13-3605(L)
Jesner v. Arab Bank
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York,
on the 9th day of May, two thousand sixteen.
PRESENT: ROBERT A. KATZMANN,
Chief Judge,
DENNIS JACOBS,
JOSÉ A. CABRANES,
ROSEMARY S. POOLER,
REENA RAGGI,
RICHARD C. WESLEY,
PETER W. HALL,
DEBRA ANN LIVINGSTON,
GERARD E. LYNCH,
DENNY CHIN,
RAYMOND J. LOHIER, JR.,
SUSAN L. CARNEY,
CHRISTOPHER F. DRONEY,
Circuit Judges.
- - - - - - - - - - - - - - - - -x
In Re: Arab Bank, PLC Alien Tort Nos. 13-3605, 13-3620,
Statute Litigation 13-3635, 13-4650,
13-4652
- - - - - - - - - - - - - - - - -x
For Plaintiffs- Michael E. Elsner and John M.
Appellants: Eubanks, Motley Rice LLC, Mount
Pleasant, South Carolina.
For Defendants- Stephen M. Shapiro, Timothy S.
Appellees: Bishop, and Chad M. Clamage, Mayer
Brown LLP, Chicago, Illinois.
Kevin Walsh, Douglas W. Mateyaschuk,
and Steven J. Young, DLA Piper LLP
(US), New York, New York.
For Amicus Curiae- Neal Kumar Katyal and Jessica L.
The Hashemite Kingdom Ellsworth, Hogan Lovells US LLP,
of Jordan: Washington, District of Columbia.
ORDER
Following disposition of this appeal, an active judge
of the Court requested a poll on whether to rehear the case
en banc. A poll having been conducted and there being no
majority favoring en banc review, rehearing en banc is
hereby DENIED.
Dennis Jacobs, Circuit Judge, joined by José A.
Cabranes, Reena Raggi, and Debra Ann Livingston, Circuit
Judges, concurs by opinion in the denial of rehearing en
banc.
José A. Cabranes, Circuit Judge, joined by Dennis
Jacobs, Reena Raggi, and Debra Ann Livingston, Circuit
Judges, concurs by opinion in the denial of rehearing en
banc.
Rosemary S. Pooler, Circuit Judge, joined by Denny Chin
and Susan L. Carney, Circuit Judges, dissents by opinion
from the denial of rehearing en banc.
Denny Chin, Circuit Judge, joined by Susan L. Carney,
Circuit Judge, dissents by opinion from the denial of
rehearing en banc.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, CLERK
2
DENNIS JACOBS, joined by JOSÉ A. CABRANES, REENA RAGGI, and DEBRA
ANN LIVINGSTON, Circuit Judges, concurring in the denial of rehearing in
banc.
I concur in the denial of in banc review of this case; rehearing would serve
no purpose remotely commensurate with the effort it would entail.
The panel opinion grudgingly rejects plaintiffs’ claim as barred by our
decision in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010)
(“Kiobel I”), which held that customary international law, as enforced by the
Alien Tort Statute (“ATS”), does not regulate corporate conduct. The panel
opinion goes on to attack Kiobel I, and says it is constrained unhappily to follow
it. Hence the in banc poll initiated by the panel itself.
Although the seven other judges who voted against in banc review do not
necessarily endorse Kiobel I (or reach the merits of it), there is consensus that
intervening developments obviate any need to go in banc.
* * *
Back in 2011, this Court rejected in banc review of this issue. See Kiobel v.
Royal Dutch Petroleum Co., 642 F.3d 379, 380 (2d Cir. 2011). The Supreme Court
took up the case, but (after oral argument) required briefing on an alternative
1
ground: whether the ATS has extraterritorial effect. The Supreme Court then
held that it does not. Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659, 1669
(2013) (“Kiobel II”).
Since the population of cases dismissible under Kiobel I is largely
coextensive with those dismissible under Kiobel II, several conclusions follow:
! The principle of Kiobel I has been largely overtaken, and its importance
for outcomes has been sharply eroded. See Flomo v. Firestone Nat’l
Rubber Co., LLC, 643 F.3d 1013, 1025 (7th Cir. 2011) (Posner, J.) (“Deny
extraterritorial application, and the statute would be superfluous . . . .”).
