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The usual forum-shopping battle involves a choice between a federal court and a state court. Often overlooked, except in the forum non conveniens arena, is another form of forum selection: the choice between a court in the United States and a court in a foreign country. This column focuses on Khulumani v. Barclay National Bank Ltd., 504 F.3d 254 (2d Cir. 2007), which presents a typical scenario: Citizens of a foreign country suing in a U.S. federal court rather than their own courts, for alleged violations of human rights. The case is important because it presents an important twist � aiding and abetting liability � that is beginning to occupy the attention of the federal courts. Khulumani involves the class claims of South African citizens against about 50 corporate defendants alleging that they had aided and abetted the South African government’s apartheid system in violation of customary international law. Plaintiffs claimed that the Alien Tort Claims Act (ATCA) provided federal jurisdiction. The Khulumani plaintiffs, unlike the New England Patriots in the 2008 Super Bowl, won the big one. In one short paragraph of the per curiam opinion, two of the three judges on the panel, with no analysis, reversed the district court dismissal of their ATCA claims. The opinion allows the plaintiffs to proceed against a staggering array of international companies, including U.S. and foreign banks, car manufacturers, drug and technology companies and producers of consumer products, such as Coca-Cola. Thus, the Khulumani decision potentially significantly expands the potential liability of numerous U.S. and international companies in human rights abuse cases. Role of opposition of foreign government When dismissing the plaintiffs’ ATCA claims, the district court considered the vehement opposition of the current South African government to the case. The minister of justice argued that the case interfered with “a sovereign’s efforts to address matters in which it has a predominant interest.” The U.S. Department of State weighed in in favor of dismissal as well, arguing that continuation of the suit risked impairing significant interests of the United States. The two-judge majority held that it was inappropriate for the district court to consider prudential concerns when determining whether subject-matter jurisdiction under the ATCA exists. The Supreme Court has ruled in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), that it is appropriate to consider prudential concerns when deciding whether to recognize a cause of action under ATCA, and that in some cases prudential considerations might limit the availability of relief. However, Sosa‘s language also suggested that the political-question doctrine is the source of the prudential limitations. And, the district court had not engaged in a serious case-specific political-question analysis. Thus, the majority opened the door on remand to such concerns. Although it is quite possible that the district court will dispose of the class claims after undertaking a careful political-question analysis, the case remains important because, in most human rights cases, the foreign government is not always unhappy about its citizens litigating in the United States. The banana workers cases are a case in point. When U.S. courts began to dismiss such cases on forum non conveniens grounds, the Nicaraguan government passed legislation making it easier for its citizens to litigate and obtain remedies for alleged human rights from U.S. companies. Cf. Franco v. Dow Chem. Co., 2003 U.S. Dist. Lexis 26639 (C.D. Calif. 2003). In other words, unless the foreign government objects to the U.S. proceedings, prudential concerns will not be relevant, and the aiding and abetting analysis will loom large. Judge Robert A. Katzmann of the majority wrote that the district court improperly conflated the ATCA question of whether there is jurisdiction with whether a cause of action ought to be recognized. The Sosa decision quite plainly separates the two questions: First, the court must determine whether there is jurisdiction. Assuming this threshold is met, then, the court must determine whether a common law cause of action ought to be created to provide a remedy. At this point, it is appropriate for the court to limit its discretion. In applying Sosa, the district court had ruled that it could not find support in international law for the proposition that aiding and abetting an international law violation is in itself an international law violation. Katzmann agreed that the district court was correct to look to international law as the source of the cause of action, but disagreed with its conclusion. Rather, aiding and abetting liability has been recognized and applied as a part of customary international law during the Nuremberg trials and more recent war crimes tribunals. Katzmann derived his standard by looking loosely at, rather than the language or actual standards of, international law: “a defendant may be held liable under international law for aiding and abetting the violation of that law by another when the defendant (1) provides practical assistance to the principal which has a substantial effect on the perpetration of the crime, and (2) does so with the purpose of facilitating the commission of that crime.” Judge Peter W. Hall wrote that once an underlying violation of international law is found, the standard for aiding and abetting liability is governed by federal common law and not international law. Hall then crafts the following test: Aiding and abetting liability should be found only where there is evidence that a defendant furthered the violation of a clearly established international law norm: (1) by knowingly and substantially assisting a principal tortfeasor, such as a foreign government or its proxy, to commit an act that violates a clearly established international law norm; (2) by encouraging, advising, contracting with or otherwise soliciting a principal tortfeasor to commit an act while having actual or constructive knowledge that the principal tortfeasor will violate a clearly established customary international law norm in the process of completing that act; or (3) by facilitating the commission of human rights violations by providing the principal tortfeasor with the tools, instrumentalities or services to commit those violations with actual or constructive knowledge that those tools, instrumentalities or services will be (or only could be) used in connection with that purpose. Hall notes that corporations must transact business in a difficult world, and that defendants are concerned that recognizing ATCA aiding and abetting liability could expose corporations to liability “for merely doing business in countries with repressive regimes or for participating in activities that, with twenty-twenty hindsight, can be said to have been indirectly linked to human rights abuses.” Defendants’ concerns do not, however, necessitate a per se rejection of aiding and abetting liability. Rather, such concerns can be accommodated by permitting the narrow and careful extension of such liability only to cases in which a defendant played a knowing and substantial role in the violation of a clearly recognized international law norm. Additionally, the consequences predicted by defendants and Judge Edward R. Korman in dissent are relevant considerations in the context of each case. Hall’s test likely would prove to be more restrictive in terms of determining whether a cause of action for aiding and abetting relief can be recognized in a particular case. Additionally, even though both opinions allow for the district court to exercise considerable discretion when determining whether to exercise jurisdiction, defendants will be happier with Hall’s formulation because it emphasizes the practical concerns of the defendants, while Katzmann’s dissent emphasized prudential considerations involving only the interests of the foreign state and the United States as expressed through their governments. An appalled judge turns an analysis on its head Korman dissented in the longest of the three separate opinions. He quite clearly was appalled at the idea of letting such a massive case proceed in U.S. courts in the face of such strong opposition by the current government of South Africa and by the U.S. State Department. He turns the analysis and the authority relied on by the majority on its head with respect to the source of aiding and abetting liability, and the role that the courts should play after Sosa in deciding whether a human rights abuse case should proceed. This case, according to Korman, is an easy one to dismiss because it is precisely the type of case the Sosa court envisioned as not being within the scope of the ATCA. The defendants agreed and applied for a stay of the panel opinion. The panel denied the motion with another fairly lengthy opinion, again with another dissent by Korman. See Khulumani v. Barclay National Bank Ltd., 509 F.3d 148 (2d Cir. 2007). The majority ruled that a stay was inappropriate because the district court needed to be provided the opportunity to rule on the prudential concerns and tests articulated by them. A petition for certiorari was filed in January. Will the court take the case? The aiding and abetting issue is huge, but the Supreme Court is unlikely to take the case unless all issues are resolved in the lower courts. Rather, the court is likely hoping that the district court, followed by another per curiam opinion affirming the result, will dispose of the case on prudential grounds. Nonetheless, if not in this case, the Supreme Court will have to pass on the aiding and abetting issue because the stakes are so high. Georgene M. Vairo is a professor of law and William M. Rains Fellow at Loyola Law School, Los Angeles. She can be reached at [email protected]. She is on the board of editors of Moore’s Federal Practice, and writes the Moore’s chapters on removal and venue problems.

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