DAIMLERCHRYSLER AG v. BAUMAN
The workers and relatives of workers in the Gonzalez-Catan plant of Mercedes Benz Argentina, a wholly owned subsidiary of German-based DaimlerChrysler AG ("the company"), sued the company for violations of the Torture Victims Protection Act of 1991. They argued that, during Argentina’s “Dirty War” of 1976-1983, the company sought to punish plant workers suspected of being union agitators and worked with the Argentinean military and police to do so by passing along information and allowing the plant to be raided. The plaintiffs also argued that the company stood to gain from these actions as they ended strikes and allowed the plant to continue operating at maximum production levels.
The plaintiffs sued the company in district court in California, where some of the company’s major subsidiaries are located under the Alien Torts Act, and the company moved for dismissal based on a lack of personal jurisdiction. The district court granted the motion for dismissal and held that the company did not have enough contacts in California to warrant a California court exercising jurisdiction. The U.S. Court of Appeals for the Ninth Circuit reversed the decision and held that it is reasonable for a California court to have jurisdiction over a multinational company that is capable of litigating the case regardless of the location and has pervasive business contacts in the state.
Can a court exercise jurisdiction over a foreign company based on the fact that a subsidiary of the company acts on its behalf in the forum state?
Legal provision: Alien Tort Statute; Torture Victim Protection Act of 1991
No. Justice Ruth Bader Ginsburg delivered the opinion for the 9-0 majority. The Court held that the company’s slim contacts in California, relative to its other national and international contacts, are not sufficient to render it “at home” in the state for the purpose of general jurisdiction. Because the company had so little connection to California and this suit had nothing to do with the company’s conduct in the state, to allow the district court to adjudicate such a case would grant the courts essentially global reach as long as the foreign company in question did any business with the state. The Court also held that subjecting the company to this suit would not be in line with the “fair play and substantial justice” standard the Due Process Clause of the Fourteenth Amendment demands.
In her opinion concurring in the judgment, Justice Sonia Sotomayor wrote that the majority opinion ignored due process and jurisdiction precedent by basing the decision on the company’s contacts outside the state rather than inside. She argued that such a case should be decided based solely on whether a company has sufficient contacts within the state to establish jurisdiction, without considering those contacts in relation to a larger company presence. Because this case dealt with foreign plaintiffs suing a foreign company for actions committed abroad, California jurisdiction should be considered unreasonable without the analysis of the majority opinion.
ORAL ARGUMENT OF THOMAS H. DUPREE, JR., ON BEHALF OF THE PETITIONER
Chief Justice John G. Roberts: We'll hear argument first this morning in Case 11-965, Daimler AG v. Bauman.
Thomas H Dupree Jr: Mr. Chief Justice, and may it please the Court:
The Ninth Circuit held that Daimler, a foreign corporation, is subject to general jurisdiction in California and thus may be sued in California on any claim arising anywhere in the world.
The Ninth Circuit reached this conclusion by attributing to Daimler the California contacts of a Daimler subsidiary, Mercedes Benz USA, a separate corporation that respects all corporate formalities and that is not Daimler's alter ego.
The Ninth Circuit's approach violates due process.
Justice Antonin Scalia: Do we have to reach that question?
I mean, I guess the Ninth Circuit must have been interpreting the long-arm statute of California, right?
Thomas H Dupree Jr: That's correct, Justice Scalia.
Justice Antonin Scalia: Now, are there -- were there California cases that disregarded the -- the corporate forum?
Thomas H Dupree Jr: California respects the corporate forum.
The Ninth Circuit applied what appears to be a Federal common law of agency that the Ninth Circuit admittedly developed solely for purposes of the jurisdictional inquiry.
Justice Antonin Scalia: But the jurisdictional inquiry is conducted on the basis of the California statute, isn't it?
Thomas H Dupree Jr: It is, but at the same time, the California statute extends to the limit of due process.
And so what the Ninth Circuit did was it construed what the permissible outer bounds of the due process clause was in this context.
Justice Antonin Scalia: I see.
It's -- it's California's reference to the outer bounds of jurisdiction that causes -- causes this to be a constitutional case?
Thomas H Dupree Jr: That's correct, Justice Scalia.
Chief Justice John G. Roberts: There's nothing in the Constitution, is there that would prohibit a State from adopting a rule that a parent is responsible for any acts of a wholly-owned subsidiary?
Thomas H Dupree Jr: Well, Mr. Chief Justice, there may be a constitutional limit; certainly to the extent that, say, California adopted a rule that said for purposes of some sort of liability, we are going to disregard the corporate forum, I think that could pose due process concerns to the extent that it is purporting to override, say, the corporate law of Delaware.
Chief Justice John G. Roberts: Well, even on a prospective basis, your brief talks about notice and fairness and predictability; but if California said going forward, this is the rule that we're going to apply, is there any constitutional problem with that?
Thomas H Dupree Jr: I -- I still think there would be, Mr. Chief Justice.
In other words, I take Your Honor's point about fair notice, if California said going forward this is the rule we're going to apply.
But at the same time, I'm not quite sure what in the Constitution would empower, say, California to essentially override, say, Delaware's corporate law and say for our State purposes, we're essentially going to rewrite the corporate DNA of a corporation that's chartered in Delaware in order to--
Justice Sonia Sotomayor: We permitted that in Container Corp.--
Thomas H Dupree Jr: --I beg your pardon, Your Honor?
Justice Sonia Sotomayor: --We permitted that in Container Corp. We permitted California law to tax the parent California corporation for the earnings of all its foreign subsidiaries.
And we said the due process clause wasn't offended by that.
Thomas H Dupree Jr: Well, Justice Sotomayor, typically this Court has applied a less rigorous due process standard in the tax cases than it has in the personal jurisdiction cases.
If one were to look at, say, Goodyear or McIntyre, of any of this Court's more recent jurisdictional decisions, it typically takes a much more rigorous view of the due process clause's limits on a sovereign's ability to adjudicate matters that arise outside the forum than it has in the tax context.
Justice Ruth Bader Ginsburg: We would never get to this question if you hadn't conceded that there is general jurisdiction over the U.S. subsidiary, over -- what is it -- MBUSA.
Thomas H Dupree Jr: Well, Justice Ginsburg, I respectfully disagree that we conceded the point below.
I'm not sure, frankly, that we could concede something like that on behalf of a different corporation that's not a party to this lawsuit.
But it is true that we focused on the attribution question in the Ninth Circuit.
And at the end of the day, I don't think that that point affects the outcome in this case, because--
Justice Ruth Bader Ginsburg: But if there were nothing to attribute, then that would be the end of it.
If there was -- if there was not general jurisdiction over MBUSA, that would be the end of the case, wouldn't it?
Thomas H Dupree Jr: --Yes, it would.
That would be one way to resolve the case.
Another way to resolve the case--
Justice Ruth Bader Ginsburg: But you didn't -- we can't resolve it that way since you -- you didn't challenge the general jurisdiction over the subsidiary.
Thomas H Dupree Jr: --Well, again, we did not argue that point.
Instead, we focussed on the attribution issue, but at the same time--
Justice Elena Kagan: Mr. Dupree -- I'm sorry.
Thomas H Dupree Jr: --I was going to say, Your Honor, at the same time, I do think that that notion, that MBUSA was subject to general jurisdiction in California, was necessarily part of the Ninth Circuit's holding.
