Posts Tagged Piercing the corporate veil
Update 18 October 2019 BMS was applied in Slemp v Johnson & Johnson.
I have reported before (search tag ‘CSR’ or ‘ATS) on the personal jurisdiction cases in US litigation. The United States Supreme Court this morning held in Bristol-Meyers Squibb, BMS for short. For background see earlier reporting in this post. California was held not to have jurisdiction for claims brought by non-residents. In her dissenting Opinion justice Sotomayor notes the important impact of the ruling, suggesting that a corporation that engages in a nationwide course of conduct cannot now be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State. Precedent evidently includes Bauman.
Judgment and opinion include many interesting takes on personal jurisdiction and how it should be managed.
Kenneth Argentieri and Yuanyou (Sunny) Yang have an interesting suggestion here, that ‘plaintiffs will continue to develop creative arguments to obtain jurisdiction over defendants in their preferred jurisdictions, for example, by arguing that a corporation’s registration to do business in a state or designation of an agent to accept service in a state constitute consent to the jurisdiction in that state. Circuit and state courts are currently split on this issue, and the United States Supreme Court has not yet ruled on it.’ We are not a the end of the personal jurisdiction road.
02-md-1499, Alien Tort Statute, Apartheid, BMS, Bristol Meyers, Colonialism, Comity, Corporate social responsibility, CSR, Daimler, DaimlerChrysler, DaimlerChrysler v Bauman, Extraterritoriality, Germany, http://opiniojuris.org/wp-content/uploads/17-Apr-SDNY-Opinion.pdf, https://www.supremecourt.gov/opinions/16pdf/16-466_1qm1.pdf, Human rights, In re South African Apartheid Litigation, Jurisdiction, Kiobel, Lungisile Ntsebeza et al v Ford General motors and IBM, Namibia, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, SC, SCOTUS, Slemp v Johnson & Johnson, Tort, United States Supreme Court, USSC
Thank you very much indeed Sarah Venn and Emma Hynes both for flagging Garcia v BIH, Total Gabon and Sigma,  EWHC 739 (Admlty), and (Emma) for providing me with copy (Bailii are not yet running it). This case is extremely suited to an oral exam of conflict of laws: in a written exam to many issues would have to be discussed. (Mine this term are mostly written. Hence I’ll run this piece early).
Claimant is a French national who worked as a professional diver offshore Gabon, West Africa, and suffered catastrophic brain injury which he blames on poor working practices on the second defendant’s site (Total Gabon), which is where he was working. He was employed by first defendant BIH, a UK based company, with choice of court and governing law made for English courts cq English law. First defendant is clearly domiciled in the UK and the Brussels I Regulation clearly applies to it. The third defendant Sigma, was contracted by Total Gabon. Claimant’s position is that he was deployed by BIH to work under the control of Sigma on the site which was, or should have been, supervised by Total Gabon. Total Gabon claim the contractual relationships between it and Sigma prevent a claim against the former.
BIH is small fish which may even have been struck off the company register. It is clear that plaintiff will not receive from BIH the amounts he needs for his constant medical care.
A default judgment was issued against BIG who did not engage with proceedings – at any rate jurisdiction against BIG per Owusu (with which readers of this blog are now ad nauseam familiar) could not be dismissed; . Total Gabon contest jurisdiction on the basis that England and Wales is not the appropriate forum.
This is not said in so many words in the Judgment however the presence of an anchor defendant per Article 4 Brussels I Recast, is of no relevance where the co-defendants are not domiciled in the EU. The regulation cannot be used to justify such anchor, residual conflicts rules take over.
Jervis Kay QC AR considers many cases which I have reported on before: VTB, Owusu, Lungowe, Spiliada. Lungowe in particular is considered by Mr Kay, including the issue of abuse of the use of anchor defendants and (at 23 in fine) the acknowledgment, implicitly (I wrote it explicitly in my review of the case) that of course EU precedent in this respect is pro inspiratio only. Applying English residual conflicts rules, the judge then reviews whether there is a serious case (‘a real prospect of succeeding’) that could be made against Total Gabon, either one in tort or one in contractual liability. He found there is such real prospect, for both, but especially for tort.
