Daimler AG v. Bauman
Daimler AG v. Bauman
Opinion
*120 This case concerns the authority of a court in the United States to entertain 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 twenty-two Argentinian residents 1 filed a complaint in the United States District Court for the Northern District *121 of California against DaimlerChrysler Aktiengesellschaft *751 (Daimler), 2 a German public stock company, headquartered in Stuttgart, that manufactures Mercedes-Benz vehicles in Germany. The complaint alleged that during Argentina's 1976-1983 "Dirty War," Daimler's Argentinian subsidiary, Mercedes-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 from Daimler under the laws of the United States, California, and Argentina. Jurisdiction over the lawsuit was predicated on the California contacts of Mercedes-Benz USA, LLC (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 in this case, given the absence of any California connection to the atrocities, perpetrators, or victims described in the complaint. 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, as plaintiffs' counsel affirmed, under the proffered jurisdictional theory, if a Daimler-manufactured vehicle overturned in Poland, injuring a Polish driver and passenger, the injured parties could maintain a design defect suit in California. See Tr. of Oral Arg. 28-29. Exercises of personal jurisdiction so exorbitant, *122 we hold, are barred by due process constraints on the assertion of adjudicatory authority.
In
Goodyear Dunlop Tires Operations, S.A. v. Brown,
564 U.S. ----,
I
In 2004, plaintiffs (respondents here) filed suit in the United States District Court for the Northern District of California, alleging that MB Argentina collaborated with Argentinian state security forces to kidnap, detain, torture, and kill plaintiffs and their relatives during the military dictatorship in place there from 1976 through 1983, a period known as Argentina's "Dirty War." Based on those allegations, plaintiffs asserted claims under the Alien Tort Statute,
Plaintiffs' operative complaint names only one corporate defendant: Daimler, the petitioner here. Plaintiffs seek to hold Daimler vicariously liable for MB Argentina's alleged *123 malfeasance. Daimler is a German Aktiengesellschaft (public stock company) that manufactures Mercedes-Benz vehicles primarily in Germany and has its headquarters in Stuttgart. At times relevant to this case, MB Argentina was a subsidiary wholly owned by Daimler's predecessor in interest.
Daimler moved to dismiss the action for want of personal jurisdiction. Opposing the motion, plaintiffs submitted declarations and exhibits purporting to demonstrate the presence of Daimler itself in California. Alternatively, plaintiffs maintained that jurisdiction over Daimler could be founded on the California contacts of MBUSA, a distinct corporate entity that, according to plaintiffs, should be treated as Daimler's agent for jurisdictional purposes.
MBUSA, an indirect subsidiary of Daimler, is a Delaware limited liability corporation. 3 MBUSA serves as Daimler's exclusive importer and distributor in the United States, purchasing Mercedes-Benz automobiles from Daimler in Germany, then importing those vehicles, and ultimately distributing them to independent dealerships located throughout the Nation. Although MBUSA's principal place of business is in New Jersey, MBUSA has multiple California-based facilities, including a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine. According to the record developed below, MBUSA is the largest supplier of luxury vehicles to the California market. In particular, over 10% of all sales of new vehicles in the United States take place in California, and MBUSA's California sales account for 2.4% of Daimler's worldwide sales.
The relationship between Daimler and MBUSA is delineated in a General Distributor Agreement, which sets forth requirements for MBUSA's distribution of Mercedes-Benz vehicles in the United States. That agreement established MBUSA as an "independent contracto[r]" that "buy[s] and
*124
sell[s] [vehicles] ... as an independent business for [its] own account." App. 179a. The agreement "does not make [MBUSA] ... a general or special agent, partner, joint venturer or employee of DAIMLERCHRYSLER or any DaimlerChrysler Group Company"; MBUSA "ha[s] no authority to make binding obligations for or act on behalf of DAIMLERCHRYSLER or any DaimlerChrysler Group Company."
After allowing jurisdictional discovery on plaintiffs' agency allegations, the District Court granted Daimler's motion to dismiss. Daimler's own affiliations with California, the court first determined, were insufficient to support the exercise of all-purpose jurisdiction over the corporation.
Bauman v. DaimlerChrysler AG,
No. C-04-00194 RMW (N.D.Cal., Nov. 22, 2005), App. to Pet. for Cert. 111a-112a,
*753
Bauman v. DaimlerChrysler AG,
No. C-04-00194 RMW (N.D.Cal., Feb. 12, 2007), App. to Pet. for Cert. 83a-85a,
The Ninth Circuit at first affirmed the District Court's judgment. Addressing solely the question of agency, the Court of Appeals held that plaintiffs had not shown the existence of an agency relationship of the kind that might warrant attribution of MBUSA's contacts to Daimler.
