Indiana District Court Follows Kiobel, Dismisses Environmental ATS Claim Against Corporations

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Contributing Author: Jeremy Grabill

On September 30, 2010, the U.S. District Court for the Southern District of Indiana issued an opinion in Viera v. Eli Lilly & Co., No. 09-495, 2010 WL 3893791 (S.D. Ind. Sept. 30, 2010), which followed the Second Circuit’s recent decision in Kiobel (discussed here and here) by dismissing an Alien Tort Statute (“ATS”) claim based on alleged environmental pollution in Brazil that Brazilian residents had asserted against various American corporations.

In Viera, Chief Judge Young found “the reasoning of the Second Circuit [concerning corporate liability under the ATS] persuasive” and dismissed the plaintiffs’ ATS claim because “the ATS cannot provide federal court jurisdiction over claims based on voluntary actions taken by a corporation.”   2010 WL 3893791, at *2.  But Jude Young also noted that he likely would’ve dismissed the plaintiffs’ ATS claim on the alternative ground that the alleged environmental pollution did not violate a sufficiently established norm of international law.  The Brazilian plaintiffs relied on several international treaties and agreements (none of which have been ratified by the United States) that purport to establish various health and safety standards to allege that the defendants’ disposal of certain chemicals at manufacturing plants in Brazil violated international law.  However, Judge Young held that it was “clear” that these authorities could not support an ATS claim:  “It goes without saying that recognized health and environmental standards differ within the States of this country, let alone between the countries of the world.”  Id. at *3.

Although the court’s rejection of the plaintiffs’ environmental pollution ATS claim is notable, Viera‘s immediate importance is based on the fact that it could provide a vehicle for the Seventh Circuit to examine Kiobel and the issue of corporate liability under the ATS.  Indeed, although Judge Young’s opinion did not dismiss the Viera case in its entirety, the opinion is critical of the plaintiffs’ remaining common law tort claims (for negligence, gross negligence, strict liability, and wrongful death) and cautions plaintiffs against a “knee-jerk” attempt to keep those claims “alive.”  Id. at *5 n.3.  Therefore, we will keep our eye on future developments in Viera to determine whether the Seventh Circuit will have an opportunity in the near future to address the issue of corporate liability under the ATS.  But whether it is the Seventh Circuit in Viera or another Circuit in a different case, ultimately it will be very important to see how another Circuit views Kiobel for purposes of predicting whether the U.S. Supreme Court will have to weigh in on the question of corporate liability under the ATS.