So I do think it is properly preserved for this Court's review if the Court elected to resolve this case on that ground.
Justice Elena Kagan: And, Mr. Dupree, even if you waived that point, if I understand it correctly, you did not waive the point that even with all attribution in the world, there still is no general jurisdiction over Daimler.
In other words, you could attribute all MBUSA's contacts and you still would not have general jurisdiction over Daimler; is that right?
Thomas H Dupree Jr: Justice Kagan, that is exactly right.
Justice Elena Kagan: So in that sense, it really doesn't depend on the attribution standard, all these hard questions of is it an alter ego test or is it an agency test and how does the Constitution relate to State law, because we could apply any test we wanted, and there still wouldn't be general jurisdiction over Daimler in California.
Thomas H Dupree Jr: Justice Kagan, that certainly would be an acceptable route for this Court to resolve the case.
And Your Honor has it exactly right, in that even if one were to attribute the constitutional contacts of MBUSA to Daimler, you would still be left with a joint enterprise that plainly is not at home in the State of California.
It would still be a German corporation headquartered in Stuttgart that draws only approximately 2 percent of its overall vehicle revenue from California sales.
Justice Sonia Sotomayor: Is that a reasonable--
Justice Antonin Scalia: How do foreign -- foreign countries resolve this attribution question?
Would -- would we be standing alone or are there a lot of other countries that assert jurisdiction over the parent, if there is general jurisdiction over the sub?
Thomas H Dupree Jr: By and large, Justice Scalia, most other countries respect the corporate forum and that includes parent/subsidiary relations.
Justice Antonin Scalia: By and large?
Who are the small?
Thomas H Dupree Jr: I'm not aware of anyone who disrespects it; and, in fact, our amici talk at length about how California's exercise of general jurisdiction in this case would not be appropriate in virtually any other nation.
I'm frankly not sure where what the Ninth Circuit did here would be viewed as tolerable.
Justice Stephen G. Breyer: How do we deal with that?
That's what's -- I mean, it's in your interest to argue that -- tell me how to deal with this.
It's perhaps true -- I think it's true that a State doesn't have to allow companies to have wholly-owned corporations.
Under the Constitution of the United States, nothing says they do.
Or a State could say, wholly-owned corporations?
Well, there's no limited liability.
Or they could say in certain kinds of accidents, there's no limited -- et cetera.
You see, they have lots of choice.
So what really seems to have been going on here is the Ninth Circuit, from your perspective, just really misstated California law by out to lunch.
When they say when we want it to be as broad as the Constitution, they don't mean, because we could get rid of limited liability, that that's what we do.
So, how can we deal with a circuit court that seems to seriously misstate the law of a State?
Thomas H Dupree Jr: Well, I think the way this Court should deal with the Ninth Circuit in this case is simply to reverse it, Your Honor.
Justice Stephen G. Breyer: I understand that that's what you would like as the bottom line.
I would like to know the chain of reasoning that gets--
Thomas H Dupree Jr: The chain of reasoning, Your Honor, is simply that California, like all States, generally respects the corporate form, certainly with regard to liability determinations.
In fact, this is a point that Professor Brilmayer makes at length in her amicus brief, where she says that it is anomalous for a State on one hand to respect the corporate form as to liability determinations, but then when it comes to making these sorts of personal jurisdictional determinations, it applies a completely different standard.
So I think--
Justice Ruth Bader Ginsburg: Suppose -- but suppose we had a case of an accident on a California highway injuring California people and they sued charging that the Mercedes Benz was defectively manufactured.
Would there be jurisdiction over both the parent and the sub in that situation?
Thomas H Dupree Jr: --If it were the case Your Honor hypothesized, I think there may well be specific jurisdiction available, depending on whether Daimler purposefully availed itself of the California forum.
Justice Ruth Bader Ginsburg: And what does that mean?
I mean, it certainly wanted to have its cars sold in -- in California.
Thomas H Dupree Jr: Right.
What this Court has said in its opinions in Asahi and then, of course, in McEntyre is that you look whether the corporation targeted the forum.
And in Asahi, Justice O'Connor's opinion identified several facts that could support such a finding.
For example, whether the parent targeted advertising at the forum, whether the parent designed a product specifically for use in that forum.
And, of course, this Court has said repeatedly that questions of specific jurisdiction are highly fact dependent.
And so in Your Honor's hypothetical, I think what the plaintiffs would do to establish specific jurisdiction over the foreign parent would be precisely to attempt to amass evidence showing that Daimler targeted the forum where they intend to bring the suit.
Justice Sonia Sotomayor: --Counsel--
Justice Ruth Bader Ginsburg: Well, there was injury in the forum and it was caused by defective manufacturing abroad.
That's a typical basis for jurisdiction under long arm statutes.
Thomas H Dupree Jr: Well, certainly courts have exercised specific jurisdiction in that situation.
But, of course, as this Court's ruling in McEntyre illustrates, that's not necessarily always the case and there may, of course, be situations where a product does cause injury in the forum, yet the foreign parent is not necessarily subject to specific jurisdiction in that forum.
Justice Anthony Kennedy: Well, how -- how would you answer Justice Ginsburg's question if you were writing the opinion in your favor?
Would you say that in the hypothetical, Daimler Chrysler put in motion a course of events that caused an injury in California?
Is that the way our jurisprudence works?
Thomas H Dupree Jr: Well--
Justice Anthony Kennedy: If you're going to answer the hypothetical in an opinion, how would you -- what would you say?
Thomas H Dupree Jr: --Well, I think I would go back to what this Court has articulated, first of all, is the standard for specific jurisdiction, which is purposeful availment or purposeful direction.
I think as far as what constellation of facts--
Justice Anthony Kennedy: Well, Daimler has purposely availed itself of California jurisdiction by establishing the sub that -- that operates there by establishing Mercedes U.S., that it operates there.
Thomas H Dupree Jr: --Well, Mercedes--
Justice Anthony Kennedy: So -- so creating a subsidiary is not availing itself of jurisdiction?
Thomas H Dupree Jr: --Well, Justice Kennedy, I think in some cases a subsidiary's work could give rise to specific jurisdiction, but I think that's not necessarily true across the United States in all cases.
Justice Anthony Kennedy: I agree.
And I'm asking what is the rationale that you would use to answer Justice Ginsburg's hypothetical in the -- in the opinion for the Court that is ruling in your favor?
Thomas H Dupree Jr: The answer I would give is that in Justice Ginsburg's hypothetical the foreign parent could be subject to specific jurisdiction if it purposefully availed itself of the forum and that very well could be an inquiry that turns on the subsidiary's activity.
Justice Anthony Kennedy: And my question is whether or not by creating Mercedes U.S., Daimler didn't purposely avail itself of the forum?
Thomas H Dupree Jr: I don't think it did, Justice Kennedy.
Justice Anthony Kennedy: Because?
Thomas H Dupree Jr: Because I don't think there is any evidence in this record that suggests that by creating a subsidiary that does business generally, it was purposefully targeting California.
Justice Sonia Sotomayor: --Mr.--
Justice Elena Kagan: Mr. Dupree--
Justice Samuel Alito: If we agree with you -- if we agree with you that the test should be whether the subsidiary is an alter ego of the parent, would that depend on the -- the law of the particular State in which the suit is brought or would it be based on some general understanding of alter ego liability?
