Citation. 134 S. Ct. 746 (2014)
Brief Fact Summary.
Plaintiffs sued Defendant in California for actions occurring outside of the U.S., arguing that general jurisdiction was established on the Defendant’s subsidiary company having substantial contacts in California.
Synopsis of Rule of Law.
A forum state has general jurisdiction over a corporation when the corporation’s affiliations with the state are so “continuous and systematic” as to render them “at home” in that state.
Argentinian residents (Plaintiffs) allege that Mercedes-Benz Argentina collaborated with the Argentinian government to kidnap, detain, torture, and kill Plaintiffs and their relatives during Argentina’s Dirty War. No part of the allegations took place in California or the United States. Plaintiffs brought suit for their claims in California against Daimler (Defendant), through the Defendant’s subsidiary Mercedes-Benz USA. Defendant’s subsidiary’s principal place of business is New Jersey but has multiple facilities in California, where it is the largest supplier of luxury vehicles. The Defendants argued California lacked general jurisdiction over the suit.
Can a state exercise general jurisdiction over a defendant for a suit involving only foreign plaintiffs and conduct that occurred abroad?
No, the state does not have general jurisdiction. The lower court’s decision is reversed.
Justice Sotomayor agreed with the Court’s judgment but argued that the Court wrongly compared the Defendant’s contact with California to other states rather than focusing solely on the Defendant’s connection to California. She also argued that the Court’s rule would curtail state sovereign power, harm small businesses, create incongruous results, and shift the risk of loss to individuals harmed by larger corporations.
Relying on precedent, the Court determined that, for purposes of establishing personal jurisdiction, a corporation is considered at home in its place of incorporation or its principal place of business. Here, general jurisdiction was not proper in California because the Defendant and its subsidiaries were not incorporated and did not have principal places of business in California.