Bauman v. DaimlerChrysler Corp.,
*125
Daimler petitioned for rehearing and rehearing en banc, urging that the exercise of personal jurisdiction over Daimler could not be reconciled with this Court's decision in
Goodyear Dunlop Tires Operations, S.A. v. Brown,
564 U.S. ----,
We granted certiorari to decide whether, consistent with the Due Process Clause of the Fourteenth Amendment, Daimler is amenable to suit in California courts for claims involving only foreign plaintiffs and conduct occurring entirely abroad. 569 U.S. ----,
II
Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons. See Fed. Rule Civ. Proc. 4(k)(1)(A) (service of process is effective to establish personal jurisdiction over a defendant "who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located"). Under California's long-arm statute, California state courts may exercise personal jurisdiction "on any basis not inconsistent with the Constitution of this state or of the United States." Cal. Civ. Proc. Code Ann. § 410.10 (West 2004). California's long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U.S. Constitution. We therefore inquire whether the Ninth Circuit's holding comports with the limits imposed by federal due process. See,
e.g.,
Burger King Corp. v. Rudzewicz,
III
In
Pennoyer v. Neff,
"The canonical opinion in this area remains
International Shoe
[
Co. v. Washington
],
International Shoe
's conception of "fair play and substantial justice" presaged the development of two categories of personal jurisdiction. The first category is represented by
International Shoe
itself, a case in which the in-state activities of the corporate defendant "ha[d] not only been continuous and systematic, but also g[a]ve rise to the liabilities sued on."
International Shoe
distinguished between, on the one hand, exercises of specific jurisdiction, as just described, and on the other, situations where a foreign corporation's "continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities."
*755
*128
Since
International Shoe,
"specific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction [has played] a reduced role."
Goodyear,
564 U.S., at ----,
*129
Our post-
International Shoe
opinions on general jurisdiction, by comparison, are few. "[The Court's] 1952 decision in
Perkins v. Benguet Consol. Mining Co.
remains the textbook case of general jurisdiction
*756
appropriately exercised over a foreign corporation that has not consented to suit in the forum."
Goodyear,
564 U.S., at ----,
Most recently, in
Goodyear
, we answered the question: "Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State? " 564 U.S., at ----,
We reversed, observing that the North Carolina court's analysis "elided the essential difference between case-specific and all-purpose (general) jurisdiction."
As is evident from
Perkins
,
Helicopteros,
and
Goodyear
, general and specific jurisdiction have followed markedly different trajectories post-
International Shoe
. Specific jurisdiction has been cut loose from
Pennoyer
's sway, but we have declined to stretch general jurisdiction beyond
*758
limits traditionally recognized.
9
As this Court has increasingly
*133
trained on the "relationship among the defendant, the forum, and the litigation,"
Shaffer,
IV
With this background, we turn directly to the question whether Daimler's affiliations with California are sufficient to subject it to the general (all-purpose) personal jurisdiction of that State's courts. In the proceedings below, the parties agreed on, or failed to contest, certain points we now take as given. Plaintiffs have never attempted to fit this case into the specific jurisdiction category. Nor did plaintiffs challenge on appeal the District Court's holding that Daimler's *134 own contacts with California were, by themselves, too sporadic to justify the exercise of general jurisdiction. While plaintiffs ultimately persuaded the Ninth Circuit to impute MBUSA's California contacts to Daimler on an agency theory, at no point have they maintained that MBUSA is an alter ego of Daimler.
Daimler, on the other hand, failed to object below to plaintiffs' assertion that the California courts could exercise all-purpose jurisdiction over MBUSA. 12 But see Brief for Petitioner 23, n. 4 (suggestion that in light of Goodyear , MBUSA may not be amenable to general jurisdiction in California); Brief for United States as Amicus Curiae 16, n. 5 (hereinafter U.S. Brief) (same). We will assume then, for purposes of this decision only, that MBUSA qualifies as at home in California.
A
In sustaining the exercise of general jurisdiction over Daimler, the Ninth Circuit relied on an agency theory, determining that MBUSA acted as Daimler's agent for jurisdictional purposes and then
*759
attributing MBUSA's California contacts to Daimler. The Ninth Circuit's agency analysis derived from Circuit precedent considering principally whether the subsidiary "performs services that are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services."
This Court has not yet addressed whether a foreign corporation may be subjected to a court's general jurisdiction based on the contacts of its in-state subsidiary. Daimler argues, and several Courts of Appeals have held, that a subsidiary's jurisdictional contacts can be imputed to its parent only when the former is so dominated by the latter as to be *135 its alter ego. The Ninth Circuit adopted a less rigorous test based on what it described as an "agency" relationship. Agencies, we note, come in many sizes and shapes: "One may be an agent for some business purposes and not others so that the fact that one may be an agent for one purpose does not make him or her an agent for every purpose." 2A C. J. S., Agency § 43, p. 367 (2013) (footnote omitted). 13 A subsidiary, for example, might be its parent's agent for claims arising in the place where the subsidiary operates, yet not its agent regarding claims arising elsewhere. The Court of Appeals did not advert to that prospect. But we need not pass judgment on invocation of an agency theory in the context of general jurisdiction, for in no event can the appeals court's analysis be sustained.