However the case eventually (access to justice issues in Gabon were not flagged neither discussed) stumbles on the question whether the English courts would be the most appropriate forum: it is found they are not. Inspiration is found especially in Erste Group Bank  EWCA Civ 379, a case in which forum non conveniens was applied even against an England-domiciled defendant because there had already been submission to Russian jurisdiction. In Garcia, the Court applies Erste per analogiam: the parallel, Mr Kay suggests, is that the case against the first defendant has effectively been wrapped up. The spectre of competing judgments therefore, Mr Kay holds, does not arise (at 36) and England is therefore not the appropriate forum. If the case is appealed I would imagine this altogether brief consideration of appropriateness and the parallel seen with Erste, I would imagine would be its Achiless heel.
(One of the considerations which defendant, per VTB, considers, is that as a rule of thumb, Gleichlauf is to be preferred (I have often found this a less attractive part of the Supreme Court’s ruling). Which is why defendant considers Rome II: if the English courts were to hear the case, they would have to apply Rome II even if their jurisdiction is a result of residual English conflicts rules).
An alternative action for Mr Garcia, one imagines, would have been (or perhaps it still is) to use Total France SA as anchor in France, to try and have the subsidiary’s actions assigned to it: a more classic CSR case.
Anyways, I think you will agree that one could have a good chinwag on this judgment at oral exam.
Dutch Shell Nigeria / Royal Dutch Shell ruling: anchor jurisdiction confirmed against Nigerian daughter.
Update 21 March a mirror case is going ahead in the High Court in London: jurisdiction against the mother company again is easily established because of Shell’s incorporation in the UK (its corporate headquarters are in The Netherlands (which is also where it has its tax residence). The High Court has allowed proceedings against Shell Nigeria to be joined. Shell is expected to argue forum non conveniens at a later stage.
Postscript 1 March 2016 in Xstrata Limited /Glencore Xstrata plc ., similar issues of corporate social responsibility and liability for a subsidiary’s actions are at stake.
As I have reported in December, the Gerechtshof Den Haag confirmed jurisdiction against Shell’s Nigerian daughter company. (Please note the link first has the NL version of the judmgent, followed by an EN translation). The proceedings can be joined with the suit against the mother company Royal Dutch Shell (RDS, headquartered in The Netherlands whence easily sued on the basis of Article 4 Brussels I Recast (Article 2 of the Regulation applicable to the proceedings)). I have finally gotten round to properly reading the court’s judgment (which deals with jurisdiction issues only). As I have pointed out, Article 6(1) (now 8(1) of the Brussels I Recast) cannot be used against defendants not domiciled in the EU. Dutch rules on joinders applied therefore. The Gerechtshof however took CJEU precedent into account, on the basis that the preparatory works of the relevant Dutch rules on civil procedure reveal that they were meant to be so applied. Consequently a lot of CJEU precedent is reviewed (the most recent case quoted is CDC). The Gerechtshof eventually holds that lest it were prima facie established that liability of RDS for the actions committed by its Nigerian daughter is clearly unfounded, use of RDS as an anchor can go ahead. Only clearly abusive attempts at joinders can be sanctioned. (A sentiment most recently echoed by the CJEU in Sovag).
The Gerechtshof Den Haag, without being definitive on the issue, also suggested that applicable law for considering whether merger operations inserting a new mother company were abusive (merely carried out to make Royal Dutch Shell escape its liability), had to be addressed using ‘among others’ the lex incorporationis (at 3.2). That is not undisputed. There are other candidates for this assessment.
The judgment being limited to jurisdiction, this case is far from over.
European private international law, second ed. 2016, Chapter 8, Headings 184.108.40.206., 8.3.2
Anchor defendant, Brussel I Verordening, Brussels I Regulation, Chandler v Cape, Corporate social responsibility, CSR, EEX Verordening, Extraterritoriality, http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2013:BY9854, https://milieudefensie.nl/publicaties/bezwaren-uitspraken/shell-rechtszaak-memorie-van-grieven-van-shell-in-hoger-beroep, Internationaal privaatrecht, IPR, JR, Jurisdiction Regulation, Kiobel, Lex loci damni, Lex loci delicti commissi, Milieudefensie, Mother company, Onrechtmatige daad, piercing, Piercing the corporate veil, Regulation 44/2001, Regulation 864/2007, Rome II Regulation, Rylands v Fletcher, Shell, Shell Nigeria, Tort
Update 21 June 2016 see also application with respect to the extraterritorial impact of the US ‘Rico’ (anti-racketeering) Act in RJR Nabisco, Inc. V European Community.
In Ranza v Nike, the Court of Appeal for the ninth circuit confirmed the high hurdle to establish personal jurisdiction over foreign corporations in the US, following the Supreme Court’s decisions in Kiobel and Bauman /Daimler. Trey Childress has good summary here and I am happy largely to refer.
