On 14 January 2014, the US Supreme Court ruled that an out of-state or foreign corporation is subject to general jurisdiction in a particular state only where its contacts are so "continuous and systematic" that it is "at home" in that state.
In Bauman, the plaintiffs were Argentine nationals asserting claims against Daimler AG's predecessor company on the grounds that its Argentine subsidiary violated the Alien Tort Act by allegedly collaborating with security forces in perpetrating kidnappings, tortures, and killings during Argentina's "dirty war." The plaintiffs asserted that a federal court in California had personal jurisdiction over Daimler AG because of the California contacts of Mercedes-Benz USA, LLC, its US subsidiary. Mercedes-Benz USA is incorporated in Delaware and has its principal place of business in New Jersey. The Court ruled that, although Mercedes-Benz USA distributes and sells Daimler vehicles throughout the country, including in California, it would violate due process to find Daimler AG amenable to general jurisdiction in California. In all but "exceptional cases," a corporation is subject to general jurisdiction only in the state where it is incorporated or has its principal place of business.
Bauman could prove helpful in limiting the exposure of non-US companies to lawsuits in the US. Although companies will still be subject to jurisdiction in the US based on a specific transaction or incident (which suffices to confer "specific jurisdiction" in the state where such transaction or incident took place), this decision has limited the ability of plaintiffs to choose their forum based on a theory that the defendant was merely doing business in that forum.
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