Daimler AG v. Bauman

Facts

Daimler is a German public stock company, headquartered in Stuttgart, that manufactures Mercedes-Benz vehicles in Germany. During Argentina’s 1976–1983 “Dirty War,” Daimler’s Argentinian subsidiary, Mercedes-Benz Argentina (MB Argentina), allegedly worked with state security forces to kidnap, detain, torture, and kill some MB Argentina workers, among them the later plaintiffs or people closely related to them. None of the alleged conduct took place in California or anywhere else in the United States. In 2004, 22 Argentinian residents sued Daimler in a federal district court in California. They sought to hold Daimler vicariously liable under the Alien Tort Statute, the Torture Victim Protection Act, and the laws of California and Argentina. To reach Daimler, the plaintiffs relied on the California contacts of Mercedes-Benz USA, LLC (MBUSA), an indirect Daimler subsidiary incorporated in Delaware with its principal place of business in New Jersey. MBUSA was Daimler’s exclusive importer and distributor in the United States. It bought cars from Daimler in Germany and distributed them to independent dealerships across the country. It had a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine. It was the largest supplier of luxury vehicles to the California market, and its California sales made up 2.4% of Daimler’s worldwide sales. The two companies’ distribution agreement described MBUSA as an independent contractor, not Daimler’s agent.

Issues

1. Does the Due Process Clause of the Fourteenth Amendment allow courts in California to exercise general jurisdiction over Daimler, a German company, on claims by foreign plaintiffs about conduct that took place entirely outside the United States, based on the California contacts of its American subsidiary?
2. Is a corporation subject to general jurisdiction in every State in which it carries on a substantial, continuous, and systematic course of business?

Holding

Even assuming MBUSA was at home in California and its contacts could be attributed to Daimler, Daimler was not at home in California. Due process therefore barred California courts from exercising general jurisdiction over Daimler on claims about MB Argentina’s conduct in Argentina.