Loredana Ranza is a US citisen, resident in the EU (first The Netherlands; Germany at the time of the court’s decision). She seeks to sue against her Dutch employer, Nike BV, and its parent corporation, Nike inc. for alleged violation of federal laws prohibiting sex and age discrimination. The Dutch equality Commission had earlier found the allegations unfounded under Dutch law.
Of particular interest are the Court’s views on the attributability test /piercing the corporate veil following Daimler and Kiobel. The Court held (p.15 ff) that prior to Daimler, personal jurisdiction over the mother company could be established using either the agency or the alter ego test, with the former now no longer available following Daimler. Under the Agency test, effectively a type of abus de droit /fraus /fraud, plaintiff needed to show that the subsidiary performed services which were sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation’s own officials would undertake to perform substantially similar services. Daimler, the Court suggested in Ranza, held that the agency test leads to too broad a jurisdictional sweep. That leaves the alter ego test: effectively, whether the actions prima facie carried out by the subsidiary, are in fact carried out by the mother company for it exercises a degree of control over the daughter which renders that daughter the mother’s alter ego. Not so here, on the facts of the case: Nike Inc, established in Oregon, is heavily involved in Nike BV’s macromanagement, but not so ‘enmeshed’ in its routine management of day-to-day operation, that the two companies should be treated as a single enterprise for the purposes of jurisdiction.
For good measure, the Court also confirmed application of dismissal of jurisdiction on the basis of forum non conveniens.
764 F. 3d 129, Alien Tort Statute, alter ego, attributability, Comity, Corporate social responsibility, CSR, DaimlerChrysler, DaimlerChrysler v Bauman, daugther company, Extraterritoriality, FNC, Forum non conveniens, http://cdn.ca9.uscourts.gov/datastore/opinions/2015/07/16/13-35251.pdf, http://www.supremecourt.gov/opinions/13pdf/11-965_1qm2.pdf, https://www.law.cornell.edu/supremecourt/text/15-138?utm_source=@USSupremeCourt, Human rights, Jurisdiction, Kiobel, Mother company, Nike, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, RJR NABISCO, INC. v. EUROPEAN COMMUNITY, SC, United States Supreme Court, USSC
Postscript 1 March 2016 in Xstrata Limited /Glencore Xstrata plc ., similar issues of corporate social responsibility and liability for a subsidiary’s actions are at stake.
Postscript 18 December: quick update, more to follow: in an interim judgment, jurisdiction was upheld.
I have earlier referred to Shell’s arguments in appeal (in Dutch) on the specific issue of jurisdiction, which may be found here . Judgment in first instance in fact, as I reported, generally was quite comforting for Shell (and other holding companies in similar situations) on the issue of substantive liability.
However on jurisdiction, the Dutch court’s approach of joinders under residual national jurisdictional rules, was less comforting. The rules on joinders, otherwise known as ‘anchor defendants’, in the Brussels regime (Brussels I as well as the Recast) do not apply to defendants domiciled outside of the EU. Consequently national rules of civil procedure decide whether an action against a daughter company, established outside of the EU, can be successfully anchored to an action against the mother company (against which jurisdiction is easily established per Article 4 of the Recast, Article 2 of the former Regulation). In first instance, the Court at The Hague ruled in favour of joining a non-EU defendant to a case against its mother company in The Netherlands.
In its submission for appeal, Shell (with reference to relevant national case-law) borrows heavily from CJEU case-law on what was Article 6(1) (now Article 8(1)), suggesting that Dutch residual law was meant to apply as a mirror the European regime, with one important difference: precisely the issue that under the Dutch regime, none of the parties need to be domiciled in The Netherlands. Any jurisdictional rule which leads the Dutch courts to accept jurisdiction against one defendant, even if that anchor defendant is not domiciled in the country, can lead to others being drawn into the procedure. This means, so Shell suggests, that the Dutch rule (Article 7(1) of the Dutch code of civil procedure) is more in need of precautions against abuse, than the equivalent European rule.
As part of the efforts to avoid abuse, the Dutch courts need to make a prima facie assessment of the claims against the anchor defendant: for if those claims are spurious, anchoring other claims to such loose ground would be abusive. On this point, the Court of Appeal will have to discuss the corporate veil, piercing it, Chandler v Cape etc. Shell’s submission does not in fact argue why piercing needs to be assessed by the lex causae (here: Nigerian law as the lex loci damni) and not, for instance, by the lex fori. I doubt the Court of appeal will raise it of its own accord. (See here for a consideration of the issues in an unrelated area and further pondering here).
