Ninth Circuit Reverses Dismissal of Carijano v. Occidental Petroleum

Early last week, the Ninth Circuit Court of Appeals revived a tort case brought by 25 members of the Peruvian Achuar indigenous group and Amazon Watch against Occidental Petroleum ("Occidental").  Plaintiffs allege that the company’s operations in the Peruvian Amazon resulted in severe contamination of the land and rivers in the region and that, as a result, they have suffered adverse health effects and negative impacts on their livelihoods.

Plaintiffs originally filed suit in 2007 in state court and asserted common law tort claims including negligence, fraud and misrepresentation, trespass, and strict liability.  Plaintiffs also brought claims under California’s Unfair Competion Law.  The case was subsequently removed to federal court and, in April 2008, the District Court for the Central District of California dismissed the case on forum non conveniens grounds.

The Carijano litigation is notable in part due to the fact that plaintiffs have sought redress through common law tort claims rather than through claims asserted pursuant to the Alien Tort Statute.  The ultimate viability of plaintiffs’ claims remains uncertain, as the litigation has only dealt with jurisdictional issues to date.  Those seeking to hold corporate defendants liable in U.S. courts for acts outside the United States will be watching the future progression of this case closely.

Last week’s Ninth Circuit decision also raises important considerations for litigants in cases where an alternate forum may be available outside the United States.  Based on the facts of the case, the Court found that the district court had abused its discretion in finding that Peru represented an adequate alternate forum for this litigation.  The Ninth Circuit observed that Occidental had consented to jurisdiction in Peru without waiving the statute of limitations defense that would be available under Peruvian law, and found that dismissal on the basis of forum non conveniens is improper when the lawsuit would be time-barred in the alternate jurisdiction.  Specifically, the Court said that

where there is reason to believe that a defendant will seek immediate dismissal based on the foreign forum’s statute of limitations, dismissal should be conditioned on waiting any statute of limitations defenses that would not be available in the domestic forum.

In addition, the Ninth Circuit found that the district court had failed to weigh plaintiffs’ expert testimony which stated that Peru did not offer a practical remedy for plaintiffs, especially with regard to damages.  The Court also found that insufficient deference was given to plaintiffs’ choice of forum. 

Finally, the Court found that a dismissal on forum non conveniens grounds should have been conditioned with certain requirements, including a commitment that Occidental would waive the statute of limitations defense.  The Court also noted that "[w]hen there is reason to beliveve that enforcing a judgment in a foreign country would be problematic, courts have required assurances that a defendant will satisfy any judgment as a condition of dismissal."

As noted above, this case raises the question of whether common law tort claims may support litigation by plaintiffs on the basis of corporate activities, and alleged abuses, outside the United States.  The Ninth Circuit’s dismissal also raises key concerns for defendants seeking to dismiss foreign plaintiffs’ claims on the basis of forum non conveniens, especially where certain claims and defenses are available in one forum and not the other.

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