The Ninth Circuit's agency finding rested primarily on its observation that MBUSA's services were "important" to Daimler, as gauged by Daimler's hypothetical readiness to perform those services itself if MBUSA did not exist. Formulated
*136
this way, the inquiry into importance stacks the deck, for it will always yield a pro-jurisdiction answer: "Anything a corporation does through an independent contractor, subsidiary, or distributor is presumably something that the corporation would do 'by other means' if the independent contractor, subsidiary, or distributor did not exist."
B
Even if we were to assume that MBUSA is at home in California, and further to assume MBUSA's contacts are imputable to Daimler, there would still 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. 16
*137
Goodyear
made clear that only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there. " For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home." 564 U.S., at ----, 131 S.Ct., at 2853-2854 (citing Brilmayer et al., A General Look at General Jurisdiction,
Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums. Plaintiffs would have us look beyond the exemplar bases Goodyear identified, *761 *138 and approve the exercise of general jurisdiction in every State in which a corporation "engages in a substantial, continuous, and systematic course of business." Brief for Respondents 16-17, and nn. 7-8. That formulation, we hold, is unacceptably grasping.
As noted, see
supra,
at 753 - 754, the words "continuous and systematic" were used in
International Shoe
to describe instances in which the exercise of
specific
jurisdiction would be appropriate. See
Here, neither Daimler nor MBUSA is incorporated in California, nor does either entity have its principal place of business there. If Daimler's California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other State in which MBUSA's sales are sizable. Such exorbitant exercises of all-purpose jurisdiction would
*762
scarcely permit out-of-state defendants "to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit."
Burger King Corp.,
It was therefore error for the Ninth Circuit to conclude that Daimler, even with MBUSA's contacts attributed to it, was at home in California, and hence subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California. 20
C
*140
Finally, the transnational context of this dispute bears attention. The Court of Appeals emphasized, as supportive of
*141
the exercise of general jurisdiction, plaintiffs' assertion of claims under the Alien Tort Statute (ATS),
The Ninth Circuit, moreover, paid little heed to the risks to international comity its expansive view of general jurisdiction posed. Other nations do not share the uninhibited approach to personal jurisdiction advanced by the Court of Appeals in this case. In the European Union, for example, a corporation may generally be sued in the nation in which it is "domiciled," a term defined to refer only to the location of the corporation's "statutory seat," "central administration," or "principal place of business." European Parliament and Council Reg. 1215/2012, Arts. 4(1), and 63(1), 2012 O.J. (L. 351) 7, 18. See also
* * *
For the reasons stated, the judgment of the United States Court of Appeals for the Ninth Circuit is
Reversed.
Justice SOTOMAYOR, concurring in the judgment.
I agree with the Court's conclusion that the Due Process Clause prohibits the exercise of personal jurisdiction over Daimler in light of the unique circumstances of this case. I concur only in the judgment, however, because I cannot agree with the path the Court takes to arrive at that result.
The Court acknowledges that Mercedes-Benz USA, LLC (MBUSA), Daimler's wholly owned subsidiary, has considerable contacts with California. It has multiple facilities in the State, including a regional headquarters. Each year, it distributes in California tens of thousands of cars, the sale of which generated billions of dollars in the year this suit was brought. And it provides service and sales support to customers throughout the State. Daimler has conceded that California courts may exercise general jurisdiction over MBUSA on the basis of these contacts, and the Court assumes that MBUSA's contacts may be attributed to Daimler *143 for the purpose of deciding whether Daimler is also subject to general jurisdiction.
Are these contacts sufficient to permit the exercise of general jurisdiction over *764 Daimler? The Court holds that they are not, for a reason wholly foreign to our due process jurisprudence. The problem, the Court says, is not that Daimler's contacts with California are too few, but that its contacts with other forums are too many. In other words, the Court does not dispute that the presence of multiple offices, the direct distribution of thousands of products accounting for billions of dollars in sales, and continuous interaction with customers throughout a State would be enough to support the exercise of general jurisdiction over some businesses. Daimler is just not one of those businesses, the Court concludes, because its California contacts must be viewed in the context of its extensive "nationwide and worldwide" operations. Ante, at 762, n. 20. In recent years, Americans have grown accustomed to the concept of multinational corporations that are supposedly "too big to fail"; today the Court deems Daimler "too big for general jurisdiction."
