In order to sue a corporation, you need to determine what courts have jurisdiction over that corporation. Determining what courts have jurisdiction over a person is easy: Wherever that person lives has jurisdiction over the person, and wherever the person happens to be has jurisdiction. For example, if you live in California but take a trip to Las Vegas:
- You can always be sued in California, because that's where you reside.
- You can be sued in Nevada, but only if you're given a subpoena while you're actually within the state's borders.
Determining where a corporation can be sued is a little trickier. Assume that Acme, Inc. is incorporated in Delaware, has its corporate headquarters in New York, and all of its retail stores and manufacturing facilities in Pennsylvania:
- Acme can be sued in Delaware, because that's where it is incorporated. A company can always be sued in its state of incorporation.
- The company can also be sued in Pennsylvania since it does most (if not all) of its business in Pennsylvania.
- Acme can also be sued in the state of its principal place of business. The question is which state is its principal place of business?
Delaware might be, because that's where it is incorporated. New York might be, because that's where its headquarters is. And Pennsylvania might be because that's where everything goes on.
Courts around the country have come up with different tests to determine where a corporation's principal place of business is, but the Supreme Court hasn't yet weighed in on the issue.
