More on The Second Circuit's Recent, Significant Decision Regarding Two Suits Involving the Alien Tort Claims Act: Part Two in a Two-Part Series
By ANTHONY J. SEBOK
|Tuesday, Nov. 06, 2007
Last month, the U.S. Court of Appeals for the Second Circuit issued a decision in Khulumani v. Barclay National Bank and Ntsebeza v. Daimler Chrysler Corp. These two cases concern a lawsuit brought on behalf of the millions of South Africans who suffered in apartheid-era South Africa. The defendants are the multinational banks and corporations who supported the apartheid system by lending it money and selling it goods and services.
In my previous column in this two-part series, I discussed the decision's background and holding. In this column, I'll go into greater detail about this landmark decision.
Two Key Arguments That Formed the Basis for the District Court's Initial Dismissal
The reason the cases ended up before the Second Circuit was that U.S. District Judge John Sprizzo in the Southern District of New York had dismissed the suit on a number of grounds. The Second Circuit reversed his dismissal of certain claims, 2-1, in a complex opinion, and sent the case back to Judge Sprizzo for further proceedings.
To be more precise, the Second Circuit affirmed Judge Sprizzo's dismissal of claims under the Torture Victims Protection Act ("TVPA"), but reversed his dismissal of claims under the Alien Tort Claims Act ("ATCA"). Thus, it is the ATCA claims on which I will focus here.
One ground Judge Sprizzo had cited in favor of his dismissal of the ATCA claims was the political question doctrine, which holds that the federal courts should decline jurisdiction in certain cases involving the judgments of the political branches of government. In this instance, both the United States and South African governments had argued that the lawsuit was meddling in post-apartheid South Africa's internal affairs.
In addition Judge Sprizzo's dismissal of the ATCA claims had also invoked the test for "aiding and abetting" liability. Since a claim of "aiding and abetting" forms the main basis of the plaintiffs' tort claim, their claims will not be able to proceed unless the test is satisfied. On appeal, the Second Circuit clarified that test, so on remand, Judge Sprizzo will apply the test the Second Circuit set forth.
The Plaintiffs' "Aiding and Abetting" ATCA Claims: Two Possible Tests
The ATCA permits an alien to sue in federal court for torts arising from the violation of a treaty or the law of nations. For example, under the ATCA, torture victims from Paraguay have been permitted to sue their torturers, and the families of victims of terrorism overseas have been able to sue the terrorist organizations that killed their loved ones. The damages, which are rarely paid but can have a high symbolic value as a vindication for victims, often include very high punitive damages, which are available under American (but not most foreign) tort law.
These particular ATCA suits are complex because the allegation was not that the defendants themselves committed torts, but that they aided and abetted the torts of others. Judge Sprizzo had held that "aiding and abetting" was not itself an actionable tort under the ATCA, but the Second Circuit, 2-1, disagreed.
Adding an additional level of complexity, the two judges who were in the majority on this issue disagreed on what the test for "aiding and abetting" in the ATCA context actually is: Judge Hall cited American tort law, namely the Restatement (Second) of Torts §876(b), which provides that one is liable for aiding and abetting the tortious conduct of another "if he . . . knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other." This test simply requires that the plaintiffs prove that the multinationals were substantially certain that one consequence of their business activities was to support the human rights violations caused by the apartheid government.
In contrast, Judge Katzmann looked to international law, relying on the test based in international human rights law that is set out in the Rome Statute of the International Criminal Court: One is guilty of aiding and abetting a crime if one renders aid to someone who commits a crime, and does so "[f]or the purpose of facilitating the commission of such a crime." (Judge Korman in dissent, saw no basis in the
ATCA for aiding and abetting liability, at least not for corporate defendants, but held that if such liability existed, the right test would be the Rome Statute's.)
This test looks to subjective intent. Thus, it would require the plaintiffs in the South Africa case to prove that the multinational corporations lent money and sold products to the apartheid-era regime with the "purpose of facilitating" not just apartheid, but the human rights violations caused by the apartheid regime.
Which "Aiding and Abetting" Test Should Judge Sprizzo Adopt?
Which rule should Judge Sprizzo adopt? To begin, the choice is his: Though two judges endorsed the Rome Statute test, one did so in dissent, not in a majority opinion.
Ultimately, the majority's holding was simply to reject Judge Sprizzo's contention that aiding and abetting was not part of the ATCA. Everything else, strictly speaking, is dicta (that is, analysis that is not necessary to the result, and thus without legal effect).
It seems likely that Judge Sprizzo will adopt the Rome Statute test. Since he does not believe the class actions should be going forward at all, based on the ATCA's intent, it seems very likely that he will choose the narrower theory of liability, feeling that this best honors the intent of the drafters of the ATCA.
