14‐4104 (L)
Balintulo v. Ford Motor Co.
In the
United States Court of Appeals
for the Second Circuit
AUGUST TERM 2014
Nos. 14‐4104(L), 14‐3589, 14‐3607, 14‐4129, 14‐4130,
14‐4131, 14‐4132, 14‐4135, 14‐4136, 14‐4137, 14‐4138, 14‐4139
SAKWE BALINTULO,
as personal representative of SABA BALINTULO, et al.,
Plaintiffs‐Appellants,
v.
FORD MOTOR CO., INTERNATIONAL BUSINESS MACHINES CORP.,
Defendants‐Movants.
On Appeal from the United States District Court
for the Southern District of New York
ARGUED: JUNE 24, 2015
DECIDED: JULY 27, 2015
Before: CABRANES, HALL, and LIVINGSTON, Circuit Judges.
This appeal presents the question of whether plaintiffs,
victims of South African apartheid, have plausibly alleged relevant
conduct committed within the United States that is sufficient to
rebut the Alien Tort Statute’s presumption against extraterritoriality.
We hold that they have not.
Accordingly, we AFFIRM the August 28, 2014 order of the
United States District Court for the Southern District of New York
(Shira A. Sheindlin, Judge).
PAUL L. HOFFMAN (Diane E. Sammons,
Nagel Rice, LLP, Roseland, NJ; Michael D.
Hausfeld, Kristen M. Ward, Hausfeld,
Washington, DC, on the brief), Schonbrun,
Desimone, Seplow, Harris & Hoffman LLP,
Venice, CA, for Plaintiffs‐Appellants.
JONATHAN HACKER (Anton Melitsky, on the
brief), O’Melveny & Myers LLP, New York,
NY, for Defendant‐Movant Ford Motor
Company.
KEITH R. HUMMEL (Teena‐Ann V.
Sankoorikal, James E. Canning, on the brief),
Cravath, Swaine & Moore LLP, New York,
NY, for Defendant‐Movant International
Business Machines Corporation.
JOSÉ A. CABRANES, Circuit Judge:
2
This appeal presents the question of whether plaintiffs,
victims of South African apartheid, have plausibly alleged relevant
conduct committed within the United States that is sufficient to
rebut the Alien Tort Statute’s presumption against extraterritoriality.
We hold that they have not.
Accordingly, we AFFIRM the August 28, 2014 order of the
United States District Court for the Southern District of New York
(Shira A. Sheindlin, Judge).
BACKGROUND
Nearly a decade and a half ago, plaintiffs filed suit under the
Alien Tort Statute (“ATS”)1 against various corporations2 for
allegedly aiding and abetting crimes proscribed by “the law of
nations” (also called “customary international law”)3 committed
1 The ATS states in full: “The district courts shall have original
jurisdiction of any civil action by an alien for a tort only, committed in violation
of the law of nations or a treaty of the United States.” 28 U.S.C. § 1350.
2 Among the original defendants in this case were dozens of corporations,
including many prominent multinational companies. Over time, however, the
District Court granted many of these defendants’ motions to dismiss, see, e.g., In
re S. African Apartheid Litig., 15 F. Supp. 3d 454, 455 (S.D.N.Y. 2014), and plaintiffs
dropped their claims against many others in their subsequent amended
complaints, see, e.g., Balintulo v. Daimler AG, 727 F.3d 174, 183 (2d Cir. 2013)
(“Balintulo I”). Accordingly, the number of defendants has been whittled down to
two: Ford Motor Co. (“Ford”) and International Business Machines Corp.
(“IBM”).
See, e.g., Mastafa v. Chevron Corp., 770 F.3d 170, 176 (2d Cir. 2014)
3
(equating violations of the law of nations with violations of customary
3
during apartheid by the South African government against South
Africans within South Africa’s sovereign territory.
The long and complicated procedural history of this
consolidated case involves rulings from all three levels of the federal
judiciary.4 As relevant here, the District Court, on April 8, 2009, held
that plaintiffs may proceed against defendants Ford and IBM (the
“Companies”) on an agency theory of liability for apartheid era
crimes allegedly committed by their subsidiaries. Thereafter, the
Companies sought a writ of mandamus in this Court. On September
17, 2010, while this case remained pending, we held, in Kiobel v.
