Mastafa v. Chevron Corp., 770 F.3d 170 (2d Cir. 2014) [click for opinion]

Plaintiff-Appellants are a group of Iraqi women who were the victims of torture by agents of the Saddam Hussein regime or whose husbands were the victims of such torture. Appellants claimed the Defendant-appellee corporations knowingly aided and abetted this torture by paying kickbacks to the Hussein regime as part of the United Nations’ Oil for Food Program. Appellants claimed these kickbacks were a violation of customary international law and, as a result, the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, and the Torture Victim Protection Act of 1991 (“TVPA”), 28 U.S.C. § 1350 note.

The district court dismissed Appellants’ case in November of 2010, ruling that the Second Circuit’s decision in Kiobel v. Royal Dutch Petroleum Co. foreclosed appellants’ case because it ruled the ATS does not confer jurisdiction for claims brought in response to alleged violations of customary international law by corporate defendants.

The Second Circuit stayed the appeal of the case after the Supreme Court granted certiorari in Kiobel. During the stay, the Supreme Court decided a case that mooted appellants’ arguments under the TVPA. However, the Kiobel decision did not conclusively rule that corporate defendants cannot be liable under the ATS for extraterritorial violations of customary international law.

The Second Circuit thus found that Appellants had pled a cognizable violation of the law of nations and had alleged a theory of liability (aiding and abetting) cognizable under customary international law. It found, however, that the presumption against extraterritorial application of the ATS as announced by the Supreme Court in Kiobel barred Appellants’ claims.

In making that determination, the Second Circuit found the presumption against extraterritorial application of the ATS was not “self evidently dispositive,” as it was on the facts in Kiobel. Accordingly, the Court engaged in a two-part analysis to determine whether the relevant conduct in Appellants’ claims sufficiently concerned the United States.

The first part of the analysis is to determine whether the relevant conduct “touched and concerned” the United States. If so, the second step is to determine whether the conduct that sufficiently touches and concerns the United States may in fact be relied upon in establishing jurisdiction.

The Second Circuit found that Appellants did allege specific relevant conduct that touched and concerned the United States so as to satisfy the first prong of the extraterritoriality analysis. However, the Second Circuit then went on to hold that the relevant conduct failed to plausibly form the basis for the required mens rea for Appellants aiding and abetting claims and the alleged violations of customary international law. Therefore, Appellants’ complaint could not form the basis for jurisdiction under the ATS and the Second Circuit affirmed the district court’s dismissal of the complaint.

Michael Lehrman of the Chicago office contributed to this summary.