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Media Alerts - Mastafa v. Chevron Corp.
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October 24, 2014
  Mastafa v. Chevron Corp.
Headline: Second Circuit Affirms the Dismissal of Five Iraqi Nationals' Claims Against Corporations for Illicitly Funding Saddam Hussein's Regime

Area of Law: International Law

Issue(s) Presented: Whether Iraqi nationals, tortured and abused during the Saddam Hussein regime, can recover damages from corporations who allegedly paid kickbacks to the regime.

Brief Summary:
Five Iraqi nationals filed a complaint against Chevron and Banque Nationale de Paris Paribas claiming that they or their relatives were tortured, imprisoned, and in some cases executed by agents of Saddam Hussein and that the defendant corporations had aided and abetted by paying Hussein's regime illegal kickbacks. The district court dismissed the complaint. The Second Circuit affirmed, holding that a recent Supreme Court decision forecloses recovery under the Torture Victim Protection Act because the Act imposes liability on individuals, not corporations. The Circuit also held it lacked jurisdiction on the Alien Tort Statute claim because the plaintiffs' complaint lacked a plausible allegation that the defendants had purposefully aided and abetted alleged violations of customary international law.

The full text of the opinion may be found at http://www.ca2.uscourts.gov/de...44726f2ed6e/1/hilite/

Extended Summary: Five Iraqi nationals brought suit against Chevron Corporation and Banque Nationale de Paris Paribas, claiming that they or their family members were tortured, imprisoned, and in some cases executed by agents of Saddam Hussein and that defendants were liable for illicitly funding the regime. Plaintiffs brought their claims under the Alien Tort Statute of 1789 (ATS) and the Torture Victim Protection Act of 1991 (TVPA). The district court dismissed the claims under Federal Rules of Civil Procedure 12(b)(1) and (6). Plaintiffs appealed and the Second Circuit stayed the appeal pending the Supreme Court's decision in Kiobel v. Royal Dutch Petroleum Co. During the stay, the Supreme Court issued another decision relevant to this case, Mohamad v. Palestinian Authority. After the Supreme Court issued the Kiobel decision, the Second Circuit lifted the stay and affirmed the dismissal of the case in full.

The Torture Victim Protection Act imposes liability on "[a]n individual who, under actual or apparent authority, or color of law, of any foreign nation" subjects another individual to torture or extrajudicial killing. In Mohamad v. Palestinian Authority, 132 S. Ct. 1702 (2012), the Supreme Court held that the TVPA "authorizes liability solely against natural persons," and "does not impose liability against organizations," including corporations. The parties agreed that this decision foreclosed plaintiffs' claims under the TVPA.

The Alien Tort Statute establishes district court jurisdiction "of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States". In Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), the Supreme Court held "the presumption against extraterritoriality applies to claims under the ATS . . . and case[s] seeking relief for violations of the law of nations occurring outside the United States [are] barred." The Second Circuit held that when faced with ATS claims, courts should focus on the particular conduct alleged in the complaint, and then follow a two-step jurisdictional analysis of that conduct. The first step is to determine whether the complained-of conduct - i.e., the "conduct which constitutes a violation of the law of nations or aiding and abetting such a violation" - sufficiently touches and concerns the United States so as to displace the presumption against extraterritoriality. The second step is to "glimps[e] at the merits" and determine whether the complaint plausibly alleges a violation under the ATS.

Applying this standard to the instant complaint, the Second Circuit concluded that it satisfied the first step because of its allegations about financial transactions that occurred in the United States. The complaint failed on the second step, however, because it failed to plausibly plead that the defendants had the mens rea required to establish a violation of the law of nations. The complaint lacked a plausible allegation that the defendants had acted with the purpose of facilitating human rights abuses.

Panel: Circuit Judges Cabranes, Straub, and Livingston

Argument Date: 05/28/2014

Date of Issued Opinion: 10/23/2014

Docket Number: No. 10‐5258‐cv

Decided: Affirmed

Case Alert Author: Joan O'Connor Archer

Counsel: John T. Murray, Murray & Murray Co., L.P.A., Sandusky, Ohio, for Plaintiffs‐Appellants.

Meir Feder, Thomas E. Lynch, Jones Day, New York, NY; Gregory G. Katsas, Michael A. Carvin, Jones Day, Washington, D.C., for Defendant‐ Appellee Chevron Corp.

Robert S. Bennett, Ellen Kennedy, Hogan Lovells US LLP, Washington, D.C.; Jennifer L. Spaziano, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, D.C., for Defendant‐Appellee Banque Nationale de Paris Paribas.

Terrence Patrick Collingsworth, Conrad & Scherer, LLP, Washington, D.C., for amicus curiae Human Rights Watch and Labor Organizations.

Author of Opinion: Judge Cabranes

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/24/2014 11:01 AM     2nd Circuit  

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