ohio—could probably sue
together in their home States. In addition, since our decision
concerns the due process limits on the exercise of specific
jurisdiction by a State, we leave open the question whether the
Fifth Amendment imposes the same restrictions on the exercise of
personal jurisdiction by a federal court. See Omni Capital
Int’l, Ltd. v. Rudolf Wolff & Co. , 484 U. S. 97
, n. 5 (1987).

															*  *  *

															The judgment of the California Supreme Court
is reversed, and the case is remanded for further proceedings not
inconsistent with this opinion.

															It is so ordered. Notes 1 California law provides
that its courts may exercise jurisdiction “on any basis not
inconsistent with the Constitution . . . of the United
States,” Cal. Civ. Proc. Code Ann. §410.10 (West 2004); see Daimler AG v. Bauman , 571 U. S. ___, ___ (2014)
(slip op., at 6). 2 The Court held that the
defendant had standing to argue that the Kansas court had
improperly exercised personal jurisdiction over the claims of the
out-of-state class members because that holding materially affected
the defendant’s own interests, specifically, the res judicata
effect of an adverse judgment. 472 U. S., at
803–806. 3 Petitioner speculates
that Phillips did not invoke its own due process rights because it
was believed at the time that the Kansas court had general
jurisdiction. See Reply Brief 7, n. 1. SUPREME COURT OF THE UNITED STATES

															_________________

															No. 16–466

															_________________

															BRISTOL-MYERS SQUIBB COMPANY, PETITIONER v. SUPERIOR COURT OF CALIFORNIA, SAN FRANCISCO COUNTY,
et al.

															on writ of certiorari to the supreme court of
california

															[June 19, 2017]

															Justice Sotomayor, dissenting.

															Three years ago, the Court imposed substantial
curbs on the exercise of general jurisdiction in its decision in Daimler AG v. Bauman , 571 U. S. ___ (2014).
Today, the Court takes its first step toward a similar contraction
of specific jurisdiction by holding that a corporation that engages
in a nationwide course of conduct cannot be held accountable in a
state court by a group of injured people unless all of those people
were injured in the forum State.

															I fear the consequences of the Court’s decision
today will be substantial. The majority’s rule will make it
difficult to aggregate the claims of plaintiffs across the country
whose claims may be worth little alone. It will make it impossible
to bring a nationwide mass action in state court against defendants
who are “at home” in different States. And it will result in
piecemeal litigation and the bifurcation of claims. None of this is
necessary. A core concern in this Court’s personal jurisdiction
cases is fairness. And there is nothing unfair about subjecting a
massive corporation to suit in a State for a nationwide course of
conduct that injures both forum residents and nonresidents
alike.

															I

															Bristol-Myers Squibb is a Fortune 500
pharmaceutical company incorporated in Delaware and headquartered
in New York. It employs approximately 25,000 people worldwide and
earns annual revenues of over $15 billion. In the late 1990’s,
Bristol-Myers began to market and sell a prescription blood thinner
called Plavix. Plavix was advertised as an effective tool for
reducing the risk of blood clotting for those vulnerable to heart
attacks and to strokes. The ads worked: At the height of its
popularity, Plavix was a blockbuster, earning Bristol-Myers
billions of dollars in annual revenues.

															Bristol-Myers’ advertising and distribution
efforts were national in scope. It conducted a single nationwide
advertising campaign for Plavix, using television, magazine, and
Internet ads to broadcast its message. A consumer in California
heard the same advertisement as a consumer in Maine about the
benefits of Plavix. Bristol-Myers’ distribution of Plavix also
proceeded through nationwide channels: Consistent with its usual
practice, it relied on a small number of wholesalers to distribute
Plavix throughout the country. One of those distributors, McKesson
Corporation, was named as a defendant below; during the relevant
time period, McKesson was responsible for almost a quarter of
Bristol-Myers’ revenue worldwide.

															The 2005 publication of an article in the New
England Journal of Medicine questioning the efficacy and safety of
Plavix put Bristol-Myers on the defensive, as consumers around the
country began to claim that they were injured by the drug. The
plaintiffs in these consolidated cases are 86 people who allege
they were injured by Plavix in California and several hundred
others who say they were injured by the drug in other
States.[ 1 ] They filed their
suits in California Superior Court, raising product-liability
claims against Bristol-Myers and McKesson. Their claims are
“materially identical,” as Bristol-Myers concedes. See Brief for
Petitioner 4, n. 1. Bristol-Myers acknowledged it was subject
to suit in California state court by the residents of that State.
But it moved to dismiss the claims brought by the nonresident
plaintiffs—respondents here—for lack of jurisdiction. The question
here, accordingly, is not whether Bristol-Myers is subject to suit
in California on claims that arise out of the design, development,
manufacture, marketing, and distribution of Plavix—it is. The
question is whether Bristol-Myers is subject to suit in California
only on the residents’ claims, or whether a state court may also
hear the nonresidents’ “identical” claims.

															II

															A

															As the majority explains, since our
pathmarking opinion in International Shoe Co. v. Washington , 326 U. S. 310 (1945) , the touchstone of
the personal-jurisdiction analysis has been the question whether a
defendant has “certain minimum contacts with [the State] such that
the maintenance of the suit does not offend ‘traditional notions of
fair play and substantial justice.’ ” Id., at 316
(quoting Milliken v. Meyer , 311 U. S. 457, 463
(1940) ). For decades this Court has considered that question
through two different jurisdictional frames: “general” and
“specific” jurisdiction. See Helicopteros Nacionales de
Colombia, S. A. v. Hall , 466 U. S. 408 , nn.
8–9 (1984). Under our current case law, a state court may exercise
general, or all-purpose, jurisdiction over a defendant corporation
only if its “affiliations with the State are so ‘continuous and
systematic’ as to render [it] essentially at home in the forum
State.” Goodyear Dunlop Tires Operations, S. A. v. Brown , 564 U. S. 915, 919 (2011) .[ 2 ]

