In 2004, twenty-two residents of Argentina filed suit in the United States District Court for the Northern District of California against DaimlerChrysler Aktiengesellschaft, a German public stock company headquartered in Stuttgart that manufactures Mercedes-Benz vehicles in Germany.
The complaint alleged that Daimler's Argentinian subsidiary, Mercedes-Benz Argentina, collaborated with state security forces during Argentina's 1976–1983 Dirty War to kidnap, detain, torture, and kill MB Argentina workers, including plaintiffs or persons closely related to them. The complaint asserted claims under the Alien Tort Statute, the Torture Victim Protection Act of 1991, and California and Argentina law. Jurisdiction over Daimler was predicated on the California contacts of Mercedes-Benz USA, LLC, another Daimler subsidiary incorporated in Delaware with its principal place of business in New Jersey.
MBUSA serves as Daimler's exclusive importer and distributor in the United States, purchasing vehicles from Daimler in Germany and distributing them to independent dealerships throughout the nation, including California. MBUSA maintains a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine. MBUSA's California sales accounted for 2.4 percent of Daimler's worldwide sales.
A General Distributor Agreement between Daimler and MBUSA established MBUSA as an independent contractor that buys and sells vehicles for its own account and has no authority to make binding obligations for Daimler.
Daimler moved to dismiss the action for lack of personal jurisdiction. After allowing jurisdictional discovery on the agency allegations, the District Court granted the motion in November 2005 and reaffirmed the dismissal in February 2007, concluding that Daimler's own contacts with California were too sporadic and that MBUSA's contacts could not be attributed to Daimler. The Ninth Circuit initially affirmed but, on rehearing, reversed in 2011, holding that MBUSA was Daimler's agent for jurisdictional purposes and that its California contacts supported the exercise of general jurisdiction over Daimler.
Daimler petitioned for rehearing and rehearing en banc, which the Ninth Circuit denied over the dissent of eight judges. The Supreme Court granted certiorari in 2013 to decide whether Daimler is amenable to suit in California for claims arising from events occurring entirely outside the United States and unrelated to any activity in California.
View case