The Supreme Court Again Revisits (And May Rein In) Personal Jurisdiction: Two Cases Now Up Next Term

On April 22, 2013, the Supreme Court granted review in another personal jurisdiction case: DaimlerChrysler AG v. Bauman, No. 11-965 (cert. granted Apr. 22, 2013). The question presented in DaimlerChrysler is "whether it violates due process for a court to exercise general personal jurisdiction over a foreign corporation based solely on the fact that an indirect corporate subsidiary performs services on behalf of the defendant in the forum State." And earlier this Term, the Supreme Court granted certiorari in a specific personal jurisdiction case—Walden v. Fiore, No. 12-574 (cert. granted Mar. 4, 2013). The question presented in Walden is "[w]hether due process permits a court to exercise personal jurisdiction over a defendant whose sole 'contact' with the forum State is his knowledge that the plaintiff has connections to that State." Both DaimlerChrysler and Walden arise from the Ninth Circuit. They will be argued in fall 2013, with a decision expected no later than the end of June 2014.1

Both of these cases are of significant interest to businesses, as personal jurisdiction delimits a court's ability to hale a defendant into court and subject that defendant to the court's power and punishment. The Supreme Court has frequently declined to engage in issues of personal jurisdiction. Indeed, until its pair of decisions during the October 2010 Term, the Supreme Court had not significantly addressed personal jurisdiction since 1987, when the Court splintered in its decision governing specific personal jurisdiction in Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102 (1987).

DaimlerChrysler will address the standard for general personal jurisdiction based on imputing the contacts of in-forum subsidiaries to foreign parent corporations. Walden will address what it means for a defendant to "expressly aim" its conduct at a forum, such that a State has specific personal jurisdiction over an alleged intentional tortfeasor. These two grants follow closely on the heels of the Supreme Court's rulings in June 2011 in Goodyear Dunlop Tires Operations and J. McIntyre Machinery—where the Supreme Court limited the ability of state courts to assert personal jurisdiction over foreign defendants. (Our prior client alert on those cases is available here.)

DaimlerChrysler

DaimlerChrysler will address the circumstances in which an in-state subsidiary's contacts with the forum State are sufficient for the forum State to have general jurisdiction over the foreign parent corporation.

In DaimlerChrysler, the plaintiffs are residents of Argentina who allege human-rights violations against them and their relatives at the hands of Argentina's military dictatorship during the "Dirty War" in the late 1970s and early 1980s. During that time, plaintiffs were employed by DaimlerChrysler's subsidiary in Argentina. Plaintiffs claimed the Argentine subsidiary collaborated with the Argentine military in carrying out the alleged abuses. DaimlerChrysler is a German company that manufactures Mercedes-Benz automobiles in Germany. It does not manufacture, market, or sell any products in the United States.

Plaintiffs filed suit in California, maintaining that DaimlerChrysler was subject to general personal jurisdiction in California not because it was present in California, but rather on an agency theory by attributing to DaimlerChrysler the California contacts of a different, indirect subsidiary incorporated in Delaware...