Saturday, January 18, 2014
My colleague, Will Huhn (Akron), explains here the implications of the Supreme Court's decision this week in Daimler AG v. Bauman. The Court in Daimler ruled that the federal courts in California lacked personal jurisdiction over the German corporation Daimler to adjudicate claims for human rights violations arising in Argentina.
What's the connection to the birth control mandate cases? In those cases the owners of two private, for-profit business corporations contend that their individual rights to freedom of religion "pass through" to the corporation -- that the corporations are in effect the "agents" of the principal shareholders, and that this is why the corporations have the right to deny their employees health insurance coverage for birth control.
In Daimler the Ninth Circuit Court of Appeals had held that MBUSA was the "agent" of Daimler AG, and that the substantial business presence of MBUSA in California could be imputed to Daimler AG. The Supreme Court was not persuaded by this agency analysis. (pp. 15-17) Instead the Court respected the separate corporate personhood of the parent company:
Even if we were to assume that MBUSA is at home in California, and further to assume MBUSA's contacts are imputable to Daimler, there would still be no basis to subject Daimler to general jurisdiction in California, for Daimler's slim contacts with the State hardly render it at home there. (p. 18)
It would be anomalous for the Court to adhere to corporate identity for purposes of personal jurisdiction and liability for tort, and yet to ignore corporate identity to give effect to the personal religious choices of stockholders. If corporations are legal fictions -- if they are in essence simply the shareholders -- then shareholders should be liable for corporate torts, debts, and taxes. Corporations are either separate and independent legal entities or they are not. For-profit business entities may or may not have the right to freedom of religion; but they are not the same "persons" as their stockholders, directors, officers, or employees.