A split en banc Ninth Circuit Court of Appeals has ruled that corporations are not immune from lawsuits alleging human rights abuses filed under the Alien Tort Claims Act (ATC A). Sarei v. Rio Tinto, PLC, Nos. 02-56256, 02-56390 and 09-56381 (9th Cir. 10/25/11). So ruling, the appeals court reversed the district court’s dismissal of genocide and war-crimes claims while affirming the dismissal of crimes-against-humanity and racial-discrimination claims.

The lawsuit involved allegations by residents of the island of Bougainville in Papua New Guinea, that they were exposed to toxins from defendant’s operations and that others were killed or injured in a 10-year civil war that arose in part from a conflict with the company. The complaint alleged that London-based Rio Tinto called in military forces that committed genocide and other human-rights violations after the islanders launched an uprising against the company’s activities. Plaintiffs also allege that the government instituted a blockade to force the islanders to surrender so defendant’s mine could be reopened. Defendant argued that corporations could not be held liable under ATC A for genocide or war crimes. ATC A provides that “district courts shall have original 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.” 28 U.S.C. § 1350.  

The slim majority rejected defendant’s argument, citing other federal appeals court decisions which have found that corporations can be held liable for war crimes under ATC A and that the international ban on genocide is sufficiently specific, universal and obligatory to warrant an ATC A claim. The dissenting judges argued that the court lacks jurisdiction over the case and is improperly expanding ATC A’s reach. In a related development, the U.S. Supreme Court recently decided to review a Second Circuit decision involving whether ATC A confers federal jurisdiction over tort claims against corporations. Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S., cert. granted 10/17/11).