Top court considers if German carmaker can be sued in United States

By Chantal Valery, AFP

WASHINGTON — The Supreme Court seemed skeptical Tuesday about whether German carmaker Daimler AG can be sued in the United States over alleged human rights abuses by a subsidiary during Argentina’s dictatorship. During an hour of oral arguments, the high court focused on a suit filed by 22 former employees, or relatives of employees, of a Mercedes Benz plant in the South American country. A California appeals court had ruled in favor of the group, which consists of 21 Argentines and a Chilean and claims managers at the plant collaborated with the Argentine regime between 1976 and 1983 — during the country’s “Dirty War.” They claim the management at the subsidiary had identified resistors or agitators and disclosed their names to authorities, allowing violent police raids, arbitrary arrests and torture. Some employees disappeared and were presumed killed. The chief of police in charge of such actions was subsequently hired by Mercedes as the head of security to cover up his actions, according to the class-action suit. The plaintiffs point to two U.S. laws in their effort to seek reparations from Daimler AG — the Torture Victims Protection Act (TVPA) and the Alien Tort Statute that dates back more than two centuries and allows foreigners to sue in U.S. court for violations of international law. “This case has no connection in the U.S.,” Daimler AG’s lawyer Thomas Dupree said, underscoring that “this case took place in Argentina” with Argentine plaintiffs. “We have been fighting from day one to demonstrate that there’s no basis for jurisdiction for Daimler,” he added, arguing that the California appeals court simply be overruled. But Daimler AG has a wholly owned subsidiary in California, Mercedes Benz-USA, and that is “sufficient to establish personal jurisdiction over Daimler,” said Kevin Russell, the lawyer for the plaintiffs. Daimler “has done billions of dollars … it enjoys benefits in doing business in the States,” added Russell. In this case, Daimler AG enjoys the backing of big business and banks in Germany and elsewhere in Europe.

The administration of U.S. President Barack Obama is also on its side, fearing negative repercussions on diplomatic relations, as well as on U.S. foreign trade and economic interests, according to an amicus brief by the Department of Justice. Edwin Kneedler, the lawyer representing the government, argued that Mercedes, in the United States, “is an independent entity” that “cannot act on behalf of Daimler,” whose stocks are held in Germany. There was “no evidence” that Daimler controls the day to day activity of Mercedes Benz-USA, he added. The Supreme Court appeared inclined to send the matter back to the lower court in California. “Why do we have to confront a federal case?” asked Justice Antonin Scalia, a conservative on the nine-member panel. His progressive counterpart Stephen Breyer echoed: “That’s a state issue, what am I suppose to do with it?” Today’s proceedings represent the second time in a year that the Supreme Court considers whether foreign companies should be held accountable in U.S. courts for alleged violations of international law committed abroad. Months ago, it ruled that the U.S. justice system does not have the jurisdiction to determine whether oil giant Shell was complicit in acts of torture by the Nigerian government.