! This present appeal was subject to two easy (alternative) dispositions:
affirm on the basis of Kiobel I (without lamentation) or remand for the
district court to consider the case under Kiobel II. See Kiobel II, 133 S.Ct. at
1669.
! There is no reason to consider or reconsider Kiobel I in banc in this
appeal.
* * *
This appeal could have been straightforwardly decided under Kiobel II,
which held that the presumption against extraterritoriality can be displaced only
2
if the “claims touch[ed] and concern[ed] the territory of the United States”; that
they must do so with “sufficient force”; and that “mere corporate presence” (for
example) is not enough. Id. Kiobel II emphasizes that this must be a high
hurdle, given the danger of judicial meddling in the affairs of foreign countries:
[T]he danger of unwarranted judicial interference in the conduct of
foreign policy is magnified in the context of the ATS, because the
question is not what Congress has done but instead what courts may
do . . . These concerns, which are implicated in any case arising
under the ATS, are all the more pressing when the question is
whether a cause of action under the ATS reaches conduct within the
territory of another sovereign . . . The principles underlying the
presumption against extraterritoriality thus constrain courts
exercising their power under the ATS.
Id. at 1664‐65.
In this case, the underlying offense against the law of nations is terrorism
against citizens of Israel by four Palestinian terrorist groups. Arab Bank, PLC,
which is headquartered in Jordan, is named as defendant because funds allegedly
passed through its branches to other countries for distribution to terrorists.
The only contact with the United States mentioned in the Arab Bank
opinion is that terrorist groups used branches of Arab Bank in a score of
countries (including a single U.S. branch, in Manhattan) for, among other
ordinary transactions, the conversion of funds from one currency to another. See
3
In re Arab Bank, PLC Alien Tort Statute Litig., 808 F.3d 144, 149‐50 (2d Cir. 2015)
(“Arab Bank then created individual bank accounts . . . often routing the transfers
through its New York branch in order to convert Saudi currency into Israeli
currency.”). The New York branch is not differentiated in any way from Arab
Bank’s numerous other branches. This is no more than the “mere corporate
presence” that is insufficient to displace the presumption against
extraterritoriality. Kiobel II, 133 S.Ct. at 1669.
In the (unlikely) event that plaintiffs could somehow plead around Kiobel
II, they would face a separate formidable barrier: the mens rea requirement. See
Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244, 259 (2d Cir.
2009). As the panel opinion emphasizes, plaintiffs do allege knowledge. See
Arab Bank, 808 F.3d at 150 (“According to the plaintiffs, Arab Bank knew that the
donations were being collected for terrorist attacks . . . Again, responsible officials
at Arab Bank purportedly knew that the accounts of these various organizations
and individuals were being used to fund the suicide bombings and other attacks
sponsored by the terrorist organizations.”) (emphasis added). However, the
standard “for aiding and abetting liability in ATS actions is purpose rather than
knowledge alone.” Presbyterian Church, 582 F.3d at 259.
4
* * *
It is thus evident that the Arab Bank panel opinion steered deliberately into
controversy. That impression is confirmed by the slender pretexts advanced by
the panel for refusing to consider extraterritoriality.
The panel considers it “unwise to decide the difficult and sensitive issue of
whether the clearing of foreign dollar‐denominated payments [in simpler terms,
money] through a branch in New York could, under these circumstances,
displace the presumption against the extraterritorial application of the ATS . . . .”
Arab Bank, 808 F.3d at 158.1 But it would have been simpler to remand for the
district court to decide that easy question (as other circuit courts are doing) than
to go in banc to decide a question that produced dueling opinions in Kiobel I. It
is as though Sisyphus, seeing the hill, elected to push upward instead of just
going around.
The panel decision notes that Kiobel II was “not the focus of either the
district court’s decision or the briefing on appeal.” Id. But this need not boggle
judicial ingenuity: the panel could have remanded in light of Kiobel II, or it could
1 This is a kind of transaction that can be done at an automated airport kiosk.
5
have asked for supplemental briefing. It is not recommended appellate craft to
avoid so easy a disposition and instead strain to revisit Circuit precedent in banc.
