Is a foreign parent corporation subject to general personal jurisdiction in a U.S. state based solely on the in-state contacts of its subsidiary?

Twenty-two Argentine residents filed a lawsuit in California federal court against Daimler AG, a German corporation. The plaintiffs allege that Mercedes-Benz Argentina (MB Argentina), Daimler's Argentinian subsidiary, collaborated with state security forces during Argentina's 1976-1983 'Dirty War' to kidnap, detain, torture, and kill certain MB Argentina workers. The claims were brought under the Alien Tort Statute, the Torture Victim Protection Act, and California and Argentina law.

Personal jurisdiction over Daimler in California was based on the contacts of Mercedes-Benz USA (MBUSA), another Daimler subsidiary. MBUSA is incorporated in Delaware with its principal place of business in New Jersey and distributes Daimler-manufactured vehicles to independent dealerships throughout the United States, including California. The plaintiffs sought to establish jurisdiction over Daimler through MBUSA's California connections.

Plaintiffs initially brought suit against Daimler in the United States District Court for the Northern District of California. The District Court granted Daimler's motion to dismiss the case for lack of personal jurisdiction. Plaintiffs then appealed this decision to the Ninth Circuit Court of Appeals. The Ninth Circuit reversed the District Court's ruling, holding that Daimler was subject to general jurisdiction in California because its subsidiary, MBUSA, acted as Daimler's agent for jurisdictional purposes. Daimler subsequently petitioned the Ninth Circuit for a rehearing, but this request was denied. Following this denial, Daimler appealed to the Supreme Court, which granted certiorari to address the constitutional question of whether exercising general personal jurisdiction over a foreign corporation based solely on the activities of its indirect subsidiary in the forum state violates due process.

(Ginsburg, J.)

No. A foreign parent corporation is not subject to general personal jurisdiction in a U.S. state based solely on the in-state contacts of its subsidiary. General jurisdiction over a corporation is limited to its place of incorporation and principal place of business, with only exceptional cases allowing for jurisdiction elsewhere. The paradigm forums for general jurisdiction reflect a corporation's home, where it is fairly regarded as at home and subject to suit on any and all claims. Mere substantial, continuous, and systematic contacts with a forum state are insufficient to establish general jurisdiction. The inquiry must consider the corporation's activities in their entirety, comparing them with its nationwide and worldwide operations. This approach prevents exorbitant exercises of all-purpose jurisdiction and ensures that a corporation is not deemed at home in every state where it conducts substantial business. Agency theories that impute a subsidiary's contacts to a parent corporation for jurisdictional purposes are rejected as incompatible with due process limits on the exercise of general jurisdiction. Such theories would subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate, an outcome that extends beyond the constitutional limits of due process. The focus remains on the corporation's own contacts with the forum state, not those of its subsidiaries or affiliates. This approach respects international comity and the territorial limitations of a sovereign's power, preventing undue interference with the rights of other nations to adjudicate disputes involving their own citizens and corporations.

Concurrence in Judgment (Sotomayor, J.) The Court should have decided this case on the narrower ground that exercising jurisdiction over Daimler would be unreasonable. The majority's focus on Daimler's out-of-state contacts and introduction of a new proportionality test will lead to greater unpredictability and unfairness in future cases. This approach unnecessarily restricts general jurisdiction and may shield multinational corporations from accountability in U.S. courts. The Court's reasoning departs from our established jurisprudence on personal jurisdiction and fails to adequately consider the interests of plaintiffs and forum states.