Thomas H Dupree Jr: Justice Alito, I think the best test would be to look to State law for guidance, precisely because that is the law that commercial actors throughout our country typically would look to, to determine whether or not they might be in a veil-piercing situation.
Justice Samuel Alito: That would mean that due process would mean something different potentially in California and New York, for example.
Wouldn't that be rather strange?
Thomas H Dupree Jr: Well, I'm not sure, Your Honor.
Certainly this Court in other due process contexts has looked to the substance of State law to inform its judgements, for example in determining the scope of protected property interests.
In punitive damages cases, it's looked to State law to determine the constitutional boundaries.
Justice Sonia Sotomayor: --Where else have we done it in the personal jurisdiction context, define the limits of the due process, Federal due process in accordance with State law?
Thomas H Dupree Jr: Well--
Justice Sonia Sotomayor: Didn't we create tests in International Shoe, in Burger King separate from State law?
Thomas H Dupree Jr: --The test this Court created in International Shoe, I think, is probably best characterized as a Federal common law test.
I think that this situation is not quite analogous, precisely for the reason I mentioned in my answer to Justice Alito, is that commercial actors and lawyers and parties throughout the country typically look to State law for guidance.
And if this Court were to adopt a general Federal common law standard, under which I think we would still prevail, but--
Justice Sonia Sotomayor: So what do we do with all the amici briefs that points to countless articles that talk about the corporate veil-piercing as the most arbitrary of State laws out there?
Thomas H Dupree Jr: --Well, I'm not sure--
Justice Sonia Sotomayor: I don't know how -- how corporations get any sense of comfort from a law that's so irrationally applied, according to some.
Thomas H Dupree Jr: --Well, I think some of the amici, candidly, may overstate the purported confusion.
At the end of the day, veil-piercing law is certainly well settled and vetted in this country's legal traditions, and I think it is sufficiently capable of precise application in advance.
Corporations deal with that standard on a day-to-day basis.
And so although I take Your Honor's point that at the margins there may be room for debate as to whether a veil should be pierced in a particular case, I think by and large it's a general standard, it's a familiar standard, and it's a workable standard and it's a standard that people look to on a day-to-day basis.
Justice Antonin Scalia: Counsel, I've been looking for the text of the California jurisdiction statute.
Where is it?
I mean, you know, that's what this case is all about, isn't it?
Thomas H Dupree Jr: I believe it's--
Justice Antonin Scalia: Is it in your brief?
Is it in the Respondent's brief?
Is it in the Government's brief?
I can't find the darn thing.
Thomas H Dupree Jr: --Well, we'll provide the cite to Your Honor.
Justice Antonin Scalia: I don't want the cite.
I want the text in front of me right here.
Thomas H Dupree Jr: --I will--
Justice Antonin Scalia: That's what briefs are supposed to have--
Thomas H Dupree Jr: --Right.
Justice Antonin Scalia: --all -- all of the significant statutes that -- that relate to the case.
Thomas H Dupree Jr: --Right.
I will provide the cite to Your Honor on rebuttal.
It is the California Civil Code.
Justice Antonin Scalia: I don't have the California Civil Code.
You're saying it's -- it's not in the briefing?
Thomas H Dupree Jr: It is in the briefing.
We did not reproduce it as a separate addendum at the beginning, but I believe it is quoted in the briefing and I will provide Your Honor with a precise page cite on rebuttal.
Justice Ruth Bader Ginsburg: But it does -- it does provide for the exercise of jurisdiction to the limits of due process.
Thomas H Dupree Jr: That's exactly right, Justice Ginsburg.
It simply says that California may exercise long arm jurisdiction consistent and to the limit permitted by Federal due process.
That's all the statute says, Justice Scalia.
I'll reserve the remainder of my time for rebuttal.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF EDWIN S. KNEEDLER FOR THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE PETITIONER
Edwin S. Kneedler: Mr. Chief Justice, and may it please the Court:
As several questions from the Court suggest, the Due Process Clause itself does not supply fixed rules for the attribution of forum contacts from one corporation to another.
Rather, such rules are the province of the positive law that creates the corporation and other substantive law such as agency that defines the relationship of that juridical person to other persons.
And those rules are the ones that the corporations themselves rely upon and that others who deal with the corporations rely upon.
Justice Sonia Sotomayor: Could you tell me why we just don't rely on the tests we apply in the tax cases?
It's a Federal test and it says if you're functionally and economically tied together and you control the other entity, the parent controls the subsidiary, your earnings are subject to the Due Process Clause and can be taxed by an individual State.
It seems like a fairly simple test.
And if you break down the complicated California test, really, that was the essence it was getting to.
So why do we go to the vagrancies of State law and why don't we just do the true and tried?
Edwin S. Kneedler: But in the instance you're talking about in taxation -- and this is related to a question the Chief Justice asked -- the due process clause does not itself prohibit a State or the Federal government from attributing substantive liability, for example, from a -- from a subsidiary to a parent, or, in the case of taxation, of choosing to look at the entire enterprise of which the parent corporation is the head.
But those are the results of deliberate choices by the lawmaking organs of the State, which they -- legislature, or when Congress does it, the Federal government.
They do not--
Justice Sonia Sotomayor: California--
Edwin S. Kneedler: --reflect a general determination that in all circumstances, the acts of the nation or the acts of a subsidiary should be attributed to the parent.
In fact, the general rule is quite to the contrary.
Justice Samuel Alito: Well, in the situation of individuals, does the -- does the due process rule regarding taxation of individuals by a State align with the -- the ability of somebody to sue that person in the State?
Somebody -- for example, if someone is a partner in a law firm that has offices all over the country, they may be paying income taxes in many jurisdictions.
Are they subject to general jurisdiction?
If there's a -- if you have somebody who works in D.C. and never goes to California but has to pay some income tax in California, are they subject to suit in California for any--
Edwin S. Kneedler: No.
Justice Samuel Alito: --claim that arises against them anywhere?
Edwin S. Kneedler: No.
No, they are not.
And -- and for the taxation, there has to -- for taxation to begin with, there has to be some nexus between the individual and the -- and the State.
The rules that I think Justice Sotomayor was talking about in the Federal Tax Code has similar provisions, really have to do with the measure of taxation.
And in most of those situations, certainly, in taxation among the States, there is an apportionment formula.
Yes, the -- the overall income may be lumped together for purposes of -- of the initial step, but then there's an apportionment formula that says that -- in the Mobil case that's cited in the briefs, for example, that -- that Vermont can only tax so much of it, that portion that is fairly attributable to Vermont.
So in that sense, it's analogous to a specific jurisdiction.
You're looking at -- you're coming up with some formula to tie the taxation to the State that is imposing -- imposing the tax.
Justice Elena Kagan: Mr. Kneedler, what do you think about this, that -- you know, as I've been looking through these cases, it seems to me that all these attribution issues and the conflict about attribution arises because courts generally have an improperly broad understanding of general jurisdiction and don't quite understand the distinction between general and specific jurisdiction.
If the courts -- if the Court here had understood that general jurisdiction applies when a company is essentially at home in a place, would any of these questions have arisen?
Edwin S. Kneedler: Probably not.
The court of appeals -- I think it's page 23 of its opinion -- says that the reason that it looked to the -- the question of whether the in-State activities of MBUSA were important to Daimler was that the importance is a measure of the presence, meaning essentially doing business within -- within California.
