* High court weighs issue separate from ruling last week
* Justices returns Rio Tinto case to lower court for second
By Lawrence Hurley
WASHINGTON, April 22 Once again showing keen
interest in whether multinational corporations can be sued in
U.S. courts for alleged human rights abuses abroad, the U.S.
Supreme Court agreed on Monday to hear Daimler AG's
appeal involving its alleged conduct in Argentina in the 1970s.
In a related case, the court asked a lower court on Monday
to take a second look at human rights claims against Rio Tinto
Both cases were on hold for a major human rights case that
the court decided last week.
In that 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
In the Daimler case, workers or relatives of workers at an
Argentina-based plant operated by Mercedes-Benz, a wholly owned
subsidiary of Daimler, sued over its alleged conduct.
They claimed the company had punished plant workers viewed
by managers as union agitators and that it had worked alongside
the Argentinian military and police forces.
Both the Daimler and Rio Tinto cases feature Alien Tort
Statute claims, and both companies are likely to benefit from
last week's decision. But the Daimler case allows the court to
examine other issues that were left open. Both companies deny
the allegations against them.
The court held in Kiobel v. Royal Dutch Shell last week 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 of complicity in a crackdown on protesters in
Nigeria from 1992 to 1995.
The ruling is expected to make it harder for plaintiffs to
bring human rights claims against corporations in U.S. courts if
the activity took place overseas.
The legal question in the Daimler case is different. It
focuses on 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 federal 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.
A federal judge in the Northern District of California said
the relationship between Daimler and the subsidiary was not
The San Francisco-based 9th U.S. Circuit Court of Appeals
disagreed, outlining in its decision the ways in which the
companies worked together on such issues as signage, prices and
vehicle servicing standards.
Because the subsidiary's activities "were sufficiently
important" to Daimler, and Daimler also had "the right to
substantially control" the other company's activities, the
appeals court concluded that there were "pervasive contacts."
The Rio Tinto case, which involves allegations by human
rights plaintiffs in Papua New Guinea, will now return to the
same appeals court. The judges will revisit the claims in light
of the Supreme Court's guidance.
Arguments and a decision in the Daimler case are due in the
court's next term, which starts in October and ends in June
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.