However, the state court ruled that there was California jurisdiction that was appropriate and re-established the importance of the "place of operations" test for firms.

[2][3] The Supreme Court overruled but cautioned that the corporate headquarters will not be considered the principal place of business if it is not the actual center of direction, control, and coordination, such as if it were “simply an office where the corporation holds its board meetings."

[2][3] Hertz petitioned to move the case to a federal court, claiming that the two parties were citizens of different states and therefore diversity-of-citizenship was relevant.

The court could not find any compelling evidence to support either the “Nerve Center” or “Place of Operations” method and continued its deliberation.

This reasoning stems from the fact that all corporations are different and will have varying factors, levels of operations, and natures of headquarters that all may change its principal state of citizenship.