Facts
- Twenty-two Argentine residents sued Daimler AG, a German corporation headquartered in Germany, alleging that its Argentine subsidiary collaborated with state forces during Argentina’s “Dirty War” to commit kidnappings, detention, torture, and killings of workers.
- Plaintiffs asserted claims under the Alien Tort Statute, the Torture Victim Protection Act, and state and foreign law.
- Plaintiffs filed in federal court in California, seeking to establish personal jurisdiction over Daimler based on the California contacts of Mercedes-Benz USA, LLC (MBUSA), a Daimler subsidiary incorporated in Delaware with its principal place of business in New Jersey.
- MBUSA distributed Daimler-manufactured vehicles to independent U.S. dealerships, including in California; the alleged injuries arose from conduct in Argentina by a different subsidiary (Mercedes-Benz Argentina), not from conduct in California.
Issues
- Whether due process permits California to exercise general (all-purpose) personal jurisdiction over Daimler for claims based on foreign conduct by a foreign subsidiary, premised on the forum contacts of Daimler’s in-state subsidiary.
- What standard governs corporate general jurisdiction—whether “continuous and systematic” contacts alone suffice or whether the corporation must be “essentially at home” in the forum.
- Whether a subsidiary’s forum contacts may be attributed to a foreign parent for general jurisdiction under a broad “agency” theory.
Decision
- The Supreme Court reversed the Ninth Circuit and held Daimler was not subject to general jurisdiction in California on these claims.
- The Court stated that general jurisdiction over a corporation exists only where its affiliations with the forum are so continuous and systematic as to render it “essentially at home” there.
- The Court treated a corporation’s place of incorporation and principal place of business as the paradigmatic forums for general jurisdiction, with only rare exceptional cases elsewhere.
- Even assuming MBUSA’s California contacts could be attributed to Daimler, those contacts did not make Daimler “at home” in California given Daimler’s overall operations and global business.
- The Court rejected the Ninth Circuit’s agency approach as overly expansive because it would make general jurisdiction turn on whether a subsidiary performs functions “important” to the parent, a rationale that would commonly apply to typical corporate structures.
Legal Principles
- General jurisdiction is distinct from specific jurisdiction; general jurisdiction allows adjudication of claims unrelated to the forum contacts only when the defendant is “essentially at home” in the forum.
- For corporations, being “essentially at home” ordinarily means the place of incorporation and principal place of business; substantial sales or business activity in a state, without more, is insufficient.
- Placing products into the stream of commerce and engaging in continuous in-forum business may support specific jurisdiction in appropriate cases but does not, by itself, justify general jurisdiction.
- A broad agency theory that attributes a subsidiary’s forum contacts to the parent merely because the subsidiary’s services are important to the parent is inconsistent with due process limits on all-purpose jurisdiction.
- Due process limits on general jurisdiction reflect fairness constraints and, in cases involving foreign parties and foreign conduct, implicate international comity concerns.
Conclusion
The Court held that California lacked general jurisdiction over Daimler for claims arising from alleged human-rights abuses in Argentina because Daimler was not “essentially at home” in California, and the in-state activities of a subsidiary distributor could not expand all-purpose jurisdiction beyond due process limits.