The Ninth Circuit Court of Appeals has determined that an oil company failed to meet its burden of proving that Peru would be an adequate alternative forum in litigation by indigenous people claiming injury from the company’s operations in their country. Carijano v. Occidental Petroleum Corp., No. 08-56187 (9th Cir., decided December 6, 2010).

The plaintiffs are 25 members of the Achuar indigenous group and Amazon Watch, a California nonprofit corporation added to the complaint after the case was removed to federal court. The nonprofit began working with the Achuar communities in 2001, years after oil drilling, refining and processing began in the region in which they lived, and helped produce a documentary film about alleged environmental contamination and its purported effects on the communities.

The plaintiffs brought claims for common law negligence, strict liability, battery, medical monitoring, wrongful death, fraud and misrepresentation, public and private nuisance, trespass, and intentional infliction of emotional distress; they sought damages, injunctive and declaratory relief, restitution, and disgorgement of profits on behalf of individual plaintiffs and two proposed classes. The district court granted the company’s motion to dismiss on forum non conveniens grounds and apparently did so without conducting oral argument and while denying the plaintiffs the opportunity to conduct limited discovery on the adequacy of Peru as an alternative forum. According to the district court, Peru is an adequate alternative forum and the public and private interest factors sufficiently overcome the strong presumption of a domestic plaintiff’s choice of forum.

A divided Ninth Circuit panel determined that the district court abused its discretion “in finding that under the unique circumstances of this case Peru provides an adequate alternative forum for Plaintiffs to pursue their claims against Occidental arising from business operations in Peru that ended 7 years previously.” The court questioned whether Occidental would be subject to jurisdiction in Peru without waiving the statute of limitations and whether the plaintiffs’ legal theories were available under Peruvian law. The court also found that the district court overlooked “important evidence related to corruption” in the Peruvian courts.

Weighing the public and private interest factors involved in the litigation, the Ninth Circuit found that California-based evidence was critical to the litigation, which turned on the “mental state of the Occidental managers who actually made the business decisions that allegedly resulted in the injury,” more than on the alleged injury’s physical location. The court further faulted the district court for failing to consider whether a judgment against Occidental could be enforced in Peru. Overall, the court determined that the factors fail to “establish … oppressiveness and vexation to a defendant … out of all proportion to plaintiff’s convenience,” and that they “fail to outweigh the deference owed to Amazon Watch’s chosen forum.” The court remanded the case for the district court to consider the question of the nonprofit’s standing and for further proceedings.  

The dissenting appeals court judge would have deferred to the district court’s determination, unpersuaded that the lower court made a clear error of judgment. She would have remanded for the district court to consider whether dismissal of the case should be conditioned on the defendant agreeing to accept service, submit to jurisdiction, waive the statute of limitations, comply with discovery, and submit to the enforcement of any Peruvian judgment in the United States. The dissenting judge was also concerned that Amazon Watch was only one plaintiff on one out of the 12 causes of action and had been added to the litigation “only after the Peruvian plaintiffs learned that Occidental was going to move for dismissal based on forum non conveniens.”