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DaimlerChrysler Wins on Human Rights Appeal
The Recorder
September 01, 2009
The 9th U.S. Circuit Court of Appeals on Friday upheld a lower court decision in favor of DaimlerChrysler AG in a lawsuit that alleged a subsidiary of the corporation committed human rights violations in 1970s and '80s Argentina.
Matthew Kemner of Carroll, Burdick & McDonough's San Francisco office represented DaimlerChrysler in the appeal. Terry Collingsworth and Natacha Thys of International Rights Advocates in Washington, D.C., represented the plaintiffs. Calls to the lawyers late Friday were not immediately returned.
Northern District of California Judge Ronald Whyte was right to dismiss the case for lack of personal jurisdiction over Germany-based DaimlerChrysler AG, Judge Dorothy Nelson wrote in the opinion, also noting that the appellants could file claims in Germany and Argentina. Judge Mary Schroeder concurred, while Judge Stephen Reinhardt dissented, in Bauman v. DaimlerChrysler Corporation , 09 C.D.O.S. 11120 .
The court lacked personal jurisdiction, Nelson wrote, because the parent corporation does not have "pervasive and continual control" over Mercedes Benz USA, a subsidiary that has two offices in California and is responsible for marketing and distributing vehicles in the state.
In 2004, 23 Argentinian residents and citizens sued DaimlerChrysler under the Alien Tort Claims Act, alleging that security forces of the military regime had kidnapped, detained or tortured them or their relatives at the direction of another DaimlerChrysler AG subsidiary, Mercedes Benz Argentina.
In Reinhardt's dissenting opinion, he argued DaimlerChrysler should be held accountable for its subsidiaries' actions, and that the majority set the bar too high for determining a relationship between parent and U.S. subsidiary.
"The result is to shield foreign corporations from actions in American courts -- although they have structured their affairs so as to reap vast profits from American markets -- and to deprive plaintiffs, including those who allege grave human rights abuses, of access to justice," he wrote.
