Adhikari v. Kellogg Brown & Root, Inc., No. 15-20225 (5th Cir. Jan. 3, 2017) [click for opinion]
The Alien Tort Statute ("ATS"), 28 U.S.C. § 1350, recognizes U.S. courts' jurisdiction over civil actions brought by non-U.S. citizens ("aliens") for torts committed either in violation of a U.S. treaty or the law of nations. The Trafficking Victims Protection Reauthorization Act ("TVPRA"), 18 U.S.C. §§ 1589 and 1590 prohibits forced labor and human trafficking, respectively.
In 2004, an Iraqi insurgent group kidnapped and murdered twelve Nepali men as they traveled through Iraq to a United States military base to work for Daoud & Partners ("Daoud"), a Jordanian corporation that had a subcontract with Defendant Kellogg Brown Root ("KBR"). In 2008, the families of eleven of the men, along with one Daoud employee who was not captured, sued Daoud and KBR under the ATS, TVPRA, and state common law, alleging that the companies "willfully and purposefully formed an enterprise with the goal of procuring cheap labor and increasing profits," and thereby engaged in human trafficking. Plaintiffs settled with Daoud, but continued their lawsuit against KBR. After nearly six years, the district court dismissed all of the claims. Plaintiffs appealed.
As to the ATS claim, the majority affirmed the district court's dismissal in light of the U.S. Supreme Court's 2013 decision in Kiobel v. Royal Dutch Petroleum Co., which held that the ATS does not apply extraterritorially. The court reasoned that, to the extent Plaintiffs alleged KBR was directly liable for the alleged misconduct, all of the relevant conduct occurred in a foreign country. The court further reasoned that Plaintiffs had failed to connect the alleged international law violations to any U.S. conduct: (1) Plaintiffs failed to demonstrate how KBR's alleged financial transactions from the U.S. demonstrated that KBR's U.S.-based employees actually engaged in violations of the law of nations; and (2) a claim that KBR's U.S.-based employees may have known about "allegations" of human rights abuse is insufficient to raise a genuine fact dispute that those employees were directly liable for violating international law.
As to the TVPRA claim, the majority noted that the TVPRA did not apply extraterritorially in 2004, the time of the alleged misconduct. Plaintiffs nevertheless argued that its 2008 amendment, § 1596, explicitly rebuts the presumption against extraterritoriality. However, relying on Fifth Circuit precedent, the majority reasoned that the ultimate question was whether, in passing § 1596, Congress merely intended to clarify what it had meant all along in the TVPRA's civil-remedy provision. Accordingly, the panel held that "[n]othing in the text of the pre-2008 TVPRA or in the text of § 1596 indicates that a plaintiff was allowed to sue for extraterritorial violations of the TVPRA before 2008," and affirmed the district court's dismissal of the claim. As to the state common law claim, the district court had dismissed Plaintiffs' negligence claims as time barred under either California or Texas law, and did not toll the claims. While Plaintiffs argued that the civil conflict in Nepal delayed their filing of the suit, thus justifying equitable tolling, the district court held that "[g]eographic location and personal hardship cannot provide the sole basis for tolling an otherwise applicable statute of limitations." The panel found that the district court did not abuse its discretion, and affirmed.
Judge Graves concurred with the majority's decision on the TVPRA and the state common law claim, but dissented as to the ATS claim. Quoting Kiobel, Judge Graves reasoned that this case squarely raised the question that Kiobel expressly left open: under what circumstances do a plaintiff's "claims touch and concern the territory of the United States … with sufficient force to displace the presumption against extraterritorial application [of the ATS]." Judge Graves reasoned that as plaintiffs "allege that a U.S. military contractor participated in a human trafficking scheme in order to fulfill its contract with the U.S. government to provide labor on a U.S. military base …. [t]here is much to support the conclusion that these claims 'touch and concern' the United States."