* * *
The circuit split that so worries the Arab Bank panel is illusory. The panel
opinion conjures up a circuit split from these cases:
! Two of the decisions pre‐date Kiobel II; so those panels did not
have the option of dismissal or remand on the ground of
extraterritoriality. See Flomo, 643 F.3d at 1021 (issued almost two
years before Kiobel II); Romero v. Drummond Co., Inc., 552 F.3d
1303, 1315 (11th Cir. 2008) (issued more than four years before
Kiobel II).
! The rest were decided on the basis of Kiobel II. See Doe I v.
Nestle USA, Inc., 766 F.3d 1013, 1027‐28 (9th Cir. 2014) (“We decline
to resolve the extraterritoriality issue, and instead remand to allow
the plaintiffs to amend their complaint in light of Kiobel II . . . It is
common practice to allow plaintiffs to amend their pleadings to
accommodate changes in the law . . . .”); Doe VIII v. Exxon Mobil
Corp., 527 F. App’x 7 (D.C. Cir. 2013) (“[I]n light of intervening
6
changes in governing law regarding the extraterritorial reach of the
Alien Tort Statute, see [Kiobel II], . . . the Alien Tort Statute claims
[are] remanded to the District Court for further consideration.”).
! As to Al Shimari v. CACI Premier Tech., Inc., 758 F.3d 516, 530
(4th Cir. 2014), cited by the Arab Bank panel as “see also”: the case
was decided solely on the basis of Kiobel II: “[P]laintiffs’ ATS claims
‘touch and concern’ the territory of the United States with sufficient
force to displace the presumption against extraterritorial application
. . . .”.
All this is by way of saying that this appeal is insufficiently important or
consequential to warrant review in banc.
* * *
In sum, the panel’s angst in having to follow Kiobel I was self‐inflicted.
The appeal could have been resolved under Kiobel II; if the problem was lack of
briefing, briefing could have been ordered; if finding the right answer under
Kiobel II was a strain on the panel, it could have remanded; if the easiest course
was to follow a precedent that the panel dislikes, it could have done what
appellate judges must frequently do: swallow hard. The one course that makes
7
no sense is to force difficulties, reel off dicta criticizing our precedent, and seek in
banc consideration of a doctrine that now has sharply reduced application.
Going in banc on this would do nothing but supply catnip for law clerks looking
to teach.
A further consideration: Kiobel I was sharply contested within the panel;
there was friction, heat and light in the Kiobel I panel opinions, and over panel
rehearing and the (defeated) 2011 in banc initiative. There is even less reason
now than then to reconsider in banc an issue so highly charged. More to the
point, the Supreme Court will have two vigorous Second Circuit opinions to
consider if that Court decides one day to revisit a question that will rarely again
be asked.
In this Circuit, a case may one day arise that cannot be disposed of under
Kiobel II, at a time when a circuit split has opened, and when the prospect looms
of many such cases. If and when that comes to pass, it may be worth our time to
consider the issue in banc. That time may never come; it has certainly not
arrived.
8
JOSÉ A. CABRANES, Circuit Judge, joined by Judges JACOBS, RAGGI, and
LIVINGSTON, concurring in the denial of rehearing en banc:
Judge Pooler’s dissent from the denial of rehearing en banc calls to mind
the insight of our esteemed late colleague, Judge Frank X. Altimari: “if attorneys
want to know what the law is not, then they should read the dissent.”1 Indeed,
Judge Pooler herself takes the view that her dissent is an “oddit[y]” that “has as
much force of law as if [her] views were published in a letter to the editor of [her]
favorite local newspaper.”2
Both sides of the Alien Tort Statute (“ATS”)3 corporate‐liability debate
were fully explicated in Kiobel I, and that debate need not be rehashed here.4
Accordingly, I write only to correct two of the misconceptions in Judge Pooler’s
dissent.
