Doe v Exxon Mobil Corporation, ATS and corporate liability

July 20, 2011

In line with our previous posts on the evolution of corporate liability under ATS (See the list of the comments here), it is worth noting that the United States Court of Appeals for the District of Columbia Circuit has rendered a decision on the John Doe v Exxon Mobil Corporation on the 8th of July. The decision interestingly seems to confirm the decision rendered on July 11th 2011 by the US Court of Appeal for the 7th Circuit in Boimah Flomo (see here).

Contracting with the Indonesian government, Exxon Mobil and its subsidiaries operated a large natural gas extraction and processing facility in in 2000–2001. Eleven villagers filed a complaint in 2001 alleging that murder, torture, sexual assault, battery, and false imprisonment committed by the Indonesian military could be attributed to Exxon under the Alien Tort Statute (“ATS”) and the Torture Victim Protection Act (“TVPA”) because they were committed by a unit dedicated only to Exxon’s facilities and placed under Exxon’s authority (p5).

Corporate liability as a new type of claim (Sosa v Alvarez Machain argument)

The Exxon Court first rejected the Sosa tribunal’s finding that ATS tribunals should not recognize private claims under federal common law for violations of any international law norm which did not exist when paragraph 1350 was enacted (See here). “The fact that the law of nations provides no private right of action to sue corporations”, it held, “addresses the wrong question and does not demonstrate that corporations are immune from liability under the ATS”(p56).

The Court overall held that “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”, and therefore concluded however, that Exxon’s objections to justiciability were “unpersuasive” (p4). Under the Articles of Confederation, it notes, the federal government used to lack authority to remedy or prevent violations of the law of nations, which motivated abandoning the Articles and convening the Constitutional Convention (p.58). As a result, Congress adopted in 1781 a resolution that “implored the States to vindicate rights under the law of nations,” and which is now acknowledged as “the direct precursor of the alien tort provision in the First Judiciary Act.” The Judiciary Act of 1789, in turn, “ensured that there would be no gap in federal subject matter jurisdiction with regard to torts in violation of treaties or the law of nations [and deliberately] provided federal jurisdiction for lawsuits brought by aliens for torts in violation of the law of nations without textual limitation” (p62).

Citing Kiobel (Legal History Amicus), it also indicated that the notion that corporations could be held liable for their torts would not have been surprising to the First Congress that enacted the ATS because corporate liability in tort was by 1789 an accepted principle of tort law in the United States (p66-67). Concluding otherwise, the Court added, would indeed disregard the general admission under all legal systems that that corporate liability comes along with the recognition of ‘corporate personhood’ (p80), recognised by the ICJ in the Barcelona Traction case.

Defendants and plaintiffs

The Exxon Court also made it clear that the corporate nature of a person cannot shield it from being brought to Court with a defendant status. The Supreme Court, it found, indeed observed that the ATS “by its terms does not distinguish among classes of defendants.” (referring to Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 438 – 1989).

“To remedy the problems identified in the preceding years,  the ATS provided federal courts with jurisdiction over “all causes” in violation of the law of nations. The text demonstrates that the ATS was not limited to criminal conduct and did not exclude corporate defendants. Congress was focused not on whether the acts were criminal or the defendant’s identity but rather on the right that had been violated (a right under “the law of nations or a treaty of the United States”) and the plaintiff’s identity (“an alien”). Together, these two factors defined a class of cases sufficiently important for Congress to grant jurisdiction over “all causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States.”

The Exxon tribunal’s point of view is interesting because the decision was rendered a couple of days after the Boimah Flomo Appeal decision and goes in the same direction. It is however far more detailed and elaborated, which possibly allows suggesting that a corporate liability trend could be emerging under ATS. Unless another tribunal decides otherwise? To be continued…

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