Supreme Court: Argentina's 'Dirty War' Victims Can't Sue Automaker In California

The Supreme Court decided Tuesday not to allow a lawsuit to move forward in California that accuses a foreign company of committing atrocities on foreign soil. The decision could make it harder for victims of crimes in other countries to seek justice in American courts.

The high court on Tuesday issued a unanimous judgment refusing to allow victims of Argentina's "dirty war" to sue the former DaimlerChrysler Corp. of Stuttgart, Germany, in California for abuses alleged to have occurred in Argentina.

Victims who say they were kidnapped and tortured by the Argentine government in the late 1970s and relatives of people who disappeared filed a suit in the California court system alleging that Mercedes-Benz was complicit in crimes against unionized auto workers committed by the military regime.

In Argentina during the 1970s and 1980s, thousands were killed, kidnapped or "disappeared," including trade unionists, left-wing political activists, journalists and intellectuals. The suit states, "the kidnapping, detention and torture of these plaintiffs were carried out by state security forces acting under the direction of and with material assistance" from the Mercedes-Benz plant in González-Catán, near Buenos Aires.

Lawyers for the plaintiffs argued that Daimler could be sued in California since its subsidiary, Mercedes-Benz USA, sold cars in that state. A federal judge threw the lawsuit out, but the 9th U.S. Circuit Court of Appeals reversed the decision and said the case could move forward.

The company, now known as Daimler, has argued that since it is a German corporation, it cannot be sued in a U.S. state court by foreign nationals for actions a subsidiary may have taken in a different country.

Justice Ruth Bader Ginsburg, who wrote the decision, agreed. Neither Daimler or Mercedes-Benz USA is incorporated in California or has its principal place of business in that state, she said. "We conclude Daimler is not 'at home' in California, and cannot be sued there for injuries plaintiffs attribute to MB Argentina's conduct in Argentina," Ginsburg said.

If the court had accepted the victims' reasoning, Ginsburg said, "if a Mercedes-Benz vehicle overturned in Saudi Arabia injuring a driver and passengers from Norway, the injured persons could maintain a design defect suit in California."

But the decision doesn't mean that foreign companies can never be sued for foreign crimes in the United States.

Ginsburg said that there could be an "exceptional case (where) a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that state. But this case presents no occasion to explore that question, because Daimler's activities in California plainly do not approach that level."

Justice Sonia Sotomayor disagreed with how the court came to that decision but agreed with the final result. "No matter how extensive Daimler's contacts with California, that state's exercise of jurisdiction would be unreasonable given that the case involves foreign plaintiffs suing a foreign defendant based on foreign conduct," she said.

Daimler spokeswoman Andrea Berg said they were pleased with the court's decision. "The plaintiffs' accusations are groundless, and today's opinion concludes the prolonged litigation in the United States," Berg said.

This isn't the first time the court has barred foreign complainants from using U.S. courts to seek justice for foreign actions.

Last year, the court unanimously agreed to shut down a federal lawsuit filed by Nigerians against Royal Dutch Petroleum, or Shell Oil, over claims that the company was complicit in murder and other abuses committed by the Nigerian government against its citizens in the oil-rich Niger Delta in the 1990s. The court said that the 1789 Alien Tort Statute, a favored tool of human rights lawyers, could not be used to haul international companies that do business in the United States as well as places where abuses occur into federal court.

The justices also unanimously allowed Mississippi to pursue claims of price-fixing against a manufacturer of LCD screens in state court, saying a federal law aimed at attempts to move class-action cases from consumer-friendly state courts to business-friendly federal courts does not apply to the state's lawsuit.

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