And as we point out in our brief, the Ninth Circuit's approach to this traces back to early New York cases that -- that address the question of doing business at a time when the business--
Justice Ruth Bader Ginsburg: But that was -- that was conceded.
But that was -- there is a very substantial argument that there was no general jurisdiction over the subsidiary, but that was not contested below.
Edwin S. Kneedler: --Yes.
Justice Ruth Bader Ginsburg: And a party can always consent to jurisdiction.
Edwin S. Kneedler: Yes.
Now -- but I think in a broader matter -- and also, I take the point that Justice Kagan made earlier that even -- even if MBUSA was subject to general jurisdiction or if we -- if that's accepted for these purposes, that doesn't mean that Daimler -- you wouldn't attribute MBUSA's jurisdictional status to Daimler.
You might attribute its contacts, if the appropriate rules for attribution of contacts work in that.
Justice Anthony Kennedy: Just as a way of getting you to state your general theory of the case, let me ask you: Do you have a recommendation as to whether or not we should remand this case?
If we accept your theory of the case, which I'll let you explain, does that require a remand?
Edwin S. Kneedler: It -- it does not.
And in our view--
Justice Anthony Kennedy: And that is because?
Edwin S. Kneedler: --Yes.
In -- in our view, it's proper for the -- for the Court to look to background principles of corporate law at least as a starting point or as a presumptive matter.
And in this country, corporate separateness, under which a parent is not liable for the acts of a subsidiary, is the general rule.
There are established exceptions to that, traditional exceptions: The alter ego exception, and the situation where a principal is responsible for the acts of an agent.
Attribution on those bases, because they're traditional, would not offend traditional notions of -- of fair play and substantial justice under the due process clause.
Here, Respondent does not argue -- Respondents do not argue for an -- that alter ego would satisfy.
And as for agency, there's no argument here that traditional agency requirements are satisfied.
Justice Anthony Kennedy: Under tradition, if you have the universe of agent and principal, an independent contractor, is the subsidiary of the latter or is it something -- is it some third -- some third animal?
Edwin S. Kneedler: I think -- I think in this case -- again, we don't have any reference to -- at all--
Justice Anthony Kennedy: Generally, if you have a -- a corporate parent and a subsidiary, do we usually think of a subsidiary as an agent?
Edwin S. Kneedler: --No, you do not.
Justice Anthony Kennedy: Do we think of it as -- what do we think about it as?
An independent contractor, or just something else?
Edwin S. Kneedler: It's an independent entity.
It may be doing work for the parent, or it may not.
In this case, at page 179A of the Joint Appendix, the agreement between Daimler and -- and MBUSA specifically provides that MBUSA is neither a special nor a general agent.
It says that MBUSA cannot act on behalf of or bind Daimler, and it's not a fiduciary.
Justice Ruth Bader Ginsburg: Well, you don't -- you wouldn't have any doubt, would you, in the hypothetical that I pose.
A Mercedes Benz car causes an accident -- there's an accident in California.
It's alleged that the accident was the defective manufacturing of that car.
California people are injured.
There would be jurisdiction in a California court.
Edwin S. Kneedler: I -- I would think so, particularly given the -- given the agreement in this case which obligates Daimler to market throughout the 50 States, and the volume of sales that are directed to the United States, some major portion of which is expected to be and intended to be in California.
I don't think there would be any question that California would have specific jurisdiction.
Justice Elena Kagan: But, of course, that just points out the difference between specific and general jurisdiction, that Daimler might be -- might be found -- found it -- there's jurisdiction over Daimler in a case which involves the blowing up of a car in California, but not over something that's not related to any of its contacts in California.
Edwin S. Kneedler: Right.
That is -- that is the -- the major -- that is the major difference.
Justice Samuel Alito: What would have to be--
Edwin S. Kneedler: If I could make a point.
Justice Samuel Alito: --What would have to be true for MBUSA to be Daimler's agent with respect to general jurisdiction?
How would the facts of this case have to be changed in order to bring this within an agency principle?
Edwin S. Kneedler: I think -- I think MBUSA would have to be acting on behalf of Daimler.
One step in that direction would be if Daimler consigned the cars to -- to MBUSA and that -- and MBUSA held itself out as the sales agent.
Here, the cars were sold to MBUSA in Germany and -- and sent to the United States.
But if there was an agency relationship, that doesn't necessarily mean that Daimler would be at home in -- in California or whatever--
Justice Sonia Sotomayor: --I mean, in most agency relationships, titles stay with the principal.
So I don't know -- or -- or when it doesn't, it transfers to the agent, but for the benefit of the principal.
So I don't know what the sale in Germany has to do.
Edwin S. Kneedler: --Well, I -- under this agreement, MBUSA is -- acts independently.
It does not act day to day directly.
Justice Sonia Sotomayor: It seems an odd thing to say given the page and a half that the lower court went through on the various ways in which Germany controls this subsidiary.
It appoints all its officers.
It approves all its operating procedures.
It approves all of the people it hires and fires.
It seems like there isn't much left for what--
Chief Justice John G. Roberts: I don't think there was a question, but you can respond.
Edwin S. Kneedler: Those are contractual undertakings.
They are not the manifestations of agency.
Agency would require that -- that Daimler control the day-to-day operations of this subsidiary.
And at page 116A of the petition appendix, the district court says there's no evidence of that whatsoever.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF KEVIN RUSSELL ON BEHALF OF THE RESPONDENTS
Kevin Russell: Mr. Chief Justice, and may it please the Court:
I'd like to begin with the question of what's in this case and what isn't, because the fact pattern in this case gives rise to multiple complicated questions, only two of which have been adequately preserved in this case.
And one of the questions that's not in the case, Justice Kagan, is whether or not, if MBUSA's contacts are attributable, they are sufficient to establish general jurisdiction.
This case has been in litigation on the personal jurisdiction issue for eight years.
Throughout that period, we have argued that if MBUSA's contacts were attributed to Daimler, they were sufficient in kind and quantity to support general jurisdiction over Daimler itself.
Justice Ruth Bader Ginsburg: So if a Mercedes Benz vehicle overturned in Poland and injured the Polish driver and passenger, suit for the design defect could be brought in California?
Kevin Russell: That's right.
And if you think that the answer to that is wrong, it's because of the argument that Daimler did not preserve.
Justice Elena Kagan: Yes, but, Mr. Russell, it's usually -- it doesn't lead to good results when you assume something that is obviously in error.
You know, it leads you to go onto a road that you wouldn't otherwise have gone onto and get to a destination that might be improper itself.
So it's bad practice, and I understand your, you know, idea about they didn't argue this, they didn't argue that.
But to assume something that's obviously a fallacy as your basis for a decision is not likely to lead you to a good outcome.
Kevin Russell: Well, that might be a reason then for this Court to dismiss this case as improvidently granted.
A cert petition, a grant of cert shouldn't be a Get-Out-of-Jail-Free card.
Justice Stephen G. Breyer: Really, suppose I think that this was crying out for an en banc.
After you got your decision, we decided Goodyear, didn't we?
And yet, even though there is no effort to reconcile the case with Goodyear, as there couldn't be -- we haven't decided it -- by the time we decided it, it still could have been taken en banc.
Kevin Russell: That's right.
Justice Stephen G. Breyer: I guess we have no power at all to force the circuit, although that's what they are there for, to consider such a matter en banc.