															If general jurisdiction is not appropriate,
however, a state court can exercise only specific, or case-linked,
jurisdiction over a dispute. Id., at 923–924. Our cases have
set out three conditions for the exercise of specific jurisdiction
over a nonresident defendant. 4A C. Wright, A. Miller, & A.
Steinman, Federal Practice and Procedure §1069, pp. 22–78 (4th ed.
2015) (Wright); see also id., at 22–27, n. 10
(collecting authority). First, the defendant must have
“ ‘purposefully avail[ed] itself of the privilege of
conducting activities within the forum State’ ” or have
purposefully directed its conduct into the forum State. J.
McIntyre Machinery, Ltd. v. Nicastro , 564 U. S.
873, 877 (2011) (plurality opinion) (quoting Hanson v. Denckla , 357 U. S. 235, 253 (1958) ). Second, the
plaintiff’s claim must “arise out of or relate to” the defendant’s
forum conduct. Helicopteros , 466 U. S., at 414.
Finally, the exercise of jurisdiction must be reasonable under the
circumstances. Asahi Metal Industry Co. v. Superior Court
of Cal., Solano Cty. , 480 U. S. 102 –114 (1987); Burger
King Corp. v. Rudzewicz , 471 U. S. 462 –478 (1985).
The factors relevant to such an analysis include “the burden on the
defendant, the forum State’s interest in adjudicating the dispute,
the plaintiff’s interest in obtaining convenient and effective
relief, the interstate judicial system’s interest in obtaining the
most efficient resolution of controversies, and the shared interest
of the several States in furthering fundamental substantive social
policies.” Id. , at 477 (internal quotation marks
omitted).

															B

															Viewed through this framework, the California
courts appropriately exercised specific jurisdiction over
respondents’ claims.

															First, there is no dispute that Bristol-Myers
“purposefully avail[ed] itself,” Nicastro , 564 U. S.,
at 877, of California and its substantial pharmaceutical market.
Bristol-Myers employs over 400 people in California and maintains
half a dozen facilities in the State engaged in research,
development, and policymaking. Ante, at 1–2. It contracts
with a California-based distributor, McKesson, whose sales account
for a significant portion of its revenue. Supra, at 2. And
it markets and sells its drugs, including Plavix, in California,
resulting in total Plavix sales in that State of nearly $1 billion
during the period relevant to this suit.

															Second, respondents’ claims “relate to”
Bristol-Myers’ in-state conduct. A claim “relates to” a defendant’s
forum conduct if it has a “connect[ion] with” that conduct. International Shoe , 326 U. S., at 319. So respondents
could not, for instance, hale Bristol-Myers into court in
California for negligently maintaining the sidewalk outside its New
York headquarters—a claim that has no connection to acts
Bristol-Myers took in California. But respondents’ claims against
Bristol-Myers look nothing like such a claim. Respondents’ claims
against Bristol-Myers concern conduct materially identical to acts
the company took in California: its marketing and distribution of
Plavix, which it undertook on a nationwide basis in all 50 States.
That respondents were allegedly injured by this nationwide course
of conduct in Indiana, Oklahoma, and Texas, and not California,
does not mean that their claims do not “relate to” the advertising
and distribution efforts that Bristol-Myers undertook in that
State. All of the plaintiffs—residents and nonresidents
alike—allege that they were injured by the same essential acts. Our
cases require no connection more direct than that.

															Finally, and importantly, there is no serious
doubt that the exercise of jurisdiction over the nonresidents’
claims is reasonable. Because Bristol-Myers already faces claims
that are identical to the nonresidents’ claims in this suit, it
will not be harmed by having to defend against respondents’ claims:
Indeed, the alternative approach—litigating those claims in
separate suits in as many as 34 different States—would prove far
more burdensome. By contrast, the plaintiffs’ “interest in
obtaining convenient and effective relief,” Burger King , 471
U. S., at 477 (internal quotation marks omitted), is obviously
furthered by participating in a consolidated proceeding in one
State under shared counsel, which allows them to minimize costs,
share discovery, and maximize recoveries on claims that may be too
small to bring on their own. Cf. American Express Co. v. Italian Colors Restaurant , 570 U. S. ___, ___ (2013)
(Kagan., J., dissenting) (slip op., at 7) (“No rational actor would
bring a claim worth tens of thousands of dollars if doing so meant
incurring costs in the hundreds of thousands”). California, too,
has an interest in providing a forum for mass actions like this
one: Permitting the nonresidents to bring suit in California
alongside the residents facilitates the efficient adjudication of
the residents’ claims and allows it to regulate more effectively
the conduct of both nonresident corporations like Bristol-Myers and
resident ones like McKesson.

															Nothing in the Due Process Clause prohibits a
California court from hearing respondents’ claims—at least not in a
case where they are joined to identical claims brought by
California residents.

															III

															Bristol-Myers does not dispute that it has
purposefully availed itself of California’s markets,
nor—remarkably—did it argue below that it would be “unreasonable”
for a California court to hear respondents’ claims. See 1 Cal. 5th
783, 799, n. 2, 377 P. 3d 874, 885, n. 2 (2016). Instead,
Bristol-Myers contends that respondents’ claims do not “arise out
of or relate to” its California conduct. The majority agrees,
explaining that no “adequate link” exists “between the State and
the nonresidents’ claims,” ante, at 8—a result that it says
follows from “settled principles [of] specific jurisdiction,” ante, at 7. But our precedents do not require this result,
and common sense says that it cannot be correct.

															A

															The majority casts its decision today as
compelled by precedent. Ibid. But our cases point in the
other direction.

															The majority argues at length that the exercise
of spe-cific jurisdiction in this case would conflict with our
decision in Walden v. Fiore , 571 U. S. ___
(2014). That is plainly not true. Walden concerned the
requirement that a defendant “purposefully avail” himself of a
forum State or “purposefully direc[t]” his conduct toward that
State, Nicastro , 564 U. S., at 877, not the separate
requirement that a plaintiff’s claim “arise out of or relate to” a
defendant’s forum contacts. The lower court understood the case
that way. See Fiore v. Walden , 688 F. 3d 558,
576–582 (CA9 2012). The parties understood the case that way. See
Brief for Petitioner 17–31, Brief for Respondent 20–44, Brief for
United States as Amicus Curiae 12–18, in Walden v. Fiore , O. T. 2013, No. 12–574. And courts and
commentators have understood the case that way. See, e.g., 4
Wright §1067.1, at 388–389. Walden teaches only that a
defendant must have purposefully availed itself of the forum, and
that a plaintiff cannot rely solely on a defendant’s contacts with
a forum resident to establish the necessary relationship. See 571
U. S., at ___ (slip op., at 8) (“[T]he plaintiff cannot be the
only link between the defendant and the forum”). But that holding
has nothing to do with the dispute between the parties:
Bristol-Myers has purposefully availed itself of California—to the
tune of millions of dollars in annual revenue. Only if its language
is taken out of context, ante, at 8–9, can Walden be
made to seem relevant to the case at hand.