The Court's conclusion is wrong as a matter of both process and substance. As to process, the Court decides this case on a ground that was neither argued nor passed on below, and that Daimler raised for the first time in a footnote to its brief. Brief for Petitioner 31-32, n. 5. As to substance, the Court's focus on Daimler's operations outside of California ignores the lodestar of our personal jurisdiction jurisprudence: A State may subject a defendant to the burden of suit if the defendant has sufficiently taken advantage of the State's laws and protections through its contacts in the State; whether the defendant has contacts elsewhere is immaterial.
Regrettably, these errors are unforced. The Court can and should decide this case on the far simpler ground that, no matter how extensive Daimler's contacts with California, *144 that State's exercise of jurisdiction would be unreasonable given that the case involves foreign plaintiffs suing a foreign defendant based on foreign conduct, and given that a more appropriate forum is available. Because I would reverse the judgment below on this ground, I concur in the judgment only.
I
I begin with the point on which the majority and I agree: The Ninth Circuit's decision should be reversed.
Our personal jurisdiction precedents call for a two-part analysis. The contacts prong asks whether the defendant has sufficient contacts with the forum State to support personal jurisdiction; the reasonableness prong asks whether the exercise of jurisdiction would be unreasonable under the circumstances.
Burger King Corp. v. Rudzewicz,
We identified the factors that bear on reasonableness in
Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty.,
*146 The same considerations resolve this case. It involves Argentine plaintiffs suing a German defendant for conduct that took place in Argentina. Like the plaintiffs in Asahi, respondents have failed to show that it would be more convenient to litigate in California than in Germany, a sovereign with a far greater interest in resolving the dispute. Asahi thus makes clear that it would be unreasonable for a court in California to subject Daimler to its jurisdiction.
II
The majority evidently agrees that, if the reasonableness prong were to apply, it would be unreasonable for California courts to exercise jurisdiction over Daimler in this case. See ante, at 761 - 762 (noting that it would be "exorbitant" for California courts to exercise general jurisdiction over Daimler, a German defendant, in this "Argentina-rooted case" brought by "foreign plaintiffs"). But instead of resolving the case on this uncontroversial basis, the majority reaches out to decide it on a ground neither argued nor decided below. 3
*766
We generally do not pass on arguments that lower courts have not addressed. See,
e.g.,
Cutter v. Wilkinson,
The majority's decision is troubling all the more because the parties were not asked to brief this issue. We granted certiorari on the question "whether it violates due process for a court to exercise general personal jurisdiction over a foreign corporation based solely on the fact that an indirect corporate subsidiary performs services on behalf of the defendant in the forum State." Pet. for Cert. i. At no point in Daimler's petition for certiorari did the company contend that, even if this attribution question were decided against it, its contacts in California would still be insufficient to support general jurisdiction. The parties' merits briefs accordingly focused on the attribution-of-contacts question, addressing the reasonableness inquiry (which had been litigated and decided below) in most of the space that remained. See Brief for Petitioner 17-37, 37-43; Brief for Respondents 18-47, 47-59.
In bypassing the question on which we granted certiorari to decide an issue not litigated below, the Court leaves respondents "without an unclouded opportunity to air the issue the Court today decides against them,"
Comcast Corp. v. Behrend,
569 U.S. ----, ----,
The relevant facts are undeveloped because Daimler conceded at the start of this litigation that MBUSA is subject *148 to general jurisdiction based on its California contacts. We therefore do not know the full extent of those contacts, though what little we do know suggests that Daimler was wise to concede what it did. MBUSA imports more than 200,000 vehicles into the United States and distributes many of them to independent dealerships in California, where they are sold. Declaration of Dr. Peter Waskönig in Bauman v. DaimlerChrysler Corp ., No. 04-00194-RMW (N.D.Cal.), ¶ 10, p. 2. MBUSA's California sales account for 2.4% of Daimler's worldwide sales, which were $192 billion in *767 2004. 4 And 2.4% of $192 billion is $4.6 billion, a considerable sum by any measure. MBUSA also has multiple offices and facilities in California, including a regional headquarters.
But the record does not answer a number of other important questions. Are any of Daimler's key files maintained in MBUSA's California offices? How many employees work in those offices? Do those employees make important strategic decisions or oversee in any manner Daimler's activities? These questions could well affect whether Daimler is subject to general jurisdiction. After all, this Court upheld the exercise of general jurisdiction in
Perkins v. Benguet Consol. Mining Co.,
III
While the majority's decisional process is problematic enough, I fear that process leads it to an even more troubling result.
A
Until today, our precedents had established a straightforward test for general jurisdiction: Does the defendant have "continuous corporate operations within a state" that are "so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities"?