First, there is Judge Pooler’s untenable suggestion that “Kiobel II strongly
suggests that corporate liability does exist under the ATS,”5 which echoes the
panel’s position that “Kiobel II . . . cast[s] a shadow on Kiobel I in several ways.”6
Frank X. Altimari, The Practice of Dissenting in the Second Circuit, 59 BROOK. L. REV. 275,
1
284 (1993); see also Kobach v. U.S. Election Assistance Comm’n, 772 F.3d 1183, 1188 (10th Cir. 2014)
(“This is one of those instances in which the dissent clearly tells us what the law is not. It is not
as if the proposition had not occurred to the majority of the Court.”).
United States v. Stewart, 597 F.3d 514, 519 (2d Cir. 2010) (Pooler, J., concurring in the
2
denial of rehearing en banc).
3 28 U.S.C. § 1350.
See generally Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010) (“Kiobel I”),
4
aff’d on other grounds, 133 S. Ct. 1659 (2013) (“Kiobel II”); Kiobel I, 631 F.3d at 149–96 (Leval, J.,
concurring only in the judgment). Notably, the Kiobel I panel’s three judges agreed that, “for a
complaint to properly allege a defendant’s complicity in human rights abuses perpetrated by
officials of a foreign government, it must plead facts supporting a reasonable inference that the
defendant acted with a purpose of bringing about the abuses.” Kiobel I, 621 F.3d at 188 (Leval, J.,
concurring only in the judgment).
5 Pooler, J., op. at 10 (emphasis in original).
1
Reading tea leaves, Judge Pooler and the panel divine significance from a
single sentence in the Chief Justice’s opinion for the Court: “Corporations are
often present in many countries, and it would reach too far to say that mere
corporate presence suffices.”7 According to Judge Pooler, this line “would be
utterly incomprehensible to include if the Court also believed corporations were
categorically immune from suit under the ATS.”8 The panel agrees: “if corporate
liability under the ATS were not possible as a general matter, the Supreme
Court’s statement about ‘mere corporate presence’ would seem meaningless.”9
Clearly not so. The Court’s statement “would be utterly incomprehensible”
and “seem meaningless” only if one were to ignore the entire context in which it
was written. Kiobel II was a case in which the Court explicitly declined to address
the corporate‐liability question, and focused instead on extraterritoriality.10
In other words, for the purposes of its decision, the Court assumed that
corporations could be held liable under the ATS. In light of this assumption, how
could the Court possibly have discussed extraterritoriality without referring to
“corporate presence”? The defendants were, after all, corporations. And
corporations are “present” in a country in a completely different sense than are
individuals.11 In short, Judge Pooler and the panel are only half right. The
implication of the Court’s statement is indeed “that corporate presence may, in
6 In re Arab Bank, PLC Alien Tort Statute Litig., 808 F.3d 144, 155 (2d Cir. 2015), as amended
(Dec. 17, 2015).
7 Kiobel II, 133 S. Ct. at 1669.
8 Pooler, J., op. at 10 (emphasis in original).
9 In re Arab Bank, 808 F.3d at 155.
See Kiobel II, 133 S. Ct. at 1663 (“We . . . now affirm the judgment below, based on our
10
answer to the second question.”).
Cf. Shaffer v. Heitner, 433 U.S. 186, 204 n.19 (1977) (“The differences between
11
individuals and corporations may, of course, lead to the conclusion that a given set of
circumstances establishes . . . [personal] jurisdiction over one type of defendant but not over the
other.”).
2
combination with some factual allegations, be sufficient”12—but sufficient only
“to displace the presumption against extraterritorial application,”13 not to
establish liability.
Second, Judge Pooler argues that “the factual premise of the majority
opinion in Kiobel I is incorrect,” because “[v]iolations of the law of nations have
been brought against juridical entities, including against ships, throughout
history in both domestic and international tribunals.”14 The primary authority
that Judge Pooler cites for this sweeping characterization of the historical record
is The Malek Adhel, an 1844 decision of the Supreme Court that involved an in rem
action against the eponymous ship brought pursuant to a federal statute
codifying an offense against the law of nations—namely, piracy.15
But Judge Pooler’s analogy between an in rem action against a ship and an
in personam action against a corporation is inapt. As the Supreme Court has
explained, a ship is named as a defendant in an in rem action only “under an
ancient admiralty fiction,” by which the ship is merely “assumed to be a person for