															By contrast, our decision in Keeton v. Hustler Magazine, Inc. , 465 U. S. 770 (1984) , suggests
that there should be no such barrier to the exercise of
jurisdiction here. In Keeton , a New York resident brought
suit against an Ohio corporation, a magazine, in New Hampshire for
libel. She alleged that the magazine’s nationwide course of
conduct—its publication of defamatory statements—had injured her in
every State, including New Hampshire. This Court unanimously
rejected the defendant’s argument that it should not be subject to
“nationwide dam-ages” when only a small portion of those damages
arose in the forum State, id., at 781; exposure to such
liability, the Court explained, was the consequence of having
“continuously and deliberately exploited the New Hampshire market,” ibid. The majority today dismisses Keeton on the
ground that the defendant there faced one plaintiff’s claim arising
out of its nationwide course of conduct, whereas Bristol-Myers
faces many more plaintiffs’ claims. See ante, at 10. But
this is a distinction without a difference: In either case, a
defendant will face liability in a single State for a single course
of conduct that has impact in many States. Keeton informs us
that there is no unfairness in such a result.

															The majority’s animating concern, in the end,
appears to be federalism: “[T]erritorial limitations on the power
of the respective States,” we are informed, may—and today do—trump
even concerns about fairness to the parties. Ante, at 6.
Indeed, the majority appears to concede that this is not, at
bottom, a case about fairness but instead a case about power: one
in which “ ‘the defendant would suffer minimal or no
inconvenience from being forced to litigate before the tribunals of
another State; . . . the forum State has a strong
interest in applying its law to the contro-versy; [and] the forum
State is the most convenient location for litigation’ ” but
personal jurisdiction still will not lie. Ante, at 7
(quoting World-Wide Volkswagen Corp. v . Woodson, 444
U. S. 286, 294 (1980) ). But I see little reason to apply such
a principle in a case brought against a large corporate defendant
arising out of its nationwide conduct. What interest could any
single State have in adjudicating respondents’ claims that the
other States do not share? I would measure jurisdiction first and
foremost by the yardstick set out in International
Shoe —“fair play and substantial justice,” 326 U. S., at
316 (internal quotation marks omitted). The majority’s opinion
casts that settled principle aside.

															B

															I fear the consequences of the majority’s
decision today will be substantial. Even absent a rigid requirement
that a defendant’s in-state conduct must actually cause a
plaintiff’s claim,[ 3 ] the
upshot of today’s opinion is that plaintiffs cannot join their
claims together and sue a defendant in a State in which only some
of them have been injured. That rule is likely to have consequences
far beyond this case.

															First, and most prominently, the Court’s opinion
in this case will make it profoundly difficult for plaintiffs who
are injured in different States by a defendant’s nationwide course
of conduct to sue that defendant in a single, consolidated action.
The holding of today’s opinion is that such an action cannot be
brought in a State in which only some plaintiffs were injured. Not
to worry, says the majority: The plaintiffs here could have sued
Bristol-Myers in New York or Delaware; could “probably” have
subdivided their separate claims into 34 lawsuits in the States in
which they were injured; and might have been able to bring a single
suit in federal court (an “open . . . question”). Ante, at 12. Even setting aside the majority’s caveats, what
is the purpose of such limitations? What interests are served by
preventing the consolidation of claims and limiting the forums in
which they can be consolidated? The effect of the Court’s opinion
today is to eliminate nationwide mass actions in any State other
than those in which a defendant is “ ‘essentially at
home.’ ”[ 4 ] See Daimler , 571 U. S., at ___ (slip op., at 8). Such a
rule hands one more tool to corporate defendants determined to
prevent the aggregation of individual claims, and forces injured
plaintiffs to bear the burden of bringing suit in what will often
be far flung jurisdictions.

															Second, the Court’s opinion today may make it
impossible to bring certain mass actions at all. After this case,
it is difficult to imagine where it might be possible to bring a
nationwide mass action against two or more defendants headquartered
and incorporated in different States. There will be no State where
both defendants are “at home,” and so no State in which the suit
can proceed. What abouta nationwide mass action brought against a
defendantnot headquartered or incorporated in the United States?
Such a defendant is not “at home” in any State. Cf. id., at
___–___ (Sotomayor, J., concurring in judgment) (slip op., at
18–19). Especially in a world in which defendants are subject to
general jurisdiction in only a handful of States, see ibid. ,
the effect of today’s opinion will be to curtail—and in some cases
eliminate—plaintiffs’ ability to hold corporations fully
accountable for their nationwide conduct.

															The majority chides respondents for conjuring a
“parade of horribles,” ante, at 12, but says nothing about
how suits like those described here will survive its opinion in
this case. The answer is simple: They will not.

															*  *  *

															It “does not offend ‘traditional notions of
fair play and substantial justice,’ ” International
Shoe , 326 U. S., at 316, to permit plaintiffs to aggregate
claims arising out of a single nationwide course of conduct in a
single suit in a single State where some, but not all, were
injured. But that is exactly what the Court holds today is barred
by the Due Process Clause.

															This is not a rule the Constitution has required
before. I respectfully dissent. Notes 1 Like the parties and the
majority, I refer to these people as “residents” and “nonresidents”
of California as a convenient shorthand. See ante, at 2;
Brief for Petitioner 4–5, n. 1; Brief for Respondents 2,
n. 1. For jurisdictional purposes, the important question is
generally (as it is here) where a plaintiff was injured, not where
he or she resides. 2 Respondents do not
contend that the California courts would be able to exercise
general jurisdiction over Bristol-Myers—a concession that follows
directly from this Court’s opinion in Daimler AG v. Bauman , 571 U. S. ___ (2014). As I have explained, I
believe the restrictions the Court imposed on general jurisdiction
in Daimler were ill advised. See BNSF R. Co. v. Tyrrell , 581 U. S. ___, ___ (2017) (Sotomayor, J.,
concurring in part and dissenting in part); Daimler , 571
U. S., at ___ (Sotomayor, J., concurring in judgment). But I
accept respondents’ concession, for the purpose of this case, that
Bristol-Myers is not subject to general jurisdiction in
California. 3 Bristol-Myers urges such
a rule upon us, Brief for Petitioner 14–37, but its adoption would
have consequences far beyond those that follow from today’s
factbound opinion. Among other things, it might call into question
whether even a plaintiff injured in a State by an item
identical to those sold by a defendant in that State could avail
himself of that State’s courts to redress his injuries—a result
specifically contemplated by World-Wide Volkswagen Corp. v. Woodson , 444 U. S. 286, 297 (1980) . See Brief for
Civil Procedure Professors as Amici Curiae 14–18; see also J. McIntyre Machinery, Ltd. v. Nicastro , 564
U. S. 873 –907 (2011) (Ginsburg, J., dissenting). That
question, and others like it, appears to await another
case. 4 The Court today does not
confront the question whether its opinion here would also apply to
a class action in which a plaintiff injured in the forum State
seeks to represent a nationwide class of plaintiffs, not all of
whom were injured there. Cf. Devlin v. Scardelletti ,
536 U. S. 1 –10 (2002) (“Nonnamed class members
. . . may be parties for some purposes and not for
others”); see also Wood, Adjudicatory Jurisdiction and Class
Actions, 62 Ind. L. J. 597, 616–617 (1987).

