The Supreme Court Curtails General Personal Jurisdiction Over Foreign Parent Corporations: Daimler AG V. Bauman

On January 14, 2014, the Supreme Court decided Daimler AG v. Bauman, No. 11-965—a closely watched personal jurisdiction case. In an opinion authored by Justice Ginsburg for eight Justices, the Court reversed the Ninth Circuit's holding that a German company was subject to general personal jurisdiction in California, based on the California contacts of the company's Delaware subsidiary. Justice Sotomayor concurred in the judgment.

Until recently, the Supreme Court has infrequently engaged with issues of personal jurisdiction. Prior to the October 2010 Term, the Supreme Court had not significantly addressed personal jurisdiction since 1987, when the Court issued a splintered decision in Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102 (1987). During the 2010 Term, the Supreme Court decided two cases that effectively limited the ability of state courts to assert personal jurisdiction over foreign defendants: Goodyear Dunlop Tires Operations v. Brown and J. McIntyre Machinery v. Nicastro. In Goodyear, the Supreme Court explained there is general jurisdiction when a business is "at home" in the forum State. 131 S. Ct. 2846, 2887 (2011). Bauman further closes the door on efforts to extend personal jurisdiction against foreign corporations.

Bauman addresses a question left unresolved by Goodyear: whether the in-state contacts of a corporate subsidiary can be imputed to a foreign parent corporation for purposes of exercising general jurisdiction over the parent, even though the parent does not itself conduct any business in the forum State. The Supreme Court held that the subsidiary's in-state contacts could not support general jurisdiction over the parent corporation. And the Court reiterated that personal jurisdiction is generally limited to where a foreign corporation's affiliations with the forum State are so extensive as to render it essentially at home in the forum State.

BACKGROUND

The question presented in Bauman was "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."

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 1970s and early 1980s. Plaintiffs and their relatives were employed by Daimler's...