Drugmakers facing product-liability lawsuits generally prefer federal courts in the belief they will receive a more beneficial hearing, which explains why GlaxoSmithKline recently wanted to move a lawsuit over its Lamictal seizure med out of a Pennsylvania state court. But a federal judge ruled Glaxo violated a new “nerve center” test for determining corporate citizenship, The Legal Intellgiencer reports. So the suit goes back to state court.

This is significant. Glaxo, you see, tried arguing that it’s really a citizen of Delaware, where it was established as a corporate entity and, therefore, is not a citizen of Pennsylvania. But US District Court Judge J. Curtis Joyner is having none of it. In a nine-page order, he is quick to note that Philadelphia is cited in various Glaxo documents, such as its 2009 shareholder report, as its headquarters. He writes that the typical location of a company’s nerve center is its corporate headquarters, “provided that the headquarters is the actual center of direction, control, and coordination.” The US Supreme Court unveiled this ‘nerve center’ test earlier this year.

The upshot is the trial goes back to Pennsylvania state court in Philadelphia, where Glaxo will now have to face a local jury. The larger impact, however, is not just on this case, but any lawsuit where a drugmaker attempts to shift litigation to other venues where an office or operation is located. “The court defined nerve center as a principal place of business, so major drug firms with offices and executives in Philadelphia will no longer be able to point to other states where they have manufacturing facilities as their principal place of business,” Lee Balefsky of Kline & Spector, the law firm representing the plaintiffs, tell us. “They will (now) be required to face state court juries, which are traditionally more plaintiff friendly than in federal court.”