Daimler AG v. Bauman

In Daimler AG v. Bauman (2014) 571 U.S. 134 S. Ct. 746, a group of Argentinian plaintiffs injured in Argentina filed suit in California against DaimlerChrysler Aktiengesellschaft (Daimler), a German company that manufactures Mercedes-Benz vehicles in Germany. (Daimler, supra, 134 S.Ct. at p. 751.) The plaintiffs argued that the California court could exercise general jurisdiction over Daimler because an indirect Daimler subsidiary, Mercedes-Benz USA, LLC (MBUSA), had several facilities in and served as the largest supplier of luxury vehicles to California, a market that generated 2.4 percent of Daimler's worldwide sales. (Id. 134 S.Ct. at p. 752.) The high court rejected this contention. The court concluded that, even if it were to assume that MBUSA, which was incorporated in Delaware and had its principal place of business in New Jersey (id. 134 S.Ct. at p. 751), was "at home" in California, "and further to assume that MBUSA's contacts are imputable to Daimler, there still would be no basis to subject Daimler to general jurisdiction in California, for Daimler's slim contacts with the State hardly render it at home there" (id. 134 S.Ct. at p. 760). In other words, when properly considered in the larger context of Daimler's corporate activities "in their entirety, nationwide and worldwide," MBUSA's contacts with California were insufficient to give that state authority "over a 'far larger quantum of ... activity' having no connection to any in-state activity." (Id. 134 S.Ct. at p. 762, fn. 20.) MBUSA, which is incorporated in Delaware and has its principal place of business in New Jersey, distributes automobiles to dealerships throughout the United States, including California. In granting Daimler's motion to dismiss, the United States Supreme Court held that even if MBUSA's contacts could be imputed to Daimler, the exercise of general jurisdiction over it in California was unacceptable. Id. at 760-62. Specifically, the court held that except in an "exceptional case," a corporation is at "home" for general jurisdiction purposes only in its state of incorporation and in the state where its principal place of business is located. Id. at 761 fn. 19. The Court refused to find jurisdiction in California over a German corporation through its United States subsidiary, despite the fact that over 10% of the defendant's U.S. sales occurred in California. Daimler, 134 S. Ct. at 752. The court held that though the defendant had systematic and continuous ties with California, these ties were not sufficient to render the defendant "at home" in that state. The Court expressed doubt that jurisdiction could be found in a forum other than a corporation's place of incorporation or principal place of business, unless their ties to the forum were so "substantial" as to make jurisdiction appropriate. Id. at 746.