Royal Dutch Petroleum Co. (“Kiobel I”), that the ATS does not confer
jurisdiction over claims pursuant to customary international law
against corporations.5 The Supreme Court granted certiorari and, on
April 17, 2013, affirmed our judgment, while explicitly declining to
international law); Flores v. S. Peru Copper Corp., 414 F.3d 233, 237 n.2 (2d Cir.
2003) (“In the context of the [ATS], we have consistently used the term
‘customary international law’ as a synonym for the term the ‘law of nations.’”);
see also Hartford Fire Ins. Co. v. California, 509 U.S. 764, 815 (1993) (Scalia, J.,
dissenting in part) (using the two terms interchangeably when noting that “‘the
law of nations,’ or customary international law, includes limitations on a nation’s
exercise of its jurisdiction to prescribe”).
4 The factual and procedural history of the case—and the various separate
cases that were consolidated to form the current action—is summarized in In re
South African Apartheid Litig., 617 F. Supp. 2d 228, 241–45 (S.D.N.Y. 2009),
Balintulo I, 727 F.3d at 182–85, In re South African Apartheid Litig., 15 F. Supp. 3d at
455–57, and In re South African Apartheid Litig., 56 F. Supp. 3d 331, 332–36
(S.D.N.Y. 2014).
5 621 F.3d 111 (2d Cir. 2010).
4
reach the corporate liability question (“Kiobel II”).6 Instead, the Court
held that “the presumption against extraterritoriality applies to
claims under the ATS”7 and thus the statute cannot be applied “to
conduct in the territory of another sovereign.”8
Two days after the Supreme Court released its ruling in Kiobel
II, we requested supplemental briefing from the parties on the
impact of that decision on the present case. Thereafter, on August
21, 2013, in Balintulo v. Daimler AG, 727 F.3d 174, 188 (2d Cir. 2013)
(“Balintulo I”), we denied the Companies’ request for a writ of
mandamus and remanded to the District Court where the
Companies would be able to “seek the dismissal of all of the
plaintiffs’ claims, and prevail, prior to discovery, through a motion
for judgment on the pleadings.” In so doing, we rejected plaintiffs’
theory of vicarious liability for the Companies based on actions
taken within South Africa by their South African subsidiaries and
concluded that Kiobel II “forecloses the plaintiffs’ claims because the
plaintiffs have failed to allege that any relevant conduct occurred in
the United States.”9
On remand, the Companies moved for a judgment in their
favor. The District Court ordered the Companies to brief the
question of whether corporations can be held liable under the ATS
Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct 1659, 1663 (2013).
6
Id. at 1669.
7
Balintulo I, 727 F.3d at 188.
8
Id. at 189.
9
5
following Kiobel II. On April 17, 2014, the District Court held that the
Supreme Court in Kiobel II, which, as noted earlier, expressly
declined to address the question of corporate liability under
customary international law, had nonetheless overruled the holding
of Kiobel I and thus altered the law of the Circuit in that respect.10
The District Court also permitted plaintiffs to move to amend their
complaints in order to allege facts sufficient to overcome the ATS’s
presumption against extraterritoriality.11 After plaintiffs submitted
their proposed amended complaints, the District Court held that the
proposed amendments were futile because the “relevant conduct”
alleged “all occurred abroad” and because plaintiffs’ theory of
liability was foreclosed by this Court’s decision in Balintulo I.12
DISCUSSION
We generally review a district court’s decision to permit or
deny leave to amend a complaint for abuse of discretion, “keeping in
mind that leave to amend should be freely granted when justice so
requires.”13 However, when denial of leave to file a revised pleading
is based on a legal interpretation, such as futility, a reviewing court
conducts a de novo review.14 A proposed amendment to a complaint
10 In re S. African Apartheid Litig., 15 F. Supp. 3d at 460.
11 Id. at 465.
12 In re South African Apartheid Litig., 56 F. Supp. 3d at 338.
Pangburn v. Culbertson, 200 F.3d 65, 70 (2d Cir. 1999) (internal quotation
13
marks omitted).
