Tuesday, August 5, 2014

Growing Circuit Split Over ATS Suits Against Corporations Following Kiobel

In a 2-1 decision, the U.S. Court of Appeals for the Eleventh Circuit recently issued a decision in Cardona v. Chiquita Brands Int'l, Inc., holding that the U.S. corporation, Chiquita, cannot be sued in U.S. federal courts over allegations that it supported Colombian paramilitary forces who tortured and killed banana-plantation workers, union members and social activists.  The Court found that it did not have jurisdiction over the claims of the 4,000 plaintiffs under either the Torture Victim Protection Act (TPVA) or the Alien Tort Statute (ATS), both found at 28 U.S.C. sec. 1350.

This decision deepens a circuit court split over the scope of the U.S. Supreme Court's 2013 decision in Kiobel v. Royal Dutch Petroleum Co., where the Supreme Court held that U.S. federal courts may not entertain claims under the ATS for alleged violations of the law of nations where the underlying activity occurred on foreign territory and there is not a sufficient connection to the United States. 
Plaintiffs in Cardona attempted to distinguish Kiobel by arguing that there is a sufficient connection to the United States because Chiquita is a U.S. corporation, unlike Royal Dutch Petroleum.  The majority of the Eleventh Circuit found that distinction unconvincing because the Supreme Court stated in Kiobel that "corporate presence" was not enough (although it did not directly address corporate citizenship).  The Second Circuit reached a similar conclusion in Balintulo v. Daimler AG, but the Fourth Circuit reached an opposite conclusion in Shimari v. CACI Int'l, Inc.  The dissenting judge in Cardona lamented the fact that the decision "disarm[s] innocents against American corporations that enage in human rights violations abroad."
The Eleventh Circuit also dismissed Plaintiffs' claim under the TPVA because the TPVA only authorizes liability against natural persons, relying on the U.S. Supreme Court's 2012 decision in Mohamad v. Palestinian Authority.
The growing circuit split suggests the issue is likely to return to the docket of the U.S. Supreme Court in the near future.


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