In Daimler AG v. Bauman, decided in January 2014, the Supreme Court ruled 8-1 that a corporation can be sued on any claim (general jurisdiction) only in a state where it is “at home,” which ordinarily means its state of incorporation or the state where it keeps its principal place of business.1Justia U.S. Supreme Court Center. Daimler AG v. Bauman Justice Ruth Bader Ginsburg wrote the majority opinion. The practical effect was immediate and sweeping: plaintiffs can no longer sue a company in any state where it happens to do heavy business for claims that arose somewhere else. If your claim is unrelated to the forum, you generally have to go to the company’s home.
The Facts Behind the Case
Twenty-two residents of Argentina sued Daimler AG, the German parent of Mercedes-Benz, in a California federal court. They alleged that during Argentina’s “Dirty War” from 1976 to 1983, Daimler’s Argentine subsidiary collaborated with state security forces to kidnap, detain, torture, and kill workers at a plant in Gonzalez-Catan.1Justia U.S. Supreme Court Center. Daimler AG v. Bauman The claims were brought under the Alien Tort Statute, which gives federal courts jurisdiction over civil actions by foreign nationals for torts in violation of international law.2Office of the Law Revision Counsel. 28 USC 1350 – Aliens Action for Tort
Nothing in the lawsuit had happened in California. No plaintiff lived there, and none of the alleged conduct occurred there. The plaintiffs’ theory rested entirely on an indirect subsidiary, Mercedes-Benz USA (MBUSA), which had offices and a vehicle distribution center in California. Because MBUSA did substantial business in the state, they argued, California courts should be able to hear any lawsuit against its German parent. The Ninth Circuit accepted the theory, treating MBUSA as Daimler’s “agent” for jurisdictional purposes.3Oyez. Daimler AG v. Bauman The Supreme Court reversed.
What the Court Decided
Before Daimler, most courts asked whether a corporation had “continuous and systematic” contacts with the forum. Regular sales, employees, or property in a state was often enough to allow general jurisdiction there. The Court had begun tightening that in 2011 in Goodyear Dunlop Tires v. Brown, ruling that limited tire sales in North Carolina did not make a foreign subsidiary subject to general jurisdiction there.4Justia U.S. Supreme Court Center. Goodyear Dunlop Tires Operations, S.A. v. Brown Daimler finished the job.
Continuous and systematic contacts, the Court held, are no longer enough on their own. A corporation must be so tied to the forum that it is essentially at home there. Two places qualify almost automatically: the state of incorporation and the state of the principal place of business.1Justia U.S. Supreme Court Center. Daimler AG v. Bauman For the second, the Court had already adopted the “nerve center” test in Hertz Corp. v. Friend, meaning the location where senior officers direct and coordinate the company’s activities, usually the headquarters.5Justia U.S. Supreme Court Center. Hertz Corp. v. Friend
The Court also rejected the agency theory outright. Even if all of MBUSA’s California contacts were treated as Daimler’s own, they would still fall short. The reasoning was arithmetic. MBUSA’s California sales, however large in isolation, were a small share of Daimler’s worldwide operations, so California could not be counted as a place where Daimler was at home.1Justia U.S. Supreme Court Center. Daimler AG v. Bauman Justice Ginsburg noted the stakes: if California qualified, so would every other state where MBUSA sold in volume, exposing global companies to suit in dozens of forums at once.
The larger the corporation, the harder the at-home test is to satisfy anywhere outside its two home forums. That is the point of the decision, not a side effect.
General Jurisdiction vs. Specific Jurisdiction
The whole ruling turns on a distinction that decides most jurisdiction fights. General jurisdiction is all-purpose: a court that has it can hear any claim against the defendant, no matter where the underlying events took place. Specific jurisdiction is narrower and much more common. It applies only when the lawsuit arises out of or relates to the defendant’s activities in the forum state. Both are limited by the Due Process Clause of the Fourteenth Amendment.6Constitution Annotated. Amdt14.S1.7.1.1 Overview of Personal Jurisdiction and Due Process
In Daimler, specific jurisdiction was never available. The alleged torts occurred in Argentina. The only theory left was general jurisdiction, and that theory failed. For plaintiffs going forward, the takeaway is that outside a defendant’s home state, specific jurisdiction is almost always the only route, and it requires a real link between the defendant’s forum conduct and the claim.
The Narrow Exceptional Case
The Court left one door cracked open. In a footnote, the majority acknowledged that “in an exceptional case,” a corporation’s operations elsewhere might be so substantial as to make it at home in a third forum.1Justia U.S. Supreme Court Center. Daimler AG v. Bauman The only example the Court endorsed was Perkins v. Benguet Consolidated Mining Co., a 1952 case involving a Philippine mining company whose president ran the entire business from Ohio during the Japanese occupation of the Philippines. He held directors’ meetings there, kept bank accounts there, distributed salary checks, and coordinated the company’s rehabilitation efforts from that office.7Justia U.S. Supreme Court Center. Perkins v. Benguet Consolidated Mining Co. Ohio had become the company’s temporary home in every meaningful sense.
