644 F.3d 909 (9th Cir. 2011), 07-15386, Bauman v. DaimlerChrysler Corp.

Docket Nº:07-15386.
Citation:644 F.3d 909
Opinion Judge:REINHARDT, Circuit Judge:
Party Name:Barbara BAUMAN; Gregory Grieco; Josefina Nunez; Gabriele Nunez; Miriam Nunez; Silvia Nunez; Emilio Guillermo Pesce; Mirta Haydee Arenas; Graciela Gigena; Guillermo Alberto Gigena; Nuria Gigena; Amelia Schiaffo; Elba Leichner; Anunciacion Spaltro De Belmonte; Hector Ratto; Eduardo Olasiregui; Ricardo Martin Hoffman; Eduardo Estiville; Alfredo Manuel
Attorney:Terrence Patrick Collingsworth and Natacha H. Thys, Conrad & Scherer, Washington, D.C., for the plaintiffs-appellants. Matthew James Kemner, Carroll, Burdick & McDonough LLP, San Francisco, CA, for the defendants-appellees.
Judge Panel:Before: MARY M. SCHROEDER, D.W. NELSON and STEPHEN REINHARDT, Circuit Judges.
Case Date:May 18, 2011
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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644 F.3d 909 (9th Cir. 2011)

Barbara BAUMAN; Gregory Grieco; Josefina Nunez; Gabriele Nunez; Miriam Nunez; Silvia Nunez; Emilio Guillermo Pesce; Mirta Haydee Arenas; Graciela Gigena; Guillermo Alberto Gigena; Nuria Gigena; Amelia Schiaffo; Elba Leichner; Anunciacion Spaltro De Belmonte; Hector Ratto; Eduardo Olasiregui; Ricardo Martin Hoffman; Eduardo Estiville; Alfredo Manuel Martin; Juan Jose Martin; Jose Barreiro; Alejandro Daer, Plaintiffs-Appellants,

v.

DAIMLERCHRYSLER CORPORATION; DaimlerChrysler AG, Defendants-Appellees.

No. 07-15386.

United States Court of Appeals, Ninth Circuit

May 18, 2011

Argued and Submitted Oct. 21, 2008.

Opinion Filed Aug. 28, 2009.

Opinion Withdrawn May 6, 2010.

Resubmitted Aug. 6, 2010.

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[Copyrighted Material Omitted]

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Terrence Patrick Collingsworth and Natacha H. Thys, Conrad & Scherer, Washington, D.C., for the plaintiffs-appellants.

Matthew James Kemner, Carroll, Burdick & McDonough LLP, San Francisco, CA, for the defendants-appellees.

Appeal from the United States District Court for the Northern District of California, Ronald M. Whyte, District Judge, Presiding. D.C. No. CV-04-00194-RMW.

Before: MARY M. SCHROEDER, D.W. NELSON and STEPHEN REINHARDT, Circuit Judges.

OPINION

REINHARDT, Circuit Judge:

I.

Plaintiffs-Appellants (the " plaintiffs" ), twenty-two Argentinian residents,1 bring suit against DaimlerChrysler Aktiengesellschaft (DCAG) alleging that one of DCAG's subsidiaries, Mercedes-Benz Argentina (MBA) 2 collaborated with state security forces to kidnap, detain, torture, and kill the plaintiffs and/or their relatives during Argentina's " Dirty War." 3 Some

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of the plaintiffs are themselves former employees of MBA and the victims of the kidnapping, detention, and torture, while others are close relatives of MBA workers who were " disappeared" and are presumed to have been murdered. The only question before us is whether the district court had personal jurisdiction over DCAG. The district court granted DCAG's motion to dismiss the case for lack of such jurisdiction. We conclude, however, that DCAG was subject to personal jurisdiction in California through the contacts of its subsidiary Mercedes-Benz USA (MBUSA). We hold that MBUSA was DCAG's agent, at least for personal jurisdictional purposes, and that exercise of personal jurisdiction was reasonable under the circumstances of this case.

II.

A.

The plaintiffs here were workers or relatives of workers at the Gonzalez-Catan plant of Mercedes-Benz Argentina (MBA), a wholly owned-subsidiary of DaimlerChrysler AG's predecessor-in-interest. The plaintiffs allege that MBA sought to brutally punish plant workers whom MBA viewed as union agitators, and that MBA collaborated with the Argentinian military and police forces in doing so. They also allege that MBA had knowledge that the result of this collaboration would be the kidnapping, torture, detention and murder of those workers, and that the plan was implemented, in part, in the following manner. First, MBA labeled the appellants as " subversives" and " agitators" and passed on this information to the state security forces. Second, MBA " had members of the military and police forces stationed within" the Gonzalez-Catan plant. Third, MBA opened the plant to periodic raids by those forces. Fourth, MBA hired Ruben Lavallen, the police station chief who had been behind much of the reign of terror and installed him as Chief of Security, providing legal representation to him when he was " accused of human rights abuses." The plaintiffs further allege that MBA was pleased with the results of the raids and detentions because those actions helped to end a strike, restoring maximum production at the plant.

B.

