On January 14, 2014, the Supreme Court issued its decision in Daimler AG v. Bauman. This case involves what is known as “personal jurisdiction,” which means that a court must possess jurisdiction over the parties to a given case before it may assert authority over them. There are a number of bases on which a court can acquire personal jurisdiction over a legal person, including a corporation. The question before the Supreme Court in this case is whether it violates due process for a federal court to exercise “general” personal jurisdiction over a foreign corporation based solely on the fact that an indirect corporate subsidiary performs services on behalf of the foreign corporation in the state where the federal court is located. In this case, the U.S. Court of Appeals for the Ninth Circuit ruled that such an exercise of general personal jurisdiction was proper.

By a vote of 9-0, the Supreme Court reversed the judgment of the Ninth Circuit. In an opinion delivered by Justice Ginsburg, the Court held that 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. Justice Sotomayor filed an opinion concurring in the judgment.

To discuss the case, we have Evan Young, who is a Senior Associate at the Austin office of Baker Botts. It should be noted that all expressions of opinion are those of Mr. Young rather than Baker Botts.

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