Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

How Will Supreme Court’s Daimler Decision Impact Business Litigation?

Author: Scarinci Hollenbeck, LLC

Date: February 12, 2014

Key Contacts

Back

Late last month, the U.S. Supreme Court released it much-anticipated decision in Daimler AG v. Bauman, which addressed when U.S. federal courts can exercise jurisdiction over corporations for conduct occurring exclusively overseas. The Court’s narrow view of general jurisdiction will likely make it harder to sue foreign and out-of-state businesses.

The case involved allegations of human rights abuses by residents of Argentina against Mercedes Benz Argentina, a subsidiary of Daimler AG. The plaintiffs contended that personal jurisdiction over Daimler rested on the California contacts of Mercedes-Benz USA, LLC (MBUSA), another Daimler subsidiary. MBUSA is a Delaware corporation with a principal place of business in New Jersey; it has several independent dealerships in California, among other states.

The Ninth Circuit Court of Appeals ruled that sales of the company’s Mercedes Benz vehicles in California and other commercial activity provided a sufficient basis for personal jurisdiction. However, the Supreme Court reversed the decision, holding that Daimler’s conduct in Argentina was outside of the reach of U.S. courts.

In reaching its decision, the Court focused on the distinction between specific and general jurisdiction, the latter of which is necessary when the lawsuit does not arise from the defendant’s conduct in the forum state. As explained by the Court, a corporation is subject to “general jurisdiction” only if its extensive contacts with the forum render it “at home” there.

With regard to the precise definition of “at home,” the justices suggested that general personal jurisdiction over a corporation may only exist in its place of incorporation and principal place of business. “A corporation that operates in many places can scarcely be deemed at home in all of them,” the justices concluded.

While the Court did acknowledge that an “exceptional case” may exist where “a corporation’s operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State,” the justices set the bar fairly high for future suits.

For a more in-depth discussion of the Court’s decision, please visit the Scarinci Hollenbeck Constitutional Law Blog.

If you have any questions about this case or would like to discuss how it may impact your company’s litigation strategies, please contact me, Christine Vanek, or the Scarinci Hollenbeck attorney with whom you work. 

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda post image

Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda

On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]

Author: Matthew F. Mimnaugh

Link to post with title - "Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda"
What Are FIRPTA Withholding Requirements? post image

What Are FIRPTA Withholding Requirements?

If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]

Author: Jesse M. Dimitro

Link to post with title - "What Are FIRPTA Withholding Requirements?"
Does Your Homeowners Insurance Provide Adequate Coverage? post image

Does Your Homeowners Insurance Provide Adequate Coverage?

Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]

Author: Jesse M. Dimitro

Link to post with title - "Does Your Homeowners Insurance Provide Adequate Coverage?"
Understanding the Importance of a Non-Contingent Offer post image

Understanding the Importance of a Non-Contingent Offer

Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]

Author: Jesse M. Dimitro

Link to post with title - "Understanding the Importance of a Non-Contingent Offer"
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC post image

Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC

Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC"
Novation Agreement Process: Step-by-Step Guide for Businesses post image

Novation Agreement Process: Step-by-Step Guide for Businesses

Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]

Author: Dan Brecher

Link to post with title - "Novation Agreement Process: Step-by-Step Guide for Businesses"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

How Will Supreme Court’s Daimler Decision Impact Business Litigation?

Author: Scarinci Hollenbeck, LLC

Late last month, the U.S. Supreme Court released it much-anticipated decision in Daimler AG v. Bauman, which addressed when U.S. federal courts can exercise jurisdiction over corporations for conduct occurring exclusively overseas. The Court’s narrow view of general jurisdiction will likely make it harder to sue foreign and out-of-state businesses.

The case involved allegations of human rights abuses by residents of Argentina against Mercedes Benz Argentina, a subsidiary of Daimler AG. The plaintiffs contended that personal jurisdiction over Daimler rested on the California contacts of Mercedes-Benz USA, LLC (MBUSA), another Daimler subsidiary. MBUSA is a Delaware corporation with a principal place of business in New Jersey; it has several independent dealerships in California, among other states.

The Ninth Circuit Court of Appeals ruled that sales of the company’s Mercedes Benz vehicles in California and other commercial activity provided a sufficient basis for personal jurisdiction. However, the Supreme Court reversed the decision, holding that Daimler’s conduct in Argentina was outside of the reach of U.S. courts.

In reaching its decision, the Court focused on the distinction between specific and general jurisdiction, the latter of which is necessary when the lawsuit does not arise from the defendant’s conduct in the forum state. As explained by the Court, a corporation is subject to “general jurisdiction” only if its extensive contacts with the forum render it “at home” there.

With regard to the precise definition of “at home,” the justices suggested that general personal jurisdiction over a corporation may only exist in its place of incorporation and principal place of business. “A corporation that operates in many places can scarcely be deemed at home in all of them,” the justices concluded.

While the Court did acknowledge that an “exceptional case” may exist where “a corporation’s operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State,” the justices set the bar fairly high for future suits.

For a more in-depth discussion of the Court’s decision, please visit the Scarinci Hollenbeck Constitutional Law Blog.

If you have any questions about this case or would like to discuss how it may impact your company’s litigation strategies, please contact me, Christine Vanek, or the Scarinci Hollenbeck attorney with whom you work. 

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: