The U.S. Supreme Court heard arguments today in DaimlerChrysler AG v. Bauman, considering whether the German carmaker can be sued in a U.S. court for its alleged role in the torture and murder of Mercedes-Benz workers during Argentina’s “Dirty War” of the 1970s. The outcome of this case could have far-reaching implications regarding corporate liability for human rights abuses in U.S. courts.
The Bauman case involves claims by former employees, and family members of deceased employees, of a Mercedes-Benz plant in Argentina, who were violently kidnapped, tortured and disappeared during Argentina’s Dirty War, against Daimler AG, the German corporation that owns the plant. The Dirty War was a period of terror in the 1970s and 1980s in which roughly 30,000 people were tortured, disappeared, or killed on suspicion of being “subversive.” Mercedes-Benz Argentina is alleged to have identified workers, especially labor union members, at its plant as subversive to state security forces, knowing that as a result, those workers would be tracked down and persecuted.
“We argued today that a corporation can be brought before a U.S. court for gross human rights violations when it has engaged in substantial business conduct here in the United States,” said lead counsel for the Bauman plaintiffs, Terry Collingsworth, of Conrad & Scherer. “The Argentinean workers and their families’ lives have been forever changed by the defendant’s alleged actions and they deserve justice.”
Collingsworth’s co-counsel, Kevin Russell of Goldstein & Russell PC, argued the case today, and litigated the case in conjunction with the Stanford Supreme Court Litigation Clinic.
The Ninth Circuit Court of Appeals ruled that Daimler could be sued in California because its U.S. subsidiary, Mercedes-Benz USA (MBUSA), conducts business in California on behalf of Daimler. Daimler argued to the Supreme Court that the Constitution requires that the parent corporation must be treated separately from its subsidiaries.
“Corporations should not be able to create endless subsidiaries to evade accountability, especially when a corporation allegedly goes out of its way to commit human rights abuses,” said Marco Simons, counsel for Bauman amicus curiae EarthRights International. “The Supreme Court should not create a new, special right for foreign corporations, and afford them the right to do business in the United States without any ability of the U.S. courts to police their actions abroad. Letting Daimler escape our courts would send a signal that the U.S. is open for business to multinational corporations who violate international law. For example, do we really want a foreign corporation that sells nerve gas to the Syrian government to be able to do business in the U.S. without having to answer to its victims?”
The Bauman plaintiffs brought suit in federal court in California in 2004. The claims were brought under two federal laws, the Alien Tort Statute and the Torture Victim Protection Act, and state law, alleging Daimler should be held accountable for the acts of its subsidiary.
While the federal district court originally dismissed the case, the Ninth Circuit held that the case may be brought in a U.S. court. Although technically “separate” corporate entities, MBUSA and Daimler shared the same chairman; MBUSA sold cars solely for Daimler; and Daimler set prices for the cars and had authority over virtually all aspects of MBUSA’s operations. Moreover, all of MBUSA’s profits went to Daimler.
Daimler petitioned for review to the Supreme Court. The Supreme Court agreed in April to hear the case and will now consider whether it violates the Constitution’s Due Process Clause for a court to exercise general personal jurisdiction over a foreign corporation based on the fact that a corporate subsidiary performs services on behalf of the defendant in the forum state.
A decision is expected in the coming months.
Conrad & Scherer has offices in the United States and Ecuador and represents clients with high quality legal services in the areas of commercial litigation, labor and employment law, personal injury, general liability, medical malpractice, health law, international law, and other areas of complex litigation. Conrad & Schrer Partner Terry Collingsworth is the lead attorney representing the Bauman plaintiffs.
EarthRights International, is a Washington-D.C. based non-profit organization specializing in legal actions against perpetrators of human rights and environmental abuses, and which submitted an amicus brief in this case.
The International Corporate Accountability Roundtable is a Washington-D.C. based coalition of human rights, environmental, labor, and development organizations that creates, promotes and defends legal frameworks to ensure corporations respect human rights in their global operations.