A Second Circuit Panel Follows Kiobel, Dismisses ATS Claim
Those looking for confirmation that Kiobel is really the law of the Second Circuit need look no further than Shan v. China Construction Bank Corporation, No. 10-2992-cv, Slip op. (2d Cir. May 5, 2011) (Summary Order). In Shan, the plaintiff sued his former employer, the China Construction Bank Corp., claiming that it caused his torture by reporting him to the Chinese police, which allegedly tortured and detained him. Plaintiff alleged violations of the Torture Victimss Act and the Alien Tort Statute.
The Second Circuit previously had held in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010), pet. for reh'g en banc denied, 2011 WL 338151 (2d Cir. Feb. 4, 2011), that the Alien Tort Statute (and the generally-recognized law of nations) does not provide a cause of action against corporations, only individuals and governments. This decision was widely criticized. I discussed it favorably here and here.
In a Summary Order in Shan, a two-judge panel of the Second Circuit (Circuit Judge Reena Raggi and District Judge John Gleeson, sitting by designation) held that they were simply unable to consider arguments that Kiobel was wrongly decided. (Circuit Judge Guido Calabresi had recused himself, and the other two judges were in agreement, obviating the need for a replacement for Judge Calabresi.) The court cited as support case law indicating that only an en banc panel could overrule Kiobel.
The plaintiff advanced an interesting argument, urging that Kiobel had deliberately limited itself to private corporations, and thus was not applicable to the defendant in Shan, since it was a company that was wholly-owned by the Chinese government. But the panel refused to consider this argument because the complaint, it held, failed to plead any underlying cause of action with the sufficiency required by Federal Rule of Civil Procedure 8.
The complaint failed to adequately plead direct liability for torture because it did not plead that the Bank directed the Chinese police to torture the plaintiff. At best, it pled only that the Bank procured his arrest in retaliation for releasing an audit. But it did not plead that the Bank was directly responsible for the police's alleged human rights violations.
The complaint failed to plead "aiding and abetting" or "conspiracy" liability because it did not sufficiently plead that the Bank acted with the purpose that the plaintiff be tortured. The cause of action also failed because the plaintiff failed to plead that the Bank's conduct amounted to "substantial assistance."
The bank had advanced an interesting Kiobel-like argument that corporations are not capable of being sued under the TVPA because that act covers violations only by individuals or governments. The DC Circuit recently had reached this conclusion. But the Second Circuit in Shan chose not to reach the argument because it could dismiss the case on the failure to meet the pleading standard on the underlying causes of action. Thus, the question whether the Torture Victims Prevention Act only allows a claim against natural persons and governments -- like the Second Circuit had held with respect to the Alien Tort Statute -- remains an open one in the Second Circuit.