Modern companies do not look like the wartime Benguet Mining Co., and lower courts have found the exception nearly impossible to satisfy. The Supreme Court reinforced that in 2017 in BNSF Railway Co. v. Tyrrell, holding that even a railroad with substantial physical assets and more than 2,000 employees in Montana was not at home there, because its operations were nationwide and its incorporation and headquarters were elsewhere.8Justia U.S. Supreme Court Center. BNSF Railroad Co. v. Tyrrell Justice Sotomayor, who concurred in the Daimler judgment but not the majority opinion, warned that the at-home test would leave general jurisdiction limited in practice to the two paradigm forums. That warning has largely proved out.
Consent by Registration After Mallory
For nearly a decade, the at-home test looked like the last word. Then in 2023, the Court carved out a meaningful workaround. In Mallory v. Norfolk Southern Railway Co., a 5-4 decision, the Court held that a state may require out-of-state corporations to consent to general personal jurisdiction as a condition of registering to do business there, and that such a requirement does not violate the Due Process Clause.9Justia U.S. Supreme Court Center. Mallory v. Norfolk Southern Railway Co.
The case involved a Virginia man who worked for Norfolk Southern in Virginia and Ohio and sued the railroad in Pennsylvania. Norfolk Southern is incorporated and headquartered in Virginia, so under Daimler, Pennsylvania had no basis for general jurisdiction. Pennsylvania, however, has a statute that treats a corporation’s registration to do business in the state as consent to be sued there on any claim. Justice Gorsuch, writing for the Court, found that arrangement constitutional because the company voluntarily registered and accepted the state’s terms.10Supreme Court of the United States. Mallory v. Norfolk Southern Railway Co.
The practical reach of Mallory depends on state law. Only a handful of states have consent-by-registration statutes that explicitly demand submission to general jurisdiction. Where those statutes exist, Daimler‘s at-home limit can be sidestepped for registered corporations. Where they do not, the at-home rule still governs.
Suing a Corporation After Daimler
The rule that matters for most plaintiffs is this: unless you are suing the company in its state of incorporation or the state of its principal place of business, and unless a consent-by-registration statute applies, you need specific jurisdiction. That means your claim has to connect to what the defendant did in the forum you chose.
Two later cases show how that plays out. In Bristol-Myers Squibb Co. v. Superior Court in 2017, the Court held that California lacked specific jurisdiction over claims by non-resident plaintiffs who took the blood thinner Plavix but were not prescribed or injured in California. Non-residents could not attach their claims to those of California residents just because the same drug was sold in the state. Each plaintiff needed an independent link between their own injury and the defendant’s California conduct.11Supreme Court of the United States. Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County
In 2021, Ford Motor Co. v. Montana Eighth Judicial District Court gave plaintiffs a more workable reading of the same standard. The Court upheld specific jurisdiction where Ford had systematically cultivated a market in the forum states for the very vehicles that later malfunctioned, even though those cars had been manufactured and first sold elsewhere. Ford’s advertising, dealership network, and service operations were enough of a link.12Justia U.S. Supreme Court Center. Ford Motor Co. v. Montana Eighth Judicial District Court The Court clarified that “arise out of or relate to” is broader than strict causation: a plaintiff does not need to show the forum contacts caused the injury, only that there is an affiliation between the forum and the controversy.
A word on parent-subsidiary structure. Daimler rejected the argument that a subsidiary’s forum activities can be attributed to a parent under an agency theory for general jurisdiction. Courts still occasionally attribute a subsidiary’s contacts to a parent under an alter ego theory, but that requires showing the parent exercised such complete control that the subsidiary had no independent existence, and that the parent misused that control to cause the plaintiff’s harm. That is a much heavier lift.
A Note on Human Rights Cases Abroad
If you are looking at Daimler because you want to sue a foreign or U.S. corporation in a U.S. court for conduct that occurred overseas, be aware that the jurisdictional door is only part of the problem. In Jesner v. Arab Bank in 2018, the Court held 5-4 that foreign corporations cannot be sued at all under the Alien Tort Statute.13Justia U.S. Supreme Court Center. Jesner v. Arab Bank, PLC And in Nestlé USA v. Doe, the Court held that alleging general corporate activity or mere corporate presence in the United States is not enough; a plaintiff must show that the specific conduct relevant to the claim occurred domestically, and making major operational decisions from a U.S. headquarters does not satisfy that requirement.14Justia U.S. Supreme Court Center. Nestle USA, Inc. v. Doe Together with Daimler, these decisions make U.S. courts largely unavailable for corporate human rights claims arising abroad.