14 Hutchison v. Deutsche Bank Sec. Inc., 647 F.3d 479, 490 (2d Cir. 2011).
6
is futile when it “could not withstand a motion to dismiss.”15 In
order to survive a motion to dismiss, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’”16 And while a court must accept all of
the allegations contained in a complaint as true, “that tenet is
inapplicable to legal conclusions, and threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.”17
I. The ATS Claims
On appeal, plaintiffs claim that they have alleged extensive
new facts demonstrating that the Companies’ U.S.‐based actions
constituted unlawful aiding and abetting of crimes in violation of
the law of nations. They allege that the Companies’ “specialized
product development, sales of such tailored products, and provision
of expertise and training” were aimed at facilitating abuses
committed in South Africa.18 Specifically, plaintiffs allege that
defendant Ford (1) provided specialized vehicles to the South
African police and security forces to enable these forces to enforce
apartheid,19 and (2) shared information with the South African
15 Lucente v. IBM Corp., 310 F.3d 243, 258 (2d Cir. 2002).
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
16
Twombly, 550 U.S. 544, 570 (2007)).
17 Mastafa, 770 F.3d at 177.
18 Appellants’ Br. 3.
19 Id. at 15–21.
7
regime about anti‐apartheid and union activists, thereby facilitating
the suppression of anti‐apartheid activity.20 As for IBM, plaintiffs
claim that the company (1) designed specific technologies that were
essential for racial separation under apartheid and the
denationalization of black South Africans;21 (2) bid on, and executed,
contracts in South Africa with unlawful purposes such as
“denationalization”22 of black South Africans;23 and (3) provided
training, support, and expertise to the South African government in
using IBM’s specialized technologies.24
In turn, the Companies assert that the District Court properly
denied plaintiffs’ motion for leave to amend their complaints
because (1) plaintiffs cannot satisfy the ATS’s territoriality and mens
rea requirements; (2) corporations cannot be sued under the ATS;
and (3) there is no aiding and abetting liability under the ATS.
II. Jurisdiction Under the ATS
Our inquiry begins by assessing whether the ATS grants us
jurisdiction over plaintiffs’ action. The Alien Tort Statute contains
numerous jurisdictional predicates, each of which must be satisfied
20 Id. at 21–23.
21 Id. at 12–13.
22 By “denationalization,” plaintiffs refer to the “stripp[ing] of . . . South
African nationality and/or citizenship by South African security forces during the
period from 1960 to 1994.” J.A. 403.
23 Appellants’ Br. 11–12.
24 Id. at 13.
8
before a court may properly assume jurisdiction over an ATS
claim.25 Thus, at the outset, a court must assure itself that: “(1) the
complaint pleads a violation of the law of nations; (2) the
presumption against the extraterritorial application of the ATS,
announced by the Supreme Court in Kiobel [II], does not bar the
claim; (3) customary international law recognizes [the asserted]
liability [of a] defendant; and (4) the theory of liability alleged by
plaintiffs (i.e., aiding and abetting, conspiracy) is recognized by
customary international law [or ‘the law of nations’].”26 And while a
defect in any of these jurisdictional predicates would be fatal to a
plaintiff’s claims, courts retain discretion regarding the order and
manner in which they undertake these inquiries.27
Here, we begin by addressing the question of whether
plaintiffs, in their proposed amended complaints, allege sufficient
conduct to displace the ATS’s presumption against
extraterritoriality. Because we agree with the District Court’s
conclusion that they do not, we need not address the other
jurisdictional predicates.28
25 Mastafa, 770 F.3d at 179.
26 Id. (internal citations omitted).
27 Id.
28 Though we dispose of plaintiffs’ claims on other jurisdictional grounds,
we note that plaintiffs fail to surmount another obstacle as well: they cannot
establish jurisdiction under the ATS for claims against corporations. As
previously discussed, the Supreme Court’s decision in Kiobel II explicitly did not
reach the corporate liability issue and did not modify the precedent of this
9
A. ATS and the Presumption Against Extraterritoriality
As noted above, the Supreme Court in Kiobel II made clear
that claims under the ATS cannot be brought for violations of the
law of nations occurring within the territory of a sovereign nation
other than the United States.29 The Court explained that it was
dismissing the plaintiffsʹ claims because “all the relevant conduct
took place outside the United States.”30 The wholly extraterritorial
nature of the Kiobel plaintiffs’ claims was “a dispositive fact” for the
Kiobel II Court and so it had no reason to explore how courts should
proceed where, as here, some of the “relevant conduct” occurred in
the United States.31
Circuit that “corporate liability is not recognized as a ‘specific, universal, and
obligatory norm’ . . . [and] is not a rule of customary international law that we
may apply under the ATS.” Kiobel I, 621 F.3d at 145 (internal citation omitted).
