Judge Lee Rosenthal Dismisses Alien Tort Claims Act Case for Lack of Causation
U.S. District Judge Lee Rosenthal in Houston -- the Chair of the Judicial Conference Committee on Rules of Practice and Procedure -- recently Issued a very thoughtful opinion analyzing the Alien Tort Claims Act and other statutes in a case brought by victims of 21 terrorist attacks in Israel during the Second Intifada and their families against oil companies that bought and sold Iraqi oil. See Abecassis v. Wyatt, 2010 WL 1286871 (S.D. Tex. Mar. 31, 2010). The 193 plaintiffs' theory was that payments from the oil sales were diverted by Saddam Hussein to secret accounts in Jordan that Hussein subsequently used to pay rewards to the families of the suicide bombers in each of the 21 terrorist attacks. Defendants thus allegedly "violated international law by financing terrorism and by aiding and abetting and conspiring to commit acts of genocide and crimes against humanity." The complaint did not name as defendants Saddam Hussein, Iraq, the terrorist organizations, or the individual terrorists who carried out these attacks.
Most of the plaintiffs were aliens and asserted claims under the Alien Tort Claims Act. The U.S. nationals asserted a claim under the Antiterrorism Act ("ATA").
Judge Rosenthal's opinion describes in careful detail the United Nations economic sanctions that were imposed on Iraq in the 1990s and the UN's "Oil for Food Program," in which Iraq was allowed to make limited oil sales in exchange for funds that would be deposited in an account that could only be used to buy food and medicines for the Iraqi people. The complaint alleged that many of the companies and individuals that Iraq chose to receive allocations to buy Iraqi oil were not really oil companies and made huge profits by selling their oil allocations to brokers and others able to transport the oil to a refinery. These companies -- defendants in the action -- allegedly secured their allocations by making side payments to Hussein's secret accounts.
As I have explained before in prior posts, the Alien Tort Claims Act gives federal courts jurisdiction over certain violations of "customary international law," but that jurisdiction is severely limited. When the ATCA was first adopted in 1789, the recognized violations of "customary international law" that it covered were: (1) piracy, (2) interfering with a nation's "safe conduct" request for one of its citizens, and (3) assaulting or impeding a nation's ambassador. Since the 1980s, however, litigants have sought to broaden the scope of "customary international law" covered by the ATCA, as well as the type of "people" who may be sued under the Act. It is this fundamental tension that presents judges like Judge Rosenthal with difficult questions indeed.
In Abecassis, the defendants moved to dismiss the case for lack of Article III standing. Citing Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), Judge Rosenthal observed that constitutional standing to bring a claim requires an "injury in fact" that is both "concrete and particularized" and "actual or imminent," a causal connection between the injury and the challenged conduct; and the likelihood that a favorable decision would redress the alleged injury. The defendants' motions to dismissed challenged the second element -- causation -- arguing that plaintiffs failed to show that their injury was "fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court." Id. (quoting Lujan).
The defendants argued that plaintiffs' injuries resulted from the independent acts of the terrorists and, perhaps, of Saddam Hussein, but certainly not as the result of their purchases of oil. The plaintiffs responded that because they pled the defendant oil companies were accessories and aidors and abettors to genocide and crimes against humanity, rather than direct tortfeasors, they did not have to plead "but for" causation, i.e., that their injuries would not have happened but for the oil purchases. Rather, they allege, they need only plead that the oil companies gave substantial assistance to the direct tortfeasors.
There have been ATCA cases that have gone both ways on the question of aiding and abetting liability, and Judge Rosenthal carefully analyzed them. Ultimately, she concluded that the injuries pled were not fairly traceable to the defendants, and plaintiffs thus failed to allege constitutional standing to bring their ATCA claim:
The plaintiffs here allege that the Hussein government caused their injuries by making payments to suicide bombers' families, which encouraged future suicide bombings. It is speculative whether the bombings that injured the plaintiffs and their family members are fairly traceable to Hussein's prior payments to families of other suicide bombers. It was the suicide bombers and the terrorist organizations that decided to carry out the specific attacks, not the Hussein government, not the third party that bought Iraqi oil, and not [the defendant that held the allocation for the oil]. The suicide bombers were independent of [the defendant]. The injuries caused by those bombers are not fairly traceable to [the defendant].
. . .
. . . The plaintiffs here have not alleged a direct relationship between [the defendants] and the principal tortfeasors, the suicide bombers. There were independent third parties between Iraq and the plaintiffs. . . . Even if [the defendants were] not independent of Hussein because of the aiding and abetting allegations, it was the third party oil sellers' decision to mark up the oil price to pay kickbacks and it was the terrorists' decisions to carry out the attacks. What these actors would have done without [the defendants'] involvement is speculative. The causation prong of the standing test is not met.
Id. at *16.
Judge Rosenthal also analyzed whether the ATCA claims stated a claim under Rule 12(b)(6), concluding that they did not. She looked to international law to determine whether there was a sufficient international norm for recognizing "secondary liability" (or "aiding and abetting" liability) for the torts pled. She held that there was not, and that the complaint failed to plead that the defendants even knew that their kickbacks paid through the Oil for Food Program were being used to fund attacks in Israel -- let alone any intention that they do so. She held that "[t]he allegation would have to be that the defendant acted with the purpose of assisting terrorists to murder or maim innocent civilians."
In analyzing the claims of the U.S. nationals under the Antiterrorism Act ("ATA"), Judge Rosenthal assumed -- without deciding -- that plaintiffs had pled standing under the liberally drafted statute, but dismissed the claim (with leave to replead) for failure to plead a cognizable claim under Rule 12(b)(6).
The ATA makes it a federal crime to "provide[] material support or resources . . . knowing or intending that they are to be used in preparation for, or in carrying out" a violation of the section that makes it a crime to kill, conspire to kill, or inflict bodily injury on a U.S. citizen abroad. 18 U.S.C. sec. 2339A. Judge Rosenthal relied upon the Seventh Circuit's recent en banc decision in Boim v. Holy Land Foundation (Boim III), 549 F.3d 685 (7th Cir. 2008), which "held that anyone who provides material support -- not necessarily substantial support -- to a terrorist organization, directly or indirectly, with knowledge that the organization carries out attacks in Israel (or with recklessness as to the truth of this fact), is liable under the ATA to an American (or his estate) injured in Israel by that organization."
After a lengthy exposition of the cases analyzing the ATA and the type of causation that it requires, Judge Rosenthal ultimately concluded that whatever the standard is, the plaintiffs had failed to meet it here because they had not alleged that each defendant knew that the oil it was buying was tied to a kickback to Saddam Hussein and that Hussein was using that money to fund terrorism targeted at U.S. nationals. Indeed, the complaint cited a news story from the time indicating Hussein was using the money to fund his army and his luxurious lifestyle, mentioning nothing about paying suicide bombers. Moreover, there were no allegations of an agreement among the "co-conspirators" to fund or otherwise support terrorism targeting Americans.
Judge Rosenthal's opinion is an excellent example of the cautious approach judges should take to claims brought under the Alien Tort Claims Act and other statutes that, if abused, could drag American corporations into costly "secondary liability" lawsuits over tortious violence committed by direct actors who have not been held to account for their actions.