Summary: The Supreme Court ruled that California courts do not have specific jurisdiction to hear claims against Bristol-Myers Squibb Company (BMS) by plaintiffs who are not California residents, reversing the California Supreme Court's decision. While BMS conducts business in California and sells Plavix (the drug in question) in the state, the company's relevant activities related to the development, marketing, and regulation of Plavix occurred in New York and New Jersey. The Court held that the Due Process Clause bars state courts from exercising specific jurisdiction over claims by nonresident plaintiffs when the company's activities in the state are not connected to the alleged injuries.


OPINION OF THE COURT HERTZ CORP. V. FRIEND 559 U. S. ____ (2010) SUPREME COURT OF THE UNITED STATES NO. 08-1107 THE HERTZ CORPORATION, PETITIONER v. MELINDA FRIEND et al.

															on writ of certiorari to the united states court of
appeals for the ninth circuit

															[February 23, 2010]

															   Justice Breyer delivered the
opinion of the Court.

															   The federal diversity
jurisdiction statute provides that “a corporation shall be deemed
to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of
business. ” 28 U. S. C. §1332(c)(1) (emphasis
added) . We seek here to resolve different interpretations
that the Circuits have given this phrase. In doing so, we place
primary weight upon the need for judicial administration of a
jurisdictional statute to remain as simple as possible. And we
conclude that the phrase “principal place of business” refers to
the place where the corporation’s high level officers direct,
control, and coordinate the corporation’s activities. Lower federal
courts have often metaphorically called that place the
corporation’s “nerve center.” See, e.g., Wisconsin
Knife Works v. National Metal Crafters , 781
F. 2d 1280, 1282 (CA7 1986); Scot Typewriter Co. v. Underwood Corp. , 170 F. Supp. 862, 865 (SDNY 1959)
(Weinfeld, J.). We believe that the “nerve center” will typically
be found at a corporation’s headquarters.

															I

															   In September 2007, respondents
Melinda Friend and John Nhieu, two California citizens, sued
petitioner, the Hertz Corporation, in a California state court.
They sought damages for what they claimed were violations of
California’s wage and hour laws. App. to Pet. for Cert. 20a. And
they requested relief on behalf of a potential class composed of
California citizens who had allegedly suffered similar harms.

															   Hertz filed a notice seeking
removal to a federal court. 28 U. S. C. §§1332(d)(2), 1441(a).
Hertz claimed that the plaintiffs and the defendant were citizens
of different States. §§1332(a)(1), (c)(1). Hence, the federal court
possessed diversity-of-citizenship jurisdiction. Friend and Nhieu,
however, claimed that the Hertz Corporation was a California
citizen, like themselves, and that, hence, diversity jurisdiction
was lacking.

															   To support its position, Hertz submitted a
declaration by an employee relations manager that sought to show
that Hertz’s “principal place of business” was in New Jersey, not
in California. The declaration stated, among other things, that
Hertz operated facilities in 44 States; and that California—which
had about 12% of the Nation’s population, Pet. for Cert.
8—accounted for 273 of Hertz’s 1,606 car rental locations; about
2,300 of its 11,230 full-time employees; about $811 million of its
$4.371 billion in annual revenue; and about 3.8 million of its
approximately 21 million annual transactions, i.e. ,
rentals. The declaration also stated that the “leadership of Hertz
and its domestic subsidiaries” is located at Hertz’s “corporate
headquarters” in Park Ridge, New Jersey; that its “core executive
and administrative functions . . . are carried out” there and “to a
lesser extent” in Oklahoma City, Oklahoma; and that its “major
administrative operations . . . are found” at those two locations.
App. to Pet. for Cert. 26a–30a.

															   The District Court of the Northern District of
California accepted Hertz’s statement of the facts as undisputed.
But it concluded that, given those facts, Hertz was a citizen of
California. In reaching this conclusion, the court applied Ninth
Circuit precedent, which instructs courts to identify a
corporation’s “principal place of business” by first determining
the amount of a corporation’s business activity State by State. If
the amount of activity is “significantly larger” or “substantially
predominates” in one State, then that State is the corporation’s
“principal place of business.” If there is no such State, then the
“principal place of business” is the corporation’s “ ‘nerve
center,’ ” i.e. , the place where “ ‘the majority
of its executive and administrative functions are
performed.’ ” Friend v. Hertz , No. C–07–5222
MMC (ND Cal., Jan. 15, 2008), p. 3 (hereinafter Order); Tosco Corp. v. Communities for a Better
Environment , 236 F. 3d 495, 500–502 (CA9 2001) (per
curiam) .

															   Applying this test, the District Court found
that the “plurality of each of the relevant business activities”
was in California, and that “the differential between the amount of
those activities” in California and the amount in “the next closest
state” was “significant.” Order 4. Hence, Hertz’s “principal place
of business” was California, and diversity jurisdiction was thus
lacking. The District Court consequently remanded the case to the
state courts.

															   Hertz appealed the District Court’s remand
order. 28 U. S. C. §1453(c). The Ninth Circuit affirmed in a
brief memorandum opinion. 297 Fed. Appx. 690 (2008). Hertz filed a
petition for certiorari. And, in light of differences among the
Circuits in the application of the test for corporate citizenship,
we granted the writ. Compare Tosco Corp. , supra ,
at 500–502, and Capitol Indemnity Corp. v. Russellville Steel Co. , 367 F. 3d 831, 836 (CA8 2004)
(applying “total activity” test and looking at “all corporate
activities”), with Wisconsin Knife Works , supra ,
at 1282 (applying “nerve center” test).