We need not delve deeply into the corporate liability question here to
note the obvious error of the District Court in its holding that the Supreme Court
in Kiobel II overturned our Court’s holding in Kiobel I. See In re South African
Apartheid Litig., 15 F. Supp. 3d 454, 460–61 (S.D.N.Y. 2014). There is no authority
for the proposition that when the Supreme Court affirms a judgment on a
different ground than an appellate court it thereby overturns the holding that the
Supreme Court has chosen not to address. To hold otherwise would undermine
basic principles of stare decisis and institutional regularity.
29 133 S. Ct. at 1669.
30 Id. at 1669.
31 Balintulo I, 727 F.3d at 191.
10
In Mastafa v. Chevron Corporation, we applied the Supreme
Court’s rulings in Morrison v. National Australia Bank Limited32 and
Kiobel II to clarify that the “focus” of the ATS inquiry is on the nature
and location of the conduct constituting the alleged offenses under
the law of nations.33 Accordingly, to determine whether specific
claims can be brought under the ATS, a court must isolate the
“relevant conduct” of a defendant—conduct that is alleged to be
either a direct violation of the law of nations or the aiding and
abetting of another’s violation of the law of nations—in a complaint
and then conduct a two‐step jurisdictional analysis.
Step one is a determination of whether that “relevant
conduct” sufficiently “touches and concerns” the United States so as
to displace the presumption against extraterritoriality. Step two is a
determination of whether that same conduct states a claim for a
violation of the law of nations or aiding and abetting another’s
violation of the law of nations.34
In order to satisfy the second step of this analysis, a plaintiff
stating a claim under an aiding and abetting theory must
demonstrate that the defendant “’(1) provides practical assistance to
the principal which has a substantial effect on the perpetration of the
561 U.S. 247 (2010) (after determining that the presumption against
32
extraterritoriality applied to the Securities Exchange Act of 1934, the Court then
determined which “territorial event[s]” or “relationship[s]” were the “focus” of
the Act).
33 Mastafa, 770 F.3d at 185‐86.
34 Id. at 186.
11
crime, and (2) does so with the purpose of facilitating the
commission of that crime.’”35 The mens rea standard for accessorial
liability in ATS actions is “purpose rather than knowledge alone.”36
Knowledge of or complicity in the perpetration of a crime—without
evidence that a defendant purposefully facilitated the commission of
that crime—is thus insufficient to establish a claim of aiding and
abetting liability under the ATS.37
B. Analysis of Plaintiffs’ Complaints
Turning to the complaints in the instant case, plaintiffs assert
that the following conduct by defendant Ford is sufficient to
displace the ATS’s presumption against extraterritoriality: (1) Ford
provided specialized vehicles to the South African security forces
that enabled these forces to violently suppress opposition to
Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244, 259
35
(2d Cir. 2009) (quoting and adopting the reasoning of Judge Katzmann’s
concurrence in Khulumani v. Barclay Nat’l Bank Ltd., 504 F.3d 254, 277 (2d Cir.
2007), which laid out the standard for a plaintiff to plead a theory of aiding and
abetting liability under the ATS).
36 Id. at 259.
37 Mastafa, 770 F.3d at 192 (“Accordingly, the defendant’s ‘complicity’ in
the government’s abuses in Presbyterian Church, without more, was insufficient to
establish a claim of aiding and abetting or conspiracy under the ATS.”);
Presbyterian Church, 582 F.3d at 263 (“It is therefore not enough for plaintiffs to
establish Talisman’s complicity in depopulating areas in or around the Heglig
and Unity camps: plaintiffs must establish that Talisman acted with the purpose
to assist the Government’s violations of customary international law.”).
