Bauman Decision in the Jurisdiction of the US - Essay Example

s Bauman decision Twenty-two Argentineans allege that one of DaimlerChrysler Aktienge-sellschaft’s (DCAG) subsidiaries, Mercedes-Benz Argentina (MBA) collaborated with the state security forces to kidnap, torture, and/or kill the plaintiffs and/or their relatives during the Argentina’s “dirty war”, which began in 1976 when the military overthrew the government of President Isabel pennon and set up a military dictatorship. The accused claims it is not subject to personal jurisdiction in the united states since it does not regularly conduct business in the united states but its subsidiary Mercedes-Benz USA)does. The plaintiffs were either workers or relatives of the victims kidnapped, send to detention, and tortured, while others were close relatives of Mercedes-Benz Argentina workers who disappeared and are presumed to have been murdered. They, plaintiffs, accuse Mercedes-Benz Argentina for brutally punishing plant workers, with the collaboration of the Argentinean military and police forces, whom the Mercedes-Benz Argentina viewed as union agitators. Plaintiffs claim that Mercedes-Benz Argentina had knowledge that the collaboration between the Mercedes-Benz Argentina and the state forces would result in kidnapping, torture, detention and murder of the workers, and that the plan was implemented in a certain manner. The manner is as follows; first, Mercedes-Benz Argentina labelled the appellants as “subversives” and “agitators” and this information they passed on to the state forces. Second, MBA had members of the military and state forces stationed within the Gonzalez-Catan plant. Third, MBA opened the plant to raids by the forces. Fourth MBA hired Ruben Lavallen, who is the police station chief and been behind much of the reign terror and installed him the chief of scrutiny, providing legal representation yet he was accused of human rights abuse. They also allege that MBA seemed to be pleased with the results of the raids and detentions since these actions helped in ending the strike and restoring maximum production at the plant. Plaintiffs brought a suit against DCAG in 2004 in the District court for the northern district of California under the Alien Tort Statute (ATS), and the Torture Victim Protection Act (TVPA). After a failed attempt to serve process at Stuttgart, Germany one of DCAG’s headquarters, they learned that DCAG purported to maintain an operational headquarters in Auburn Hills, Michigan after which they then attempted to serve DCAG in Michigan, Bauman v. DaimlerChrysler AG.DCAG moved to quash service and to dismiss the case since it lacked personal jurisdiction. In DCAG’s proxy statement submitted by the plaintiffs stated that since Daimler-Benz and Chrysler merged, DCAG maintained two operational headquarters, one in Michigan and the one at the current Daimler-Benz headquarters, Stuttgart. Co-Chairmen and Co-Chief Executive Officers of DCAG, Jurgen E. Schrempp, the former Chairman of Daimler Benz, and Robert J. Eaton, the former Chairman and CEO of Chrysler Corporation, both had offices and staff in Michigan and Stuttgart. Following the submission of this evidence, DCAG withdrew its motion to quash service after the respondents produced documents showing that the Michigan and Stuttgart were dual operational quarters. The service was authorized by a German trial court but was stayed by a German appellate so it could determine whether the process would infringe on Germany’s sovereignty. The defendants objected to these two documents and termed them as unauthenticated hearsay, but the district court dismissed the objection. The court also refused to further examine some of the plaintiffs’ evidence including the percentage of the DCAG’s worldwide sales that occurred through MBUSA in California and the overlap between the personnel of DCAG and MBUSA, since the court found the evidence irrelevant to whether MBUSA was an agent of DCAG and this was beyond the scope of supplemental briefing. The court ruled on DCAG’s motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing. Respondents then attempted to serve petitioner in the United States in light of its 1998 merger with DCAG Daimler AG is a German public stock company that manufactures Mercedes Benz vehicles in Germany; and owning property, manufacturing or selling products, or employing workers in the United States is not under its jurisdiction. The respondents however alleged that Daimler Ag was subject to general personal jurisdiction in California because Mercedes-Benz USA LLC, an indirect subsidiary of Daimler AG which is incorporated in Delaware, distributes Daimler AG manufactured vehicles to dealerships in California. The respondents asserted that Daimler AG was subject to general personal jurisdiction in California and could be sued on causes of action with no relationship to the state since MBUSA was acting as Daimler AG’s agent in California. In response Daimler AG argued that Ninth circuit authority recognizing agency as a basis for imputing a subsidiary’s jurisdictional contacts to a parent corporation is inconsistent with the court’s precedent and that, in any event, MBUSA was not Daimler AG’s agent. After the petitioner withdrew its motion to quash the service on the availability of documents showing that Michigan and Stuttgart were dual operational headquarters, in the California north district, a petitioner moved to dismiss for lack of personal jurisdiction and the court granted petitioner’s motion and on appeal, the ninth circuit reversed owing to that there are two types of personal jurisdiction that is general and specific. Ninth circuit only considered general jurisdiction since DCAG’s contacts with California did