A federal appeals court has set a high bar for foreign plaintiffs attempting to use U.S. courts to hold foreign defendants accountable for human rights violations in foreign lands, ruling that liability can be imposed only where it is shown that a defendant "purposefully" aided and abetted a violation of international law.
In a major decision Friday, the 2nd U.S. Circuit Court of Appeals in The Presbyterian Church of Sudan v. Talisman Energy, Inc., 07-0016, clarified the standard for aiding-and-abetting and conspiracy liability under the Alien Tort Statute.
In applying international law, the court said, "We hold that the mens rea standard for aiding and abetting liability in Alien Tort Statute actions is purpose rather than knowledge alone."
The court affirmed Southern District of New York Judge Denise L. Cote's dismissal of the case, where plaintiffs claimed a Canadian oil company helped the Sudanese government with a brutal campaign to forcibly displace civilians and create buffer zones around oil facilities.
The circuit also addressed an issue of first impression, saying that an alleged conspiracy to commit violations of international law would require the same proof of mens rea as claims for aiding and abetting.
Although Alien Tort Statute claims have been brought with increasing frequency over the years, cases against foreign corporations for aiding and abetting human rights violations in a foreign country rarely reach the jury (NYLJ, May 28).
In Talisman, the plaintiffs charged that Talisman Energy Inc., part of a consortium developing oil fields in southern Sudan, built roads that helped the military displace civilians and upgraded airfields the military used to launch attacks. In return, the company won the right to develop oil concessions in that region, the plaintiffs claimed.
They argued that Talisman could be sued in New York under the Alien Tort Statute because it aided and abetted the commission of genocide, war crimes and crimes against humanity -- all violations of international law.
Judge Cote dismissed the case in 2006 and the plaintiffs appealed to the circuit, where Judges Dennis Jacobs, Pierre N. Leval and Jose A. Cabranes ruled Friday in a 68-page decision by Judge Jacobs that "plaintiffs have not established Talisman's purposeful complicity in human rights abuses."
Talisman moved for dismissal five years ago in light of two major cases on the Alien Tort Statute: the 2nd Circuit's decision in Flores v. Southern Peru Copper Corp., 414 F.3d 233 (2003), and the U.S. Supreme Court's decision in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), the only time the high court has addressed the Alien Tort Statute.
Judge Cote denied the motion in June 2005 (NYLJ, June 16, 2005) and denied a renewed motion to dismiss in August 2005 that was based on concerns about the litigation expressed by the governments of the United States and Canada (NYLJ, Sept. 1, 2005).
However, in a 2006 opinion, Judge Cote dismissed the suit under different grounds. She said that while jurisdiction under the Alien Tort Statute is dependent on the violation of international law, "the offense of conspiracy is limited to conspiracies to commit genocide and wage aggressive war."
She also outlined aiding-and- abetting liability under the statute and concluded that the plaintiffs had not met the standard and dismissed the case against Talisman.
The circuit held that, under Sosa, "the standard for imposing accessorial liability under the Alien Tort Statute must be drawn from international law; and that under international law a claimant must show that the defendant provided substantial assistance with the purpose of facilitating the alleged offenses."
The court was affirming Judge Cote, he said, "because plaintiffs presented no evidence that the company acted with the purpose of harming civilians living in southern Sudan."
Judge Jacobs said that, in Khulumani v. Barclay National Bank Ltd., 504 F.3d 254 (2007), another 2nd Circuit panel recognized aiding-and-abetting liability "but fractured on the standard for pleading such liability."
With the issue remaining "live" in the circuit, Judge Jacobs said the Talisman panel was drawing on Judge Robert Katzmann's concurring opinion in Khulumani.
Judge Katzmann wrote that aiding-and-abetting liability could only be found where the defendant "provides practical assistance to the principal which has a substantial effect on the perpetration of the crime" and "does so with the purpose of facilitating the commission of the crime."
Therefore, Judge Jacobs said, mere knowledge of human rights abuses is not enough.
"Even if there is sufficient international consensus for imposing liability on individuals who purposefully aid and abet a violation of international law…no such consensus exists for imposing liability on individuals who knowingly (but not purposefully) aid and abet a violation of international law," he said.
Talisman's actions did not meet that standard, he said.
One example set out by the judge was that Talisman built roads and improved airports, "notwithstanding awareness that this infrastructure might be used for attacks on civilians."
"But obviously there are benign and constructive purposes for these projects and (more to the point) there is no evidence that any of this was done for an improper purpose," Judge Jacobs said.
There was also evidence senior Talisman officials expressed concern that the military was using airstrips for attacks.
"Since, however, the proper test of liability is purpose (not knowledge) all this evidence of knowledge (and protest) cuts against Talisman's liability," he said.
The judge said there was evidence that the Muslim-dominated government attacked Christians in the southern Sudan, those attacks helped the oil business, and oil revenues helped pay for the "military's capabilities to persecute its enemies."
"But if [Alien Tort Statute] liability could be established by knowledge of those abuses coupled only with such commercial activities as resource development, the statute would act as a vehicle for private parties to impose embargoes or international sanctions through civil actions in United States courts," he said.
Paul L. Hoffman of Schonbrun DeSimone Seplow Harris & Hoffman in Venice, Calif., argued for the plaintiffs
Marc J. Gottridge of Lovells argued for the defendant.