															II

															   At the outset, we consider a
jurisdictional objection. Respondents point out that the statute
permitting Hertz to appeal the District Court’s remand order to the
Court of Appeals, 28 U. S. C. §1453(c), constitutes an
exception to a more general jurisdictional rule that remand orders
are “not reviewable on appeal.” §1447(d). They add that the
language of §1453(c) refers only to “court[s] of appeals,” not to
the Supreme Court. The statute also says that if “a final judgment
on the appeal” in a court of appeals “is not issued before the end”
of 60 days (with a possible 10-day extension), “the appeal shall be
denied.” And respondents draw from these statutory circumstances
the conclusion that Congress intended to permit review of a remand
order only by a court of appeals, not by the Supreme Court (at
least not if, as here, this Court’s grant of certiorari comes after
§1453(c)’s time period has elapsed).

															   This argument, however, makes far
too much of too little. We normally do not read statutory silence
as implicitly modifying or limiting Supreme Court jurisdiction that
another statute specifically grants. Felker v. Turpin , 518
U. S. 651 , 660–661 (1996); Ex parte Yerger , 8 Wall.
85, 104–105 (1869). Here, another, pre-existing federal statute
gives this Court jurisdiction to “revie[w] . . . [b]y writ of
certiorari” cases that, like this case, are “in the courts of
appeals” when we grant the writ. 28 U. S. C. §1254. This
statutory jurisdictional grant replicates similar grants that yet
older statutes provided. See, e.g., §1254, 62 Stat. 928;
§1, 43 Stat. 938–939 (amending §240, 36 Stat. 1157); §240, 36 Stat.
1157; Evarts Act, §6, 26 Stat. 828. This history provides
particularly strong reasons not to read §1453(c)’s silence
or ambiguous language as modifying or limiting our pre-existing
jurisdiction.

															    We thus interpret §1453(c)’s “60-day”
requirement as simply requiring a court of appeals to reach a
decision within a specified time—not to deprive this Court of
subsequent jurisdiction to review the case. See Aetna Casualty
& Surety Co. v. Flowers , 330 U. S. 464 , 466–467
(1947); Gay v. Ruff , 292 U. S. 25 , 28–31
(1934).

															III

															   We begin our “principal place of
business” discussion with a brief review of relevant history. The
Constitution provides that the “judicial Power shall extend” to
“Controversies . . . between Citizens of different States.”
Art. III, §2. This language, however, does not automatically
confer diversity jurisdiction upon the federal courts. Rather, it
authorizes Congress to do so and, in doing so, to determine the
scope of the federal courts’ jurisdiction within constitutional
limits. Kline v. Burke Constr. Co. , 260 U. S. 226 , 233–234
(1922); Mayor v. Cooper , 6 Wall. 247, 252
(1868).

															   Congress first authorized federal
courts to exercise diversity jurisdiction in 1789 when, in the
First Judiciary Act, Congress granted federal courts authority to
hear suits “between a citizen of the State where the suit is
brought, and a citizen of another State.” §11, 1 Stat. 78. The
statute said nothing about corporations. In 1809, Chief Justice
Marshall, writing for a unanimous Court, described a corporation as
an “invisible, intangible, and artificial being” which was
“certainly not a citizen.” Bank of United States v .
Deveaux, 5 Cranch 61, 86 (1809). But the Court held that a
corporation could invoke the federal courts’ diversity jurisdiction
based on a pleading that the corporation’s shareholders were all
citizens of a different State from the defendants, as “the term
citizen ought to be understood as it is used in the constitution,
and as it is used in other laws. That is, to describe the real
persons who come into court, in this case, under their corporate
name.” Id. , at 91–92.

															   In Louisville, C. & C. R. Co. v. Letson , 2 How. 497 (1844), the Court modified this initial
approach. It held that a corporation was to be deemed an artificial
person of the State by which it had been created, and its
citizenship for jurisdictional purposes determined accordingly. Id., at 558–559. Ten years later, the Court in Marshall v. Baltimore & Ohio R. Co. , 16 How.
314 (1854), held that the reason a corporation was a citizen of its
State of incorporation was that, for the limited purpose of
determining corporate citizenship, courts could conclusively (and
artificially) presume that a corporation’s shareholders were citizens of the State of incorporation. Id. , at
327–328. And it reaffirmed Letson. 16 How., at 325–326.
Whatever the rationale, the practical upshot was that, for
diversity purposes, the federal courts considered a corporation to
be a citizen of the State of its incorporation. 13F C. Wright, A.
Miller, & E. Cooper, Federal Practice and Procedure §3623, pp.
1–7 (3d ed. 2009) (hereinafter Wright & Miller).

															   In 1928 this Court made clear that the “state
of incorporation” rule was virtually absolute. It held that a
corporation closely identified with State A could proceed in a
federal court located in that State as long as the corporation had
filed its incorporation papers in State B, perhaps a State where
the corporation did no business at all. See Black and White
Taxicab & Transfer Co. v. Brown and Yellow Taxicab
& Transfer Co. , 276 U. S. 518 , 522–525
(refusing to question corporation’s reincorporation motives and
finding diversity jurisdiction). Subsequently, many in Congress and
those who testified before it pointed out that this interpretation
was at odds with diversity jurisdiction’s basic rationale, namely,
opening the federal courts’ doors to those who might otherwise
suffer from local prejudice against out-of-state parties. See, e.g., S. Rep. No. 530, 72d Cong., 1st Sess., 2, 4–7
(1932). Through its choice of the State of incorporation, a
corporation could manipulate federal-court jurisdiction, for
example, opening the federal courts’ doors in a State where it
conducted nearly all its business by filing incorporation papers
elsewhere. Id. , at 4 (“Since the Supreme Court has decided
that a corporation is a citizen . . . it has become a common
practice for corporations to be incorporated in one State while
they do business in another. And there is no doubt but that it
often occurs simply for the purpose of being able to have the
advantage of choosing between two tribunals in case of
litigation”). See also Hearings on S. 937 et al. before a
Subcommittee of the Senate Committee on the Judiciary, 72d Cong.,
1st Sess., 4–5 (1932) (Letter from Sen. George W. Norris to
Attorney General William D. Mitchell (May 24, 1930)) (citing a
“common practice for individuals to incorporate in a foreign State
simply for the purpose of taking litigation which may arise into
the Federal courts”). Although various legislative proposals to
curtail the corporate use of diversity jurisdiction were made, see, e.g., S. 937, S. 939, H. R. 11508, 72d
Cong., 1st Sess. (1932), none of these proposals were enacted into
law.

