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Second Circuit Holds Remaining ATS Claims in Apartheid Litigation Barred by Kiobel

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Wednesday, August 21, 2013 at 8:03 PM

The Second Circuit today held that the ATS claims against Ford, Daimler, and IBM  — the three remaining defendants in the decade-long litigation against more than fifty companies for allegedly aiding and abetting the apartheid regime in South Africa — are barred by the Supreme Court’s decision in June in Kiobel.  The decision, while not unexpected, is a blow to human rights litigators who had hoped that, despite the Kiobel decision, the lower courts would continue to allow ATS suits against U.S. companies.

The Second Circuit panel — Cabranes, Livingston, and Hall — emphatically rejected the plaintiffs’ arguments that the ATS claims should still survive Kiobel on the grounds that they “touch and concern the territory of the United States” because two of the defendants (IBM and Ford) are U.S. companies and the defendants’ conduct affronts significant U.S. interests.  The panel held that the only relevant consideration was whether the allegedly wrongful conduct itself took place outside the United States:

The Supreme Court expressly held that claims under the ATS cannot be brought for violations of the law of nations occurring within the territory of a sovereign other than the United States.  Kiobel, 133 S. Ct. at 1662, 1668–69. The majority framed the question presented in these terms no fewer than three times; it repeated the same language, focusing solely on the location of the relevant “conduct” or “violation,” at least eight more times in other parts of its eight-page opinion; and it affirmed our judgment dismissing the plaintiffs’ claims because “all the relevant conduct took place outside the United States,” id. at 1669. Lower courts are bound by that rule and they are without authority to “reinterpret” the Court’s binding precedent in light of irrelevant factual distinctions, such as the citizenship of the defendants.See Agostini v. Felton, 521 U.S. 203, 237–38 (1997); see also Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 66–67 (1996). Accordingly, if all the relevant conduct occurred abroad, that is simply the end of the matter under Kiobel[Emphasis added and footnotes deleted]

The panel also rejected plaintiffs’ argument that, even if the alleged torts occurred in South Africa,  the defendants took relevant actions inside the U.S. and that discovery should be provided to determine the scope of that conduct.  In a footnote, the panel notes that “Like the Supreme Court, we have no reason to address how much conduct must occur in the United States because all of the relevant conduct that purportedly violated the law of nations in this case occurred on the territory of a foreign soivereign.”

The panel also reaffirmed as the “law of this Circuit” the Second Circuit’s 2010 holding in Kiobel (which the Supreme Court did not address in its decision despite having granted cert on the question) that corporations may not be held liable for violations of international law under the ATS.

As a procedural matter, the Second Circuit decision today does not actually end the case.   The panel remanded the case to Judge Scheindlin of the Southern District of New York to consider a motion to dismiss the case in light of the Kiobel decision.

By way of disclosure, Arnold & Porter represented Daimler in this case, although I was not personally involved because I had filed a brief in this case when I was in government.