If he so holds, then the issue will go back to the Second Circuit, and this time will result in a holding, not in dicta. After that, it is virtually certain that the loser will seek U.S. Supreme Court review. It is also very possible the Court would be interested in taking the case.
Why This Issue May Eventually Come Before the Supreme Court
That is because aiding and abetting under the ATCA has become a very important topic, since it is the primary theory of liability that allows human rights lawyers to sue corporations. Moreover, litigation against corporations based on the human rights abuses of totalitarian regimes and terror organizations is an important part of the campaign for human rights, since most multinationals have assets and operations in the United States, and therefore are willing to appear in court to defend themselves, unlike the governments and groups they are accused of helping, who can simply hide in their home countries, far from U.S. court jurisdiction.
The ATCA does not actually state a test for aiding and abetting. Of course, it eventually could; Congress could choose to amend the statute to state a preference between the two choices. Currently, however, the ATCA, enacted in 1789 as part of the Judiciary Act, is extraordinary both in its terseness and in the fact that Congress has not tried to amend it all over its 200-plus year history. The Court might want to clarify its application.
The Two Methods of Analyzing ATCA "Aiding and Abetting" Claims
In the face of this legislative silence, there are two ways of analyzing the question of which test the courts should adopt.
The first approach is to engage in a straightforward historical and doctrinal study of customary international law. After all, the ATCA itself essentially instructs the federal courts to look to customary international law to find the substantive tort rules under which litigants may make their claims. Interestingly, taking this approach does not necessary require rejecting the approach of the Second Circuit's Judge Hall, who suggested that the ATCA rely on the Restatement. After all, customary international law might instruct a given nation's judge applying that law that she should consult her own nation's domestic tort law to answer the question of what counts as aiding and abetting (as opposed to whether aiding and abetting should count as customary international law at all).
Also very interestingly, it turns out that the conflict between the relatively plaintiff-friendly Restatement test and the relatively less friendly test from the Rome Statute is probably a false conflict. As Kevin Jon Heller, an academic at the University of Auckland, has pointed out, the language in the Rome Statute does not reflect the practice of criminal tribunals hearing aiding and abetting cases for human rights violations since the end of the Second World War.
As Heller notes, even in the trials of those accused of aiding and abetting the Nazis, the test adopted by the Nuremburg tribunal was whether the defendant had "knowledge that his actions assist the perpetrator in the commission of the crime." (This test was used to hold Bernhard Weiss, a high-ranking corporate officer of the Flick Concern, liable for aiding and abetting slave labor because he procured an increase in the number of freight cars available to his company, in order to transport more slaves.)
The second approach is to ask, frankly and fully, which test fits with the structure and purpose of the ATCA. From this perspective the answer becomes harder to state with certainty. As the Supreme Court took great pains to argue in its 2004 decision Sosa v. Alvarez-Machain, not every wrong recognized by international law falls within the ATCA. Thus, answering the question precisely what causes of action come within "customary international law" requires an inquiry into the evil that Congress was trying to address when it created the statute in 1789, if not necessarily (as original-intent adherents would have it) the exact wrongs that were in its "legislative intent" when the statute was drafted.
Why There Is No Simple Answer to the "Aiding and Abetting" Test Issue
It is well known that the category of wrongdoers the ATCA was supposed to capture were those whose activities were hostis humani generis--the activities of an enemy to mankind. The original candidates for this category were pirates, but courts have been comfortable expanding this concept to include torturers and those engaged in genocide as well. Moreover, it is clear that aiding and abetting may also be hostis humani genris. As noted by another judge of the U.S. District Court for the Southern District of New York in its 2007 decision in Almog v. Arab Bank, in 1785 Attorney General Bradford argued that those who aided and abetted an act of piracy could be subject to a civil suit under the ATCA.
The question, then, once again, is whether the right test for aiding and abetting consistent with the historical vision of the ATCA is one that requires specific intent, or simply awareness of the consequences of one's actions.
It is not clear to me whether the criminal trials of Nuremberg really can answer that question, since the question goes beyond the definition of customary international law. It goes deeper, relating to the point or purpose of creating a separate tort action for violations of customary international law.
I cannot offer a simple answer to this question. I think that the point and purpose of the ATCA could be well-served by either test for aiding and abetting. One thing I am sure of, however, is that the arguments that will win the day have to do more than count decisions by human rights tribunals around the world since 1945. That is because I think that the right answer depends on an interpretation of the purpose of the statute, not an empirical inquiry into what human rights tribunals think aiding and abetting means.
Professor Sebok notes that readers interested in the issues raised in the South African ATCA case may also be interested in Brooklyn Law School's one-day conference entitled "Corporate Liability for Grave Breaches of International Law" on Friday, November 16, 2007, co-sponsored by The Dennis J. Block Center for the Study of International Business Law and the Brooklyn Journal of International Law, for which CLE credit is offered. - Ed.