Overshadowed Aspects of Second Circuit’s Opinion in Kiobel

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Contributing Author: Jeremy Grabill

As we  noted here, last week we discussed the Second Circuit’s landmark decision in Kiobel v. Royal Dutch Petroleum Co., __ F.3d __, 2010 WL 3611392 (2d Cir. Sept. 17, 2010), which rejected corporate liability under the Alien Tort Statute (“ATS”), in a post over on the Washington Legal Foundation’s Legal Pulse blog.  There are two aspects of the Kiobel opinion, however, which may have been overshadowed by the court’s ultimate holding that corporations cannot be sued (at least not for alleged human rights abuses) under the ATS.  Indeed, although they may not be as far-reaching as the court’s central holding re: corporate liability, the following two aspects of Kiobel should be helpful to individuals that find themselves defendants in ATS cases in the wake of the Second Circuit’s opinion.

First, the majority in Kiobel makes a powerful observation concerning the plaintiffs’ reliance on a “handful of specialized treaties.”  The Supreme Court held in Sosa that a norm must be “specific, universal, and obligatory” to qualify as a rule of customary international law.  However, quoting a “distinguished scholar of international law,” the Second Circuit notes in Kiobel that, in some cases, “the very reason of [a] treaty [is] to create an obligation which would not have existed by the general [international] law, or to exclude an existing rule which would otherwise have applied.”  2010 WL 3611392, at *17.  Thus, contrary to what might seem like conventional wisdom (e.g., that treaties tend to reflect customary international law), this aspect of Kiobel is a powerful reminder that sometimes the exact opposite may be true.

Second, notwithstanding his harshly-worded separate opinion in Kiobel, Judge Leval nevertheless concurs in the dismissal of the plaintiffs’ claims because he concludes that the plaintiffs failed to plausibly allege that the corporate defendants acted with a “purpose” to bring about the human rights abuses at issue.  Courts are increasingly requiring plaintiffs asserting “aiding and abetting” claims under the ATS to satisfy this pleading requirement, and it seems obvious to us that it will be much harder for plaintiffs to make such a facial showing against an individual defendant than against a corporate defendant (because plaintiffs should no longer be able to simply rely on generic corporate actions, but rather must make specific allegations against specific individuals).  And as reflected by Judge Leval’s opinion, making such a showing against a corporate defendant is not always easy in the first place.  Thus, while Kiobel does not rule out ATS claims against a corporation’s employees, managers, officers, or directors, the “purpose” pleading requirement (applied through the lens of Iqbal and Twombly) stands as a formidable hurdle for plaintiffs that may attempt to avoid the impact of Kiobel by proceeding against individual defendants.