FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

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 No. 07-15386 SCHIAFFO; ELBA LEICHNER;

ANUNCIACION D.C. No. SPALTRO DE

BELMONTE; HECTOR RATTO; CV-04-00194-RMW

EDUARDO OLASIREGUI; RICARDO  Northern District of

MARTIN California, HOFFMAN; EDUARDO

ESTIVILLE; ALFREDO MANUEL San Jose

MARTIN; JUAN JOSE MARTIN; JOSE ORDER

BARREIRO; ALEJANDRO DAER,

Plaintiffs-Appellants,

v.

DAIMLERCHRYSLER CORPORATION;

DAIMLERCHRYSLER AG,

Defendants-Appellees. 

Filed November 9, 2011

Before: Mary M. Schroeder, Dorothy W. Nelson, and

Stephen Reinhardt, Circuit Judges.

Order;

Dissent by Judge O’Scannlain

20115
ORDER

The panel has voted unanimously to deny the petition for

rehearing. Judge Schroeder and Judge Reinhardt have voted

to deny the petition for rehearing en banc, and Judge Nelson

so recommended.

A judge of the court called for a vote on the petition for

rehearing en banc. A vote was taken, and a majority of the

active judges of the court failed to vote for en banc rehearing.

Fed. R. App. P. 35(f).

The petition for rehearing and the petition for rehearing en

banc are DENIED. No further petitions for panel or en banc

rehearing will be entertained.

O’SCANNLAIN, Circuit Judge, joined by TALLMAN,

BYBEE, CALLAHAN, BEA, M. SMITH, IKUTA, and N.R.

SMITH, Circuit Judges, dissenting from the denial of rehearing en banc:

Our court today extends the reach of general personal jurisdiction far beyond its breaking point. Its holding, that federal

courts have personal jurisdiction over a German corporation

for its Argentinian subsidiary’s alleged activities in Argentina

based simply on having a separate U.S.-based subsidiary, is

an affront to due process. The panel ignores the Supreme

Court’s warnings that the Due Process Clause permits “defendants to structure their primary conduct with some minimum

assurance as to where that conduct will and will not render

them liable to suit.” Burger King Corp. v. Rudzewicz, 471

U.S. 462, 472 (1985) (internal quotation marks omitted). We

thus place ourselves at odds again with the dictates of the

Supreme Court, which has never approved such a broad jurisdictional reach as in this case. Moreover, our decision today

is inconsistent with the law of at least six of our sister circuits.

20116 BAUMAN v. DAIMLERCHRYSLER CORP.
I therefore dissent from our regrettable failure to rehear this

case en banc.

I

The facts pertinent to this appeal are relatively straightforward. Twenty-two Argentinian residents brought suit in the

Northern District of California against DaimlerChrysler A.G.

(“Daimler”), a German corporation, alleging that one of its

subsidiaries, Mercedes-Benz Argentina, engaged in human

rights violations in Argentina during that country’s “Dirty

War” in the 1970s and 1980s. Bauman v. DaimlerChrysler

Corp., 644 F.3d 909, 911-12 (9th Cir. 2011). Without need for

an evidentiary hearing, the district court properly dismissed

the suit for lack of personal jurisdiction over Daimler. Id. at

913.

On appeal, the panel initially affirmed the district court.

Bauman v. DaimlerChrysler Corp., 579 F.3d 1088 (9th Cir.

2009), vacated, 603 F.3d 1141 (9th Cir. 2010). Then — after

granting rehearing and without additional oral argument —

the panel inexplicably changed its mind and reversed the district court, holding that Daimler was indeed subject to general

jurisdiction in California based solely “through the contacts of

its subsidiary Mercedes-Benz USA.” Bauman, 644 F.3d at

912. In so holding, the panel drastically expands the reach of

personal jurisdiction beyond all constitutional bounds.

No one disputes that Daimler itself lacks sufficient contacts

with California to render it subject to general personal jurisdiction there. Nor does anyone dispute that Daimler’s U.S.-

based subsidiary, Mercedes-Benz USA, does have sufficient

contacts with California to render it subject to general personal jurisdiction. See Bauman, 644 F.3d at 920 n.11. But

Mercedes-Benz USA was not joined as a party to this lawsuit.

The only question, then, is whether Mercedes-Benz USA’s

mere existence in California renders Daimler subject to genBAUMAN v. DAIMLERCHRYSLER CORP. 20117
eral personal jurisdiction for matters arising in Argentina

without violating the Due Process Clause. See id. at 920.

II

As the Supreme Court recently reaffirmed, for a foreign

corporation to be subject to general jurisdiction, its contacts

with the forum state must be “so continuous and systematic

as to render [it] essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct.

