United States Supreme Court Holds That Non-U.S. Corporations Are Subject To General Personal Jurisdiction In U.S. States Only In States Where They Are 'At Home'

In Daimler AG v. Bauman, No. 11-965, 2014 U.S. LEXIS 644 (U.S. Jan. 14, 2014) (Ginsburg, J.), the Supreme Court of the United States held that a court may not exercise general personal jurisdiction over a non-U.S. corporation unless that corporation's contacts with the forum state are so continuous and systematic as to render the corporation "at home" there. The Supreme Court also held that a non-U.S. corporation will not be subject to a state's general jurisdiction simply because the corporation's subsidiary is "at home" in the forum state and the subsidiary's contacts with the state are imputed to the corporation. Daimler limits the situations under which a large, multinational corporation will be subject to general personal jurisdiction. As a result, plaintiffs may have more difficulty establishing jurisdiction over an foreign corporation when the claims sued upon do not arise in or relate to the forum state.

Defendant DaimlerChrysler Aktiengesellschaft ("Daimler") is a German public stock company that manufactures Mercedes-Benz vehicles in Germany. Plaintiffs were twenty-one residents and citizens of Argentina and one resident of Argentina who was also citizen of Chile. They alleged that MB Argentina, a wholly owned subsidiary of Daimler's predecessor in interest, collaborated with Argentinian state security forces to kidnap, detain, torture and kill plaintiffs and their relatives during the military dictatorship in place from 1976 through 1983. Plaintiffs sued Daimler in the United States District Court for the Northern District of California asserting claims under the Alien Tort Statute, 28 U.S.C. § 1350, and the Torture Victim Protection Act of 1991, 106 Stat. 73 (1992), as well as claims for wrongful death and intentional infliction of emotional distress under the laws of Argentina and California. Plaintiffs made no allegations that MB Argentina's purported collaboration with Argentinian authorities took place in California or in the United States.

Daimler moved to dismiss the action for lack of personal jurisdiction. Plaintiffs argued that jurisdiction over Daimler was proper because Daimler's indirect subsidiary, MBUSA, has significant contacts with California. MBUSA, which is a Delaware limited liability company that operates in New Jersey, is Daimler's exclusive importer and distributer of cars in the United States. Plaintiffs argued that MBUSA's contacts should be imputed to Daimler based upon an agency theory and that those contacts were sufficient to establish general personal jurisdiction over Daimler in California.

The district court granted Daimler's motion to dismiss for lack of personal jurisdiction. The court held that plaintiffs failed to demonstrate that MBUSA acted as Daimler's agent, and therefore, its contacts with California could not be imputed to Daimler. On appeal...