12
apartheid;38 and (2) Ford was responsible for aiding and abetting the
suppression of its own workforce in South Africa.39
As for IBM, plaintiffs allege that (1) IBM employees trained
employees of the South African government on how to use their
hardware and software to create identity documents—“the very
means by which black South Africans were deprived of their South
African nationality”;40 (2) IBM bid on contracts in South Africa with
unlawful purposes such as denationalizing black South Africans;41
and (3) IBM designed specific technologies that were essential for
racial separation under apartheid and the denationalization of black
South Africans.42
In Balintulo I, we reasoned that the Companies’ alleged
domestic conduct lacked a clear nexus to the human rights abuses
occurring in South Africa.43 Here too, plaintiffs’ amended pleadings
do not establish federal jurisdiction under the ATS because they do
not plausibly allege that the Companies themselves engaged in any
“relevant conduct” within the United States to overcome the
presumption against extraterritorial application of the ATS.
38 Appellants’ Br. 36; see also J.A. 507, 513–17, 551.
39 Appellants’ Br. 37 n.16; see also J.A. 521–22.
40 Appellants’ Br. 35; see also J.A. 547.
41 Appellants’ Br. 34; see also J.A. 528, 534, 544, 546–48.
42 Appellants’ Br. 34–35; see also J.A. 535, 546–47.
43 727 F.3d at 192.
13
1. Allegations Against Ford
Beginning with the allegations against Ford, plaintiffs only
allege “relevant conduct” that occurred in South Africa, thus failing
to satisfy step one of Mastafa’s two‐step jurisdictional analysis.44 It
was Ford’s subsidiary in South Africa, not Ford, that is alleged to
have assembled and sold the specialized vehicles to South Africa’s
government, with parts shipped principally from Canada and the
United Kingdom—not from the United States.45 Similarly, it was
Ford’s South African subsidiary, not Ford, that allegedly provided
information to the apartheid government about anti‐apartheid
activists in South Africa.46 Although plaintiffs repeatedly allege—no
less than six times in their proposed amended complaint47—that
Ford controlled their South African subsidiary, we have previously
rejected a vicarious liability theory based on allegations materially
identical to those asserted here.48
44 See Mastafa, 770 F.3d at 186.
45 J.A. 506–07, 514.
46 J.A. at 519–21.
47 J.A. at 455–68.
48 Balintulo I, 727 F.3d at 192 (holding that because the complaint alleged
only actions taken within South Africa by defendants’ South African subsidiaries
and because these “putative agents did not commit any relevant conduct within
the United States giving rise to a violation of customary international law—that
is, because the asserted violation[s] of the law of nations occurr[ed] outside the
United States—the defendants cannot be vicariously liable for that conduct under
the ATS” (internal quotation marks and citation omitted)).
14
Plaintiffs contend that their amended pleadings demonstrate
that the Companies controlled their South African subsidiaries from
the United States such that they could be found directly—and not
just vicariously—liable for their subsidiaries’ conduct under the
ATS. But holding Ford to be directly responsible for the actions of
its South African subsidiary, as plaintiffs would have us do, would
ignore well‐settled principles of corporate law, which treat parent
corporations and their subsidiaries as legally distinct entities.49
While courts occasionally “pierce the corporate veil” and ignore a
subsidiary’s separate legal status, they will do so only in
extraordinary circumstances, such as where the corporate parent
excessively dominates its “subsidiary in such a way as to make it a
‘mere instrumentality’ of the parent.”50
Here, plaintiffs present no plausible allegations—indeed, they
present no allegations—that would form any basis for us to “pierce
[Ford’s] corporate veil.”51 The complaints do not suggest that Ford’s
control over its subsidiaries differed from that of most companies
headquartered in the United States with subsidiaries abroad.
Allegations of general corporate supervision are insufficient to rebut
Carte Blanche (Singapore) Pte., Ltd. v. Diners Club Int’l, Inc., 2 F.3d 24, 26
49
(2d Cir. 1993) (“Generally speaking, a parent corporation and its subsidiary are
regarded as legally distinct entities.”).
50 New York State Elec. & Gas Corp. v. FirstEnergy Corp., 766 F.3d 212, 224
(2d Cir. 2014).
