Civil Procedure I, Pages 137–142

Daimler AG v. Bauman

Supreme Court of the United States, 2014

Facts:

Daimler is a German corporation whose subsidiary MB Argentina allegedly helped the Argentinian government kidnap, detain, torture, and kill plaintiffs and their relatives in Argentina. Plaintiffs seek to hold Daimler vicariously liable in California. Daimler also has a subsidiary named MBUSA who is their exclusive importer, but with whom Daimler has an agreement that says they are and "independant contractor" that does not make them "a general or specific agent" and can't "make binding obligations for" Daimler.

Procedural History:

  • District Court allowed plaintiffs' discovery, but granted Daimler's motion to dismiss because Daimler's own connections with California were insufficient to support general jurisdiction over them. They also denied plaintiffs' allegation that MBUSA acted as Daimler's agent in the US.

  • The Ninth Circuit reversed, ruling that the agency test was satisfied and that consideration of reasonableness did not bar the exercise of jurisdiction.

Issue:

Is Daimler amendable to suit in California courts for claims involving only foreign plaintiffs and conduct occurring entirely abroad?

Plaintiff's Arguments:

  • Daimler had sufficient minimum contacts themselves with California.

  • MBUSA, another subsidiary of Daimler's, is a Delaware corporation that has substantial contacts in California and is Daimler's exclusive importer and distributor, giving California jurisdiction over the defendant.

Rule:

Not only must the contacts with the forum state be "continuous and systematic", it must be so much so as to render it essentially at home in the forum state.

Note:

This doesn't mean what it sounds like. It is only used for foreign companies.

Reasoning:

Neither corporation is domiciled in California. MBUSA is likely liable in any state. To allow the foreign parent to be likewise adjudicated in any state would basically remove out-of-state defendants' ability to "structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." It also would greatly strain international judicial relations as such a policy does not exist in the European Union.

Holding:

Daimler is not "at home" in California, and cannot be sued there for injuries from conduct in Argentina. Ninth Circuit's judgment reversed.

Concurring Opinion:

Justice Sotomayor: The court's argument based on being subject to too many courts is flawed. If a company has sufficient contacts with all states, it should be able to be called into all of those states. The issue here is that Daimler simply does not have enough contact. It's foreign plaintiffs suing foreign defendants over foreign conduct, so a more appropriate forum is available.


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