committed by Daimler’s subsidiary, Mercedes-Benz Argentina (MB Argentina) during Argentina’s “Dirty War” from 1976-1983.  The sole basis for jurisdiction in California against Daimler was the allegation that Daimler’s subsidiary, Mercedes-Benz USA (MB USA) had distributed vehicles that entered the stream of commerce in California.  After the trial court dismissed the action against Daimler for lack of personal jurisdiction, the federal court of appeals adopted an agency theory of corporate parent liability and concluded that jurisdiction over Daimler existed by virtue of its subsidiary’s business transactions in California. The Supreme Court reversed this decision, and took the opportunity to build on its 2012 decision in Goodyear. For general jurisdiction against a foreign corporate defendant to exist, the Supreme Court found, the affiliation with the forum state must be “continuous and systematic” such that the foreign corporation is essentially “at home in the forum State.”  Simply because Daimler, as the parent, may have benefitted from MB USA’s business transactions, some of which were derived from business in California, did not create “continuous and systematic” contacts with the forum state that would give rise to jurisdiction over Daimler.

Importantly for the sake of comparing the emerging rules on general jurisdiction in the United States with the EU model, the Supreme Court in Daimler gave specific credence to the “domicile” rule for the exercise of general jurisdiction over a defendant.  As the Supreme Court stated, “[f]or an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equiva­lent place, one in which the corporation is fairly regarded as at home, ” such as the corporation’s “place of incorporation and principal place of business.” While the Supreme Court did not reject the notion that general jurisdiction over a corporation could exist in a forum other than its place of incorporation or principal place of business, the connection to the forum would have to be more than a “continuous, and systematic course of business.” Rather, the relevant inquiry is “whether that corpora­tion’s affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.”

The drawing together of the US and EU approach to personal jurisdiction in Daimler was no accident. The Supreme Court specifically reprimanded the lower court for paying “little heed to the risks to international comity its expansive view of general juris­diction posed .”  Citing Article 63 of Brussels I (Recast), the Supreme Court specifically noted the EU rule that a corporation may generally be sued only in the nation in which it is “domiciled”  by virtue of the location of the corporation’s “statutory seat,” “central admin­istration,” or “principal place of business.”  The Supreme Court also acknowledged the views of the United States Government that existing expansive rules of jurisdiction over foreign defendants in the United States had been a significant roadblock in efforts to secure an international convention on the recognition and enforcement of foreign judgments.

While the Supreme Court’s decisions in Goodyear and Daimler point to potential harmonization of jurisdictional rules in substance, the nature of the development of these rules speaks volumes to the critical difference between US and EU approaches to personal jurisdiction.   Because of the constitutionalization of procedural rules in US courts as a component of the due process rights of defendants, it is the United States Supreme Court that ultimately determines the permissibility of jurisdictional rules in both federal and state courts.  When the Supreme Court is silent, as it was in the decades before Goodyear and Daimler, lower courts and legislators are free to expansively define jurisdiction in ways that may be wholly inconsistent with international norms.  It is only if and when the Supreme Court exercises it prerogative to hear a case that some definitive rule may emerge. Even when such prerogative is exercised, as in Goodyear and Daimler, nuanced applications of those rulings may create later divergences in the lower courts. Whether this process is more cumbersome than rule-making in the EU can be debated, but at least for the time being, it has yielded a window of opportunity to jump start negotiations for an international agreement to deal with the jurisdictional challenges to the enforcement of foreign judgments.