A little bird tells me that appeal judgment will be issued on 18 December. I may or may not be able to review that before the Christmas break. In the negative, it will have to be an Epiphany posting. (Potentially in more than one meaning of the word).
Artikel 7 lid 1 Rv, Brussel I Verordening, Brussels I Regulation, Chandler v Cape, Corporate social responsibility, CSR, ECLI:NL:GHDHA:2015:3586, ECLI:NL:GHDHA:2015:3587, ECLI:NL:GHDHA:2015:3588, ECLI:NL:RBDHA:2013:BY9854, EEX Verordening, Extraterritoriality, http://uitspraken.rechtspraak.nl/#ljn/BY9854, http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHDHA:2015:3586, https://milieudefensie.nl/publicaties/bezwaren-uitspraken/shell-rechtszaak-memorie-van-grieven-van-shell-in-hoger-beroep, Internationaal privaatrecht, IPR, JR, Jurisdiction Regulation, Kiobel, Lex loci damni, Lex loci delicti commissi, Lis alibi pendens, Milieudefensie, Mother company, Onrechtmatige daad, piercing, Piercing the corporate veil, Regulation 44/2001, Regulation 864/2007, Rome II Regulation, Rylands v Fletcher, samenspraak, Shell, Shell Nigeria, Tort, tussenvonnis, Xstrata Limited / Glencore Xstrata plc
Doe v Nestle and Tiffany v China Merchants Bank et al: The concertina effect of the Alien Torts Statute
Update 27 May 2020 thank you Russell Hopkins for flagging the US Government amicus curiae brief on this (and the Cargill) case.
Update 8 July 2019 for the latest in the Doe v Nestle case see the Court of Appeals for the Ninth circuit here. The majority held that held that plaintiffs allege concrete and redressable injury that was fairly traceable to the challenged conduct of one defendant, and their allegations against another defendant were sufficient to allow a final opportunity to replead. This gives them enough standing for the case to continue on the merits.
I may yet have to insert a special category ‘ATS’ in the ‘Categories’ on the right hand side of this blog. Distinguishing, and precedent application alike keep on stretching cq enforcing the USCC’s decision in Kiobel.
On the precedent side of the debate, Tiffany v China Merchants Bank et al , the US Second Circuit Court of Appeals took the application of Kiobel in Daimler as cue for a refusal of the recognition of Asset Restraints and Discovery Orders against a Bank with merely branch offices in New York. The Bank’s sites of incorporation and principal places of business are all outside of the US. With reference to Daimler, the Court held that there is no basis on which to conclude that the Bank’s contacts in New York are so ‘continuous and systematic’ judged against their national and global activities, that they are ‘essentially at home’ in the State.
The Ninth Circuit Court of Appeals in Doe v Nestle reversed the lower court’s decision to dismiss ATS claims and arguably indeed adopted an extensive view of ‘aiding and abetting’ within the context of ATS: ‘Driven by the goal to reduce costs in any way possible, the defendants allegedly supported the use of child slavery, the cheapest form of labor available. These allegations explain how the use of child slavery benefitted the defendants and furthered their operational goals in the Ivory Coast, and therefore, the allegations support the inference that the defendants acted with the purpose to facilitate child slavery.’ : these allegations were considered to even meet the supposedly stricter ‘purpose’ test. Defendant’s market power and control over operations abroad seemed to have played an important role.
Applicants have now been allowed to re-plead given the intervening judgments by the USSC (the Doe v Nestle case has been running for a while)- watch this space, yet again.
17-55435, Alien Tort Statute, Asset Restraints and Discovery Orders, ATS, Comity, Corporate social responsibility, CSR, DaimlerChrysler, DaimlerChrysler v Bauman, Doe v Nestle, Extraterritoriality, http://cdn.ca9.uscourts.gov/datastore/opinions/2014/09/04/10-56739.pdf, http://cdn.ca9.uscourts.gov/datastore/opinions/2019/07/05/17-55435.pdf, Human rights, Inc. v. Bank of China, Jurisdiction, Kiobel, Nestle, Piercing the corporate veil, Recognition, Recognition and enforcement, Regulation 1215/2012, Rio Tinto, SC, SCOTUS, Tiffany, Tiffany (NJ) LLC v. China Merchants Bank and Gucci America, Touch and concern, United States Supreme Court, USSC
In Anglo-American South Africa, the Court of Appeal held mid July on the application of the definition of corporate ‘domicile’ in the Brussels I-Regulation. Specific context was the use of the English courts under the Brussels I Regulation, by a Botswana-born plaintiff, against a South Africa incorporated company, part of the Anglo-American PLC group of companies. Anglo-American itself are incorporated in England, hence a case against them would have been straightforward (under Article 2 of the Regulation) however would not have had any merit: there was no suggestion that Anglo-American were in any way at fault for the behaviour of one of the employees of one of their corporate affiliates.
