Ninth Circuit Latest to Permit Corporate Liability Under Alien Tort Statute; Supreme Court to Resolve Circuit Split in 2012

In Sarei v. Rio Tinto, PLC, Nos. 02-56256, 02-56390, 09-56381, 2011 WL 5041927 (9th Cir. Oct. 25, 2011), the United States Court of Appeals for the Ninth Circuit became the latest Circuit to hold that corporations may be held liable under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350. As previously reported here and here, the Second Circuit held last year in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010), that the scope of liability under the ATS does not extend to corporations because imposing liability on corporations for violations of the law of nations has not achieved a sufficiently “specific, universal, and obligatory” character so as to be considered a norm of customary international law. In Sarei, the Ninth Circuit joined the District of Columbia Circuit, the Seventh Circuit and the Eleventh Circuit in reaching the opposite conclusion. The current circuit split will be resolved by the United States Supreme Court, which granted certiorari to Kiobel on October 17, 2011.

Plaintiffs in Rio Tinto were a group of current and former residents of Bougainville, Papua New Guinea (“PNG”), where defendants Rio Tinto, PLC and Rio Tinto Ltd. (collectively, “Rio Tinto”) were engaged in mining operations. Plaintiffs alleged that beginning in the 1960s, Rio Tinto “displaced villages, razed massive tracts of rain forest, intensely polluted the land, rivers, and air . . . and systematically discriminated against its Bougainvillian workers, who lived in slave-like conditions.” In February 1990, Bougainville residents revolted and sabotaged the Bougainville mine. In the wake of the uprising, the country descended into civil war and the PNG government imposed a military blockade on the island that prevented medicine, clothing, and other necessities from reaching Bougainville residents. According to the complaint, Rio Tinto pressured the PNG government to engage in “aerial bombardment of civilian targets, wanton killing and acts of cruelty, village burning, rape, and pillage” that resulted in the deaths of an estimated 15,000 Bouganvillians.

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