Clifford Chance

U.S. Supreme Court To Review Exercise Of Jurisdiction Over A Multinational That Distributes Products In The United States Through A Subsidiary

25 April 2013

The U.S. Supreme Court has agreed to review a ruling from the U.S. Court of Appeals for the Ninth Circuit that expands the jurisdiction of U.S. courts over foreign corporations.  DaimlerChrysler AG v. Bauman, No. 11-965, ___, 2013 WL 1704716 (U.S. Apr. 22, 2013).  In this case, the Ninth Circuit allowed Argentine plaintiffs to assert jurisdiction in federal court in California over a German parent company, DaimlerChrysler Aktiengesekkschaft ("Daimler") for acts allegedly committed in Argentina by Daimler's Argentine subsidiary, Mercedes-Benz Argentina ("MBA"), on the basis that Daimler distributes products in California through a separate subsidiary, Mercedes-Benz USA ("MBUSA").  The Ninth Circuit held that the activities of the U.S. affiliate made it an "agent" of Daimler that created "general personal jurisdiction" over Daimler, which means that plaintiffs can sue the parent company in California for any and all claims, regardless of where the claims arose.

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