The US Supreme Court [official website] ruled [opinion, PDF] Tuesday in Daimer AG v. Bauman [SCOTUSblog backgrounder] that DaimlerChrysler AG (Daimler) [company website] does not have to face suit in California for alleged human rights violations by a subsidiary that took place entirely in Argentina. The US Court of Appeals for the Ninth Circuit ruled [JURIST report] for Barbara Bauman, who represented 21 Argentine residents, allowing them to bring suit for the actions of Mercedes-Benz Argentina (MB Argentina) [corporate website, in Spanish], a Daimler subsidiary, during the nation's 1976-1983 "Dirty War" [GlobalSecurity backgrounder; JURIST news archive]. The plaintiffs claim that MB Argentina collaborated with state security forces to kidnap, detain, torture and kill certain MB Argentina workers that are either named as plaintiffs or were closely related to the plaintiffs. They argue that business activities in California by Mercedes-Benz USA (MBUSA) as a subsidiary of Daimler should permit the filing of a lawsuit because of an important agency relationship between MBUSA and Daimler, but the Supreme Court held that Daimler is not amenable to suit in California for injuries allegedly caused by conduct of MB Argentina that took place entirely outside the US. Justice Ruth Bader Ginsberg delivered the opinion of the court:
If Daimler's California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other State in which MBUSA's sales are sizable. Such exorbitant exercises of all-purpose jurisdiction would scarcely permit out-of-state defendants "to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." ... It was therefore error for the Ninth Circuit to conclude that Daimler, even with MBUSA's contacts attributed to it, was at home in California, and hence subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California. ... The Ninth Circuit, moreover, paid little heed to the risks to international comity its expansive view of general jurisdiction posed.Justice Sonia Sotomayor filed a concurring opinion.
The Supreme Court heard oral arguments [JURIST report] in the case in October. In general, there was a sense among academics and legal scholars [SCOTUSblog report] that the Ninth Circuit ruling may have gone too far in granting jurisdiction in the case. Nevertheless, uncertainty surrounding the case persisted because scholars recognized [JURIST op-ed] the Supreme Court had not yet developed a principled rationale for general personal jurisdiction in prior case law and questions remained following the Goodyear v. Brown [JURIST report] decision in 2011.