A federal appeals court in San Francisco today dismissed a human rights lawsuit filed against the parent company of Mercedes Benz by Argentine autoworkers and relatives who claim they or their family members were kidnapped, tortured or murdered in the 1970s.

A panel of the 9th U.S. Circuit Court of Appeals ruled by a 2-1 vote that U.S. courts have no jurisdiction over the case because there is not a close enough connection between Mercedes Benz’s American subsidiary and the parent company, Daimler AG of Germany.
The panel upheld a similar ruling in which U.S. District Judge Ronald Whyte of San Jose dismissed the lawsuit in 2007.

The case was filed in 2004 by 23 Argentine residents. They include relatives of nine autoworkers and union activists at a Mercedes Benz plant who disappeared in 1976 and 1977 during the so-called “dirty war” conducted by Argentina’s military dictatorship and are presumed dead.

Other plaintiffs are eight former workers at the plant near Buenos Aires who claim they were kidnapped and tortured.

The lawsuit claims Mercedes Benz officials aided and directed the alleged abuses by giving Argentine security forces the names of workers they considered subversive, while allegedly knowing the workers would be kidnapped, tortured or killed.

Mercedes Benz has denied the allegations.

Company spokesman Han Tjan said today, “We have always maintained the complaint lacked any merit.”

The lawsuit was based on a two-century-old law, the Alien Tort Claims Statute of 1789, which allows foreigners to sue companies or individuals that are on American soil in U.S. court for violations of international law. The law was originally aimed at foreign piracy.

In today’s ruling, Circuit Judges Dorothy Nelson and Mary Schroeder said Daimler AG didn’t have enough control over or continuous contact with its American subsidiary to qualify the subsidiary as its agent. The court therefore had no jurisdiction, the two judges said.

Circuit Judge Stephen Reinhardt dissented, saying that the standard set by the majority would make it difficult for abuse victims to sue foreign corporations with U.S. operations.

Reinhardt wrote, “The result is to shield foreign corporations from actions in American courts – although they have structured their affairs so as to reap vast profits from American markets – and to deprive plaintiffs, including those who allege grave human rights abuses, of access to justice.”

The Argentinians’ lawyers at International Rights Advocates in Washington, D.C., were not immediately available for comment. The decision could be appealed further to a larger panel of the appeals court or to the U.S. Supreme Court.

Tjan, who is Daimler’s director of corporate communications for North and South America, said the company welcomes the ruling.

“The exercise of jurisdiction of U.S. courts would be completely inappropriate,” Tjan said.
The alien tort law has been used in federal courts around in the country in recent years for a number of lawsuits by foreign citizens against corporations for events that took place overseas.

Last year, U.S. District Judge Susan Illston allowed a trial in San Francisco on a human rights lawsuit filed under the law against San Ramon-based Chevron Corp. by Nigerian villagers.

A jury exonerated Chevron of the villagers’ claims it was responsible for injuries and deaths caused by Nigerian security forces in a violent end to a protest on an offshore oil platform in Nigeria in 1998.

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