International Shoe Co. v. Washington,
*150
In
Perkins
, for example, we found an Ohio court's exercise of general jurisdiction
*768
permissible where the president of the foreign defendant "maintained an office," "drew and distributed ... salary checks," used "two active bank accounts," "supervised ... the rehabilitation of the corporation's properties in the Philippines," and held "directors' meetings," in Ohio.
We engaged in the same inquiry in Helicopteros . There, we held that a Colombian corporation was not subject to general jurisdiction in Texas simply because it occasionally sent its employees into the State, accepted checks drawn on a Texas bank, and purchased equipment and services from a *151 Texas company. In no sense did our analysis turn on the extent of the company's operations beyond Texas.
Most recently, in
Goodyear Dunlop Tires Operations, S.A. v. Brown,
564 U.S. ----,
This approach follows from the touchstone principle of due process in this field, the concept of reciprocal fairness. When a corporation chooses to invoke the benefits and protections of a State in which it operates, the State acquires the authority to subject the company to suit in its courts. See
International Shoe,
Had the majority applied our settled approach, it would have had little trouble concluding that Daimler's California contacts rise to the requisite level, given the majority's assumption that MBUSA's contacts may be attributed to Daimler and given Daimler's concession that those contacts render MBUSA "at home" in California. Our cases have long stated the rule that a defendant's contacts with a forum State must be continuous, substantial, and systematic in order for the defendant to be subject to that State's general jurisdiction. See
Perkins,
*770 *153 Under this standard, Daimler's concession that MBUSA is subject to general jurisdiction in California (a concession the Court accepts, ante, at 758, 759) should be dispositive. For if MBUSA's California contacts are so substantial and the resulting benefits to MBUSA so significant as to make MBUSA "at home" in California, the same must be true of Daimler when MBUSA's contacts and benefits are viewed as its own. Indeed, until a footnote in its brief before this Court, even Daimler did not dispute this conclusion for eight years of the litigation.
B
The majority today concludes otherwise. Referring to the "continuous and systematic" contacts inquiry that has *154 been taught to generations of first-year law students as "unacceptably grasping," ante, at 760, the majority announces the new rule that in order for a foreign defendant to be subject to general jurisdiction, it must not only possess continuous and systematic contacts with a forum State, but those contacts must also surpass some unspecified level when viewed in comparison to the company's "nationwide and worldwide" activities. Ante, at 762, n. 20. 9
Neither of the majority's two rationales for this proportionality requirement is persuasive. First, the majority suggests that its approach is necessary for the sake of predictability. Permitting general jurisdiction in every State where a corporation has continuous and substantial contacts, the majority asserts, would "scarcely permit out-of-state defendants 'to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.' "
Ante,
at 762 (quoting
Burger King Corp.,
Nor is the majority's proportionality inquiry any more predictable than the approach it rejects. If anything, the majority's *155 approach injects an additional layer of uncertainty because a corporate defendant must now try to foretell a court's analysis as to both the sufficiency of its contacts with the forum State itself, as well as the relative sufficiency of those contacts in light of the company's operations elsewhere. Moreover, the majority does not even try to explain just how extensive the company's in-state contacts must be in the context of its global operations in order for general jurisdiction to be proper.
The majority's approach will also lead to greater unpredictability by radically expanding the scope of jurisdictional discovery.
*771
Rather than ascertaining the extent of a corporate defendant's forum-state contacts alone, courts will now have to identify the extent of a company's contacts in every other forum where it does business in order to compare them against the company's in-state contacts. That considerable burden runs headlong into the majority's recitation of the familiar principle that " '[s]imple jurisdictional rules ... promote greater predictability.' "
Ante,
at 760 - 761 (quoting
Hertz Corp. v. Friend,
Absent the predictability rationale, the majority's sole remaining justification for its proportionality approach is its unadorned concern for the consequences. "If Daimler's California activities sufficed to allow adjudication of this Argentina-rooted case in California," the majority laments, "the same global reach would presumably be available in every other State in which MBUSA's sales are sizable." Ante, at 761.
The majority characterizes this result as "exorbitant,"
ibid.,
but in reality it is an inevitable consequence of the rule of due process we set forth nearly 70 years ago, that there are "instances in which [a company's] continuous corporate operations within a state" are "so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities,"
International Shoe,
In any event, to the extent the majority is concerned with the modern-day consequences of
International Shoe
's conception of personal jurisdiction, there remain other judicial doctrines available to mitigate any resulting unfairness to large corporate defendants. Here, for instance, the reasonableness prong may afford petitioner relief. See
supra,
at 764 - 765. In other cases, a defendant can assert the doctrine of
forum non conveniens
if a given State is a highly inconvenient place to litigate a dispute. See
Gulf Oil Corp. v. Gilbert,
C
*157 The majority's concern for the consequences of its decision should have led it *772 the other way, because the rule that it adopts will produce deep injustice in at least four respects.
