Skip to comments.Supreme Court extends protections for multinational companies
Posted on 01/14/2014 1:17:18 PM PST by Lurking Libertarian
The Supreme Court on Tuesday extended protection for multinational companies from lawsuits in the United States over conduct that took place in other countries.
The justices threw out a case in California that sought damages from Daimler AG for its alleged complicity in atrocities committed in Argentinas 1976-to-1983 Dirty War. The company manufactures Mercedes-Benz automobiles and has a subsidiary, Mercedes-Benz USA, that does business in California and other states.
But Justice Ruth Bader Ginsburg, writing for a unanimous court, said those connections were too tenuous to mean the company could be sued in U.S. courts.
Ginsburg said that under the arguments of the plaintiffs Argentines who say they or their relatives were harmed in the Dirty War California is a place where Daimler may be sued on any and all claims against it, wherever in the world the claims may arise.
Such a view is so exorbitant that due process is violated, she said.
(Excerpt) Read more at washingtonpost.com ...
Background: suppose a driver from California gets into a car accident in Nevada. The other driver can sue the Californian in Utah, because that's where the accident happened. This is called "specific jurisdiction."
Or, the other driver can sue the Californian in California, because that's his home state. The case has nothing to do with California, but a California resident can be sued in his home state for anything he did anywhere in the world. That's called "general jurisdiction."
In the case of a corporation, many states (especially, but certainly not exclusively, California) said that there was general jurisdiction over a corporation that did a lot of business in the state, because that state was like its "home." What the Court did today-- and this changes a lot of law in a lot of states-- is to say that a corporation's "home" is only where its headquarters is. So a corporation is still subject to "specific jurisdiction" in any state where it (allegedly) did something wrong, but is subject to "general jurisdiction" only in its real "home."
That should have been "sue the Californian in Nevada." Ooops!
This isn't a "hot button" issue like abortion or gay marriage, but will have a huge impact on the day-to-day work of lawyers.
I don’t like multi-nationals. I think they serve one-worlders and work to achieve a one-wolrd government.
Probably not, because those cases use a "specific jurisdiction" theory (aiding and abetting a U.S. citizen to commit a crime in the U.S.).
This decision also protects U.S. corporations from being sued outside the state where they are incorporated or where their headquarters are.
Well, that is a positive.
I dont like multi-nationals. I think they serve one-worlders and work to achieve a one-world government.
Fortunately, due process of law does not depend on whether a defendant is liked. Most of those who surf this site would not be liked by a whole lot of people.
And the court said the connection of the two did not permit this.
When the Supreme Court granted cert. in this case, everybody thought that that was the issue the Court would decide. But what's significant is that the decision was much broader-- the Court didn't focus only on the parent/subsidiary issue, but on the idea that a corporation only has one "home" jurisdiction.
Thanks! It’s a story that deserves a more in depth coverage.
If someone has a problem with what Daimler AG did in Argentina, then they should deal with it in Argentina -- or in Germany.
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In a case decided last year (while this case was still making its way through the lower courts), the Supreme Court shut down most attempts to use U.S. courts to remedy human rights abuses overseas. So the Court had an easy way to get rid of this case on that ground. What is significant is that, instead of taking that route, the Court reached out to decide this case on a much broader ground, one that will apply to any attempt to sue an American or foreign corporation outside its home state or country.
What is even more significant is that the decision was almost unanimous. (Ginsburg, usually considered a "liberal," wrote the decision; no one dissented; only Sotomayor didn't join Ginsburg's opinion, but even she would have reversed, albeit on much narrower grounds.)
Have either of you made a prediction on the NLRB case before SCOTUS? It seemed that the Obama Admins main case was the inconvenience of undoing so many decisions. I didn’t see any strong Constitutional arguments made, but I felt that way about the ACA.
That’s interesting because a corporation could place its headquarters in a very difficult jurisdiction for lawsuits, one that had a high hurdle and limitations on penalties for a plaintiff and strong protections and bars for a defendant. I wonder what the Justices were thinking. Have you read their decision?