Kevin Russell: That's because Petitioners didn't raise that question en banc.
They filed an en banc petition after Goodyear came down--
Justice Stephen G. Breyer: And they didn't raise these--
Kevin Russell: --And they did not raise these questions.
Justice Elena Kagan: But, Mr. Russell, they did talk about Daimler wasn't subject to general jurisdiction.
They didn't contest MBUSA's being subject to general jurisdiction, but they said Daimler isn't subject to general jurisdiction.
So, you know, they didn't make the precise argument that they should have made, but they basically put the question at issue: Is Daimler subject to general jurisdiction?
Daimler is a German corporation.
If it were subject to general jurisdiction in California, so too it would be subject to general jurisdiction in every State in the United States, and all of that has got to be wrong.
Kevin Russell: Well, with respect, Justice Kagan, it's not as easy as you seem to think it is.
Let me give you an example.
In Perkins, this Court cited a prior case as a quintessential paradigmatic example of general jurisdiction, called Barrow Steamship Company v. Kane, and in that case, it approved -- this Court approved the exercise of general jurisdiction in New York over a British steamship company for a tort that occurred in Ireland based on the fact that it had an office run, actually, by another company, a mercantile company called Henderson.
Justice Ruth Bader Ginsburg: What was the year of that decision?
Kevin Russell: That was 1898.
But this Court--
Justice Ruth Bader Ginsburg: Yes, but the thinking about jurisdiction has changed enormously since then.
Kevin Russell: --But my point is that this Court in Perkins, which is quite a long time after International Shoe, cited to Barrows as an example of a paradigmatic example.
Justice Ruth Bader Ginsburg: If there was ever an example of a corporation being at home in a particular place, it's Perkins against Benguet.
It was a Philippine company that was shut down entirely.
It was World War II.
To the extent the company was operating at all, it was in Ohio.
It was not able to operate in what otherwise would have been its home base.
So everything that the corporation was doing occurred in Ohio.
Kevin Russell: Justice Ginsburg, just to be clear, I'm not saying that this case is like Perkins.
I'm saying that in Perkins, a post-International Shoe case, this Court embraced the result in Barrows, which is a case quite like this one.
Justice Antonin Scalia: Mr. Russell, I'm still hung up on -- on why we have to confront a Federal constitutional question.
It doesn't seem to me that a State statute which says we want to exercise jurisdiction to the extent the Constitution permits -- I don't think that invites a Court to restructure standard State law and to say we're not going to observe the corporate distinction.
I guess you'd have to say we can hold the individual shareholders of a corporation liable, because that might not violate the Constitution.
I don't think that when California adopts this statute it means to change its standard law regarding corporations, regarding individuals, and so forth.
Why should we assume that?
Kevin Russell: --Because Petitioner, again, didn't make that argument, either.
Justice Stephen G. Breyer: --Now we're -- look at the odd thing.
It might not violate the Constitution.
I mean, it's the same question, but it is bothering me, too.
It might not violate the Constitution of the United States for a State to say we don't have limited liability in respect to the subsidiary corporation or the general corporation.
It's very unlikely to do that.
It's going to be a big problem to get investment in that State, but it might not violate -- it might not violate the Constitution as here, to say, you know, we are in California not going to have subsidiaries when a plaintiff comes in and sues on the basis of something that happened outside the country; but we will have it when, in fact, he sues on something that happened in California.
Now, a State could do that, I guess, but it's pretty odd.
And if you look what the -- what the Ninth Circuit said in its opinion, it never referred to California law directly.
It's all Ninth Circuit cases or Second Circuit cases.
The only thing it says about California is probably something that was quoted in that circuit case, something like that.
So, what am I supposed to do, because State law is up to the State?
How do I handle that?
Kevin Russell: This case has been litigated on the interpretation of the California statute that says that California intended, notwithstanding what rules it applies for liability, to exercise personal jurisdiction to the furthest extent permitted by the Constitution.
And here it's not that difficult a question.
Here the question is, if Petitioner would have been subject to general jurisdiction in California had it conducted the same operations through a subdivision in the case, does the Due Process Clause give it a constitutional right to avoid that jurisdiction simply by conducting those same operations through a wholly-owned subsidiary.
Justice Stephen G. Breyer: So you think, in other words, that California has abolished -- I mean, California says there is no corporate insulation?
A corporation, when it tries to work through a subsidiary, that subsidiary has unlimited liability from lawsuits in California.
Is that what you think California law is?
Kevin Russell: California wants to go as far as the Constitution would permit.
Justice Stephen G. Breyer: The answer then to my question is yes.
You think right today, in California, the law is there is no -- there is unlimited liability for a corporation that is a subsidiary of another?
Kevin Russell: Not that there is unlimited liability, but that the exercise--
Justice Stephen G. Breyer: Well, you can bring a lawsuit, unlimited liability.
Justice Samuel Alito: Well, Mr.--
Kevin Russell: --Because the statute at issue doesn't speak to liability.
It speaks to personal jurisdiction.
Justice Samuel Alito: --Mr. Russell, is it clear that the California law regarding corporate liability would apply to all of your claims?
Kevin Russell: No.
Justice Samuel Alito: You have Federal claims, you have Argentine claims; isn't that correct?
Kevin Russell: That's correct.
Justice Samuel Alito: But California law controls personal jurisdiction.
It doesn't, does it, necessarily control corporate liability, let's say, with respect to the Argentine claims?
Kevin Russell: No, it certainly wouldn't.
The choice of law principles would almost certainly point to Argentine law.
Justice Ruth Bader Ginsburg: Well, but why should we -- now that the Federal claims are out -- I mean, when you started the suit you had a claim under the Alien Tort Statute, you had a claim under the Torture Victims Protection Act, but now those Federal claims are out and we are left with a claim under California law and Argentinian law.
Why should a Federal forum exercise supplemental jurisdiction over those claims once the Federal claims are out of the picture?
Kevin Russell: Well, certainly we agree that if this case were remanded to the district court it would have discretion to refuse to exercise supplemental jurisdiction.
Justice Ruth Bader Ginsburg: Wouldn't it be arbitrary for it to exercise personal jurisdiction when there is no Federal claim and the case involves foreign plaintiffs injured abroad, allegedly due to the activities of a subsidiary operating abroad?
Kevin Russell: Ultimately, we don't think so.
I think you would have to take into account this case has been in litigation for eight years already.
I think that's a substantial reason for the Court to want to allow the case to continue.
I recognize that we would have a very hard time appealing from a decision that refused to exercise supplemental jurisdiction.
But again, on the question that the Court actually granted cert on and which was actually preserved here, I do think that the Court could simply hold that, look, attribution of contacts between a wholly-owned subsidiary and its parents is not so unreasonable as to violate the Constitution.
At the end of the day, the due process question is whether the defendant had sufficiently availed itself of the benefits of doing business in the State to warrant an exercise of jurisdiction.
It can do that either directly, through its--
Justice Ruth Bader Ginsburg: Yes, but that test that you just -- the sufficiently purposeful availing, those are all specific jurisdiction questions.
Kevin Russell: --With respect--
Justice Ruth Bader Ginsburg: And not general jurisdiction questions.
Kevin Russell: --With respect, I don't think that's correct.
Justice Kennedy's opinion for the plurality in Castro, for example, identified the underlying premise of both general and specific jurisdiction and availing oneself of the benefits of being in the State.