First, the majority's approach unduly curtails the States' sovereign authority to adjudicate disputes against corporate defendants who have engaged in continuous and substantial business operations within their boundaries.
10
The majority does not dispute that a State can exercise general jurisdiction where a corporate defendant has its corporate headquarters, and hence its principal place of business within the State. Cf.
Hertz Corp.,
Second, the proportionality approach will treat small businesses unfairly in comparison to national and multinational conglomerates. Whereas a larger company will often be immunized from general jurisdiction in a State on account of its extensive contacts outside the forum, a small business will not be. For instance, the majority holds today that Daimler is not subject to general jurisdiction in California despite its multiple offices, continuous operations, and billions of dollars' worth of sales there. But imagine a small business that manufactures luxury vehicles principally targeting the California market and that has substantially all of its sales and operations in the State-even though those sales and operations may amount to one-thousandth of Daimler's. Under the majority's rule, that small business will be subject to suit in California on any cause of action involving any of its activities anywhere in the world, while its far more pervasive competitor, Daimler, will not be. That will be so even if the small business incorporates and sets up its headquarters elsewhere (as Daimler does), since the small business' California sales and operations would still predominate when "apprais[ed]" in proportion to its minimal "nationwide and worldwide" operations, ante, at 762, n. 20.
Third, the majority's approach creates the incongruous result that an individual defendant whose only contact with a forum State is a one-time visit will be subject to general jurisdiction if served with process during that visit,
*773
Burnham v. Superior Court of Cal., County of Marin,
Finally, it should be obvious that the ultimate effect of the majority's approach will be to shift the risk of loss from multinational corporations to the individuals harmed by
*159
their actions. Under the majority's rule, for example, a parent whose child is maimed due to the negligence of a foreign hotel owned by a multinational conglomerate will be unable to hold the hotel to account in a single U.S. court, even if the hotel company has a massive presence in multiple States. See,
e.g.,
Meier v. Sun Int'l Hotels, Ltd.,
The Court rules against respondents today on a ground that no court has considered in the history of this case, that *160 this Court did not grant certiorari to decide, and that Daimler raised only in a footnote of its brief. In doing so, the Court adopts a new rule of constitutional law that is unmoored from decades of precedent. Because I would reverse the Ninth Circuit's decision on the narrower ground that the exercise of jurisdiction over Daimler would be unreasonable in any event, I respectfully concur in the judgment only.
One plaintiff is a resident of Argentina and a citizen of Chile; all other plaintiffs are residents and citizens of Argentina.
Daimler was restructured in 2007 and is now known as Daimler AG. No party contends that any postsuit corporate reorganization bears on our disposition of this case. This opinion refers to members of the Daimler corporate family by the names current at the time plaintiffs filed suit.
At times relevant to this suit, MBUSA was wholly owned by DaimlerChrysler North America Holding Corporation, a Daimler subsidiary.
International Shoe
was an action by the State of Washington to collect payments to the State's unemployment fund. Liability for the payments rested on in-state activities of resident sales solicitors engaged by the corporation to promote its wares in Washington. See
Colloquy at oral argument illustrated the respective provinces of general and specific jurisdiction over persons. Two hypothetical scenarios were posed: First, if a California plaintiff, injured in a California accident involving a Daimler-manufactured vehicle, sued Daimler in California court alleging that the vehicle was defectively designed, that court's adjudicatory authority would be premised on specific jurisdiction. See Tr. of Oral Arg. 11 (Daimler's counsel acknowledged that specific jurisdiction "may well be ... available" in such a case, depending on whether Daimler purposefully availed itself of the forum). Second, if a similar accident took place in Poland and injured Polish plaintiffs sued Daimler in California court, the question would be one of general jurisdiction. See id., at 29 (on plaintiffs' view, Daimler would be amenable to such a suit in California).
See
Shaffer v. Heitner,
See,
e.g.,
Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty.,
Selectively referring to the trial court record in
Perkins
(as summarized in an opinion of the intermediate appellate court), Justice SOTOMAYOR posits that Benguet may have had extensive operations in places other than Ohio. See
post,
at 769 - 770, n. 8 (opinion concurring in judgment) ("By the time the suit [in
Perkins
] was commenced, the company had resumed its considerable operations in the Philippines," "rebuilding its properties there" and "purchasing machinery, supplies and equipment." (internal quotation marks omitted)). See also
post,
at 767, n. 5 (many of the corporation's "key management decisions" were made by the out-of-state purchasing agent and chief of staff). Justice SOTOMAYOR's account overlooks this Court's opinion in
Perkins
and the point on which that opinion turned: All of Benguet's activities were directed by the company's president from within Ohio. See
Perkins v. Benguet Consol. Mining Co.,
Justice SOTOMAYOR emphasizes
Perkins
' statement that Benguet's Ohio contacts, while "continuous and systematic," were but a "limited ... part of its general business."