Plaintiffs brought suit against DCAG in the District Court for the Northern District of California under the Alien Tort Statute (" ATS" ), 28 U.S.C. § 1350, and the Torture Victims Protection Act of 1991 (" TVPA" ), 106 Stat. 73, note following 28 U.S.C. § 1350. After attempting to serve process at one of DCAG's headquarters in Stuttgart, Germany,4 they learned that DCAG purported to maintain an operational headquarters in Auburn Hills, Michigan. They then attempted to serve DCAG in Michigan. Bauman v. DaimlerChrysler AG (Bauman I), No. C-04-00194 RMW, 2005 WL 3157472, *2 (N.D.Cal. Nov. 22, 2005). DCAG moved to quash service and to dismiss the case for lack of personal jurisdiction. In support of its opposition to these motions, the plaintiffs submitted DCAG's proxy statement which stated that, following the merger of Daimler-Benz and Chrysler, DCAG would " maintain two operational headquarters— one located at the current Chrysler headquarters, 1000 Chrysler Drive, Auburn Hills, Michigan 48326-2766, and one located at the current Daimler-Benz headquarters,

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Epplestrasse 225, 70567 Stuttgart, Germany." The language referring to dual operational headquarters was repeated four times in the proxy statement. The plaintiffs also submitted a document from DCAG's website, entitled " Investor Questions and Answers." 5 This document also discussed the " dual operational headquarters" and went on to note that the Co-Chairmen and Co-Chief Executive Officers of DCAG, Jurgen E. Schrempp (former Chairman of Daimler-Benz AG) and Robert J. Eaton (former Chairman and CEO of Chrysler Corporation) both had " offices and staff in both locations." After this evidence was submitted, DCAG withdrew its motion to quash service. Bauman I, 2005 WL 3157472, at *2.

C.

As discussed in more detail below, the District Court for the Northern District of California did not hold an evidentiary hearing when it ruled on DCAG's motion to dismiss for lack of personal jurisdiction; therefore, the plaintiffs " need only demonstrate facts that if true would support jurisdiction over the defendant." Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir.2001) (per curiam) (quoting Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995) (emphasis added)).

DCAG was a German stock company,6 but according to DCAG, sales of its vehicles in the United States " accounted for 1% of the nation's Gross Domestic Product (GDP)." In the annual report DCAG filed with the SEC in 2006, DCAG further admits that " a significant portion of our business, primarily in the case of the Mercedes Car Group, depends in part on export sales to the United States." (emphasis added). Mercedes-Benz USA, LLC (" MBUSA" ) was a Delaware limited liability company with its principal place of business in New Jersey. MBUSA was a wholly-owned subsidiary of the holding company DaimlerChrysler North America Holding Corporation, which was, in turn, a wholly-owned subsidiary of DCAG.7

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MBUSA was the single largest supplier of luxury vehicles to the California market; according to DCAG's figures, MBUSA's sales in California alone accounted for 2.4% of DCAG's total worldwide sales.

MBUSA had a regional office in Costa Mesa, California, a Vehicle Preparation Center in Carson, California, and a Classic Center in Irving, California. Bauman I, 2005 WL 3157472, at *10. Because of MBUSA's extensive contacts with California, DCAG does not dispute that MBUSA is subject to general jurisdiction in California. Id.

DCAG manufactured Mercedes-Benz motor vehicles and parts primarily at factories in Germany. MBUSA purchased Mercedes-Benz vehicles from DCAG in Germany for distribution in the United States.

Before DCAG created MBUSA, DCAG and its predecessors used two independent distributors to distribute Mercedes-Benz vehicles in the United States. From 1952 to 1957, Max Hoffman was the sole distributor of Mercedes-Benz vehicles; the relationship was terminated " [d]ue to low number of vehicle sales." From 1958-1964, an independent subsidiary of the Studebaker-Packard Corporation was the sole distributor. That company declared bankruptcy in 1964; that same year, the predecessor-in-interest to MBUSA became the exclusive U.S. distributor of Mercedes-Benz vehicles.

The final subsidiary that is relevant to this case is the DaimlerChrysler Corporation (DCC). As the district court noted, when the Chrysler Corporation and Daimler-Benz AG merged, they both became wholly-owned subsidiaries of DCAG. Bauman I, 2005 WL 3157472, at *1. At that point, Chrysler Corporation changed its name to DaimlerChrysler Corporation. Id.

D.

The relationship between DCAG and MBUSA is governed by a General Distributor Agreement (" the Agreement" ) which establishes extensive requirements for MBUSA as the general distributor of Mercedes-Benz cars in the U.S.8 Because the Agreement is the critical legal document that defines DCAG's relationship with MBUSA, we will discuss its provisions at some length.

Sales Figures

According to the Agreement, DCAG and MBUSA agree every year upon a set of quantitative and qualitative objectives, that can include a " minimum or specific number of Vehicles to be sold by [MBUSA] and its Authorized Resellers to end users ... [and] a minimum or a specific market share in defined vehicle segments" in the United States.

Sales Network

DCAG has extensive oversight over MBUSA's network of Authorized Resellers.

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MBUSA must " consult" with DCAG before establishing its sales and service network of Authorized Resellers, and before making any adjustments to that sales and service network. MBUSA must make " any changes or adjustments" to that network requested by DCAG. (emphasis added). MBUSA must receive approval from DCAG before entering into an agreement with any Authorized Reseller. According to the Agreement, " DCAG may, in its sole discretion, reject any such proposed appointment." (emphasis...

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