															   At the same time as federal dockets increased
in size, many judges began to believe those dockets contained too
many diversity cases. A committee of the Judicial Conference of the
United States studied the matter. See Reports of the Proceedings of
the Regular Annual Meeting and Special Meeting (Sept. 24–26 &
Mar. 19–20, 1951), in H. R. Doc. No. 365, 82d Cong., 2d Sess.,
pp. 26–27 (1952). And on March 12, 1951, that committee, the
Committee on Jurisdiction and Venue, issued a report (hereinafter
Mar. Committee Rept.).

															   Among its observations, the committee found a
general need “to prevent frauds and abuses” with respect to
jurisdiction. Id. , at 14. The committee recommended
against eliminating diversity cases altogether. Id. , at
28. Instead it recommended, along with other proposals, a statutory
amendment that would make a corporation a citizen both of the State
of its incorporation and any State from which it received more than
half of its gross income. Id. , at 14–15 (requiring
corporation to show that “less than fifty per cent of its gross
income was derived from business transacted within the state where
the Federal court is held”). If, for example, a citizen of
California sued (under state law in state court) a corporation that
received half or more of its gross income from California, that
corporation would not be able to remove the case to federal court,
even if Delaware was its State of incorporation.

															   During the spring and summer of 1951 committee
members circulated their report and attended circuit conferences at
which federal judges discussed the report’s recommendations.
Reflecting those criticisms, the committee filed a new report in
September, in which it revised its corporate citizenship
recommendation. It now proposed that “ ‘a corporation shall be
deemed a citizen of the state of its original creation … [and]
shall also be deemed a citizen of a state where it has its
principal place of business.’ ” Judicial Conference of the
United States, Report of the Committee on Jurisdiction and Venue 4
(Sept. 24, 1951) (hereinafter Sept. Committee Rept.)—the source of
the present-day statutory language. See Hearings on H. R. 2516
et al. before Subcommittee No. 3 of the House Committee on the
Judiciary, 85th Cong., 1st Sess., 9 (1957) (hereinafter House
Hearings). The committee wrote that this new language would provide
a “simpler and more practical formula” than the “gross income”
test. Sept. Committee Rept. 2. It added that the language “ha[d] a
precedent in the jurisdictional provisions of the Bankruptcy Act.” Id ., at 2–3.

															   In mid-1957 the committee presented its
reports to the House of Representatives Committee on the Judiciary.
House Hearings 9–27; see also H. Rep. No. 1706, 85th Cong., 2d
Sess., 27–28 (1958) (hereinafter H. R. Rep. 1706) (reprinting
Mar. and Sept. Committee Repts.); S. Rep. No. 1830, 85th
Cong., 2d Sess., 15–31 (1958) (hereinafter S. Rep. 1830)
(same). Judge Albert Maris, representing Judge John Parker (who had
chaired the Judicial Conference Committee), discussed various
proposals that the Judicial Conference had made to restrict the
scope of diversity jurisdiction. In respect to the “principal place
of business” proposal, he said that the relevant language “ha[d]
been defined in the Bankruptcy Act.” House Hearings 37. He
added:

															“All of those problems have arisen in bankruptcy
cases, and as I recall the cases—and I wouldn’t want to be bound by
this statement because I haven’t them before me—I think the courts
have generally taken the view that where a corporation’s interests
are rather widespread, the principal place of business is an actual
rather than a theoretical or legal one. It is the actual place
where its business operations are coordinated, directed, and
carried out, which would ordinarily be the place where its officers
carry on its day-to-day business, where its accounts are kept,
where its payments are made, and not necessarily a State in which
it may have a plant, if it is a big corporation, or something of
that sort.

															   “But that has been pretty well worked out in
the bankruptcy cases, and that law would all be available, you see,
to be applied here without having to go over it again from the
beginning.” Ibid. The House Committee reprinted the Judicial
Conference Committee Reports along with other reports and relevant
testimony and circulated it to the general public “for the purpose
of inviting further suggestions and comments.” Id. , at III.
Subsequently, in 1958, Congress both codified the courts’
traditional place of incorporation test and also enacted into law a
slightly modified version of the Conference Committee’s proposed
“principal place of business” language. A corporation was to “be
deemed a citizen of any State by which it has been incorporated and
of the State where it has its principal place of business.” §2, 72
Stat. 415.

															IV

															   The phrase “principal place of
business” has proved more difficult to apply than its originators
likely expected. Decisions under the Bankruptcy Act did not provide
the firm guidance for which Judge Maris had hoped because courts
interpreting bankruptcy law did not agree about how to determine a
corporation’s “principal place of business.” Compare Burdick v. Dillon , 144 F. 737, 738 (CA1 1906)
(holding that a corporation’s “principal office, rather than a
factory, mill, or mine . . . constitutes the ‘principal place of
business’ ”), with Continental Coal Corp. v. Roszelle Bros. , 242 F. 243, 247 (CA6 1917) (identifying
the “principal place of business” as the location of mining
activities, rather than the “principal office”); see also
Friedenthal, New Limitations on Federal Jurisdiction, 11 Stan.
L. Rev. 213, 223 (1959) (“The cases under the Bankruptcy Act
provide no rigid legal formula for the determination of the
principal place of business”).

															    After Congress’ amendment,
courts were similarly uncertain as to where to look to determine a
corporation’s “principal place of business” for diversity purposes.
If a corporation’s headquarters and executive offices were in the
same State in which it did most of its business, the test seemed
straightforward. The “principal place of business” was located in
that State. See, e.g., Long v. Silver ,
248 F. 3d 309, 314–315 (CA4 2001); Pinnacle Consultants,
Ltd. v. Leucadia Nat. Corp. , 101 F. 3d 900,
906–907 (CA2 1996).

															   But suppose those corporate headquarters,
including executive offices, are in one State, while the
corporation’s plants or other centers of business activity are
located in other States? In 1959 a distinguished federal district
judge, Edward Weinfeld, relied on the Second Circuit’s
interpretation of the Bankruptcy Act to answer this question in
part:

															“Where a corporation is engaged in far-flung and
varied activities which are carried on in different states, its
principal place of business is the nerve center from which it
radiates out to its constituent parts and from which its officers
direct, control and coordinate all activities without regard to
locale, in the furtherance of the corporate objective. The test
applied by our Court of Appeals, is that place where the
corporation has an ‘office from which its business was directed and
controlled’—the place where ‘all of its business was under the
supreme direction and control of its officers.’ ” Scot
Typewriter Co., 170 F. Supp., at 865.