2846, 2851 (2011). Our court today undermines this stringent

standard by inventing a new test for general personal jurisdiction that gives Daimler no “minimum assurance as to where

. . . conduct will and will not render [it] liable to suit.” Burger

King Corp., 471 U.S. at 472 (internal quotation marks omitted).1

A

Under our case law, there are two separate tests for determining whether a subsidiary’s contacts can be imputed to a

parent corporation for purposes of general jurisdiction. Doe v.

Unocal Corp., 248 F.3d 915, 926 (9th Cir. 2001). One test,

the alter ego test, requires a showing “(1) that there is such

unity of interest and ownership that the separate personalities

[of the two entities] no longer exist and (2) that failure to disregard [their separate identities] would result in fraud or injus1The reasoning in Goodyear is directly applicable here. Goodyear asked

the question: “Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of

the subsidiaries in the forum State?” Goodyear, 131 S. Ct. at 2850. The

Court answered that question with a resounding, and unanimous, “no.”

Said otherwise, an affiliate of a United States corporation is not subject to

suit in a state where the affiliate itself took no action. By contrast, Bauman

holds that an affiliate (in this case a foreign parent of a United States subsidiary) is amenable to suit in state court on claims unrelated to any activity of that affiliate in the forum State. This is exactly what Goodyear says

we must not do; and as the Supreme Court explains, such an exercise of

the state’s coercive power is incompatible with the Due Process Clause.

See id. at 2850-51. 

20118 BAUMAN v. DAIMLERCHRYSLER CORP.
tice.” Id. (internal quotation marks omitted). The panel

correctly concludes that this test is not at issue here because

there is no reasonable argument that Daimler controls

Mercedes-Benz USA “to such a degree as to render the latter

the mere instrumentality of the former.” Id. (internal quotation

marks omitted); see Bauman, 644 F.3d at 920.

Yet the panel finds general jurisdiction over Daimler here

by reformulating our other test, the agency test. See id. at 931.

As interpreted by the Bauman panel, the agency test requires

two showings: First, the subsidiary’s services must be “sufficiently important to [the parent] that they would almost certainly be performed by other means if [the subsidiary] did not

exist, whether by [the parent] performing those services itself

or by [the parent] entering into an agreement with a new subsidiary or a non-subsidiary national distributor for the performance of those services.” Id. at 922.2

 Second, it must be

shown that the parent has “the right to substantially control”

the subsidiary’s activities. Id. at 924.3 In redefining the agency

2The panel’s newly reformed test is not even an accurate characterization of our precedents. As we clearly stated in Chan v. Society Expeditions, Inc., 39 F.3d 1398 (9th Cir. 1994), the relevant inquiry under the

first part of the agency test is whether “the subsidiary was either established for, or is engaged in, activities that, but for the existence of the subsidiary, the parent would have to undertake itself,” id. at 1405 n.9

(emphasis added); see also Harris Rutsky & Co. Ins. Servs. v. Clements

Ltd., 328 F.3d 1122, 1135 (9th Cir. 2003); Doe, 248 F.3d at 928-29.

Surely, in the absence of its subsidiary, Daimler would not undertake

Mercedes-Benz USA’s activities itself. Rather, Daimler could easily do

what it has done in the past and, for example, hire some other entity to

handle U.S. operations. See Bauman, 644 F.3d at 914 (discussing Daimler’s history of “independent distributors to distribute Mercedes-Benz

vehicles in the United States”). 

3The panel also errs in interpreting the second part of the agency test,

which requires a high degree of control of the subsidiary by the parent,

essentially reaching the level of actual day-to-day control. See Doe at 926

(“An . . . agency relationship is typified by parental control of the subsidiary’s internal affairs or daily operations.”); see also Harris Rutsky & Co.

Ins. Servs., 328 F.3d at 1135; Kramer Motors, Inc. v. British Leyland, Inc.,

BAUMAN v. DAIMLERCHRYSLER CORP. 20119
test, the panel drastically expands our test for personal jurisdiction and ignores the bedrock concerns of fundamental fairness that underpin Supreme Court due process jurisprudence.

B

The panel’s interpretation of the agency test is far too

expansive and threatens to make innumerable foreign corporations unconstitutionally subject to general personal jurisdiction in our courts. Indeed, it is difficult to see what limits

there are on the panel’s formulation. Anything a corporation

does through an independent contractor, subsidiary, or distributor is presumably something that the corporation would do

“by other means” if the independent contractor, subsidiary, or

distributor did not exist. Bauman, 644 F.3d at 922.

