Daimler AG v. Bauman, 571 U.S. ___, 134 S. Ct. 746, 187 L. Ed. 2d 624, No. 11-965 (1/14/14)

U.S. Supreme Court retracts the long arm of the law: general personal jurisdiction for any court is not what you learned in law school.

Plaintiffs sued a German automaker in California, asserting personal jurisdiction on the theory that it was subject to general jurisdiction based on voluminous in-state sales by its U.S. subsidiary. The Supreme Court reaffirmed and expounded upon its unanimous opinion in Goodyear Dunlop Tires Ops. v. Brown, 546 U.S. ___, 131 S. Ct. 2846 (2011), and held that Daimler was not subject to jurisdiction. The opinion dismantles the test often used by courts, asking where a corporation engages in “continuous and systematic” or “continuous and substantial” business activities. For general jurisdiction over a corporate defendant to be proper, the contact with the forum must be so pervasive that the defendant is fairly regarded as “at home” there. The paradigm is the state of incorporation and the state where the corporation’s principal place of business is located. Anything else would be the “exceptional” case, as a corporation engaging in business in many states “can scarcely be deemed at home in all of them.”

Case Law Alerts, 2nd Quarter, April 2014