The U.S. Supreme Court unanimously ruled Tuesday that 22 residents of Argentina cannot sue German automaker Daimler AG in the United States over the automaker’s alleged human rights abuses of its workers during Argentina’s so-called “Dirty War” in the 1970s.
Justice Ruth Bader Ginsburg writing for the unanimous court that reversed an appeals court said Daimler could not be subjected to lawsuits by foreign people suing since they had “nothing to do with anything that occurred or had its principal impact in California.” Justice Sonia Sotomayor concurred in the judgment but wrote a separate opinion.
Ginsburg added if “Daimler’s California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other state.”
The nine-year-old case has broad implications for automakers around the world. The Justice Department and major automakers had asked the Supreme Court to throw out the case.
The plaintiffs say Mercedes-Benz Argentina collaborated with the Argentine government to kidnap, detain, torture or kill employees or their relatives during Argentina’s military regime of 1976-83. The “Dirty War” began when the military overthrew President Isabel Peron and installed a dictatorship.
Some of those who sued are former employees of Mercedes-Benz who say they were victims of kidnapping, detention and torture; others are close relatives of Mercedes-Benz workers who “disappeared” and are presumed to have been murdered.
All of those suing worked or had relatives at the Mercedes Gonzalez-Catan plant. They charge that the company brutally punished plant workers it viewed as union agitators and that the company collaborated with the Argentinian military and police forces in doing so.
Daimler said the company had hired an independent expert to review the allegations and found no evidence to support the claims.
The rest of the auto industry has backed Daimler, saying that upholding the ruling would put multinational companies at risk for suits around the world.
The Justice Department has also sided with Daimler, saying threat of lawsuits could discourage foreign companies from doing business here.
But a lawyer for those suing, Terrence P. Collingsworth, had argued Daimler “has made billions of dollars through sales of its luxury cars in California.”
He wrote that reversing the decision would allow “a foreign car manufacturer to evade jurisdiction in the United States for design defect claims through the simple expedient of spinning off its American sales division into a wholly owned subsidiary.”
The two major auto trade associations — the Alliance of Automobile Manufacturers and the Association of Global Automakers — back Daimler. They call the ruling “mind-boggling.” They note that Ford Motor Co. has 161 foreign subsidiaries, and say automakers around the world could be targeted by suits if the decision stands.