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United States: Supreme Court Continues Recent Trend Of Limiting Suits For Corporate Conduct Outside Of The US

Author: Sander Bak, Atara Miller & Jed Schwartz, Milbank, Tweed, Hadley & McCloy LLP, in Mondaq (USA), Published on: 24 January 2014

Following the trend of its recent decisions…the Supreme Court…in Daimler AG v. Bauman, reversed the Ninth Circuit, and held that a corporation could not be sued in the US for actions that took place entirely abroad, even if [it] has some general contacts within the forum state…[T]he Supreme Court ruled that it would violate due process to subject a foreign corporation…to general jurisdiction in California based on its subsidiary's systematic contacts with that state…If…[Mercedes-Benz USA]'s sales activities in California could make Daimler subject to jurisdiction for any conduct that occurred throughout the world, the same would be true for "every other State in which MBUSA's sales are sizable…[S]uch an "exorbitant" exercise of jurisdiction would be unfair…[This] decision will restrict the ability of plaintiffs to bring suit in the US against foreign corporate defendants where the allegations are based on extraterritorial activities. [Refers to Mercedes-Benz (part of Daimler)]

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Related companies: Daimler Mercedes-Benz (part of Daimler)