For a company, legal person or association of natural persons, Article 60 of the Regulation (in contrast with the provision for natural persons, which refers to national conflicts law to determine the concept) aims to encourage harmonisation by listing three possible locations only, for the determination of corporate domicile: statutory seat (a term not known in English or Irish law: hence Article 60(2) refers to registered office or place of incorporation; central administration; and principal place of business.
Evidently this troika of criteria does not rule out positive jurisdiction conflicts – it does help address negative ones (ie where no court claims jurisdiction).
It was for the Court of Appeal to decide whether under the rules of the Brussels I-Regulation, AASA could be found to have their central administration in England (place of incorporation and principal place of business not having any calling). Justifiable reference was made to the fact that the concept needs to be given an EU (‘autonomous’) meaning. ECJ case-law on the exact issue is however, non-existent (reference in the judgment was made to Daily Mail, ECJ case-law on the freedom of establishment, and to relevant German case-law).
Aikens LJ essentially agreed with the analysis in first instance by Smith J, that ‘the correct interpretation of “central administration” in Article 60(1)(b), when applied to a company, is that it is the place where the company concerned, through its relevant organs according to its own constitutional provisions, takes the decisions that are essential for that company’s operations. That is, to my mind, the same thing as saying it is the place where the company, through its relevant organs, conducts its entrepreneurial management; for that management must involve making decisions that are essential for that company’s operation’. (at 45).
This is in contrast with (at 39) both place of incorporation, and principal place of business: ‘the first is the domicile for the purpose of the internal laws of the state where the company is incorporated. It will usually be identified in its Memorandum and Articles of Association or equivalent. The third is the place where the company does its principal “business”. Where that is must be a question of fact in each case.‘
The case is an interesting attempt at forum shopping, with a certain relevance for the corporate social responsibility debate: by suggesting that the place of central administration is the very head of the corporate spider web, plaintiffs can sue directly in Europe. This case shows however that such suggestion is not easily substantiated. Neither would it necessarily assist much at the applicable law stage.
Acte claire, Anglo-American, Article 60, Brussels I, Brussels I Regulation, Central administration, Corporate domicile, Corporate social responsibility, CSR, Domicile, EEX, EEX Verordening, Forum shopping, http://www.bailii.org/ew/cases/EWCA/Civ/2014/1130.html, Jurisdiction, Jurisdiction Regulation, Parent, piercing, Piercing the corporate veil, Subsidiary, Young v Anglo American South Africa Limited  EWCA Civ 1130.
‘Apartheid’ dismissed and Al-Shimari distinguished: The bar is high for the ATS’ touch and concern test
For readers unfamiliar with earlier posts on the Alien Torts Statute and its role in the corporate social responsibility debate, the title of this piece may sound like gobbledygook. Review of the interim ruling in Apartheid probably helps. As I noted in that piece, Scheindlin USDJ instructed counsel to brief on the ‘touch and concern’ test put forward by the Supreme Court in Kiobel, with the warning that they must show in particular that the companies concerned acted ‘not only with the knowledge but with the purpose to aid and abet the South African regime’s tortious conduct as alleged in these complaints’.
Having now reviewed those extra briefs, she has decided that the high bar set by the USCC in Kiobel was not met in current case. She distinguished (at p.18) the case from Al-Shimari, for the alleged violation of international law was inflicted by the South African subsidiaries of the US defendant corporations, over whom defendants may have exercised control however control alone, it transpires, is not enough to create sufficient link with the US to meet the Kiobel test.
Applicants had previously already argued that critical policy level decisions were made in the US, and that the provision of expertise, management, technology and equipment essential to the alleged abuses came from the US. This has now, so it would seem, been further backed up by detailed facts however even these facts did not graduate so to speak the US companies’ involvement from management and effective control to ‘aiding and abetting’ as Scheindlin USDJ had instructed counsel to show.
Similarish issues are at stake in trying to subject activities taking place outside the EU, to EU law by virtue of companies’ EU headquarters.
