Ninth Circuit Holds that Corporations Can Be Sued for Human Rights Violations Under Alien Tort Statute

Earlier this week in Sarei v. Rio Tinto, an en banc panel of the Ninth Circuit ruled that international mining giant Rio Tinto could be sued under the Alien Tort Statute (ATS) for its role in genocide and crimes against humanity against the inhabitants of the Island of Bougainville in Papau New Guinea in the 1980s.

There, Rio Tinto operated a mining operation on an island that had previously been inhabited by a an indigenous culture. In 1988, the island’s inhabitants were upset over Rio Tinto’s displacement of villages, environmental destruction and discrimination against native workers. The inhabitants revolted against the mining giant by sabotaging its operations. At Rio Tinto’s request, the Papau New Guinea government sent in its military, and with the help of Rio Tinto vehicles and helicopters, suppressed the revolt and killed about 15,000 residents. Shortly thereafter, the country fell into a decade-long civil war.

In 2000, residents of Bougainville brought an action in federal court under the ATS in the Central District of California against Rio Tinto.  At issue on this appeal was whether corporations can be held liable under the ATS. Liability is not clear under the statute as it was passed in 1789 and does not define who or what can be a defendant.

Rio Tinto argued, citing Kiobel v. Dutch Petroleum Co., 621 F.3d 111,125 (2d. Cir. 2010), that customary international law has not generally recognized liability for corporations thats violate its norms. The Ninth Circuit disagreed, and found more convincing the concurring opinion in Kiobel – that no principle of international law or domestic law supported the Kiobel majority’s conclusion that norms enforceable through the ATS only apply to individuals and leave corporations immune from suit. Similarly, looking at the statutory language and legislative history, the Ninth Circuit found no suggestion that the ATS was intended to be solely limited to individual liability.

Finally, the Ninth Circuit joined the Second and D.C. Circuits in holding that corporations can be held liable under ATS. The Second Circuit, in the case cited above, is the only circuit to hold that corporations can’t be held liable under the statute. The U.S. Supreme Court recently granted certiorari on Kiobel and might ultimately resolve the circuit split.

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