Ninth Circuit Addresses Emerging Issues In ATS Litigation

On October 25, 2011, the United States Court of Appeals for the Ninth Circuit, sitting en banc, decided Sarei v. Rio Tinto, PLC,1 the latest in a series of significant federal appellate decisions addressing the scope of jurisdiction and potential liability under the Alien Tort Statute (ATS), which provides that "the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."2 The ATS was enacted by the First Congress in order to provide U.S. courts with the ability to redress the three chief violations of international law — piracy, violation of safe conducts, and infringement of the rights of ambassadors — that were recognized at the time of its passage. While it went practically unused for the first two hundred years following its enactment, foreign plaintiffs have increasingly sought to use the statute to bring claims in the U.S. courts against multinational corporations, typically based on allegations that those corporations have "aided and abetted" human rights violations committed by foreign governments. The Supreme Court has addressed the statute only once, in its 2004 decision in Sosa v. Alvarez-Machain.3 In Sosa, the Supreme Court held that the ATS conferred jurisdiction only over tort claims based on the present-day law of nations that "rest on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th century paradigms [i.e., the three international law violations described above] that existed at the time of the ATS's enactment. The Court further noted that ATS claims may only be predicated on alleged violations of international law norms that are "specific, universal, and obligatory."4 While the Supreme Court in Sosa plainly intended to limit plaintiffs' ability to access the U.S. courts with innovative international law claims, the Court's recognition of the evolving nature of international law appears instead to have emboldened plaintiffs in seeking to expand the array of "universal" international law violations cognizable under the ATS; given the relative paucity of U.S. case law and the need to rely on secondary sources to define the international law norms raised in ATS claims, the lower courts have struggled with these cases, and the still-small body of jurisprudence is characterized by lengthy opinions and frequent, often spirited, dissents.

The Ninth Circuit's decision in Rio Tinto continues this trend. The case produced seven separate opinions (collectively spanning nearly 100 pages) that address a series of fundamental issues surrounding ATS claims and provide a clear illustration of the significant disagreement within the federal judiciary over the purpose and scope of the statute. First, the Ninth Circuit held that the Supreme Court's recent decision in Morrison v. Nat'l Australia Bank Ltd.5 did not apply to deprive courts of jurisdiction over ATS claims based on conduct occurring outside the United States. Second, the Ninth Circuit held in Rio Tinto that corporations may be held liable on an aiding and abetting basis under the ATS for certain claims based on violations of international law.6 On this issue, the Ninth Circuit adopted the majority view — adopted by all Circuits to date except for the Second — holding that corporations may be sued under the ATS. Third, the Ninth Circuit addressed the exhaustion doctrine, which ATS defendants have long invoked — previously without success — as a basis for claiming that ATS claimants must exhaust their remedies in the courts of the nation where the alleged misconduct occurred prior to bringing their claims to the U.S. Fourth, the Ninth Circuit addressed the applicability of the political question doctrine, the act of state doctrine, and the role of international comity in deciding ATS claims.

In the end, the Ninth Circuit majority allowed certain of the plaintiffs' claims — which alleged that Rio Tinto, a British mining company and its Australian affiliate, had engaged and/or aided and abetted the government of Papua New Guinea in a host of human rights violations stemming from a violent dispute over Rio Tinto's mining operations in that nation — to stand, while holding that others were properly dismissed. The majority's decision led to strident claims by the dissent that the Court's decision constituted "judicial imperialism" and that the majority had, through its decision, "arrogate[d] to ourselves imperial authority over the whole world."7

Factual Background

The Rio Tinto plaintiffs were current and former residents of the island of Bougainville in Papua New Guinea (PNG) who alleged that Defendants Rio Tinto PLC, a British corporation, and Rio Tinto Limited, an Australian corporation (collectively "Rio Tinto Group" or "Rio Tinto"), constructed and operated a mine in the village of Panguna on Bougainville which produced massive amounts of waste, causing environmental harm and health problems for local residents. Plaintiffs further alleged that Rio Tinto engaged in racial discrimination in its hiring practices, paying black workers significantly lower wages than white workers who Rio Tinto brought in from outside the island. Noting that Rio Tinto agreed to pay the government 19.1% of the mine's profits in exchange for its cooperation, Plaintiffs alleged that the mine was "a major source of income for PNG and provided [an] incentive for the PNG government to overlook any environmental damage or other atrocities Rio [Tinto] committed" and that the government's financial stake "effectively turned the copper mine into a joint venture between PNG and Rio [Tinto] and allowed Rio [Tinto] to operate under color of state law."

Eventually, local residents began to conduct protests against the mine's operation, and the mine was shut down on a temporary basis in order to permit a study of its environmental impacts and associated health risks. Residents rejected the resulting study, however, claiming it downplayed the mine's negative impacts. After the report was issued, critical infrastructure and equipment at the mine was destroyed in a bombing.

Plaintiffs alleged that Rio Tinto, aware of its significant economic influence over the PNG government, threatened to reconsider future investment in PNG if the violence did not stop, and that PNG responded to this threat by sending armed forces to Bougainville to put down the uprising. The PNG army mounted an attack on February 14, 1990, and the struggle to close the mine continued for almost a decade, during which Plaintiffs claim that PNG, at the behest of Rio Tinto, committed atrocious human rights abuses and war crimes, which they alleged resulted in 15,000 civilian deaths.

Procedural History

Plaintiffs brought suit in the U.S. District Court for the Central District of California, alleging that Rio Tinto's actions constituted violations of customary international law. Defendants moved to dismiss the complaint, arguing that the district court lacked subject matter jurisdiction under the ATS and/or that 3 Plaintiffs failed to state a claim upon which relief could be granted. Alternatively, Defendants contended that the action should be dismissed on forum non conveniens...