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In Sarei v. Rio Tinto, PLC, Nos. 02-56256,
02-56390, 09-56381, 2011 WL 5041927 (9th Cir. Oct. 25, 2011), the
United States
Court of Appeals for the Ninth Circuit became the latest
Circuit to hold that corporations may be held liable under the
Alien Tort Statute ("ATS"), 28 U.S.C. § 1350. As previously
reported
here and
here, the Second Circuit held last year in Kiobel v. Royal Dutch Petroleum Co., 621
F.3d 111 (2d Cir. 2010), that the scope of liability under the ATS
does not extend to corporations because imposing liability
on corporations for violations of the law of nations has not
achieved a sufficiently "specific, universal, and
obligatory" character so as to be considered a norm of
customary international law. In Sarei, the Ninth
Circuit joined the District of Columbia Circuit, the Seventh
Circuit and the Eleventh Circuit in reaching the opposite
conclusion. The current circuit split will be resolved by the
United States Supreme Court, which granted certiorari to Kiobel
on October 17, 2011.
Plaintiffs in Rio Tinto were a group of current and
former residents of Bougainville, Papua New Guinea
("PNG"), where defendants Rio Tinto, PLC and Rio Tinto
Ltd. (collectively, "Rio Tinto") were engaged in mining
operations. Plaintiffs alleged that beginning in the 1960s,
Rio Tinto "displaced villages, razed massive tracts of rain
forest, intensely polluted the land, rivers, and air
. . . and systematically discriminated against its
Bougainvillian workers, who lived in slave-like
conditions." In February 1990, Bougainville residents
revolted and sabotaged the Bougainville mine. In the wake of
the uprising, the country descended into civil war and the PNG
government imposed a military blockade on the island that prevented
medicine, clothing, and other necessities from reaching
Bougainville residents. According to the complaint, Rio Tinto
pressured the PNG government to engage in "aerial bombardment
of civilian targets, wanton killing and acts of cruelty, village
burning, rape, and pillage" that resulted in the deaths of an
estimated 15,000 Bouganvillians.
Plaintiffs brought numerous claims
against Rio Tinto under the ATS, which confers federal jurisdiction
over tort actions brought by aliens for violations of the law of
nations, or "customary international law." Rio Tinto
argued, among other things, that plaintiffs' claims were
nonjusticiable political questions and that plaintiffs could not
file an ATS suit in federal court without first exhausting local
remedies in Papua New Guinea. The district court found no such
exhaustion requirement but agreed that plaintiffs' claims were
nonjusticiable political questions and dismissed all of
them. Both sides appealed. On appeal, Rio Tinto argued
that it could not be liable because the scope of liability under
the ATS does not extend to corporations.
The Ninth Circuit rejected Rio
Tinto's argument that the ATS does not allow for corporate
liability. Whereas Rio Tinto had argued that treaties
establishing international tribunals for criminal trials have not
explicitly provided for corporate liability, the Court concluded
that the more appropriate inquiry was to look at the statute
itself. Noting that the text of the ATS contains no express
language limiting the scope of liability to individuals and that
the legislative history of the statute contains nothing to suggest
otherwise, the Court found no basis for holding that such a
limitation on liability exists. In determining whether
international law extends the scope of liability for a violation of
a given norm to the perpetrator being sued, the Court concluded
that the proper inquiry is "not whether there is a specific
precedent so holding, but whether international law extends its
prohibitions to the perpetrators in question." Thus, the
Court attached little significance to the Second Circuit's
assertion in Kiobel that no international tribunal has
ever held a corporation criminally liable, reasoning that this in
itself would not prohibit any such tribunal from holding a
corporation criminally liable under customary international
law.
With Rio Tinto, the Second
Circuit's decision in Kiobel is increasingly becoming
an outlier among ATS cases ruling on corporate liability. The
District of Columbia Circuit, the Seventh Circuit, the Eleventh
Circuit and federal district courts in Maryland and Virginia have
all held that the ATS does not bar corporate liability. The
circuit split will be resolved by the Supreme Court, which granted
certiorari to Kiobel last month and will decide
the case during its current 2011-2012 term. Petitioners'
brief is due December 14, 2011, and respondents' brief is due
January 27, 2012.
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