Personal jurisdiction by other methods

Question 1

Daimler V Bauman

Answer 1

Facts
This case arises from a lawsuit filed in 2004 by twenty-two Argentinian residents against DaimlerChrysler Aktiengesellschaft (Daimler), a German public stock company that manufactures Mercedes-Benz vehicles. The plaintiffs claimed that during Argentina’s “Dirty War” from 1976 to 1983, Daimler’s Argentinian subsidiary, Mercedes-Benz Argentina (MB Argentina), collaborated with state security forces to kidnap, detain, torture, and kill certain MB Argentina workers, who were either the plaintiffs or related to them. They sought damages for alleged human-rights violations under U.S., California, and Argentinian law, predicated on the California contacts of Mercedes-Benz USA, LLC (MBUSA), a subsidiary of Daimler that distributes Daimler-manufactured vehicles to independent dealerships throughout the U.S., including California.
Issue
Can a court in the United States exercise jurisdiction over a foreign corporation based solely on the activities of a subsidiary in the forum state, when the lawsuit does not arise out of the subsidiary’s activities in that state?
Holding
No, the Supreme Court held that due process constraints on the assertion of adjudicatory authority prevent the District Court from exercising jurisdiction over Daimler in this case, given the lack of any California connection to the atrocities, perpetrators, or victims described in the complaint.
Reasoning
The Court reasoned that for a court to assert jurisdiction over a foreign corporation “to hear any and all claims against it,” the corporation’s affiliations with the state in which the court is located must be so continuous and pervasive “as to render it essentially at home in the forum State.” The Court found that Daimler, whose affiliations with California consisted solely of the activities of MBUSA, was not “at home” in California and could not be sued there for injuries plaintiffs attribute to MB Argentina’s conduct in Argentina. The Court distinguished between general or all-purpose jurisdiction and specific or conduct-linked jurisdiction, clarifying that Daimler’s limited contacts in California through its subsidiary did not suffice for the exercise of general jurisdiction over Daimler for claims unrelated to those California activities. The Court also emphasized the need for a clear jurisdictional rule to allow corporations to structure their activities with some assurance of where those activities will expose them to legal suits

Question 2

Shaffer v Heitner

Answer 2

Shaffer v. Heitner
433 U.S. 186, 97 S. Ct. 2569 (1977)

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Facts
Shaffer v. Heitner concerned a shareholder’s derivative suit filed by Greyhound Corp. shareholder, Heitner, in the Delaware Court of Chancery against Greyhound, its subsidiary, and 28 officers or directors, alleging that they had caused the corporations to engage in illegal activities resulting in substantial legal penalties.
Heitner, a nonresident of Delaware, owned stock in Greyhound, a Delaware corporation with its principal business in Arizona. Alongside his complaint, Heitner sought a Delaware statute-based sequestration of the defendants’ Delaware property, targeting shares in Greyhound and other financial interests tied to the corporation. The property was sequestered by the court as a means to establish jurisdiction over the nonresident defendants.

Issue
The central issue was whether Delaware’s sequestration statute, which allowed the state courts to exercise jurisdiction over nonresident defendants based solely on the presence of their property in the state, was consistent with the Due Process Clause of the Fourteenth Amendment. This issue examined if the state’s action was permissible despite the lack of sufficient contacts among the defendants, the litigation, and the State of Delaware.

Holding
The Supreme Court held that Delaware’s assertion of jurisdiction, based solely on the statutory presence of the defendants’ property in the state, violated the Due Process Clause of the Fourteenth Amendment. The Court found that the property sequestered under the Delaware statute was not sufficiently connected to the plaintiffs’ cause of action to support the state’s jurisdiction over the nonresident defendants.

Reasoning
The Court’s reasoning emphasized a shift in jurisdictional theory from territorial presence to minimum contacts and fairness principles established in International Shoe Co. v. Washington. It rejected the notion that jurisdiction could be based solely on the presence of property in the state if the property and the defendants’ actions related to the litigation showed no meaningful contacts with the state. The Court stressed that for a state to exercise jurisdiction, there must be sufficient ties among the defendant, the forum, and the litigation. The decision to focus on the relationship between the defendants and the forum state, rather than the mere presence of property, underscored the importance of fairness and substantial justice in jurisdictional questions, aligning with the evolving due process requirements under the Fourteenth Amendment.