51 Id.
15
the presumption against territoriality and establish aiding and
abetting liability under the ATS.
2. Allegations Against IBM
Plaintiffs’ first allegation against IBM also fails because the
“relevant conduct” all occurred within South Africa and so they
cannot satisfy step one of Mastafa’s two‐step jurisdictional analysis.52
Just as in the case of Ford, it is IBM’s South African subsidiary—not
IBM—that is alleged to have trained South African government
employees to use IBM hardware and software to create identity
materials.53 These allegations cannot rebut the presumption against
extraterritoriality as they do not sufficiently “tie[ ] the relevant
human rights violations to actions taken within the United States.”54
Plaintiffs’ second allegation against IBM—that the company
bid on contracts meant to further the denationalization of South
African blacks—falls short of alleging a violation of the law of
nations for a simple reason: IBM did not win the contract for the
only bid specifically alleged to have been made by IBM, rather than
IBM’s South African subsidiary.55 Indeed, even according to
plaintiffs, another company, ICL, won the passbooks contract over
52 See Mastafa, 770 F.3d at 186.
53 J.A. 547; see also J.A. 446.
54 Balintulo I, 727 F.3d at 192.
55 J.A. 528
16
IBM.56 It is simply not a violation of the law of nations to bid on, and
lose, a contract that arguably would help a sovereign government
perpetrate an asserted violation of the law of nations.
Plaintiffs final allegation against IBM, on the other hand,
appears to “touch and concern” the United States with sufficient
force to displace the presumption against extraterritoriality. Their
proposed amended complaint reads, in relevant part, as follows:
In the United States, IBM developed both
the hardware and the software—both a
machine and a program—to create the
Bophuthatswana ID. Once IBM had
developed the system, it was transferred to
the Bophuthatswana government for
implementation.57
Identity documents, like those allegedly created by IBM and
transferred to the Bophuthatswana government, were an essential
component of the system of racial separation in South Africa.58 And
56 J.A. at 169–70, 258.
57 J.A. at 546.
58 Appellant’s Br. 8–9. Bophuthatswana was a Bantustan, a territory set
aside by the South African government for particular ethnic groups. Id. Given the
outcome of our analysis, we need not reach the question of whether plaintiffs’
allegations regarding racial separation systems in South Africa constitute a
violation of the law of nations. Cf. Mastafa, 770 F.3d at 181 (undertaking that
analysis in the context of crimes allegedly committed by the Saddam Hussein
regime). Of course, whether a violation of the law of nations has indeed occurred
is an independent jurisdictional predicate, see infra n.27 and accompanying text,
17
so, designing particular technologies in the United States that would
facilitate South African racial separation would appear to be both
“specific and domestic”59 conduct that would satisfy the first of the
two steps of our jurisdictional analysis.60 Accordingly, if this
allegation is able to also satisfy the second prong of our
extraterritoriality inquiry—that is, if such conduct aided and abetted
a violation of the law of nations—the presumption against
extraterritoriality would be displaced and we would be able to
establish jurisdiction for this particular claim under the ATS.
Upon an initial review of the “relevant conduct” in the
complaint, however, we conclude that plaintiffs’ claim against IBM
does not meet the mens rea requirement for aiding and abetting
liability established by our Court. While the complaint must
“support [] an inference that [IBM] acted with the ‘purpose’ to
advance [South Africa’s] human rights abuses,”61 it plausibly alleges,
at most, that the company acted with knowledge that its acts might
facilitate the South African government’s apartheid policies. But, as
we noted earlier, mere knowledge without proof of purpose is
and one inextricably intertwined with the extraterritoriality analysis that we
conduct here.
59 Mastafa, 770 F.3d at 191.
60 See supra II.A.; see also Mastafa, 770 F.3d at 191 (finding multiple
domestic purchases and financing transactions by one defendant and numerous
domestic payments and “financing arrangements” by another defendant to be
sufficiently “specific and domestic” to satisfy the first prong of the jurisdictional
analysis).