not give rise to the cause of action before the court. Under the circuit precedent, the court of appeals explained that if one or two separate tests is satisfied, they may find the necessary contacts to support the exercise of personal jurisdiction over a foreign parent company .the first test, alter ego test applies when there is unity of interest and ownership that separate personalities of the two entities no longer exist. The second test, agency test, applicable here has two prongs with the first asking if the tasks performed by the subsidiary are sufficiently important to the foreign entity that the corporation would perform equivalent services if no agent were available. The ninth circuit determined that DCAG enjoyed the right to control nearly every aspect of its subsidiary operations since the same person, Dieter Zetsche, was the chairman of both MBUSA and DCAG. In its final decision, the ninth circuit held that, even if the agency test is met, the court must still independently determine whether the assertion of jurisdiction is reasonable. Judge O’Scannanlain recognized that if this case was brought anywhere other than the second or ninth circuits, the case would have been dismissed due to absence of personal jurisdiction over Daimler. Judge Reinhardt cited that absolutely no authority for the proposition that the existence of an alternative forum would be relevant to personal jurisdiction analysis. The argument would have been dismissed out of hand since there s no allegation that Daimler and MBUSA are alter egos of each other that failed to adhere to their corporate requirements. The case would also be dismissed in the first and eleventh circuits for lack of corporate interrelatedness. Implications of this case are that; great care and reserve should be exercised when extending notions of personal jurisdiction into the international field .A foreign company would be amenable to suit in the united states if a claim brought by a foreign plaintiff is based on foreign conduct and if the company has a domestic subsidiary that provides services a parent would secure by other means if the subsidiary were not there. The ninth circuit adopted a limitless jurisdictional standard for the purpose of enabling domestic courts to engage in international affairs by just adjusting and redressing human rights abuses and now there are innumerable foreign companies that are potentially subject to general personal jurisdiction in the United States. The ninth circuit’s notion of personal jurisdiction which is boundless empowers California federal courts to hear all disputes that involve foreign corporate defendants with United States subsidiaries. The twenty-two Argentineans should be allowed to use the American court system since the ninth circuit has adopted limited foreign jurisdiction. Anything a corporate does through a contractor, subsidiary whether independent or not is presumed as something the corporate would have done through other means if the contractor, subsidiary never existed. The jurisdiction in the United States is inappropriate as this may result in retaliatory rulings by foreign courts applying similar limitless jurisdiction to American companies that have foreign subsidiaries. General jurisdiction threatens foreign trade and diplomatic interests and this may discourage foreign companies from doing business in the United States and United States consumers will miss the full benefits of foreign trade and united state corporations won’t export for fear of facing a similar rule abroad. If the rules from Bauman decision remain in place, foreign companies are less likely to operate in the united states since the result will be proliferation of suits by foreign plaintiffs who re suing foreign defendants on the basis of foreign conduct. The suits would enmesh American courts in complex international forcing companies in question to limit their commercial ties and even maybe pull out of the United States market. It is worth providing an effective forum for human rights litigation to avoid potential serious repercussions. The availability of a forum for human rights litigation would permit defendants to plan their primary conduct with a minimum assurance if the conduct will render them liable to suit or not. In accordance with the circuit, it is impossible for corporations that are seeking to determine as to whether a formation of new subsidiary will expose them to suit in a state whereby they have no jurisdictional contacts and this uncertainty will deter valuable economic activity by corporations and result in unwillingness to form subsidiaries in domestic markets for the fear of inability to make meaningful assessment of the legal risks related to commercial expansion Corporations should not be called to answer for the contact of their subsidiaries since the extension of personal jurisdiction is devastating for small businesses yet they create new jobs and provide employment to about half of the united states’ private sector work force .to avoid this a lax standard as stated in Judge Reinhardt’s opinion could be applied in asserting jurisdiction over businesses based on the contacts of their subsidiaries. Works cited DaimlerChrysler AG v. Barbara Bauman, et al.,. United States Court of appeals for the ninth circuit 18 May 2011. Print DaimlerChrysler AG v. Barbara Bauman, et al.,. United States Court of appeals for the ninth circuit. 9 November 2011. Print. DaimlerChrysler AG v. Barbara Bauman, et al.,. United States Supreme Court. 06 February 2012. Print. DaimlerChrysler AG v. Barbara Bauman, et al.,. United States Supreme Court. 03 March 2012. Print. DaimlerChrysler AG v. Barbara Bauman, et al.,. United States Supreme Court. 11 June 2012. Print. . Read More