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Recent case law has done nothing to change the principle that corporations may be held liable under international law for violating norms of universal concern such as the prohibitions on genocide and torture, a federal judge has ruled. Southern District of New York Judge Denise Cote this week rejected the argument of oil company Talisman Energy Inc. that newer U.S. Supreme Court and 2nd Circuit decisions have changed the landscape for corporate liability under the Alien Tort Statute, 28 U.S.C. �1350. Judge Cote, in The Presbyterian Church of Sudan v. Talisman Energy, Inc., 01 Civ. 9882, refused the company’s motion on the pleadings. Talisman, a Canadian company, was sued by residents of southern Sudan who claimed the company helped perpetuate genocide, crimes against humanity and other violations of international law. The company has already lost two motions to dismiss in the litigation, including a 2003 ruling by the late Southern District Judge Allen G. Schwartz. Judge Schwartz, Judge Cote said in her opinion, held that corporations can be held liable under international law for violations of “jus cogens norms” — which include torture, slavery and extrajudicial killing. Schwartz cited several grounds in favor of recognizing corporate liability, including norms established by international treaties, resolutions of the United Nations Security Council and other organizations and decisions of the European Court of Justice. But before Cote, Talisman argued that two important cases handed down since the Schwartz opinion rendered that opinion clearly erroneous. The first is Sosa v. Alvarez-Machain, 124 S.Ct. 2739 (2004), which Talisman contended requires courts to find that corporate liability and secondary liability are too indefinite and are not accepted enough in international law to support a claim under the Alien Tort Statute (ATS). The second is Flores v. Southern Peru Copper Corp., 406 F.3d 65 (2d. Cir. 2003), in which the 2nd Circuit said that, in determining “customary international law,” courts should look at “concrete evidence of the customs and practices of States.” Taken together, Talisman claimed, these two cases undermined the standard recognized by Schwartz to such a degree that Cote should dismiss the case on the pleadings. But Cote called the company’s argument “misguided.” Schwartz’s 2003 opinion, she said “meticulously demonstrated” that corporations can be held liable for violations of jus cogens norms and no decision since has called that into question. In fact, Cote said, the 2nd Circuit has since “twice confronted ATS cases with corporate defendants, and neither time did it hold that corporations cannot be held liable under customary international law.” CIRCUIT RULINGS In Bano v. Union Carbide Corp., 361 F. 3d 696 (2d Cir. 2004), the court vacated the dismissal of property damage claims against a corporation. “Perhaps more importantly,” she said, the Flores case itself “made no mention of the possibility that the defendant’s status as a corporation could support a finding that jurisdiction was lacking.” And the Supreme Court in Alvarez-Machain, she said, “explicitly contemplates the existence of corporate liability under customary international law.” Talisman, she said, had argued that “no treaty or international decision imposes liability on corporations for violations of customary international law relating to human rights,” a fact that “demonstrates that corporate liability is not part of the customary international law governing violations of jus cogens norms.” “This argument rests on a misreading of Flores and a flawed conception of customary international law,” she said, in part, because under the case law, it is recognized that states do not have to be universally successful in implementing a principle “for a rule of customary international law to arise.” In fact, she said, Talisman has been unable to offer a single case where a government has objected to the exercise of jurisdiction over one of its companies “based on the principle that it is not a violation of international law for corporations to commit or aid in the commission of genocide or other similar atrocities.” “If this issue was a genuine source of disagreement in the international community, it would be expected that the assertion of such a rule as customary would provoke objections from States whose interests were implicated by the assertion of the rule in those cases against their nationals,” Judge Cote said. After denying the motion for dismissal on the pleadings based on Talisman’s arguments about corporate liability, Cote went on to call “similarly misguided” the company’s move for dismissal on the ground that it was not secondarily liable for actions by the Sudanese government. Attorneys with Berger & Montague in Philadelphia, Anderson Kill & Olick and Lieff, Cabraser, Heimann & Bernstein in New York represented the plaintiffs. Attorneys with Clifford Chance represented Talisman.

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