Eight Justices of the U.S. Supreme Court today cut short an effort to use a state long-arm statute to hold a multinational corporation accountable for human rights abuses.
The judgment in Daimler AG v. Bauman thus freed the defendant, a corporation whose subsidiary, Mercedes-Benz USA, “is the largest supplier of luxury vehicles to the California market,” from a 2004 lawsuit brought by 22 Argentinians. As Justice Ruth Bader Ginsburg (above right) explained in her opinion for the Court, plaintiffs alleged that Mercedes’ Argentina subsidiary had
collaborated with Argentinian state security forces to kidnap, detain, torture, and kill plaintiffs and their relatives during the military dictatorship in place there from 1976 through 1982, a period known as Argentina’s “Dirty War.”
The multi-count suit was on shaky footing even before the Court heard argument last October. The Court’s application of a presumption against extraterritorial jurisdiction in Kiobel v. Royal Dutch Petroleum Co. (2013) impaired counts based on the Alien Tort Statute; similarly, the Court’s ruling in Mohamad v. Palestinian Authority (2012) that only human beings may be held liable under the Torture Victim Protection Act gutted counts based on that statute. Left were counts that looked to California’s long-arm statute, which permits a court to exercise personal jurisdiction provided that the state and federal constitutions so permit. It was this proviso that ended the case: Ginsburg wrote at footnote 20 that whether a court enjoyed general jurisdiction over a corporate defendant depended not only
‘on the magnitude of the defendant’s in-state contacts,’
but also on
a corporation’s activities in their entirety, nationwide and worldwide.
Applying this reasoning, the Court concluded that the named defendant lacked sufficient contacts with California, so that the Due Process Clause of the 14th Amendment to the U.S. Constitution forbade the exercise of “general” or “all-purpose” jurisdiction.
Ginsburg’s opinion for the Court further placed the holding within “the transnational context”: quoting a 2001 article by Friedrich K. Juenger (a since-departed and much-missed Cal-Davis colleague of mine), Ginsburg wrote that the Court’s withholding of jurisdiction jibed with practice in the European Union, and thus avoided “risks to international comity.”
The Court’s reasoning drew sharp criticism from Justice Sonia Sotomayor (above left). In a separate opinion sure to provoke much discussion among civil procedure profs, Sotomayor complained that
the Court decides this case on a ground that was neither argued nor passed on below,
and in so doing
unduly curtails the States’ sovereign authority to adjudicate disputes against corporate defendants who have engaged in continuous and substantial business operations within their boundaries,
with the result of
shift[ing] the risk of loss from multinational corporates to the individuals harmed by their actions.
Notwithstanding her stated concern for the interests of individuals, even Sotomayor ruled against the plaintiffs in this case. She advanced a “far simpler ground,” which bore echo with the Court’s 2013 decision in Kiobel: “exercise of jurisdiction would be unreasonable given that the case involves foreign plaintiffs suing a foreign defendant based on foreign conduct,” she wrote, adding, in an apparent reference to the courts of Argentina, “that a more appropriate forum is available.”
Sotomayor’s concurrence in the judgment thus underscores the Court’s current reluctance to provide a human rights accountability forum like that sought by these plaintiffs.