Page 6 - Litigation

S6 | MONDAY, DECEMBER 14, 2015 | Litigation | NYLJ.COM

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Application ‘Daimler’
Surveying the of in the Circuits

2014 decision provided signiicant guidance on jurisdiction.

in the U.S. federal circuit courts. Indeed, the would presumably be available in every other Notably, the court explicitly acknowledged
BY STEPHEN BALDINI, First, Fourth, Sixth, Eighth, Tenth, D.C., and State in which MBUSA’s sales are sizable.”10 that this approach departed from Second

ANTHONY PIERCE
Federal Circuits have yet to substantively As discussed in the following cases, Daimler’s Circuit precedent dating back to 1985, but
AND STANLEY WOODWARD
consider a challenge to the exercise of gen- impact should be signiicant. The decision has overturned by Daimler.12
Teral personal jurisdiction. Those courts that the potential to reduce litigation exposure for Relatedly, in Monkton Ins. Servs. v. Rit-
he decision in Daimler v. Bauman,1 is have addressed the issue, however, highlight companies in jurisdictions other than where ter, the Fifth Circuit held that the exercise
hailed as “arguably the most important who the beneiciaries of Daimler are: non-U.S. the purported harm occurred.
of general personal jurisdiction over a Cay-
U.S. Supreme Court ruling on general entities, entities sued in inconvenient forums, man Islands bank, Butterield Bank (Cayman)
personal jurisdiction in 70 years.”2 In Daimler, and, potentially, entities whose websites are Increased Protection for Non-U.S. Entities
Limited (Butterield), was improper where
the U.S. Supreme Court unanimously held accessible in many jurisdictions.
Butterield was incorporated and headquar-
that a corporation may be subject to general Arguably the preeminent beneficiaries tered in the Cayman Islands.13 The court was

personal jurisdiction only where its contacts General Jurisdiction
of Daimler are entities incorporated and not persuaded by Butterield’s contacts with
with a forum state are so “continuous and headquartered outside the United States. Texas through its website, its telephone con-
systematic” such that the corporation is Daimler involved the potential exercise of After Daimler, such companies are subject versations with the plaintiff, a Texas resident,
“essentially at home in . the State.”3 Except general personal jurisdiction over German to a U.S. court’s jurisdiction only when they and wire transfers to Texas banks at the
in exceptional circumstances,4 the court fur- DaimlerChrysler Aktiengesellschaft (Daimler) direct conduct toward the United States request of the plaintiff.14
ther afirmed that the “paradigm” bases for based on the contacts of its U.S. subsidiary, and thus give rise to an action. The Second, Similarly, in Ranza v. Nike, the Ninth Circuit
general personal jurisdiction—where a cor- Mercedes-Benz USA (MBUSA).6 MBUSA is a Fifth, Ninth, and Eleventh Circuits, have all held that the exercise of general personal
poration may be considered “at home”—are Delaware limited liability corporation serving conirmed as much (and no circuit has held jurisdiction over a wholly owned foreign sub-
that corporation’s “place of incorporation and as Daimler’s exclusive importer and distribu- to the contrary). Resoundingly, these courts sidiary of Nike would be improper because

principal place of business.”5 This watershed tor in the United States where California then have rejected the exercise of general personal the subsidiary was neither incorporated
decision reversed the notion that companies claimed more than 10 percent of all sales of jurisdiction against entities in actions where within nor maintained its principal place of
with substantial sales throughout the United new vehicles and accounted for 2.4 percent of the conduct giving rise to the action occurred business within the pertinent forum.15 Fur-
States can be sued anywhere. While it has Daimler’s worldwide sales.7 In 2004, the year outside the United States.
ther, the court rejected the argument that
been nearly two years since Daimler’s issu- the action was iled, Daimler’s California sales For instance, in Gucci Am. v. Bank of by having a nominal number of employees
ance, there have been notably few challenges amounted to $4.6 billion. The Supreme Court China, the Second Circuit held that the travel to the forum and otherwise work within
to the exercise of general personal jurisdiction
acknowledged the amount was “a consider- exercise of general personal jurisdiction the forum the subsidiary rendered itself “at
able sum by any measure.”8
over a foreign bank, Bank of China, in an home” there.16

Despite such contacts, the Supreme Court action where the conduct at issue occurred And in Carmouche v. Tambrolee Mgmt.,
STEPHEN BALDINI is a partner at Akin Gump Strauss held that there was “no basis to subject Daim- entirely outside the United States, was the Eleventh Circuit held that the exercise
Hauer & Feld in New York and head of the firm’s ler to general jurisdiction in California.”9 In improper. This was despite Bank of China’s of general personal jurisdiction over Tam-
litigation practice. ANTHONY PIERCE is a partner reaching this decision, the court noted that maintenance of branch ofices in the forum borlee Management (Tamborlee), a corpora-
and STANLEY WOODWARD is counsel in the firm’s “[i]f Daimler’s California activities suficed to because the court noted the bank was incor- tion registered in Panama providing shore
Washington, D.C. office.
allow adjudication . the same global reach
porated and headquartered elsewhere.11
excursions for tourists in Belize, would be