Metropolitan News-Enterprise


Thursday, May 19, 2011


Page 1


Court Revives Suit Over Alleged Involvement in ‘Dirty War’




A federal court in California has jurisdiction over a suit against the maker of Mercedes-Benz automobiles by former residents of Argentina who claim they were kidnapped, detained, or tortured by security forces directed by a subsidiary of the company, the Ninth U.S. Circuit Court of Appeals ruled yesterday.

The decision represents an about-face for the three-judge panel, which ruled in 2009 that personal jurisdiction did not exist over DaimlerChrysler AG, which is headquartered in Stuttgart, Germany and does not have an agent for service in California.

The court, however, withdrew its opinion last year and reached the opposite conclusion yesterday. Judge Stephen Reinhardt, who dissented from the original ruling, authored the opinion for a unanimous panel.

‘Dirty War’

The plaintiffs are 23 citizens and residents of Argentina who claim they, or members of their families. They claim that Mercedes Benz Argentina had a close relationship with the regime, which worked with the company in targeting those believed to be working with leftist trade unions during the “Dirty War” of the 1970s and 1980s.

The suit was filed under the Alien Tort Claims Act, which allows an action in federal court “by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”

In dismissing, U.S. District Judge Ronald Whyte of the Northern District of California rejected the plaintiffs’ claim that jurisdiction exists in this state based on an agency relationship between the German company and Mercedes-Benz USA, which has offices and does business in California.

Senior Judge Dorothy W. Nelson, joined by Judge Mary Schroeder, reasoned in the original opinion that the German company does not exert “pervasive and continual” control over the American subsidiary.

Reinhardt, dissenting, argued that the majority was employing the wrong test. The issue was not control, he declared, “but rather the relative importance of the services provided to the parent corporation.”

In yesterday’s opinion, Reinhart said the plaintiffs had pled sufficient facts to survive a motion to dismiss on the question of personal jurisdiction.

The facts as pled by the plaintiffs, he said, establish that Mercedes-Benz USA is the agent of DaimlerChrysler AG. The U.S. subsidiary accounts for 2.4 percent of the parent’s worldwide sales, the judge noted, while the parent “has the right to control nearly all aspects of MBUSA’s operations,” including the number of vehicles it sells, the location of its facilities, the selection of dealers, the types of information it collects from customers, and its standards for pricing, modifying and servicing vehicles and issuing warranties.

Human Rights Policy

The judge went on to say that it is reasonable to permit the case to go forward in California, rather than force the plaintiffs to litigate in Germany or Argentina. Germany has no greater factual connection to the case than California, Reinhardt said, and California has a strong public policy interest in advancing international human rights.

The suit cannot be litigated in Argentina, he explained, because the country’s highest court “has held that human rights civil cases arising out of the Dirty War are subject to a two-year and three month statute of limitations.” Even if a suitable forum were available there, or in Germany, Reinhardt noted, the issue on appeal is jurisdiction, not the forum non conveniens doctrine, so the plaintiffs need not establish at this stage that California is the most appropriate forum, only that it is a reasonable one.

The case is Bauman v. DaimlerChrysler Corporation, 07-15386.


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