Daimler AG v. Bauman
Citation: 571 U.S. 117 (2014)
Facts
Argentinian plaintiffs sued Daimler AG (a German corporation) in the Northern District of California for human rights abuses committed by Mercedes-Benz Argentina during Argentina’s “Dirty War.” They argued that Daimler’s U.S. subsidiary, MBUSA, had substantial California contacts and that MBUSA’s contacts could be attributed to Daimler under an agency theory, making Daimler subject to general jurisdiction in California.
Issue
Can a foreign corporation be subject to general jurisdiction in a state based on the contacts of its in-state subsidiary under an agency theory?
Holding
No. The Supreme Court rejected both the agency theory and the Ninth Circuit’s approach. Even assuming MBUSA’s contacts could be attributed to Daimler, Daimler was not “at home” in California. General jurisdiction is limited to a corporation’s formal home — place of incorporation and principal place of business — except in truly exceptional circumstances.
Rule
General jurisdiction over a corporation is available only where the corporation’s “affiliations with the State are so continuous and systematic as to render it essentially at home” there. The paradigm cases are incorporation and principal place of business. A corporation doing extensive business in many states is not “at home” everywhere it does business. Agency attribution cannot expand general jurisdiction beyond these limits.
Significance
Daimler is the most important recent case on general jurisdiction and is essential for transnational litigation courses. It effectively ended the practice of suing foreign defendants in U.S. courts based on their subsidiaries’ U.S. activities, unless the defendant is truly “at home” in the forum.