02-md-1499, Alien Tort Statute, Apartheid, Comity, Corporate social responsibility, CSR, DaimlerChrysler, DaimlerChrysler v Bauman, Extraterritoriality, Human rights, In re South African Apartheid Litigation, Jurisdiction, Kiobel, Lungisile Ntsebeza et al v Ford General motors and IBM, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, SC, SCOTUS, Touch and concern, United States Supreme Court, USSC
Update 19 June 2017. SCOTUS held today in BMS and rejected jurisdiction.
Update 8 May 2017. Transcipt of pleadings issued in BMS and background here.
Update 12 January 2017 Bristol-Myers, if certiorari will be granted, will further define the limits to the Daimler case-law. Notice how Bristol-Myers, in their certiorari submission, emphasise predictability for the defendant: a sentiment often found in EU private international law. Update 19 January 2017. Certiorari granted.
Update 6 January 2017 a new case has just been launched in New York, against Germany, re its colonial past in Namibia, which one imagines will test both sovereign immunity and ATS.
(Update 3 September 2014: case dismissed end of August). Previous Update 25 July 2014: Docket still shows active case but no further development).
(Update on linked development: in April 2015, SCOTUS denied certiorari in Chiquita, in whuich the CA had applied Kiobel restrictively).
In Kiobel, the USSC /SCOTUS held on the basis of extraterritoriality: under what circumstances may US courts recognize a cause of action under the Alien Torts Statute, for violations of the law of nations, occurring within the territory of a sovereign other than the United States? In focusing on this question (and replying in the negative), the SC did not entertain the question which actually led to certiorari, namely whether the law of nations recognises corporate liability.
Soon after the same USSC held in Daimler that 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.”
In the ‘Apartheid litigation’ [Lungisile Ntsebeza et al v Ford General motors and IBM], the Southern District of New York picked up the issue where SCOTUS had left it: can corporations be held liable under the Alien Tort Statute (“ATS”) for violations of “the law of nations”‘? Scheindlin USDJ held they can on 17 April last [Xander Meise Bay has a good overview of the successive litigation here]. She firstly held that it is federal common law that ought to decide whether this is so – not international law itself (ATS being a federal US Statute). Next she argued that the fact in particular (withheld by Jacobs J in Kiobel) that few corporations were ever held to account in a court of law for violations of public international law was not instrumental in finding against such liability.
Counsel have now been instructed to brief on the ‘touch and concern’ test put forward by the Supreme Court in Kiobel, with the warning that they must show in particular that the companies concerned acted ‘not only with the knowledge but with the purpose to aid and abet the South African regime’s tortious conduct as alleged in these complaints’. A strict timetable for arguments has been laid down whence the wait for further development should not be too long. (Update 25 July 2014: Docket still shows active case but no further development; Update 3 September 2014: case dismissed end of August).
02-md-1499, Alien Tort Statute, Apartheid, BMS, Bristol Meyers, Colonialism, Comity, Corporate social responsibility, CSR, Daimler, DaimlerChrysler, DaimlerChrysler v Bauman, Extraterritoriality, Germany, http://opiniojuris.org/wp-content/uploads/17-Apr-SDNY-Opinion.pdf, Human rights, In re South African Apartheid Litigation, Jurisdiction, Kiobel, Lungisile Ntsebeza et al v Ford General motors and IBM, Namibia, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, SC, SCOTUS, United States Supreme Court, USSC
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).
Alien Tort Statute, Comity, Corporate social responsibility, CSR, DaimlerChrysler, DaimlerChrysler v Bauman, Extraterritoriality, http://www.illinoiscourts.gov/Opinions/SupremeCourt/2017/121281.pdf, http://www.supremecourt.gov/opinions/13pdf/11-965_1qm2.pdf, Human rights, Jurisdiction, Kiobel, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, SC, United States Supreme Court, USSC
- ‘Like Dassonville on steroids’. Bobek AG in Rheinland on personality v territoriality, the nature of EU harmonisation, and its links with (as well as historic roots of) conflict of laws and regulatory competition. 29/07/2020
- Avonwick Holdings. The High Court awkwardly on locus damni, and on ‘more closely connected’ in Rome II. 24/07/2020
- CJEU in Novo Banco: confirms mere presence of a natural person’s core immovable asset (the ‘family home’) does not in itself determine COMI (in insolvency). 22/07/2020
- The Hungarian Supreme Court on conduct in litigation resulting in implied choice of law. 21/07/2020
- Forum non and infringing copyright in the air: The Performing Rights Society v Qatar Airways. 20/07/2020
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