571 U.S. 117 (2014)
In 2004, twenty-two residents of Argentina filed suit in the United States District Court for the Northern District of California against DaimlerChrysler Aktiengesellschaft, a German public stock company headquartered in Stuttgart that manufactures Mercedes-Benz vehicles in Germany.1
The complaint alleged that Daimler's Argentinian subsidiary, Mercedes-Benz Argentina, collaborated with state security forces during Argentina's 1976–1983 Dirty War to kidnap, detain, torture, and kill MB Argentina workers, including plaintiffs or persons closely related to them.2 The complaint asserted claims under the Alien Tort Statute, the Torture Victim Protection Act of 1991, and California and Argentina law.3 Jurisdiction over Daimler was predicated on the California contacts of Mercedes-Benz USA, LLC, another Daimler subsidiary incorporated in Delaware with its principal place of business in New Jersey.4
MBUSA serves as Daimler's exclusive importer and distributor in the United States, purchasing vehicles from Daimler in Germany and distributing them to independent dealerships throughout the nation, including California.5 MBUSA maintains a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine.6 MBUSA's California sales accounted for 2.4 percent of Daimler's worldwide sales.7
A General Distributor Agreement between Daimler and MBUSA established MBUSA as an independent contractor that buys and sells vehicles for its own account and has no authority to make binding obligations for Daimler.
Daimler moved to dismiss the action for lack of personal jurisdiction.8 After allowing jurisdictional discovery on the agency allegations, the District Court granted the motion in November 2005 and reaffirmed the dismissal in February 2007, concluding that Daimler's own contacts with California were too sporadic and that MBUSA's contacts could not be attributed to Daimler.9 The Ninth Circuit initially affirmed but, on rehearing, reversed in 2011, holding that MBUSA was Daimler's agent for jurisdictional purposes and that its California contacts supported the exercise of general jurisdiction over Daimler.10
Daimler petitioned for rehearing and rehearing en banc, which the Ninth Circuit denied over the dissent of eight judges.11 The Supreme Court granted certiorari in 2013 to decide whether Daimler is amenable to suit in California for claims arising from events occurring entirely outside the United States and unrelated to any activity in California.12
Whether the Due Process Clause of the Fourteenth Amendment permits a court to exercise general personal jurisdiction over a foreign corporation for claims arising entirely from events outside the United States based on the contacts of its in-state subsidiary?13
The Due Process Clause of the Fourteenth Amendment limits a state's authority to exercise general personal jurisdiction over a foreign corporation.14 This authority exists only when the corporation's affiliations with the state are so continuous and systematic as to render it essentially at home in the forum state.15 The paradigm bases for general jurisdiction over a corporation are its place of incorporation and principal place of business.16
No. Daimler is a German corporation with its principal place of business in Stuttgart, Germany.17 MBUSA is a separate Delaware limited liability company with its principal place of business in New Jersey.18 The claims arise from events in Argentina with no connection to California.19 Even if MBUSA's contacts are attributed, Daimler's affiliations with California are not sufficient to render it at home there under the standard set forth in Goodyear.20
The Due Process Clause does not permit the exercise of general personal jurisdiction over Daimler in California for these claims.21
Related opinions on this issue
Justice Sotomayor concurs in the judgment that Daimler is not subject to general jurisdiction in California.22 She agrees that the Due Process Clause prohibits the exercise of personal jurisdiction over Daimler in light of the unique circumstances of this case.23 She would have decided the case on the narrower ground that the exercise of jurisdiction would be unreasonable.24
The case involves Argentine plaintiffs suing a German defendant for conduct that took place in Argentina.25 Like the plaintiffs in Asahi, respondents failed to show that it would be more convenient to litigate in California than in Germany, a sovereign with a far greater interest in resolving the dispute.26 She criticizes the majority for deciding this case on a ground that was neither argued nor passed on below.27
She also criticizes the adoption of a new proportionality test for general jurisdiction that compares in-state contacts to nationwide and worldwide operations.28
Whether MBUSA's California contacts may be attributed to Daimler under an agency theory so as to support the exercise of general jurisdiction over Daimler?29
An agency relationship may support attribution of contacts for specific jurisdiction.30 The Ninth Circuit's test based on whether the subsidiary performs important services that the parent would otherwise perform itself is inconsistent with the limits on general jurisdiction established in International Shoe and Goodyear.31
No. The Ninth Circuit's agency analysis rested on MBUSA's services being important to Daimler as gauged by Daimler's hypothetical readiness to perform those services itself if MBUSA did not exist.32 This test would subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary performing important services, an outcome that sweeps beyond the sprawling view of general jurisdiction rejected in Goodyear.33
MBUSA's contacts may not be attributed to Daimler under the agency theory advanced by the Ninth Circuit.34
Whether Daimler's own affiliations with California are sufficient to render it at home in the State for purposes of general jurisdiction?35
A corporation is at home in the forum state only when its affiliations are so continuous and systematic as to render it essentially at home.36 The paradigm examples are place of incorporation and principal place of business.37 Substantial sales in the state do not suffice if they are not the paradigm bases and would lead to general jurisdiction in every state where sales are sizable.38
No. Daimler and MBUSA are not incorporated in California and do not have their principal places of business there.39 MBUSA's California sales account for only 2.4 percent of Daimler's worldwide sales.40 If this sufficed to allow adjudication of an Argentina-rooted case in California, the same global reach would be available in every other state in which MBUSA's sales are sizable, an unacceptably grasping exercise of all-purpose jurisdiction.41
Daimler's affiliations with California are not sufficient to render it at home in the State.42