Summary
The Supreme Court held that Daimler AG was not subject to general personal jurisdiction in California based on the California contacts of its subsidiary, Mercedes-Benz USA. The Court explained that a corporation is generally subject to all-purpose jurisdiction only where its affiliations render it essentially at home, ordinarily its place of incorporation or principal place of business. Because the claims concerned conduct occurring entirely in Argentina and neither Daimler nor Mercedes-Benz USA was at home in California, the Ninth Circuit's judgment was reversed.
Topics
Practice areas
Questions Presented
- Whether the Due Process Clause permits California courts to exercise general personal jurisdiction over a foreign corporation for claims brought by foreign plaintiffs concerning conduct occurring entirely abroad.
- Whether the California contacts of Daimler's subsidiary, Mercedes-Benz USA, could be attributed to Daimler under an agency theory for purposes of general jurisdiction.
- Whether Daimler's affiliations with California rendered it essentially at home there despite the absence of incorporation or principal place of business in California.
Holdings
- Daimler was not subject to general personal jurisdiction in California because its affiliations with California were not so continuous and systematic as to render it essentially at home there.
- The Ninth Circuit's agency analysis could not support general jurisdiction because treating services as jurisdictionally attributable merely because they were important to Daimler would effectively subject a foreign corporation to general jurisdiction whenever it had an in-state subsidiary or affiliate.
- Exercising general jurisdiction over Daimler in California for an Argentina-rooted dispute involving foreign plaintiffs, a foreign defendant, and conduct occurring entirely abroad would be an exorbitant exercise of jurisdiction inconsistent with due process.
Key quotations
“A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forum State.” (571 U.S. at 127)
“With respect to a corporation, the place of incorporation and principal place of business are “paradig[m] . . . bases for general jurisdiction.”” (571 U.S. at 137)
“That formulation, we hold, is unacceptably grasping.” (571 U.S. at 138)
“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.” (571 U.S. at 139)
Factual background
Twenty-two residents of Argentina sued Daimler, a German corporation, alleging that its Argentine subsidiary collaborated with Argentine security forces during the 1976-1983 Dirty War to kidnap, detain, torture, and kill workers. The alleged conduct occurred entirely in Argentina and had no connection to California. Plaintiffs based jurisdiction on the California contacts of Daimler's indirect subsidiary, Mercedes-Benz USA, which distributed Daimler vehicles and maintained facilities in California.
Procedural history
Argentine plaintiffs sued Daimler in the Northern District of California for alleged human-rights abuses committed by Mercedes-Benz Argentina in Argentina. The District Court dismissed for lack of personal jurisdiction. The Ninth Circuit initially affirmed, then withdrew that decision and held that Mercedes-Benz USA's California contacts could be attributed to Daimler under an agency theory, rendering Daimler subject to general jurisdiction in California. The Supreme Court granted certiorari and reversed.