See generally von Mehren & Trautman 1177-1179. See also Twitchell, The Myth of General Jurisdiction,
Remarkably, Justice SOTOMAYOR treats specific jurisdiction as though it were barely there. Given the many decades in which specific jurisdiction has flourished, it would be hard to conjure up an example of the "deep injustice" Justice SOTOMAYOR predicts as a consequence of our holding that California is not an all-purpose forum for suits against Daimler.
Post,
at 771. Justice SOTOMAYOR identifies "the concept of reciprocal fairness" as the "touchstone principle of due process in this field."
Post,
at 768 (citing
International Shoe,
As the Court made plain in Goodyear and repeats here, general jurisdiction requires affiliations "so 'continuous and systematic' as to render [the foreign corporation] essentially at home in the forum State." 564 U.S., at ----, 131 S.Ct., at 2851, i.e., comparable to a domestic enterprise in that State.
MBUSA is not a defendant in this case.
Agency relationships, we have recognized, may be relevant to the existence of
specific
jurisdiction. "[T]he corporate personality,"
International Shoe Co. v. Washington,
Indeed, plaintiffs do not defend this aspect of the Ninth Circuit's analysis. See Brief for Respondents 39, n. 18 ("We do not believe that this gloss is particularly helpful.").
The Ninth Circuit's agency analysis also looked to whether the parent enjoys "the right to substantially control" the subsidiary's activities.
Bauman v. DaimlerChrysler Corp.,
By addressing this point, Justice SOTOMAYOR asserts, we have strayed from the question on which we granted certiorari to decide an issue not argued below. Post, at 765 - 766. That assertion is doubly flawed. First, the question on which we granted certiorari, as stated in Daimler's petition, is "whether it violates due process for a court to exercise general personal jurisdiction over a foreign corporation based solely on the fact that an indirect corporate subsidiary performs services on behalf of the defendant in the forum State." Pet. for Cert. i. That question fairly encompasses an inquiry into whether, in light of Goodyear , Daimler can be considered at home in California based on MBUSA's in-state activities. See also this Court's Rule 14.1(a) (a party's statement of the question presented "is deemed to comprise every subsidiary question fairly included therein"). Moreover, both in the Ninth Circuit, see, e.g., Brief for Federation of German Industries et al. as Amici Curiae in No. 07-15386(CA9), p. 3, and in this Court, see, e.g., U.S. Brief 13-18; Brief for Chamber of Commerce of United States of America et al. as Amici Curiae 6-23; Brief for Lea Brilmayer as Amica Curiae 10-12, amici in support of Daimler homed in on the insufficiency of Daimler's California contacts for general jurisdiction purposes. In short, and in light of our pathmarking opinion in Goodyear , we perceive no unfairness in deciding today that California is not an all-purpose forum for claims against Daimler.
International Shoe
also recognized, as noted above, see
supra,
at 753 - 754, that "some single or occasional acts of the corporate agent in a state ..., because of their nature and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to suit."
Plaintiffs emphasize two decisions,
Barrow S.S. Co. v. Kane,
We do not foreclose the possibility that in an exceptional case, see, e.g., Perkins , described supra, at 755 - 757, and n. 8, 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. But this case presents no occasion to explore that question, because Daimler's activities in California plainly do not approach that level. It is one thing to hold a corporation answerable for operations in the forum State, see infra, at 763, quite another to expose it to suit on claims having no connection whatever to the forum State.
To clarify in light of Justice SOTOMAYOR's opinion concurring in the judgment, the general jurisdiction inquiry does not "focu[s] solely on the magnitude of the defendant's in-state contacts." Post, at 767. General jurisdiction instead calls for an appraisal of a corporation's activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, "at home" would be synonymous with "doing business" tests framed before specific jurisdiction evolved in the United States. See von Mehren & Trautman 1142-1144. Nothing in International Shoe and its progeny suggests that "a particular quantum of local activity" should give a State authority over a "far larger quantum of ... activity" having no connection to any in-state activity. Feder, supra, at 694.
Justice SOTOMAYOR would reach the same result, but for a different reason. Rather than concluding that Daimler is not at home in California, Justice SOTOMAYOR would hold that the exercise of general jurisdiction over Daimler would be unreasonable "in the unique circumstances of this case."
Post,
at 763. In other words, she favors a resolution fit for this day and case only. True, a multipronged reasonableness check was articulated in
Asahi,
Justice SOTOMAYOR fears that our holding will "lead to greater unpredictability by radically expanding the scope of jurisdictional discovery."
