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Stretching Jurisdiction to Cover Foreign Torts and Corporations

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By William Peacock, Esq. on October 08, 2013 7:01 AM

DaimlerChryster (DCAG) isn't located on these fair shores. The German corporation is as foreign to Northern California as lederhosen and pumpernickel, yet they are being sued in the United States District Court for the Northern District of California.

Nor was the alleged tortfeasing done in California. DCAG's Argentinean subsidiary allegedly committed human rights violations in Argentina in the late 1970s during the "Dirty War," hiring state agents to remove left-wing dissidents from the plant during the aftermath of a military coup. Many of the dissidents were never heard from again.

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Yet, the lawsuit wasn't brought in Argentina or Germany. It was brought in California under the Alien Tort Claims Act, 28 U.S.C. § 1350, which provides original jurisdiction in district courts for torts committed "in violation of the law of nations or a treaty of the United States." And since DCAG has a United States subsidiary that sells vehicles in California (Mercedes Benz USA), the plaintiffs argue that the federal courthouse in Northern California is an appropriate venue with jurisdiction.

The issue before the court is, how far are we willing to stretch jurisdiction under traditional long-arm principles of minimum contacts?

Interestingly enough, SCOTUSblog notes that immediately before granting certiorari here, the Court decided Kiobel v. Royal Dutch Petroleum, a decision that denied jurisdiction under the Alien Tort Claims Act where there was absolutely no connection, via parties or tortfeasing, to the United States. The opinion did leave a narrow window for cases where there might be a connection to the U.S., however.

Does a corporate cousin suffice for such a connection? MBUSA is a wholly-owned subsidiary of DCAG, as is the subsidiary in Argentina that was behind the alleged human rights violations, but it doesn't seem that either subsidiary crossed borders or did business with each other directly.

On the one hand, allowing jurisdiction here stretches long arm jurisdiction to almost limitless bounds, yet on the other hand, denial of jurisdiction would provide a blueprint for avoiding liability under the Alien Tort Claims Act via distinct subsidiaries in each country.

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