Justice Ruth Bader Ginsburg: And Goodyear distinguished the two by saying general jurisdiction means it's equivalent to residence for an individual.
It's where you are at home.
And general jurisdiction was much broader in the days before long arm statutes.
But now that we have specific jurisdiction so you can sue where the event occurred, just as specific jurisdiction has expanded, so general jurisdiction has shrunk.
Kevin Russell: I understand that there are very serious and important questions with respect to what it means to be at home in a State.
And that if Petitioner had raised those arguments below, it might actually have prevailed.
But this Court ought not to forgive that waiver in a case like this and it ought not to decide that question when not only is the argument forfeit, but it's barely been briefed in this case.
Justice Anthony Kennedy: Well, I understood the concession as being, that if Mercedes were the only corporation involved in this dispute, there would be specific -- sufficient contacts.
That doesn't tell me anything about Daimler.
Kevin Russell: That is--
Justice Anthony Kennedy: I'm -- I'm not so sure that this concession is that troublesome for Daimler.
Kevin Russell: --No.
There has been one concession, which is that MBUSA's contacts are sufficient to subject MBUSA itself to general jurisdiction.
And there's been one forfeiture--
Justice Anthony Kennedy: So how does that answer the question about Daimler?
Kevin Russell: --Well, because there's been one forfeiture as well.
And that is, we've argued for 8--
Justice Anthony Kennedy: There has been one--
Kevin Russell: --Forfeiture, as well.
We have argued for 8 years that if you attribute the contacts in MBUSA to Daimler, those contacts are sufficient to establish general jurisdiction over Daimler.
They're sufficient to satisfy the minimum contacts.
Justice Ruth Bader Ginsburg: Well, any claim arising anyplace in the world.
Kevin Russell: That's right.
That's been our argument.
They could have said no, that's not right; they could have said MBUSA doesn't do enough business in California.
They could have said that general -- that doing business theory of general jurisdiction is no good.
They could have said you can only be subject to general jurisdiction--
Justice Anthony Kennedy: --But I think their concession is quite consistent with the proposition that the distinction between parent and subsidiary is meaningful for jurisdictional purposes.
And that you're not just automatically an -- you yourself do not defend the Ninth Circuit's position that if Daimler gives enough functions to Mercedes that it has to give, that then Daimler is -- is liable.
You don't -- your footnote, I think page 35 of your brief, you -- you don't take the Ninth Circuit's reasoning to its full extent.
Kevin Russell: --That's right.
We do think that this is an easier case because we have a wholly-owned subsidiary that operates in very much the same way as a subdivision would.
Notice that in the Federal--
Justice Antonin Scalia: Mr. Russell, does it not follow from -- from your argument that a Federal court should entertain a suit against the shareholders of a foreign corporation when that foreign corporation has sufficient contacts in California?
Kevin Russell: --No, I don't think it does.
Justice Antonin Scalia: Why--
Kevin Russell: But the question ultimately is whether it's fair to say that the defendant has sufficiently benefitted from--
Justice Antonin Scalia: --Why is it any less fair?
Kevin Russell: --Because unlike a shareholder, a parent company enjoys not only the economic benefits of the subsidiary's activities--
Justice Antonin Scalia: Don't the shareholders?
Kevin Russell: --They enjoy a partial.
But in addition they have -- the parent has the right and here the substantial right to control the day to day--
Justice Antonin Scalia: Don't the shareholders?
Kevin Russell: --No, they don't.
All the shareholders have the right to do is appoint the -- the people to the board.
Here, Daimler exercised a degree of control that is much more significant than that.
Justice Antonin Scalia: Well, I can't see a distinction.
And I think if you stretch the California statute as far as you're stretching it, you -- you have to assume that California would exercise jurisdiction in that case--
Kevin Russell: Well, I don't think--
Justice Antonin Scalia: --if you're the Ninth Circuit.
Kevin Russell: --I don't think that's right.
I mean, this Court has recognized that look, the Due Process Clause requires ultimately drawing some lines, but it can't be done in a mechanical way.
Here, Goodyear provides a safe harbor to companies that want to make sure that they're not subject to general jurisdiction in California.
They can do so by selling their cars to an independent distributor, the way Petitioner used to do and the way that Toyota still does.
But with respect to--
Justice Ruth Bader Ginsburg: But if you go -- if you go back to the -- to the foundation case of International Shoe.
That case recognized that you can be an agent for one purpose, but not for another.
So the people -- the salesmen who were promoting the sales of shoes were the agents of International Shoe for the purpose of promoting the sale of shoes.
They were not an all-purpose agent for the purpose of, say, dealing -- real estate dealings on behalf of the corporation.
So you could have an agency for one purpose, selling cars in California, but totally unrelated to torturing people in Argentina.
Kevin Russell: --That's right.
But the -- but that I think we need to separate the two ideas of what does it take to make Petitioner at home in California.
Once it's established that it is at home in California, it is simply a traditional aspect of general jurisdiction that it will be subject to suit for things that happened abroad.
If this suit had been brought against Apple Computer, which is headquartered in California, I don't think we would be here today.
The question here is whether the -- the conduct in California is rendered insufficient by virtue of the fact that it was undertaken by a subsidiary.
Justice Stephen G. Breyer: That is my problem, and I don't know what to do.
It's really -- Justice Scalia has been mentioning this problem.
You're seeing it through the lens of jurisdiction.
I'm seeing it through the lens of corporate law.
Five shareholders get together from outside California and they set up a corporation in California.
To insulate themselves from liability, particularly lawsuits.
Now, instead of those five shareholders, everything is the same, but now it's a German corporation and suddenly, they can't insulate themselves from the lawsuits in California.
I think it unlikely that California would have such a corporate law, whether it goes by the name of jurisdiction or some other name.
But that's a State law question.
So what am I supposed to do?
That's where we started this argument.
And that's what I--
Kevin Russell: Well, Justice Breyer, if you think -- if you think that the -- the proper resolution of a case like this turns on issues that were not preserved below and have not been argued here, then you can do one of two things.
Justice Stephen G. Breyer: --What?
Kevin Russell: You can dismiss the case as improvidently granted or you can decide the case on the assumptions upon which it's been litigated and make clear that you're doing that.
Justice Stephen G. Breyer: Well, another thing we could do is we could say we've decided now two cases that seem to bear on this, and one is Goodyear and the other is Kiobel; and we could say we'll send it back for consideration of this case in light of those.
Kevin Russell: We would have no problem with that if you made clear that it was open to us under remand to argue that they didn't preserve these arguments.
That would be a fine result for us.
Chief Justice John G. Roberts: You just--
Justice Antonin Scalia: I'm sorry.
Chief Justice John G. Roberts: --You mentioned Kiobel.
Do you still think you have a viable claim under Kiobel, or haven't you conceded that?
Kevin Russell: We are not prepared to concede that at this point, although we recognize we have an uphill struggle to fit ourselves within the exception that's been left.
Principally, our argument would be based on the fact that at the time of suit, this was a dual American/German company with dual headquarters in -- in the United States, which is different than Shell.
But we're not prepared to concede it, but we're not asking this Court to resolve it.
Justice Antonin Scalia: If this is as -- as Justice Breyer and I seem to think, a question of State law, don't you think it's extraordinary that the Ninth Circuit could make such a significant holding on -- on California law without -- there is a certification procedure in California, isn't there?