															Numerous Circuits have since followed this rule,
applying the “nerve center” test for corporations with “far-flung”
business activities. See, e.g., Topp v. Compair Inc. , 814 F. 2d 830, 834 (CA1 1987); see also
15 J. Moore et al., Moore’s Federal Practice §102.54[2], p.
102–112.1 (3d ed. 2009) (hereinafter Moore’s). Scot ’s analysis, however, did not go
far enough. For it did not answer what courts should do when the
operations of the corporation are not “far-flung” but rather
limited to only a few States. When faced with this question,
various courts have focused more heavily on where a corporation’s
actual business activities are located. See, e.g., Diaz-Rodriguez v. Pep Boys Corp ., 410 F. 3d
56, 60–61 (CA1 2005); R. G. Barry Corp. v. Mushroom
Makers, Inc. , 612 F. 2d 651, 656–657 (CA2 1979); see also
15 Moore’s §102.54, at 102–112.1.

															   Perhaps because corporations come in many
different forms, involve many different kinds of business
activities, and locate offices and plants for different reasons in
different ways in different regions, a general “business
activities” approach has proved unusually difficult to apply.
Courts must decide which factors are more important than others:
for example, plant location, sales or servicing centers;
transactions, payrolls, or revenue generation. See, e.g., R. G. Barry Corp., supra , at
656–657 (place of sales and advertisement, office, and full-time
employees); Diaz-Rodriguez , supra , at 61–62
(place of stores and inventory, employees, income, and sales).

															   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.” See, e.g. , Gafford v. General Elec. Co. , 997 F. 2d 150,
162–163 (CA6 1993); Amoco Rocmount Co. v. Anschutz
Corp. , 7 F. 3d 909, 915 (CA10 1993); 13F Wright &
Miller §3625, at 100. A major treatise confirms this growing
complexity, listing Circuit by Circuit, cases that highlight
different factors or emphasize similar factors differently, and
reporting that the “federal courts of appeals have employed various
tests”—tests which “tend to overlap” and which are sometimes
described in “language” that “is imprecise.” 15 Moore’s §102.54[2],
at 102–112. See also id., §§102.54[2], [13], at 102–112 to
102–122 (describing, in 14 pages, major tests as looking to the
“nerve center,” “locus of operations,” or “center of corporate
activities”). Not surprisingly, different circuits (and sometimes
different courts within a single circuit) have applied these highly
general multifactor tests in different ways. Id. ,
§§102.54[3]–[7], [11]–[13] (noting that the First Circuit “has
never explained a basis for choosing between ‘the center of
corporate activity’ test and the ‘locus of operations’ test”; the
Second Circuit uses a “two-part test” similar to that of the Fifth,
Ninth, and Eleventh Circuits involving an initial determination as
to whether “a corporation’s activities are centralized or
decentralized” followed by an application of either the “place of
operations” or “nerve center” test; the Third Circuit applies the
“center of corporate activities” test searching for the
“headquarters of a corporation’s day-to-day activity”; the Fourth
Circuit has “endorsed neither [the ‘nerve center’ or ‘place of
operations’] test to the exclusion of the other”; the Tenth Circuit
directs consideration of the “total activity of the company
considered as a whole”). See also 13F Wright & Miller §3625
(describing, in 73 pages, the “nerve center,” “corporate
activities,” and “total activity” tests as part of an effort to
locate the corporation’s “center of gravity,” while specifying
different ways in which different circuits apply these or other
factors).

															    This complexity may reflect an unmediated
judicial effort to apply the statutory phrase “principal place of
business” in light of the general purpose of diversity
jurisdiction, i.e. , an effort to find the State where a
corporation is least likely to suffer out-of-state prejudice when
it is sued in a local court, Pease v. Peck, 18
How. 595, 599 (1856). But, if so, that task seems doomed to
failure. After all, the relevant purposive concern—prejudice
against an out-of-state party—will often depend upon factors that
courts cannot easily measure, for example, a corporation’s image,
its history, and its advertising, while the factors that courts can
more easily measure, for example, its office or plant location, its
sales, its employment, or the nature of the goods or services it
supplies, will sometimes bear no more than a distant relation to
the likelihood of prejudice. At the same time, this approach 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.

															V

															A

															   In an effort to find a single,
more uniform interpretation of the statutory phrase, we have
reviewed the Courts of Appeals’ divergent and increasingly complex
interpretations. Having done so, we now return to, and expand,
Judge Weinfeld’s approach, as applied in the Seventh Circuit. See, e.g., Scot Typewriter Co. , 170 F. Supp., at
865; Wisconsin Knife Works , 781 F. 2d, at 1282. We
conclude that “principal place of business” is best read as
referring to the place where a corporation’s officers 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 officers who have traveled there for the
occasion).

															   Three sets of considerations,
taken together, convince us that this approach, while imperfect, is
superior to other possibilities. First, the statute’s language
supports the approach. 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” re-quires 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
(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.

															   A corporation’s “nerve center,” usually its
main headquarters, is a single place. The public often (though not
always) considers it the corporation’s main place of business. And
it is a place within a State. By contrast, the application of a
more general business activities test has led some courts, as in
the present case, to look, not at a particular place within a
State, but incorrectly at the State itself, measuring the total
amount of business activities that the corporation conducts there
and determining whether they are “significantly larger” than in the
next-ranking State. 297 Fed. Appx. 690.

															   This approach invites greater litigation and
can lead to strange results, as the Ninth Circuit has since
recognized. Namely, if a “corporation may be deemed a citizen of
California on th[e] basis” of “activities [that] roughly reflect
California’s larger population . . . nearly every national
retailer—no matter how far flung its operations—will be deemed a
citizen of California for diversity purposes.” Davis v. HSBC Bank Nev., N. A. , 557 F. 3d 1026, 1029–1030 (2009).
But why award or decline diversity jurisdiction on the basis of a
State’s population, whether measured directly, indirectly (say
proportionately), or with modifications?