Such a result surely cannot be squared with the Supreme

Court’s repeated admonitions that due process must permit

“defendants to structure their primary conduct with some

minimum assurance as to where that conduct will and will not

render them liable to suit.” Burger King Corp., 471 U.S. at

472 (quoting World-Wide Volkswagen Corp. v. Woodson, 444

U.S. 286, 297 (1980)) (internal quotation mark omitted).

While the panel seems to be treating personal jurisdiction

lightly — perhaps even as a mere technicality — we must not

forget that limits on personal jurisdiction have constitutional

underpinnings. See Brown, 131 S. Ct. at 2853 (“The Due Process Clause of the Fourteenth Amendment sets the outer

628 F.2d 1175, 1177 (9th Cir. 1980). As the panel originally held, Daimler

did not exercise “pervasive and continual control” over Mercedes-Benz

USA. Bauman, 579 F.3d at 1096. That determination was correct. Far

from having its day-to-day actions dictated from Germany, MercedesBenz USA has considerable autonomy to act within the terms of a General

Distributor Agreement. Bauman, 644 F.3d at 914. Mercedes-Benz USA

negotiates its own seller’s agreements, id. at 915, and even “ha[s] the

power to independently decide against buying” certain types of Daimler’s

vehicles, Bauman, 579 F.3d at 1096. 

20120 BAUMAN v. DAIMLERCHRYSLER CORP.
boundaries of a state tribunal’s authority to proceed against a

defendant.”).

Moreover, our court now seemingly rejects respect for corporate separateness, a well-established “principle of corporate

law deeply ingrained in our economic and legal systems.”

United States v. Bestfoods, 524 U.S. 51, 61 (1998) (internal

quotation marks omitted). It is “[a] basic tenet of American

corporate law . . . that the corporation and its shareholders are

distinct entities,” over which jurisdiction must be individually

established. Dole Food Co. v. Patrickson, 538 U.S. 468, 474

(2003). “Where two corporations are in fact separate” — as

they irrefutably are here — “permitting the activities of the

subsidiary to be used as a basis for personal jurisdiction over

the parent violates this principle and thus due process.” Cent.

States, Se. & Sw. Areas Pension Fund v. Reimer Express

World Corp., 230 F.3d 934, 944 (7th Cir. 2000); cf. J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2797 (2011)

(Ginsburg, J., dissenting) (“A few points on which there

should be no genuine debate bear statement at the outset. . . .

[A]ll agree, [the parent company] surely is not subject to general (all-purpose) jurisdiction in New Jersey courts, for that

foreign-country corporation is hardly ‘at home’ in New Jersey.”).

III

The problems with today’s decision don’t end there. The

panel’s holding perpetuates a split with at least six of our sister circuits, which do not even recognize the existence of the

agency test. Moreover, our holding today is an affront to

international comity and threatens the ability of the Executive

Branch to execute its foreign affairs duties.

A

Not only does the panel’s interpretation of the agency test

fly in the face of due process, but the mere existence of the

BAUMAN v. DAIMLERCHRYSLER CORP. 20121
agency test is also contrary to the law of at least six of our sister circuits.4

 Some circuits, for example, use only the alter ego

test. See Epps v. Stewart Info. Servs. Corp., 327 F.3d 642,

648-49 (8th Cir. 2003) (“[P]ersonal jurisdiction can be based

on the activities of the nonresident corporation’s in-state subsidiary, but only if the parent so controlled and dominated the

affairs of the subsidiary that the latter’s corporate existence

was disregarded so as to cause the residential corporation to

act as the nonresidential corporate defendant’s alter ego.”);

Dalton v. R&W Marine, Inc., 897 F.2d 1359, 1363 (5th Cir.

1990) (“Although the mere existence of a parent-subsidiary

relationship will not support the assertion of jurisdiction over

a foreign parent, there may be instances in which the parent

so dominates the subsidiary that they do not in reality constitute separate and distinct corporate entities.” (internal quotation marks omitted)); see also Estate of Thomson v. Toyota

Motor Corp. Worldwide, 545 F.3d 357, 362-63 (6th Cir.

4

It is also inconsistent with the Supreme Court’s early decision in Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925) (Brandeis, J.).

There, the Court held that general personal jurisdiction may not be

imposed on a foreign corporation merely because of the corporation’s

ownership of a subsidiary present in the forum state. Id. at 337; see also

id. (“The corporate separation, though perhaps merely formal, was real. It

was not pure fiction.”). Though decided before the International Shoe line

of cases, Cannon Mfg. Co. has never been overruled. See generally Int’l

Shoe Co. v. Washington, 326 U.S. 310 (1945). 