Kevin Russell: There is, although--
Justice Antonin Scalia: So why -- why wouldn't they have asked the California Supreme Court whether -- whether this jurisdiction statute was meant to alter corporate law or, you know, tort law, or, you know -- just imagine any change in law that would bear upon jurisdiction, and all those changes must be assumed to have happened.
Couldn't -- couldn't they ask that?
Is that what this California jurisdictional statute means?
Kevin Russell: --Sure.
They could have asked that.
Usually they only ask those questions--
Justice Antonin Scalia: Is it too late to ask it now?
Kevin Russell: --It wouldn't be if you sent it back.
I mean, usually courts of appeals don't ask those questions unless somebody asks them to.
And here Petitioner never asked them to.
It assumed, as did we, that the statute meant that they wanted the most permissive attribution rule that's permitted by the Due Process Clause; and I don't think it's unreasonable -- that's an unreasonable interpretation of the statute.
I recognize that it's a little bit problematic that these statutes don't give greater definitive guidance; the Petitioner hasn't complained about that either.
And so on the premises on which this case was litigated, I do think you can decide this case by resolving two questions: First, on the assumption that if MBUSA's contacts are attributable to Petitioner, they are sufficient to make it at home, does the fact that those contacts are through a wholly-owned subsidiary rather than a subdivision make the exercise of general jurisdiction improper--
Justice Samuel Alito: If we assume for the sake of argument that there isn't a preservation issue regarding this in-home -- this at-home question, why shouldn't the rule be that unless a corporation is incorporated in the jurisdiction or has its principal place of business in the jurisdiction, the -- the acts of the subsidiary are not attributable unless it's an alter ego.
It's a nice clean rule; many of the prominent scholars in this area think that the American doctrine of general jurisdiction doesn't serve any good purpose.
Now that specific jurisdiction has been expanded, it makes us an international outlier.
Why shouldn't we have a nice clear rule like that, and everybody will know exactly where things stand?
Kevin Russell: --Just to be clear, there are two parts to that rule.
There is one that's the assertion that ordinarily, you're only at home in the place of principal business, or principal -- principal place of business, or your place of incorporation.
And the other is, oh, we'll only apply that rule with respect to subsidiary contacts.
That additional thing, which is necessary to -- to shoehorn it into this case, I think, is very artificial.
So if this Court is going to--
Justice Ruth Bader Ginsburg: What is the additional thing?
Kevin Russell: --That we will only apply that rule if the contacts, if I understand Justice Alito's proposal, we only apply that rule if the contacts in the State are through a subsidiary.
That's a very artificial gerrymander, honestly, to fit the facts of this case.
If this Court is going to say that the doing business theory of general jurisdiction is no longer good law, it should do so directly, it should do so when the case has actually been briefed.
It hasn't been briefed here.
Justice Ruth Bader Ginsburg: You did say in your brief that recognizing that other nations are highly critical of our expansive, one-time expansive, notion of doing business as a basis for general jurisdiction, you say that that shouldn't be taken into account as a basis for constitutional decisionmaking.
And yet what we are talking about is a notion of whether it's fair and reasonable to require a corporation to answer in a forum, and is what the other countries think unenlightening on what's fair and reasonable.
Kevin Russell: I don't know that you can't take it into account at all, but I will say that the constitutional test is whether it's consistent with traditional notions of fairness and justice, meaning traditional American notions of substantial fairness.
Justice Elena Kagan: Mr. Russell, how would you make the argument, and again with Justice Alito, sort of putting these waiver questions aside for a second, a German corporation incorporated in Germany, headquartered in Germany, 2.4 percent of its sales are in California.
How do you argue that it's subject to jurisdiction, general jurisdiction, not specific jurisdiction, general jurisdiction, which means over suits that have nothing to do with California or indeed, as here, over in the United States, have anything to do with anything that happened in the United States.
How do you make the argument that Daimler is subject to general jurisdiction?
Kevin Russell: I would say a couple things.
I haven't briefed this, but this is what I would say in a brief if we had the opportunity to brief it.
And that is it has done billions of dollars in business in California.
Justice Elena Kagan: It's 2.4 percent of its sales.
That would make it subject to general jurisdiction every place.
Kevin Russell: --But the problem is a corporation shouldn't be jurisdictionally better off simply because it's bigger than its competitors who are smaller and therefore necessarily do a bigger portion of their business in a smaller number of places.
I think there is a very significant fairness problem with the proportionality test suggested by the government, again never raised in this case.
Nobody ever argued that MBUSA didn't do enough business in California, and in fact it's done billions of dollars of business there and it's enjoyed the benefits of being in the State, of doing business in the State, to a far greater degree than many of its competitors, say Tesla, which is subject to general jurisdiction for suits for anything that it does anywhere in the world.
Justice Elena Kagan: If it is subject to general jurisdiction in California, is it subject to general jurisdiction in all 49 other States?
Kevin Russell: I think there would still be a question of whether -- they would be able to raise the arguments that they haven't raised in other jurisdictions.
It may be that the billions of dollars that they are doing business in California is enough, but the few millions of dollars they do in Iowa is not.
Justice Elena Kagan: So everybody is subject to general jurisdiction in like California and New York and Florida because they are big markets, but no worries about, you know, Delaware?
Kevin Russell: That may be the result.
Justice Elena Kagan: That's a bad example.
Kevin Russell: That may be the case if -- the Court has always recognized that doing business is enough.
Back to the Barrow case, when just having an office, a sales office.
Another case that this Court cited in Perkins and cited in International Shoe as an example of a paradigmatic case was a case called Hausa by then-Judge Cardozo.
It was a suit by somebody from New York, who sued in New York, sued a Pennsylvania corporation, and the justification was it had a sales office in New York.
Now, if this Court thinks that those cases were wrong, if it thinks that we need to change our conception of general jurisdiction in light of the evolved modern--
Justice Ruth Bader Ginsburg: Isn't that exactly what Goodyear held?
Kevin Russell: --No.
Goodyear didn't purport to change anything.
I know you used a new phrase to describe the prior precedent, but it wasn't purporting to revise it, and I don't think that there was substantial argument in that case on that score.
Justice Ruth Bader Ginsburg: There would hardly be room for a decision next to Goodyear that says, oh, for general jurisdiction purposes it's enough that you have some subsidiary operating in the State.
The whole idea of Goodyear was to say there is one place you can always sue a corporation, one or two, place of incorporation, a principal place of business.
Kevin Russell: Well, again if I can just respond to that idea.
The one consequence of that, and getting back to what I would say to Justice Kagan, is people aren't subject to general jurisdiction only in one or two places.
They are subject to general jurisdiction anywhere they set foot and are served with process.
And I think it is quite unfair to say--
Justice Ruth Bader Ginsburg: But people can be only one place at a time.
Kevin Russell: --But they go a lot of places over time.
And as a consequence they are in fact in the course of living their lives or even doing business in an unincorporated forum subject to general jurisdiction in a lot of places.
Again, this is an important question that hasn't been briefed in this case, it wasn't preserved below, and I think that you ought to decide the case on the grounds, on the premises on which it has been litigated for eight years.
And if you can't do that you ought to dismiss the case as improvidently granted or at least remand the case to allow a full airing of these issues in an appropriate forum.
Justice Samuel Alito: If this 2.4 percent figure is important, wouldn't we get into impossible line-drawing problems?
