Personal Jurisdiction and Corporate Groups: DaimlerChrysler AG v. Bauman

Abstract

Large firms are often organized into corporate groups or conglomerates. Disputes, however, are frequently adjudicated by courts that have jurisdiction over only some components of that group. The U.S. Supreme Court’s upcoming decision in DaimlerChrysler AG v. Bauman potentially addresses this tension between multinational corporate groups and court jurisdiction. The case involves Argentine plaintiffs who sued a German corporation in the United States, alleging violations of the Alien Tort Claims Act and the Torture Victims Protection Act. The question before the U.S. Supreme Court, however, is the scope of personal jurisdiction over non-resident defendants.

This article proposes a framework for understanding what is at stake in the U.S. Supreme Court’s decision. The consequences of the decision depend on how the Court analyzes three aspects of personal jurisdiction. The first is the extent to which a subsidiary’s contacts with a forum state can be imputed to the corporate parent. The second is so-called “general” jurisdiction – whether the contacts are so extensive that the court may exercise personal jurisdiction over a defendant for any cause of action, even one unrelated to the contacts. The third is whether jurisdiction would be “reasonable,” which requires courts to apply a discretionary multifactor analysis.

Ultimately, the opinion is unlikely to resolve either the scope of the underlying statutes (especially the Alien Tort Claims Act) or, given early concessions by the litigants, the extent of contacts required to establish general jurisdiction. Instead, it provides an opportunity to develop much needed guidance about jurisdictional attribution in the context of corporate groups, or to serve as another example of a discretionary, policy-driven analysis of the reasonableness of jurisdiction in the context of multinational businesses.

Keywords: personal jurisdiction, due process, Constitution, Supreme Court, general jurisdiction, Alien Tort Claims Act, Alien Tort Statutes, Torture Victims Protection Act, corporate groups, conglomerates, subsidiary, parent corporation, civil procedure, Kiobel, Asahi, Goodyear, Bauman, extraterritoriality

JEL Classification: K00, F23, K10, K40, K41, K49, K39