The Global Lawyer: One Year Later
was the legal equivalent of a 70-year flood. Which case law precincts are in the flood's path?
January 04, 2015 at 09:40 AM
7 minute read
By the time the U.S. Supreme Court's decision in Morrison v. National Australia Bank was 1 year old, the Federal Reporter was littered with the bones of its billion-dollar casualties. Daimler v. Bauman, handed down by the high court last January, has slain fewer giant cases. But it has the potential to scorch wide swathes through the case law, in ways both intended and unintended.
Daimler abolished the “doing business” test for general jurisdiction that had prevailed for nearly 70 years. Now, unless there's a link between the injury and the forum, a business can only be sued “at home.” This cuts the number of states where a court can assert general jurisdiction over a major U.S. company from 50 to two: the place of incorporation and the main place of business (putting aside the vague possibility that a company might be “at home” in some third way). Even more consequentially, Daimler cuts the number of states where a court can establish general jurisdiction over a non-U.S. defendant to zero. As many commentators have noted, this is bound to put pressure on other forms of jurisdiction.
Daimler won our Litigator of the Week honor for Gibson, Dunn & Crutcher's Thomas Dupree Jr. It was immediately hailed in Forbes as a way to end shopping for the friendliest forum in nationwide class actions. But after this summer's Plavix class action ruling by the California Court of Appeals in Bristol Myers Squibb v. Superior Court, DRI-The Voice of the Defense Bar blogged that “Forum Shopping Lives On” despite Daimler. The intermediate court ruled that out-of-state plaintiffs were able to meet the test for specific jurisdiction even though their injuries did not occur in California, in part because the activities injuring plaintiffs nationwide were part of a “common effort.” The U.S. Chamber of Commerce understandably cried that specific jurisdiction was being distorted to undermine Daimler, and the California Supreme Court accepted Bristol Myers' petition for review.
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