What if it was 1.4 percent?
Kevin Russell: Well, you do get into line-drawing problems in this area.
This Court has recognized that even in specific jurisdiction cases.
Justice Antonin Scalia: You think it should be billions of dollars, right, that percentage, right?
Kevin Russell: I think billions of dollars is enough.
Justice Antonin Scalia: So we've got to pick a dollar amount rather than a percentage.
Kevin Russell: Well, you have to pick some metric.
I mean, this Court's cases have always been general.
They talked about minimum contacts.
They talked about systematic and continuous business operations in the State.
And the Court has always recognized that those are not standards that are capable of mechanical operation or bright line the rules.
If you think that you need to develop some new standards, you ought to do it in a case when it is squarely presented and adequately briefed.
If there are no further questions--
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Dupree, you have four minutes remaining.
REBUTTAL ARGUMENT OF THOMAS H. DUPREE, JR., ON BEHALF OF THE PETITIONER
Thomas H Dupree Jr: Just a few brief points.
First, with regard to Justice Breyer's question about remand, I think there is absolutely no reason for this Court to remand this case to the Ninth Circuit.
The issues as to attribution were fully briefed below.
They are fully briefed here.
I think that were this Court to either remand the case or dismiss the case, for one thing, the circuit split would persist.
The Ninth Circuit's decision in the event of a remand would remain on the books.
Even if this Court were to remand the decision of the Second Circuit which--
Justice Sonia Sotomayor: Do you really care how we do it?
Given that so many issues have not been adequately briefed, conceded when they are obviously fallacious and unsupportable, why don't we just say simply exercise of jurisdiction is unreasonable in this case?
Thomas H Dupree Jr: --Well, Justice Sotomayor--
Justice Sonia Sotomayor: The other side -- neither you or the other side have argued that there isn't a reasonableness component.
I know some of my colleagues don't think there is.
But both of you have proceeded in your briefing as if there is.
Do you care how you win?
Thomas H Dupree Jr: --Well, yes, Your Honor, I think we do.
I think we do.
And let me say this.
I think that with, regard to Your Honor's points about issues being waived or forfeited below, the only issue that even arguably, even arguably was operated below was the discrete question as to whether Mercedes Benz itself is subject to general jurisdiction in California.
The question that Justice Kagan and others were inquiring about, namely that even were one to accept the attribution theory and evaluate Daimler as a joint enterprise, would that render the combined enterprise at home in California, we plainly did not waive or forfeit that question.
In fact we expressly addressed it in our opening brief and we have been fighting in this case from day one to argue that, even if you were to attribute the contacts, there is no basis for jurisdiction over Daimler.
That question is squarely presented for this Court's review.
I also think that, as Justice Ginsburg and others have noted, there has been some confusion in the lower courts over the distinction between specific jurisdiction and general jurisdiction.
This Court saw it in Goodyear, for example, and I think that were this Court to resolve this case on the ground that Justice Kagan suggested or Justice Alito suggested, namely, that a corporation cannot be at home outside of the areas where it maintains its principal place of business or is incorporated, that it can't be subject to general jurisdiction anywhere else.
That would be a clean rule.
It would be a workable rule.
I think it's fully consistent with what the Court said in Goodyear, and it would provide clarity and guidance to the lower courts and eliminate the circuit split that currently exists over agency jurisdiction.
A couple other quick points.
Justice Scalia, I regret to report that neither the parties nor the courts below reproduced the text of the California statute.
The Solicitor General, however, to his credit did on page 4 of his brief.
It simply says that California may exercise jurisdiction on any basis not inconsistent with the Constitution of California or the United States.
And the Ninth Circuit panel on page 19A of the Petitioner's appendix said that, therefore, the question is this case -- in this case is simply whether the exercise of jurisdiction would exceed the permissible bounds of due process.
The last point I want to make, and we've been discussing legal issues, is just to remind the Court of the facts of this case.
This is a case involving Argentine plaintiffs suing a German corporation based on events that allegedly occurred in Argentina more than 30 years ago.
This case has no connection to the United States, and it has no business in a California courtroom.
The Ninth Circuit's contrary conclusion is indefensible, and for that reason, we ask that the judgment be reversed.
Chief Justice John G. Roberts: Thank you, counsel.
The case is submitted.
Chief Justice John G. Roberts: Justice Ginsburg has our opinion in case 11-965, Daimler vs. Bauman.
Justice Ruth Bader Ginsburg: In this case concerns the authority of a court in the United States to entertainment a claim brought by foreign plaintiffs against a foreign defendant based on events occurring entirely outside the United States.
The litigation commenced in 2004 when 22 Argentinean residence filed a complaint in the United States District Court for the Northern District of California against DaimlerChrysler Aktiengesellschaft hereafter Daimler, a German public stock company, headquartered in Stuttgart that manufactures Mercedes-Benz vehicles in Germany.
The complaint alleged that during Argentina's 1976 to 1983 “Dirty War,” Daimler's Argentinian subsidiary Mercedez-Benz Argentina (MB Argentina) Collaborated with state security forces to kidnap, detain, torture, and kill certain MB Argentina workers, among them, plaintiffs or persons closely related to plaintiffs.
Damages for the alleged human-rights violations were sought under the laws of the United States, California, and Argentina.
Jurisdiction over the lawsuit was predicated on the California connections of yet another entity Mercedes-Benz USA, (MBUSA), a subsidiary of Daimler incorporated in Delaware with its principal place of business in New Jersey.
MBUSA distributes Daimler-manufactured vehicles to independent dealerships throughout the United States, including California.
The question presented is whether the Due Process Clause of the Fourteenth Amendment precludes the District Court from exercising jurisdiction over Daimler, given the absence of any California connection to the atrocities, perpetrators, or victims.
Plaintiffs invoked the court's general or all-purpose jurisdiction.
California, they urge, is a place where Daimler may be sued on any and all claims against it, wherever in the world the claims may arise.
For example, in plaintiff's view, if a Mercedes-Benz vehicle overturned in Saudi Arabia, injuring a driver and passengers from Norway the injured persons could maintain a design defect suit in California.
The District Court granted Daimler's motion to dismiss for lack of jurisdiction, reversing the District Court's judgment, the Court of Appeals held that MBUSA which it assumed to fall within California courts' all-purpose jurisdiction, was Daimler's "agent" for jurisdictional purposes, so that Daimler, too, should generally be answerable to suit in that State.
Exercises of personal jurisdiction of such breath we hold today are barred by due process constraints on the assertion of adjudicatory authority.
Three years ago in Goodyear Dunlop Tires Operations v. Brown, we stated that a court may assert general or all-purpose jurisdiction over a foreign corporation only when the corporation's affiliations with the State in which suit is brought are so constant and pervasive as to render it essentially at home in the forum State.
Instructed by Goodyear, we conclude Daimler is not at home in California, and cannot be sued there for injuries plaintiffs attribute to MB Argentina's conduct in Argentina.
Plaintiffs had originally stated claims under two federal statutes, the Alien Tort Statute and the Torture Victim Protection Act.
Maintaining that those statutes supported jurisdiction over torturers wherever they may have acted and whomever they may have victimized.
But we have recently made plan that in neither statute which is the offshore conduct alleged in this case.
The judgment of the Court of Appeals for the Ninth Circuit is reversed.
Justice Sotomayor has filed an opinion concurring in the judgment.