Supreme Court of the United States - 134 S.Ct. 746, 187 L.Ed.2d 624, 82 USLW 4043
Daimler AG v. Bauman (2014), a United States Supreme Court case, explores the extent to which a foreign corporation may be subject to general personal jurisdiction in American courts. This pivotal case clarified standards for general jurisdiction and underscored the importance of due process rights for international businesses.
A group of Argentine residents brought a case against DaimlerChrysler Aktiengesellschaft (Daimler), a German company, in a federal district court in California. They claimed that Daimler's Argentine subsidiary, Mercedes-Benz Argentina (MB Argentina), had conspired with state security forces during the 1970s "Dirty War" to perpetrate human rights abuses. The plaintiffs sought to establish jurisdiction in California, contending that Daimler maintained significant, ongoing business ties in the state via its U.S. subsidiary, Mercedes-Benz USA (MBUSA).
Initially, the district court dismissed the case due to lack of jurisdiction. However, the Ninth Circuit Court of Appeals reversed this decision. The case then advanced to the U.S. Supreme Court, where it was determined that Daimler could not be subjected to general personal jurisdiction in California, as its contacts with the state did not make it "at home" there.
The Supreme Court's decision emphasized the limitations of due process on general jurisdiction, noting that a corporation is typically subject to general jurisdiction only in its place of incorporation or primary place of business. This ruling set a higher bar for asserting general jurisdiction over foreign corporations, thus restricting the ability of U.S. courts to adjudicate claims against them.
Daimler AG v. Bauman is significant because it clarified and narrowed the scope of general jurisdiction, safeguarding foreign corporations from unjust exposure to U.S. courts. Ultimately, this case fostered fairness and predictability in global business dealings and enriched the understanding of jurisdictional principles in U.S. civil procedure.
The Supreme Court held that a foreign corporation cannot be sued in California for human rights violations that occurred in another country unless the corporation's affiliations with the state are so constant and pervasive as to render it essentially at home in the forum state. The Court rejected the agency theory and confirmed that specific jurisdiction is crucial in legal cases. The Court established factors to determine the reasonableness of personal jurisdiction, including the burden on the defendant, the interests of the forum State, the plaintiff's interest in obtaining relief in the forum State, and the interests of other sovereigns in resolving the dispute. The Court's decision is criticized for resolving a complex and fact-intensive question without the benefit of full briefing, which invites error.
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