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Daimler Gets Supreme Court Hearing on Human-Rights Suit

The U.S. Supreme Court will consider giving companies new protection from human-rights suits, agreeing to hear a Daimler AG (DAI) appeal stemming from allegations that a company unit collaborated in torture and killings in Argentina.

The German automaker is being sued under the Alien Tort Statute, a law the Supreme Court scaled back last week in a victory for corporations.

The Daimler appeal doesn’t directly concern that law, instead contending that the company lacks sufficient ties to California to give courts there the authority to hear the case. The U.S. Chamber of Commerce is backing the appeal.

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. The company denies the allegations.

A San Francisco-based federal appeals court said the suit could go forward in a federal court in San Jose, California.

Daimler, based in Stuttgart, Germany, contends 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.

Next Term

The court will hear arguments in its 2013-14 term, which starts in October and runs through the following June.

The 1789 Alien Tort Statute has been a favorite tool of human-rights advocates seeking to hold companies responsible for overseas atrocities. The law lay dormant for almost two centuries before being revived in the 1970s as a means of pressing lawsuits.

Last week’s Supreme Court ruling threw out a suit accusing two foreign-based units of Royal Dutch Shell Plc (RDSA) of facilitating torture and executions in Nigeria. The majority said the Alien Tort Statute generally doesn’t apply to conduct beyond U.S. borders.

Multinational companies have faced dozens of Alien Tort Statute suits blaming them for human rights violations, environmental wrongdoing and labor abuses.

The case is DaimlerChrysler v. Bauman, 11-965.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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