A Second Circuit Panel Follows Kiobel, Dismisses ATS Claim

Posted on May 10, 2011 by Russell Jackson

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.

 

 

 

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Federal Court Tosses Wrongful Death Claims Under Torture Victims Protection Act and Alien Tort Claims Act

Posted on November 14, 2009 by Russell Jackson

An Alabama federal court recently held that the Torture Victims Protection Act does  not authorize wrongful death claimants to bring suit for their own damages, but instead merely authorizes them to sue for the torture victim’s own injury.  In Baloco v. Drummond Co., Case No. 7:09-CV-00557-RDP, Slip op. (N.D. Ala. Nov. 9, 2009) (subscription to AmLaw Daily may be required to see opinion), the children of alleged torture victims sued Drummond Company for wrongful death damages that they had suffered as a result of their fathers’ murders in Columbia, which allegedly were committed by Colombian paramilitary organizations at the behest of the defendant to prevent union organizing.

Previously, wives and family members had brought suit against Drummond under the Alien Tort Claims Act, the TVPA, and Columbian common law for the injuries suffered by their murdered family members, which suit had resulted in summary judgment for Drummond on the wrongful death claims and a jury verdict for Drummond on the ATCA claim for allegedly aiding and abetting the murders.  Slip op. at 3.

In analyzing the motion to dismiss, Judge David Proctor first had to decide whether the claims of these plaintiffs were barred by the res judicata effect of the earlier judgment.  In addition to a final judgment rendered by a court of competent jurisdiction, res judicata requires that the parties in the two actions be identical, or at least in privity.  It also requires that the same cause of action be involved in both cases.  Analyzing the pleadings in the first action, Judge Proctor determined that many of the plaintiffs before him had also been plaintiffs in the first action and asserted the same claim.  Judge Proctor considered their argument that res judicata should not apply to them because they had learned new facts since the first action that supported their claim.  But the court distinguished between new factual developments that occur that may justify not applying res judicata, and the mere discovery of new evidence that existed at the time of the first action, which does not.

Nevertheless, there were three plaintiffs who could not be eliminated on res judicata grounds at the pleading stage, and so the court moved on to consider the question of their standing to bring their claims.  The TVPA provides a federal cause of action for torture and extrajudicial killing.  The claim may be brought by the victim or on his behalf by his legal representative or one who would be a claimant in an action for wrongful death.  Plaintiffs argued that this allowed them to sue for their own wrongful death damages.  The court concluded, however, that the TVPA does not allow recovery for injuries except those suffered by the torture victim himself; the mention of wrongful death in the statute defines who may bring the claim, but does not alter the fact that the claim is for the victim’s damages, not those of his family.  Slip op. at 13-16.  Accordingly, the court held that plaintiffs lacked standing to sue under the TVPA.

Plaintiffs also asserted claims under the Alien Tort Claims Act.  But the ATCA provides no guidance on the issue of standing.  Judge Proctor reasoned that “[i]n the case of the [ATCA], several courts, including the Eleventh Circuit, have referenced the TVPA as the most analogous statute.”  Id. at 16.  The court thus held that because the plaintiffs lack standing under the TVPA, they lack standing under the ATCA as well.

Finally, in declining to exercise supplemental jurisdiction over the Columbian common law claims, the court noted that the issues of Columbian law were so complex that it would be impossible for the court to navigate them.

 

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