USSC rejects US jurisdiction in Daimler v Bauman. General jurisdiction not easily eastablished lest in a company’s true home.

Update For a September 2017 application see the Illinois Supreme Court in Aspen Insurance v Interstate Warehousing.

The United States Supreme Court on 14 January rejected US jurisdiction in Daimler v Bauman.  See previous posting on this case here and ultra-short reference here. Chief Justice Roberts’ and concurring opinions in Kiobel leave room for further distinguishing.  Daimler does less so. The Court in the end did not focus too much on the issue of agency and attributability of a subsidiary’s actions to the mother company (Daimler is a German corporation that was sued in California by Argentinian plaintiffs for human rights violations in Argentina. The Californian link was a subsidiary which distributes cars there but which is not incorporated there: its corporate home is Delaware).

As William Baud points out, the USSC (as indeed do highest courts of the land elsewhere) does not necessarily decide on the points which counsel would like it to decide. Instead, the USSC generally upholds a restrictive view of general jurisdiction. Per International Shoe [see also Dwight Healy and Owen Pell], general jurisdiction other than in the State of incorporation applies only (in the case of foreign companies) when a foreign company’s “continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.”

If you want to sue a company on the basis of its having its ‘home’ in the forum, then that home better be exactly that. Not, as here, merely a condo in the US when its true home lies in Germany.

Generally,  the USSC held that a state court may exercise general jurisdiction over out-of-state corporations when their “affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.”

(Writing for the majority) Judge Ginsburg (p.23) noted the difference between the Court of Appeal’s approach and the EU approach when it comes to overall personal jurisdiction over corporations (she referred to the recast Brussels I Regulation, 1215/2012, which is yet to apply but which in substance on this issue does not differ from the previous version). However in reality there is quite a different direction (compared to Daimler) which the EU takes vis-a-vis foreign corporations, in the particular context of B2B consumer contracts as well as employment contracts (an entirely different subject-matter, I appreciate).

Geert.

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