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On 14 January 2014, the U.S. Supreme Court ruled that a German corporation, Daimler, could not be sued in California for human rights violations committed in Argentina by an Argentinian subsidiary of Daimler’s predecessor company during the dirty war of 1976-1983, because California was not its “home” for the purposes of establishing general jurisdiction.
The Ninth Circuit had ruled that personal jurisdiction could be established on the basis that another Daimler subsidiary, Mercedes-Benz USA (MBUSA), was Daimler’s agent for the purposes of jurisdiction. However, Justice Ginsburg, who delivered the Opinion of the Court, was critical of the Ninth Circuit’s approach to agency, finding that their reliance on the “importance” of the services provided by the subsidiary to the parent corporation “stacked[ed] the deck” so that foreign corporations would be subject to general jurisdiction “whenever they have an in-state subsidiary or affiliate.” (Slip. Op., 17)
Notwithstanding this rebuke, the agency question was ultimately beside the point: even if one assumed that MBUSA was at home in California and its contacts were imputable to its parent, Daimler’s “slim contacts” with California meant it was not “at home” there. According to Justice Ginsburg, the Supreme Court has repeatedly declined to stretch the scope of general jurisdiction beyond traditional limits. (Slip. Op., 18-19) It is not enough to assert that a corporation is at home in a state simply because it “engages in a substantial, continuous, and systematic course of business” there; rather, the corporation must be incorporated in that state, have its principal place of business there or, exceptionally, there must be some other equally substantial connection with the state.
Although the decision is hardly surprisingly in the light of Goodyear v. Brown, it nevertheless presents a further obstacle to transnational litigation in U.S. Courts. In a passing reference to Kiobel v. Royal Dutch Petroleum, Justice Ginsburg rejected the argument that U.S. federal courts have a “strong interest in adjudicating and redressing international human rights abuses,” observing that the plaintiffs’ ATS and TVPA claims have been rendered “infirm” by Kiobel and Mohamad v. Palestinian Authority.
The facts of Kiobel raised a similar problem to the one in Bauman: Nigerian plaintiffs established jurisdiction over a English-Dutch parent corporation in a New York federal court on the basis of a New York office that managed the parent company’s listing on the New York Stock Exchange. In Wiwa v. Royal Dutch Petroleum, the Second Circuit found this was sufficient for establishing personal jurisdiction over Royal Dutch Petroleum (see Agora article). Perhaps if the Supreme Court in Kiobel had been able to dismiss the case for lack of personal jurisdiction, it may not have applied a presumption against extraterritoriality to the ability of federal judges to recognise new causes of action in ATS cases. The fact that the Supreme Court decided Bauman by examining personal general jurisdiction and not simply by applying its decision in Kiobel – the reference to the claims being “infirm” notwithstanding – supports the view that at least some Justices believe there is room under the Kiobel “touch and concern” test for transnational cases to proceed, as long as personal jurisdiction can be established.
In this respect, Bauman is Kiobel’s less controversial, but equally potent, younger brother: Kiobel limited subject matter jurisdiction in transnational human rights cases under the ATS, and now Bauman has limited the ability of courts to assert personal general jurisdiction over foreign corporations in transnational cases.
Andrew Sanger is the Volterra Fietta Junior Research Lecturer at Newnham College and the Lauterpacht Centre for International Law, University of Cambridge.