D.C. Circuit Upholds Corporate Liability under the Alien Tort Statute

On July 8, the D.C. Circuit Court of Appeals reinstated a lawsuit brought against Exxon Mobil Corp. (“ExxonMobil”) by Acehnese villagers, alleging that the company and its Indonesian subsidiary are liable for killings, torture, and other human rights abuses committed by the Indonesian military. In a lengthy 2-1 decision, the D.C. Circuit held that companies are proper defendants under the Alien Tort Statute (“ATS”), expressly disagreeing with the Second Circuit’s decision in Kiobel v. Royal Dutch Petroleum, 621 F.3d 111 (2d Cir. 2010).

The ExxonMobil case, originally filed in 2001, has a complex history. In 2005, the District Court for the District of Columbia dismissed plaintiffs’ claims under the ATS and the Torture Victim Protection Act, and held that aiding and abetting was not a proper theory of liability under the ATS. Plaintiffs were subsequently allowed to amend their original complaint and proceed under D.C. tort law. In 2009, the District Court dismissed plaintiffs’ remaining claims in an unusual decision relying on the “prudential standing” doctrine. Plaintiffs appealed the dismissal, and ExxonMobil raised the question of corporate liability on cross-appeal.

In reinstating plaintiffs’ claims, the D.C. Circuit stated “neither the text, history, nor purpose of the ATS supports corporate immunity for torts based on heinous conduct allegedly committed by its agents in violation of the law of nations.” The Court stated that the Kiobel decision “overlooks the key distinction between norms of conduct and remedies” and found that while international law provides the norms of conduct applicable in ATS cases, citing to Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), federal common law governs the available remedies.

The Court also agreed with plaintiffs that aiding and abetting is a proper theory of liability under the ATS. Notably, the Court found that the proper standard for aiding and abetting liability is “knowing assistance that has a substantial effect on the commission of the human rights violation.” In stating that a “knowledge” standard is proper for aiding and abetting claims, the Court disagreed with the Second Circuit’s holding in Presbyterian Church of Sudan v. Talisman, 582 F.3d 244 (2d Cir. 2009). In that case, the Second Circuit held that defendants may only be found liable for violations of customary international law under an aiding and abetting theory of liability if they provide substantial assistance to the primary violator with the intent of furthering the human rights violation.

In its decision,  the D.C. Circuit observed that the Eleventh Circuit has also upheld corporate liability for ATS claims, citing Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009), Romero v. Drummond Co., Inc., 552 F.3d 1303 (11th Cir. 2008), and Aldana v. Del Monte Fresh Produce N.A., 416 F.3d 1242 (11th Cir. 2005).  Unlike the D.C. Circuit’s decision, the Eleventh Circuit cases do not include much analysis of the question of whether corporations are proper defendants.  The D.C. Circuit’s opinion establishes a clear split with the Second Circuit’s analysis in Kiobel.  In June, plaintiffs in the Kiobel case have filed a petition for a writ of certiorari with the Supreme Court.  Some commentators believe that the clear split between the Circuits may lead the Supreme Court to take up the question of corporate liability under the ATS, an issue which was left unanswered in Sosa.

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