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Supreme Court to Hear Another Alien Tort Statute Case Re Corporations

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by Publius
Posted April 22, 2013, 1:46 PM

Lyle Denniston writes at SCOTUSblog:

The Supreme Court on Monday agreed to take on another dispute over lawsuits in American courts against foreign companies, just days after coming close to barring such cases under the Alien Tort Statute.  In the new case, also involving the ATS, the issue is whether a foreign corporation may be sued in the U.S., based solely on the fact that it has an indirect, corporate subsidiary that provides some services here.

The granted case is DaimlerChrysler AG v. Bauman (docket 11-965).   DaimlerChrysler is a German company, and it was sued in federal court in California for alleged human rights violations in Argentina for actions by a subsidiary in that country.  The basis for suing the company in the U.S. is that it has another subsidiary that sells the company’s autos in California.  (Daimler was merged with the U.S. company, Chrysler Corp., in 1998.)

 

The Court had been holding the DaimlerChrysler case until it decided the core question of whether ATS claims could be made when all of those involved were foreign nationals or entities, and the incidents occurred abroad — that is, when there is virtually no U.S. connection.  In the decision last Wednesday in Kiobel v. Royal Dutch Petroleum (10-1491), the Court declared that a lawsuit with all of those aspects could not be heard and decided in a U.S. court.   That decision apparently left an opening, though perhaps quite small, for an ATS claim if there were a connection to the U.S.

The Justices apparently accepted the DaimlerChrysler case to settle what kind of a U.S. connection is sufficient to support an ATS claim in a U.S. federal court.

The lawsuit against the German automaker was filed by former employees at the Gonzalez Catan auto plant (or by workers’ relatives) for alleged human rights violations aimed at those workers.  The plant was operated by Mercedes-Benz Argentina.  The lawsuit contended that the Daimler subsidiary identifed workers at the plant as “subversives” during the so-called “dirty war” waged by the Argentine military between 1976 and 1983.

State security forces stationed in the plant, the lawsuit contended, arrested and detained workers, and some of them disappeared.  The police chief allegedly behind the raids of the plant was hired by the Daimler subsidiary as its security chief, according to the legal claims.  Those claims were filed in federal district court in California under the ATS and under the Torture Victim Protection Act (TVPA).  (A ruling last year by the Supreme Court barred lawsuits against foreign corporations under the TVPA, but the issue is still open whether corporations may be targeted under ATS.)

The parent company sought to have the case dismissed, arguing that the federal court had no jurisdiction over it.  The district judge said it was a “close question,” but dismissed the case.  The Ninth Circuit Court overturned that result, finding that the company’s continuous corporate activity within the state was substantial enough to justify general jurisdiction over it.

That is the finding DaimlerChrysler challenged in its petition to the Supreme Court.   The case will be heard and decided in the Court’s next Term, starting in October. . . .

 

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