At Concurring Opinions, Marco Simons (EarthRights International) has this post on the Daimler v. Bauman case (argued at the Supreme Court 10/15): Is There a Constitutional Right to Corporate Separateness? Mr. Simons and I have been on opposite sides of some cases in the past, but I think there is something to his originalist argument here:
The Ninth Circuit held that the contacts of Daimler’s US subsidiary could be attributed to the parent for personal jurisdiction purposes, because, functionally speaking, they were essentially acting as a single business – the subsidiary was performing acts on behalf of the parent, which the parent would have had to do if the subsidiary did not exist. Daimler argues that this is a violation of due process, because the Constitution requires that it be treated separately from its subsidiary.
My organization, EarthRights International (ERI), submitted an amicus brief on the side of the Bauman plaintiffs, arguing that the Constitution does not enshrine any right to corporate separateness. Indeed, it’s difficult to see how it could – when both Due Process clauses were adopted, it was illegal in all states for one corporation to own another. How can a corporation have a constitutional right to be treated separately from its subsidiaries when subsidiaries did not exist when the constitutional provisions at issue were adopted?
I am most interested to see the approach of the Court’s self-identified originalists to this question. There can be no question that the original intent of the due process clause was not to afford some right to maintain distinctions between parents and subsidiaries, concepts which did not exist at the time. Will the originalists disregard their approach to the Constitution when it comes to protecting the interests of foreign multinational corporations?
My prior thoughts on Daimler are here. I would say, in response to Simons, that the original point of the due process clause as invoked here was (arguably) procedural fairness, and that (arguably) Daimler was treated unfairly in that it was not clear (until the Ninth Circuit said so) that operating a subsidiary in California would expose it to worldwide claims. Once it’s made clear that operating a subsidiary in California would have that effect, though, I agree that it’s harder from an originalist perspective to say the Constitution requires otherwise.
NOTE: This article was originally posted at The Originalism Blog, “The Blog of the Center for the Study of Constitutional Originalism at the University of San Diego School of Law,” and is reposted here with permission from the author.