The U.S. Supreme Court ruled that Daimler AG could not be sued for alleged human rights violations under the Alien Tort Statute of 1789.
The U.S. Supreme Court has ruled in favor of Daimler AG in a contentious case involving human rights violations in Argentina during the 1970s and 1980s.
In a unanimous decision, the court ruled Daimler cannot be sued in California for injuries allegedly caused by conduct of its Argentinian subsidiary when that conduct took place entirely outside of the United States. The ruling addressed legal issues surrounding the case, Bauman v. Daimler AG, and not the facts or substance of the charges.
“We are very pleased with the Supreme Court’s unanimous conclusion that Daimler is not subject to jurisdiction in California in this case. The plaintiffs’ accusations are groundless, and today’s opinion concludes the prolonged litigation in the United States,” Daimler said in a statement.
The case involved the conduct of Daimler employees, including managers and supervisors, working in Argentina during a period in the 1970s and 1980s when the country was ruled by a brutal military dictatorship. The plaintiffs in the lawsuit alleged Daimler employees facilitated the “disappearance” of some employees and the torture of others.
The charges have haunted Daimler for nearly four decades but a favorable ruling, while it might not exonerate the company, would put limits on its liability for the conduct of a handful of employees in Argentina at a time when thousands of junta opponents vanished and likely were murdered.
The ruling provides corporations new protection from lawsuits involving violations of human rights. The German automaker was sued in the U.S. under the 1789 Alien Tort Statute – the scope of which the Supreme Court recently narrowed, which was considered a victory for corporate interests looking to limit their potential liability in cases involving violations of human rights.
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Daimler’s appeal did not directly concern that law, but instead argued that the company lacked sufficient connection to California to give courts there the authority to hear the case despite its extensive dealer network in the state, which is the single largest market in the U.S. for Mercedes-Benz passenger cars.
Daimler argued the courts in California lack “personal jurisdiction” over the company. Under that legal concept, a defendant doesn’t have to face lawsuits in a state unless it has a certain minimum level of contacts with the jurisdiction. The U.S. Chamber of Commerce supported Daimler’s appeal.
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Daimler’s Argentine Mercedes-Benz unit is accused of collaborating with state security forces during the so-called Dirty War from 1976 to 1983. The company allegedly identified workers seen as union agitators, knowing security forces would then kidnap, torture and in some cases kill the people. Daimler has long denied the allegations, which have also been the subject of lawsuits filed in Europe.
Daimler officials denied the allegations once again during the company’s annual shareholders in Berlin earlier this month. It has been a sore topic for a company that openly collaborated with the Nazis before and during World War II.
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Nonetheless, a San Francisco-based federal appeals court had said the suit could go forward in a federal court in San Jose, California.
The Alien Tort Statute has been a favorite tool of human-rights advocates seeking to hold companies responsible for atrocities beyond the borders of the U.S. The law lay dormant for almost two centuries before being revived in the 1970s as a means of pressing lawsuits.
However, Supreme Court has been limiting the law’s applications in recent rulings. Last year, it threw out a suit accusing two foreign-based units of Royal Dutch Shell Plc of facilitating torture and executions in Nigeria. The majority said the Alien Tort Statute generally doesn’t apply to conduct beyond U.S. borders.