The U.S. Supreme Court gave multinational companies a stronger shield against lawsuits, throwing out a case against Daimler AG over a company unit’s alleged collaboration in torture and killings in Argentina.
The justices unanimously said the parent company didn’t have enough ties to California to give courts there the authority to hear the case.
“Daimler’s slim contacts with the state hardly render it at home there,” Justice Ruth Bader Ginsburg wrote for the court. The ruling reversed a federal appeals court decision that had let the case go forward.
The ruling adds to a line of Supreme Court decisions that have reduced the options available to people trying to sue multinational corporations in American courts.
Daimler’s Argentine Mercedes-Benz unit was accused of collaborating with state security forces during the “Dirty War” from 1976 to 1983. Mercedes-Benz Argentina allegedly identified workers seen as union agitators, knowing security forces would then kidnap, torture and in some cases kill the people. The company denies the allegations.
Daimler, based in Stuttgart, Germany, contended the courts in California lack “personal jurisdiction” over the company. Under that legal concept, a defendant doesn’t have to face lawsuits in a state unless it has a certain minimum level of contact with the jurisdiction.
Daimler was sued by a group of former employees and representatives of deceased workers. They argued that Daimler had sufficient contacts with California because of billions of dollars in sales through its Mercedes-Benz USA unit.
Last year the Supreme Court scaled back a favorite legal tool of human-rights activists, the 1789 Alien Tort Statute. The majority said the Alien Tort Statute generally doesn’t apply to conduct beyond U.S. borders.
The people suing Daimler were invoking the Alien Tort Statute along with state and Argentine law in their suit.
In 2011, the court said three overseas units of Goodyear Tire & Rubber Co. couldn’t be sued in a North Carolina court over a bus wreck in France.
The case is DaimlerChrysler v. Bauman, 11-965.
–Editors: Laurie Asseo, Mark McQuillan