Justices agree to hear Daimler human rights case

WASHINGTON Mon Apr 22, 2013 10:36am EDT

A shareholder arrives to a Daimler AG annual shareholder meeting in Berlin, April 4, 2012. REUTERS/Fabrizio Bensch

A shareholder arrives to a Daimler AG annual shareholder meeting in Berlin, April 4, 2012.

Credit: Reuters/Fabrizio Bensch

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WASHINGTON (Reuters) - The Supreme Court agreed on Monday to hear Daimler AG's (DAIGn.DE) appeal of a lawsuit claiming the company violated human rights against workers at an Argentina plant in the 1970s.

The San Francisco-based 9th U.S. Circuit Court of Appeals had ruled in favor of plaintiffs in allowing claims to proceed in federal court.

Workers or relatives of workers at an Argentina-based plant operated by Mercedes-Benz, a wholly owned subsidiary of Daimler, sued over the alleged conduct.

They said the company had punished plant workers viewed by managers as union agitators and that it had worked alongside the Argentinian military and police forces.

In a related case, the court on Monday asked a lower court to take a second look at human rights claims against Rio Tinto (RIO.L) (RIO.AX).

Both cases were on hold for a major human rights case that the court decided last week.

In last week's unanimous decision, the high court limited the ability of human rights plaintiffs to invoke the 1789 Alien Tort Statute when suing companies over alleged collusion with violent foreign governments.

The court held in Kiobel v. Royal Dutch Shell that a federal court in New York could not hear claims made by 12 Nigerians who accused Anglo-Dutch oil company Royal Dutch Shell Plc (RDSa.L) of complicity in a crackdown on protesters in Nigeria from 1992 to 1995.

The legal question in the Daimler case is different. It concerns whether a U.S. court has the authority to hear a case against a foreign corporation "solely on the fact that an indirect corporate subsidiary performs services on behalf of the defendant" in the state where the lawsuit was filed, which in this instance was California.

The plaintiffs said California was a suitable place to file the lawsuit because Mercedes-Benz USA, an indirect subsidiary of Daimler, distributes Daimler cars to dealerships in the state.

Arguments and a decision are due in the court's next term, which starts in October and ends in June 2014.

The cases are Rio Tinto v. Sarei, U.S. Supreme Court, No. 11-649 and Daimler AG v. Bauman, U.S. Supreme Court, No. 11-965.

(Reporting by Lawrence Hurley; Editing by Howard Goller, Gerald E. McCormick and Lisa Von Ahn)

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