Post,
at 770 - 771. But it is hard to see why much in the way of discovery would be needed to determine where a corporation is at home. Justice SOTOMAYOR's proposal to import
Asahi
's"reasonableness" check into the general jurisdiction determination, on the other hand, would indeed compound the jurisdictional inquiry. The reasonableness factors identified in
Asahi
include "the burden on the defendant," "the interests of the forum State," "the plaintiff's interest in obtaining relief," "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," "the shared interest of the several States in furthering fundamental substantive social policies," and, in the international context, "the procedural and substantive policies of other
nations
whose interests are affected by the assertion of jurisdiction."
The Courts of Appeals have uniformly held that the reasonableness prong does in fact apply in the general jurisdiction context. See
Metropolitan Life Ins. Co. v. Robertson-Ceco Corp.
,
While our decisions rejecting the exercise of personal jurisdiction have typically done so under the minimum-contacts prong, we have never required that prong to be decided first. See
Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty.,
The majority appears to suggest that Daimler may have presented the argument in its petition for rehearing en banc before the Ninth Circuit. See
ante,
at 752 (stating that Daimler "urg[ed] that the exercise of personal jurisdiction ... could not be reconciled with this Court's decision in
Goodyear Dunlop Tires Operations, S.A. v. Brown,
564 U.S. ----,
See DaimlerChrysler, Innovations for our Customers: Annual Report 2004, p. 22, http://www.daimler.com/Projects/c2 c/channel/documents/1364377_2004_DaimlerChrysler_Annual_Report.pdf (as visited on Jan. 8, 2014, and available in Clerk of Court's case file).
To be sure, many of Daimler's key management decisions are undoubtedly made by employees outside California. But the same was true in
Perkins
. See
Perkins v. Benguet Consol. Min. Co.,
While
Helicopteros
formulated the general jurisdiction inquiry as asking whether a foreign defendant possesses "continuous and systematic general business contacts,"
The majority suggests that I misinterpret language in
Perkins
that I do not even cite.
Ante,
at 756, n. 8. The majority is quite correct that it has found a sentence in
Perkins
that does not address whether most of the Philippine corporation's activities took place outside of Ohio. See
ante,
at 756, n. 8 (noting that
Perkins
described the company's "wartime activities" as "necessarily limited,"
The majority views the phrase "at home" as serving a different purpose-that of requiring a comparison between a defendant's in-state and out-of-state contacts. Ante, at 761, n. 20. That cannot be the correct understanding though, because among other things it would cast grave doubt on Perkins -a case that Goodyear pointed to as an exemplar of general jurisdiction, 564 U.S., at ----, 131 S.Ct., at 2855-2856. For if Perkins had applied the majority's newly minted proportionality test, it would have come out the other way.
The majority apparently thinks that the Philippine corporate defendant in
Perkins
did not have meaningful operations in places other than Ohio. See
ante,
at 755 - 756, and n. 8. But one cannot get past the second sentence of
Perkins
before realizing that is wrong. That sentence reads: "The corporation has been carrying on in Ohio a continuous and systematic, but limited, part of its general business."
In light of these facts, it is all but impossible to reconcile the result in Perkins with the proportionality test the majority announces today. Goodyear 's use of the phrase "at home" is thus better understood to require the same general jurisdiction inquiry that Perkins required: An out-of-state business must have the kind of continuous and substantial in-state presence that a parallel local company would have.
I accept at face value the majority's declaration that general jurisdiction is not limited to a corporation's place of incorporation and principal place of business because "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."
Ante,
at 761, n. 19; see also
ante,
at 761. Were that not so, our analysis of the defendants' in-state contacts in
Perkins v. Benguet Consol. Mining Co.,
States will of course continue to exercise specific jurisdiction in many cases, but we have never held that to be the outer limit of the States' authority under the Due Process Clause. That is because the two forms of jurisdiction address different concerns. Whereas specific jurisdiction focuses on the relationship between a defendant's challenged conduct and the forum State, general jurisdiction focuses on the defendant's substantial presence in the State irrespective of the location of the challenged conduct.
See also,
e.g.,
Woods v. Nova Companies Belize Ltd.,
The present case and the examples posited involve foreign corporate defendants, but the principle announced by the majority would apply equally to preclude general jurisdiction over a U.S. company that is incorporated and has its principal place of business in another U.S. State. Under the majority's rule, for example, a General Motors autoworker who retires to Florida would be unable to sue GM in that State for disabilities that develop from the retiree's labor at a Michigan parts plant, even though GM undertakes considerable business operations in Florida. See Twitchell, The Myth of General Jurisdiction,
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Reference
- Full Case Name
- DAIMLER AG, Petitioner v. Barbara BAUMAN Et Al.
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- 4535 cases
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- Published