Moreover, as the panel’s flip-flop in this case clearly demonstrates, the

agency test is far too manipulable to satisfy the requirements of due process. See Hertz Corp. v. Friend, 130 S. Ct. 1181, 1193 (2010) (“Simple

jurisdictional rules also promote greater predictability. Predictability is

valuable to corporations making business and investment decisions.”).

Judges are not well equipped to make assessments about what a foreign

corporation might do in unforseen, hypothetical scenarios, especially in

the early stages of litigation. See Bauman, 644 F.3d at 920 (noting that the

subsidiary’s services must be “sufficiently important to [the parent] that

they would almost certainly be performed by other means if [the subsidiary] did not exist, whether by [the parent] performing those services itself

or by [the parent] entering into an agreement with a new subsidiary or a

non-subsidiary national distributor for the performance of those services”).

20122 BAUMAN v. DAIMLERCHRYSLER CORP.
2008). Other circuits similarly describe their test as analogous

to the corporate law doctrine of piercing the corporate veil.

See IDS Life Ins. Co. v. SunAmerica Life Ins. Co., 136 F.3d

537, 540 (7th Cir. 1998) (Posner, C.J.); Mylan Labs., Inc. v.

Akzo, N.V., 2 F.3d 56, 62-63 (4th Cir. 1993). Yet another circuit uses words like “agency” while clearly applying something more like the alter ego test. See Consol. Dev. Corp. v.

Sherritt, Inc., 216 F.3d 1286, 1293-94 (11th Cir. 2000) (“For

[plaintiffs] to persuade us that the district court had general

personal jurisdiction over [the nonresident defendant] because

of [its subsidiary’s] activities in the United States, it would

have to show that [the subsidiary’s] corporate existence was

simply a formality, and that it was merely [the parent’s]

agent.”).

Whatever the precise name of the test, it is clear that the

exercise of jurisdiction found to be proper here would be

improper in many other circuits. Given that corporations must

be able “to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit,” Burger King Corp., 471 U.S. at 472,

this case presents a question of substantial importance where

a uniform rule is desirable, cf. Michelin Tire Corp. v. Wages,

423 U.S. 276, 285 (1976) (“[T]he Federal Government must

speak with one voice when regulating commercial relations

with foreign governments.”).

B

Finally, the panel’s decision may also have unpredictable

effects on foreign policy and international comity. In many

European countries, for example, jurisdiction by imputation is

discouraged. Council Regulation 44/2001, 2001 O.J. (L 012)

1 (EC). Nonetheless, several countries have enacted “retaliatory jurisdictional laws.” Gary B. Born, Reflections on Judicial Jurisdiction in International Cases, 17 Ga. J. Int’l &

Comp. L. 1, 15 (1987) (“These provisions empower national

courts to exercise jurisdiction over foreign persons in circumBAUMAN v. DAIMLERCHRYSLER CORP. 20123
stances where the courts of the foreigner’s home state would

have asserted jurisdiction.”). For example, as a result of our

court’s holding today, an Italian court might be able to assert

jurisdiction over a United States parent corporation based on

that court’s jurisdiction over a wholly owned Italian subsidiary.

Indeed, as the Solicitor General has noted, “foreign governments’ objections to our state courts’ expansive views of general personal jurisdiction have in the past impeded

negotiations of international agreements on the reciprocal recognition and enforcement of judgments.” Brief for the United

States as Amicus Curiae Supporting Petitioners at 33, Brown,

131 S. Ct. 2846; see also id. at 12 (“[E]xcessive assertion of

general jurisdiction potentially threatens particular harm to

the United States’ foreign trade and diplomatic interests.”).

Naturally, in the past, the Supreme Court has taken such

issues to heart. See, e.g., Asahi Metal Indus. Co. v. Superior

Court, 480 U.S. 102, 115 (1987) (urging courts “to consider

the procedural and substantive policies of other nations whose

interests are affected by the assertion of jurisdiction by [state]

court[s]”); see also id. (“Great care and reserve should be

exercised when extending our notions of personal jurisdiction

into the international field.” (internal quotation marks omitted)). Yet the panel brushed aside these concerns, which

deserve full consideration.

IV

In sum, Daimler is hardly “at home” in California when

sued only for its Argentinian subsidiary’s activities in Argentina. Brown, 131 S. Ct. at 2851. Our court’s holding represents a breathtaking expansion of general personal

jurisdiction, which is unwarranted in light of Supreme Court

precedent, the precedent of our sister circuits, and our own

precedents. Moreover, today’s decision presents a gratuitous

threat to our nation’s economy, foreign relations, and international comity.

20124 BAUMAN v. DAIMLERCHRYSLER CORP.
I respectfully dissent; our court should have granted the

petition for rehearing en banc.

BAUMAN v. DAIMLERCHRYSLER CORP. 20125