61 Presbyterian Church, 582 F.3d at 260.
18
insufficient to make out the proper mens rea for aiding and abetting
liability.62
Moreover, where the language in the complaint seems to
suggest that IBM acted purposefully,63 “it does so in conclusory
terms and fails to establish even a baseline degree of plausibility of
plaintiffs’ claims.”64 A complaint will not “suffice if it tenders naked
assertions devoid of further factual enhancement.”65 Indeed,
plaintiffs do not—and cannot—plausibly allege that by developing
hardware and software to collect innocuous population data, IBM’s
purpose was to denationalize black South Africans and further the
aims of a brutal regime.66 This absence of a connection between
IBM’s “relevant conduct” and the alleged human rights abuses of
the South African government means that plaintiffs, even if allowed
62 See Mastafa, 770 F.3d at 192–94.
63 See, e.g., J.A. 534.
64 Mastafa, 770 F.3d at 194.
65 Iqbal, 556 U.S. at 678 (quotation marks, brackets, and citation omitted).
66 See Mastafa, 770 F.3d at 194 (“Plaintiffs never elaborate upon [a similarly
conclusory] assertion in any way that establishes the plausibility of a large
international corporation intending—and taking deliberate steps with the
purpose of assisting—the Saddam Hussein regime’s torture and abuse of Iraqi
persons.”); see also Kiobel, 621 F.3d at 192 (Leval, J., concurring in the judgment)
(“[The complaint] pleads also in conclusory form that the Nigerian military’s
campaign of violence against the [victim‐plaintiffs] was ‘instigated, planned,
facilitated, conspired and cooperated in’ by [defendant corporation]. Such
pleadings are merely a conclusory accusation of violation of a legal standard and
do not withstand the test of Twombly and Iqbal.”).
19
to amend their complaint, will be unable to state a valid ATS claim
against IBM.
Accordingly, because plaintiffs fail plausibly to plead that any
U.S.‐based conduct on the part of either Ford or IBM aided and
abetted South Africa’s asserted violations of the law of nations, their
claims cannot form the basis of our jurisdiction under the ATS. We
therefore affirm the District Court’s denial of plaintiffs’ motion for
leave to file an amended complaint because the proposed
amendments are futile as a matter of law.
CONCLUSION
To summarize, we hold that:
(1) Knowledge of or complicity in the perpetration of a crime
under the law of nations (customary international law)—
absent evidence that a defendant purposefully facilitated
the commission of that crime—is insufficient to establish a
claim of aiding and abetting liability under the ATS.
(2) It is not a violation of the law of nations to bid on, and lose,
a contract that arguably would help a sovereign
government perpetrate an asserted violation of the law of
nations.
(3) Allegations of general corporate supervision are
insufficient to rebut the presumption against
extraterritoriality and establish aiding and abetting liability
under the ATS.
20
(4) Here, plaintiffs’ amended pleadings do not establish
federal jurisdiction under the ATS because they do not
plausibly allege that the Companies themselves engaged in
any “relevant conduct” within the United States to
overcome the presumption against extraterritorial
application of the ATS.
a. Holding Ford to be directly responsible for the
actions of its South African subsidiary, as plaintiffs
would have us do, ignores well‐settled principles of
corporate law, which treat parent corporations and
their subsidiaries as legally distinct entities.
b. Plaintiffs have plausibly alleged some specific,
domestic conduct in the complaint—namely, that
IBM in the United States designed particular
technologies in the United States that facilitated
South African apartheid. This conduct satisfies the
first prong of our extraterritoriality analysis as it
“touches and concerns” the United States.
c. Plaintiffs’ complaint against IBM fails on the second
prong of the required jurisdictional analysis: it does
not plausibly allege that IBM’s conduct purposefully
aided and abetted South Africa’s alleged violations
of customary international law.
21
d. Accordingly, the alleged conduct cannot state a
claim for aiding and abetting liability under the ATS
and cannot form the basis for our jurisdiction.
(5) Because we decide the case on the basis of the presumption
against extraterritoriality, we need not address whether
plaintiffs’ complaint satisfies the ATS’s other jurisdictional
predicates, including whether the complaint pleads a
violation of the law of nations; whether customary
international law recognizes the asserted liability of the
Companies; and whether the theory of liability alleged by
plaintiffs is recognized by customary international law.
For the reasons set forth above, we AFFIRM the August 28,
2014 order of the District Court.
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