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Alien Tort Claims Act 4/2/2009 3:01:31 PM EST Drimmer on Sarei v. Rio Tinto, 550 F.3d 822 (9th Cir. 2008) Attorney, Steptoe & Johnson
This commentary, discussing the Ninth Circuit’s decision in Sarei v. Rio Tinto, 550 F.3d 822 (9th Cir. 2008), and its implications, was prepared by Jonathan Drimmer, a partner at Steptoe & Johnson who practices in international and commercial litigation and advises corporations on issues related to Alien Tort Claims Act compliance.
Mr. Drimmer writes: On December 16, 2008, the U.S. Court of Appeals for the Ninth Circuit, sitting en banc, issued a long awaited Alien Tort Claims Act (ATCA) decision in Sarei v. Rio Tinto, 550 F.3d 822 (9th Cir. 2008). The case, involving claims of human rights violations by current and former residents of Papua New Guinea (PNG) against the British mining company Rio Tinto at its copper mine on the island of Bougainville, had been pending before the Ninth Circuit for more than 5 years in total.
Although the issues before the en banc court were myriad, and involved several novel questions under the ATCA, the court chose to address just one issue: whether a plaintiff seeking ATCA relief must show that he or she exhausted all local remedies, or that seeking such local relief would be futile or infeasible. In a fractured decision, a plurality of judges held that district courts must consider whether exhaustion is appropriate on a case-by-case basis, making that determination by analyzing the nexus of the case to the U.S. and the gravity of the underlying allegations. For multi-national corporations and their executive officers, that ruling may allow for an additional argument in seeking the dismissal of ATCA cases; however, on a practical level, given the substantial overlap between the exhaustion doctrine and the forum non conveniens defense, which long has been available to ATCA defendants, the ruling ultimately should impact few cases.
The ATCA and Corporations
On the books since 1789, the ATCA permits foreign claimants to file tort actions in U.S. federal courts based on a discrete set of serious international crimes -- violations of the law of nations-- committed domestically or abroad. 28 U.S.C. 1350. The Act remained dormant until 1980, when Paraguayan citizens filed suit in New York under the ATCA against a Paraguayan police official for acts of torture and murder in Paraguay. See Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980). When the lawsuit was permitted to proceed, many others followed, leading to damage awards that have regularly exceeded $10 million and in several instances $100 million, not to mention the substantial litigation costs and negative publicity even for defendants who ultimately prevail. See, e.g., Arce v. Garcia, 434 F.3d 1254, 1256 (11th Cir. 2006) ($54 million in damages after contested trial in case involving individual plaintiffs); Mehinovic v. Vuckovic, 198 F.Supp.2d 1322 (N.D. Ga. 2002) ($140 million in case involving individual plaintiffs); Mushikiwabo v. Barayagwiza, 1996 U.S. Dist. LEXIS 4409 (S.D.N.Y. 1996) ($103 million in case involving individual plaintiffs).
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