[Adam N. Steinman is Professor of Law and Michael J. Zimmer Fellow at Seton Hall University School of Law. This contribution is cross-posted at Civil Procedure & Federal Courts Blog.
]
Last week the Supreme Court issued its decision in
Daimler AG v. Bauman, a case covered earlier
here and
here and
here. In many ways, the case resembles
Kiobel v. Royal Dutch Petroleum, last Term's decision on the Alien Tort Statute (ATS). The
Daimler plaintiffs had brought claims under the ATS against Daimler—a German company headquartered in Stuttgart—for human rights and other violations committed by Daimler's Argentinian subsidiary during the "dirty war" of the 1970s and 1980s. The Supreme Court's decision in
Daimler, however,
is all about personal jurisdiction, and it is not limited to the ATS context.
The Ninth Circuit had held that Daimler was subject to general personal jurisdiction in California based on the activities of its American subsidiary, MBUSA. Because it involves general jurisdiction,
Daimler is an important follow-up to the Court's 2011 decision in
Goodyear Dunlop v. Brown. Writing for a unanimous Court in
Goodyear, Justice Ginsburg explained that general jurisdiction over corporations is proper "when their affiliations with the State are so 'continuous and systematic' as to render them essentially at home in the forum State."
In
Daimler, all nine Justices conclude that it would be unconstitutional for California to exercise general jurisdiction over Daimler. Justice Ginsburg again writes for the Court, although Justice Sotomayor writes a separate concurrence that disagrees with much of Justice Ginsburg's reasoning. Parts of the decision—and some of the areas of disagreement—are harder than usual to follow because the parties either conceded or forfeited a number of potentially important points during the course of the litigation [See p.15]. That said, the most significant parts of the
Daimler decision address three issues:
(1) When can a subsidiary's activities in the forum state be attributed to the parent for purposes of general jurisdiction?
(2) More generally, when is a corporation subject to general jurisdiction under the Goodyear standard?
(3) What role (if any) do the so-called "reasonableness" factors play in the general jurisdiction context?
The majority opinion does not provide much affirmative guidance on the first question, although Justice Ginsburg rejects the Ninth Circuit's approach. The Ninth Circuit had attributed MBUSA's contacts to Daimler using an "agency theory," which "rested primarily" on the premise that "MBUSA's services were 'important' to Daimler, as gauged by Daimler's hypothetical readiness to perform those services itself if MBUSA did not exist." [p.17] Justice Ginsburg reasons that this view "stacks the deck, for it will always yield a pro-jurisdiction answer." [p.17]. Nor—on these facts—could attribution be based on Daimler's "control" over MBUSA. According to the Ninth Circuit,
