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Exxon Seeks Dismissal of Alien Tort Case Originating in Indonesia
The National Law Journal
Lawyers for Exxon Mobil Corp. want a federal appeals court in Washington to absolve it from any liability stemming from human rights allegations that its security force -- foreign government soldiers hired to protect personnel and facilities -- brutalized a group of villagers in Indonesia.
"This case involves allegations that Indonesian soldiers abused Indonesian citizens on Indonesian soil during an Indonesian civil war," an attorney representing Exxon, O'Melveny & Myers partner Sri Srinivasan, said at a Jan. 25 hearing in the U.S. Court of Appeals for the D.C. Circuit.
"Right. But the question is whether an American corporation is liable for that," said Judge David Tatel, interrupting Srinivasan, one of O'Melveny's top appellate advocates. "You left that out."
In two consolidated cases, the appeals court is examining an array of closely watched legal issues, including whether Exxon can be held liable for alleged human rights violations through aiding or abetting the soldiers or because the oil and gas company acted in joint participation with them. The plaintiffs' claims also include state law allegations of wrongful death, assault and battery.
Reinstating the villagers' claims, lawyers for Exxon argue, would unfairly export U.S. law abroad and interfere with Indonesia's sovereignty. Judge Brett Kavanaugh, who heard the case with Tatel and Judge Judith Rogers, said in court, "we obviously have serious objections" from the Indonesian government about the suit proceeding at all.
In the D.C. Circuit, which has not ruled on the dispute, the case posed significant issues for the business community. Exxon received the support of business groups that included the U.S. Chamber of Commerce and the National Foreign Trade Council. Additionally, the Washington Legal Foundation filed a friend of the court brief backing Exxon, which is also represented in the appeal by the firms Paul, Weiss, Rifkind, Wharton & Garrison and Willkie Farr & Gallagher.
"One of the biggest problems with these lawsuits is they are massive fishing expeditions and extremely burdensome," said Mark Stancil, a Robbins, Russell, Englert, Orseck, Untereiner & Sauber appellate litigation partner in Washington who filed a brief for the chamber. "While few have been successful, they are a huge deterrent to companies wanting to do business overseas and impose burdens on corporations that are doing business overseas."
Stancil and Robbins Russell name partner Alan Untereiner said the suit against Exxon highlights the "tremendous" discovery and trial costs and the potential for "coerced" settlements. The chamber, the lawyers said in court papers, took no position on the underlying factual allegations.
MoloLamken name partner Jeffrey Lamken, a veteran U.S. Supreme Court advocate who represented the National Foreign Trade Council in the appeal, said in court papers filed in November that tort suits based on allegations in a foreign country undermine the ability of the United States to pursue foreign policies.
"Allowing international human-rights litigation under a patchwork of different state laws -- for injuries perpetrated against foreign nationals by other foreign nationals in a foreign country -- threatens our nation's economic and political relations," Lamken said.
Lawyers for the plaintiffs allege that the Indonesian security personnel operated under Exxon Mobil's control. The suit, first filed in 2001 in Washington's federal trial court, claims soldiers physically abused and killed villagers who lived or worked near an Exxon gas operation in Aceh, Indonesia.
Before he resigned from the bench, U.S. District Judge Louis Oberdorfer said the plaintiffs had presented enough evidence to go to trial on allegations of wrongful death, assault and battery, in addition to liability for alleged negligent hiring and supervision. Chief Judge Royce Lamberth picked up the litigation in 2008 and ultimately dismissed the claims on the ground that the plaintiffs, as nonresident aliens, lacked standing to sue in federal district court.
THE AMERICAN CONNECTION
For the lawyers representing the 15 villagers, the case is no more complex than an action against an off-duty police officer hired to protect a grocery store.
An attorney for the villagers, Agnieszka Fryszman, criticized Srinivasan's characterization of the litigation as one that has no connection to the United States. The case, Fryszman said, is about an American corporation, headquartered in New Jersey, that employed government soldiers as private security guards who allegedly ran afoul of the law.
"We know that they were stationed at the front desk of Exxon's facilities, just like the guards at the front desk of my office building," Fryszman, a Cohen Milstein Sellers & Toll partner, said in the D.C. Circuit at last month's hearing. "They checked IDs and they checked handbags. We know that they escorted Exxon VIPs, and we know that they guarded, cleared the roads for Exxon convoys."
Paul Hoffman of Venice, Calif., employment law shop Schonbrun DeSimone Seplow Harris Hoffman & Harrison, which also represents villagers in the litigation, said at oral argument that "general principles of corporate civil liability are recognized throughout the world. There is no country, there is no legal system for which you cannot get tort liability for these kinds of torts."
Hoffman argued there is no limitations on defendants under the Alien Tort Statute (1789).
"There's absolutely no rationale reason why you would exclude a particular defendant," Hoffman said in the D.C. Circuit. "If there was a corporation in 1789 that was engaged in piracy that could be sued in Boston, there's no reason to deprive anybody of an ability to get recompense from that corporation."
Lawyers for Exxon, Fryszman said in an interview, "are making the case bigger and more political than it is." The plaintiffs, she said, are ready for trial without any additional discovery.
"There is a 200-year tradition in tort law that you can sue a person wherever they are found," said Fryszman, who heads Cohen Milstein's international human rights and pro bono practice. "There is nothing odd about that."