We don’t want frivolous lawsuits, but we do want lawsuits with a firm foundation to go forward. I wonder if they shut the door too hard on this one. They are, after all, just human.
That the President can't tell the Senate that it's in recess when it says it isn't is a no-brainer: I wouldn't be surprised to see 8 or even 9 votes to overturn the appointments on that ground.
The broader ground which has been argued is that, even when the Senate is in recess, the President can appoint someone only if the vacancy happened during that recess. The text of the Constitution literally says that, but every President since Andrew Jackson (really) has ignored that limitation. If the Court decides on that ground, then the whole Recess Appointment power becomes essentially a nullity. (And, as the Obama Administration has pointed out to the Court, that means that Dwight Eisenhower's appointment as the General of the Armies in WWII was illegal.)
A corporation can still be sued in any state where it did something wrong (that's "specific jurisdiction"-- see my post #1 on this thread). That is usually enough to permit meritorious cases.
What this decision is about is "general jurisdiction"-- suing a corporation in State A for something it allegedly did in State [or country] B. SCOTUS said ages ago that such a suit could be brought in the corporation's "home" state, but a lot of states have interpreted that to mean "anywhere it does a lot of business." SCOTUS today said, no, a corporation only has one "home" (or possibly two-- the state of incorporation and the state where its headquarters are).
I’d like to see the broader ruling, but I’ll be delighted with the narrow ruling. I really don’t trust the SCOTUS as I cannot fathom a Constitutional thread of their decisions, at least not one that is consistent. The only one who seems consistent is Thomas. I wish we had five more like him.
What’s your rulings scorecard? I mean how many times have you called it wrong? I hate to get my hopes up. ;-]
I’d read that, but didn’t put it together. Thanks for clarifying it. I enjoy your posts and feel free to ping me to any good legal discussions. Take care.
SCOTUS has historically held that the Senate and House have the power to establish and enforce the rules of their respective chambers. So if the Senate considered itself “in session,” I suspect the Court will defer to the Senate’s rules and procedures on the question of whether or not the Senate was in recess.
That being said, I predict that the Court will rule narrowly here and find only that the three 2012 NLRB appointments were unconstitutional because Noel Canning’s claim that the NLRB ruling against it is invalid is predicated on the argument that three of the five NLRB members were unconstitutionally appointed. I don’t believe Noel Canning is asking the Court to rule on any other unconstitutional appointments.
Who knows what SCOTUS will actually do. Lately their rulings have made for very strange bedfellows indeed. When Scalia and Thomas are on opposing sides and Sotomayor sides with Scalia, it becomes impossible for a novice like me to venture an educated guess.
That’s exactly what I’m feeling. I cannot get a handle on any discernible judicial philosophy. Scalia is inscrutable so often that I sometimes think he’s ditzy. I don’t read a lot of strict constructionism or originalism in their rulings, other than Thomas who seems pretty consistent. Their long game is either very long or they don’t have a long game and it’s Hail-Mary passes all the way.
‘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 corporations statutory seat, central administration, or principal place of business.’
That’s our Ginsburg... always looking to anything but the Constitution of The United States of America.
Oh well, worked out this time.
The reliance on foreign law actually makes sense here, which is why Scalia, who has condemned reliance on foreign law, joined the opinion (as did all of the court's conservatives).
The actual text of the Constitution doesn't help much here-- it says that a defendant in a lawsuit is entitled to "due process," i.e. to fairness, but doesn't get more specific than that. It is logical to say that it is not "fair" for a foreign corporation to get dragged into U.S. courts on a theory that foreign courts would never apply to U.S. corporations.
In context it was so superfluous and inept it actually did make me laugh. Like it was a rote or formulaic act by her.
BTW it was a relief that she didn’t look to the middle-east for her international example of ‘fairness’! Or China, Nigeria...