Industryweek 5977 Daimler Not Liable Us Alleged Argentina Abuse

High Court: Daimler Not Liable in US for Alleged Argentina Abuse

Jan. 14, 2014
The top American judicial authority sided with the company in a lawsuit filed by 22 former employees and their relatives of a Mercedes Benz plant in the South American country. A California appeals court had earlier ruled in favor of the group.

WASHINGTON -- German carmaker Daimler AG (IW 1000/18) is not liable in the United States for alleged human rights abuses by a subsidiary during Argentina's dictatorship, the Supreme Court ruled today.

The top American judicial authority sided with the company in a lawsuit filed by 22 former employees and their relatives of a Mercedes Benz plant in the South American country.

A California appeals court had earlier ruled in favor of the group -- 21 Argentines and a Chilean who claim managers at the plant collaborated with the Argentine regime between 1976 and 1983, during a period known as the country's "Dirty War."

But the Supreme Court said Daimler "is not amenable to suit in California for injuries allegedly caused by conduct of MB Argentina that took place entirely outside the United States."

Daimler AG has a wholly owned subsidiary in California, Mercedes Benz-USA, and the claimants had argued that Daimler makes billions of dollars by selling its luxury vehicles there.

But "even assuming, for purposes of this decision, that MBUSA qualifies as at home in California, Daimler's affiliations with California are not sufficient to subject it to the general jurisdiction of that state's courts," the nine-member high court said in its unanimous decision.

According to Justice Ruth Bader Ginsburg, who penned the ruling, the California court had "no warrant to conclude that Daimler, even with MBUSA's contacts attributed to it, was at home in California, and hence subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California."

Ginsburg added that "considerations of international rapport thus reinforce our determination that subjecting Daimler to the general jurisdiction of courts in California would not accord with the fair play and substantial justice due process demands."

The Allegations

The claimants alleged that the management at the subsidiary had identified resisters or agitators and disclosed their names to authorities, allowing violent police raids, arbitrary arrests and torture. Some employees disappeared and were presumed killed.

The chief of police in charge of such actions was subsequently hired by Mercedes as the head of security to cover up his actions, according to the class-action suit.

The Supreme Court did not rule on the actual subject matter of the suit.

Daimler said it was "very pleased" with the Supreme Court's decision and that the ruling concludes its prolonged litigation in the United States.

"Furthermore, we have always regarded the accusations as groundless," the company added.

The plaintiffs had pointed to two U.S. laws in their effort to seek reparations from Daimler -- the Torture Victims Protection Act (TVPA) and the Alien Tort Statute (ATS) that dates back more than two centuries and allows foreigners to sue in U.S. court for violations of international law.

However, "recent decisions of this court ... have rendered plaintiffs' ATS and TVPA claims infirm," the justices said.

Last year, in another win for big business, they ruled that the U.S. justice system does not have the jurisdiction to determine whether oil giant Shell (IW 1000/1) was complicit in acts of torture by the Nigerian government.

The panel unanimously rejected a collective lawsuit by 12 plaintiffs -- relatives of Nigerians executed by the former military government in Lagos -- who accused the Anglo-Dutch company of complicity in human rights violations.

Copyright Agence France-Presse, 2014

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