															   Second, administrative simplicity is a major
virtue in a jurisdictional statute. Sisson v. Ruby , 497
U. S. 358 , 375 (1990) (Scalia, J., concurring in judgment)
(eschewing “the sort of vague boundary that is to be avoided in the
area of subject-matter jurisdiction wherever possible”). Complex
jurisdictional tests complicate a case, eating up time and money as
the parties litigate, not the merits of their claims, but which
court is the right court to decide those claims. Cf. Navarro Savings Assn. v. Lee , 446 U. S. 458 , 464,
n. 13 (1980). Complex tests produce appeals and reversals,
encourage gamesmanship, and, again, diminish the likelihood that
results and settlements will reflect a claim’s legal and factual
merits. Judicial resources too are at stake. Courts have an
independent obligation to determine whether subject-matter
jurisdiction exists, even when no party challenges it. Arbaugh v. Y & H Corp ., 546 U. S. 500 , 514
(2006) (citing Ruhrgas AG v. Marathon Oil Co. , 526 U. S. 574 ,
583 (1999)). So courts benefit from straightforward rules under
which they can readily assure themselves of their power to hear a
case. Arbaugh , supra , at 514.

															   Simple jurisdictional rules also promote
greater predictability. Predictability is valuable to corporations
making business and investment decisions. Cf. First Nat. City
Bank v. Banco Para el Comercio Exterior de Cuba , 462 U. S. 611 ,
621 (1983) (recognizing the “need for certainty and predictability
of result while generally protecting the justified expectations of
parties with interests in the corporation”). Predictability also
benefits plaintiffs deciding whether to file suit in a state or
federal court.

															   A “nerve center” approach, which ordinarily
equates that “center” with a corporation’s headquarters, is simple
to apply comparatively speaking . The metaphor of a
corporate “brain,” while not precise, suggests a single location.
By contrast, a corporation’s general business activities more often
lack a single principal place where they take place. That is to
say, the corporation may have several plants, many sales locations,
and employees located in many different places. If so, it will not
be as easy to determine which of these different business locales
is the “principal” or most important “place.”

															   Third, the statute’s legislative history, for
those who accept it, offers a simplicity-related interpretive
benchmark. The Judicial Conference provided an initial version of
its proposal that suggested a numerical test. A corporation would
be deemed a citizen of the State that accounted for more than half
of its gross income. Mar. Committee Rept. 14–15; see supra , at 8. The Conference changed its mind in light of
criticism that such a test would prove too complex and impractical
to apply. Sept. Committee Rept. 2; see also H. Rep. 1706, at 28;
S. Rep. 1830, at 31. That history suggests that the words
“principal place of business” should be interpreted to be no more
complex than the initial “half of gross income” test. A “nerve
center” test offers such a possibility. A general business
activities test does not.

															B

															   We recognize that there may be no
perfect test that satisfies all administrative and purposive
criteria. We recognize as well that, under the “nerve center” test
we adopt today, there will be hard cases. For example, in this era
of telecommuting, some corporations may divide their command and
coordinating functions among officers who work at several different
locations, perhaps communicating over the Internet. That said, our
test nonetheless points courts in a single direction, towards the
center of overall direction, control, and coordination. Courts do
not have to try to weigh corporate functions, assets, or revenues
different in kind, one from the other. Our approach provides a
sensible test that is relatively easier to apply, not a test that
will, in all instances, automatically generate a result.

															   We also recognize that the use of
a “nerve center” test may in some cases produce results that seem
to cut against the basic rationale for 28 U. S. C. §1332, see supra , at 6. For example, if the bulk of a company’s
business activities visible to the public take place in New Jersey,
while its top officers direct those activities just across the
river in New York, the “principal place of business” is New York.
One could argue that members of the public in New Jersey would be less likely to be prejudiced against the corporation than
persons in New York—yet the corporation will still be entitled to
remove a New Jersey state case to federal court. And note too that
the same corporation would be unable to remove a New York state
case to federal court, despite the New York public’s presumed
prejudice against the corporation.

															   We understand that such seeming anomalies will
arise. However, in view of the necessity of having a clearer rule,
we must accept them. Accepting occasionally counterintuitive
results is the price the legal system must pay to avoid overly
complex jurisdictional administration while producing the benefits
that accompany a more uniform legal system.

															   The burden of persuasion for establishing
diversity jurisdiction, of course, remains on the party asserting
it. Kokkonen v. Guardian Life Ins. Co. of
America , 511 U.
S. 375 , 377 (1994); McNutt v. General Motors
Acceptance Corp. , 298 U. S. 178 , 189
(1936); see also 13E Wright & Miller §3602.1, at 119. When
challenged on allegations of jurisdictional facts, the parties must
support their allegations by competent proof. McNutt , supra , at 189; 15 Moore’s §102.14, at 102–32 to 102–32.1.
And when faced with such a challenge, we reject suggestions such
as, for example, the one made by petitioner that the mere filing of
a form like the Securities and Exchange Commission’s Form 10–K
listing a corporation’s “principal executive offices” would,
without more, be sufficient proof to establish a corporation’s
“nerve center.” See, e.g., SEC Form 10–K, online at
http://www.sec.gov/about/forms/ form10-k.pdf. (as visited Feb. 19,
2010, and available in Clerk of Court’s case file). Cf. Dimmitt
& Owens Financial, Inc. v . United States , 787
F. 2d 1186, 1190–1192 (CA7 1986) (distinguishing “principle
executive office” in the tax lien context, see 26 U. S. C.
§6323(f)(2), from “principal place of business” under 28 U.
S. C. §1332(c)). Such possibilities would readily permit
jurisdictional manipulation, thereby subverting a major reason for
the insertion of the “principal place of business” language in the
diversity statute. Indeed, if the record reveals attempts at
manipulation—for example, that the alleged “nerve center” is
nothing more than a mail drop box, a bare office with a computer,
or the location of an annual executive retreat—the courts should
instead take as the “nerve center” the place of actual direction,
control, and coordination, in the absence of such manipulation.

															VI

															   Petitioner’s unchallenged
declaration suggests that Hertz’s center of direction, control, and
coordination, its “nerve center,” and its corporate headquarters
are one and the same, and they are located in New Jersey, not in
California. Because respondents should have a fair op- portunity to
litigate their case in light of our holding, however, we vacate the
Ninth Circuit’s judgment and remand the case for further
proceedings consistent with this opinion.

															It is so ordered.

Summary: The Supreme Court ruled that a corporation's "principal place of business" for the purposes of determining diversity jurisdiction is its "nerve center," or the place where its high-level officers direct, control, and coordinate its activities. This is typically the corporation's headquarters.