the purpose of filing a lawsuit and enforcing a judgment,” and “treated as if
endowed with personality.”16 Thus, “[t]he concept of the ship as a distinct
juridical entity” is no more than “a convenient conceptual tool.”17
12 Arab Bank, 808 F.3d at 155.
13 Kiobel II, 133 S. Ct. at 1669.
14 Pooler, J., op. at 8 (alterations omitted).
43 U.S. 210, 229 (1844) (describing the initiation of the action “upon an information in
15
rem, upon a seizure brought for a supposed violation of the act of the 3d of March, 1819, . . . to
punish the crime of piracy”). The Constitution empowers Congress to “define and punish . . .
[o]ffenses against the [l]aw of [n]ations” such as piracy. See U.S. Const. art. I, § 8, cl. 10.
Cont’l Grain Co. v. The FBL‐585, 364 U.S. 19, 22–23 & n.1 (1960) (emphases supplied)
16
(internal quotation marks omitted) (quoting Oliver Wendell Holmes, Jr., The Common Law 26–27
(1881)); see also Chase Manhattan Fin. Servs., Inc. v. McMillian, 896 F.2d 452, 456–57 (10th Cir.
1990) (describing the notion “that the ship itself is the ‘person’ who committed the offense and
is legally responsible for the consequences” as a “fiction”); Ins. Co. of N. Am. v. S/S Am. Argosy,
732 F.2d 299, 302 (2d Cir. 1984) (“The in rem liability of a ship is a fiction . . . .”).
17 Smith v. The Mormacdale, 198 F.2d 849, 850 (3d Cir. 1952).
3
In this respect, ships are no different from other inanimate objects, against
which in rem actions have been brought regularly since the Founding under
federal statutes prohibiting piracy, slavery, and other law‐of‐nations offenses.
Following Judge Pooler’s analogy to its logical conclusion, these cases must stand
for the proposition that sealskins,18 1998 Mercury Sables,19 houses,20 and bronze
rods21 are equally capable of violating international law.
By contrast to an in rem action against a ship, an in personam action against
a corporation need not rely on any such fiction. This is because, unlike a ship, a
corporation is truly “distinct from” its “corporate owner/employee,” and is “a
legally different entity with different rights and responsibilities due to its
different legal status.”22 A corporation has, “necessarily and inseparably incident
to” its very existence, “the ability to sue or be sued.”23 Accordingly, an action
against a corporation is exactly that—an action against the corporation. Pace
Judge Pooler, there is a difference between fact and fiction.
18 See Davison v. Seal‐Skins, 7 F. Cas. 192, 192–93 (C.C.D. Conn. 1835) (holding that
“sealskins . . . saved and rescued from . . . piratical capture” could be salvaged through in rem
action against them).
See United States v. One 1998 Mercury Sable, 122 F. App’x 760, 761 (5th Cir. 2004)
19
(unpublished opinion) (holding that 1998 Mercury Sable, as part of proceeds from peonage, was
subject to forfeiture).
See United States v. Sabhnani, 599 F.3d 215, 260–63 (2d Cir. 2010) (permitting forfeiture
20
of house used to facilitate involuntary servitude).
See Martin v. One Bronze Rod, 581 F. App’x 744, 750 (11th Cir. 2014) (unpublished
21
opinion) (assuming without deciding that forfeiture of bronze rod connected to “piratical
activity” was authorized).
22 Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163 (2001); see also Am. Protein
Corp. v. AB Volvo, 844 F.2d 56, 60 (2d Cir. 1988) (“A corporation is an entity that is created by
law and endowed with a separate and distinct existence from that of its owners. Because a
principal purpose for organizing a corporation is to permit its owners to limit their liability,
there is a presumption of separateness between a corporation and its owners, which is entitled
to substantial weight.” (citation omitted)).
Cook Cty., Ill. v. United States ex rel. Chandler, 538 U.S. 119, 126–27 (2003) (alterations
23
and internal quotation marks omitted).
4
For these reasons—and for the reasons forcefully stated by Judge Jacobs in
his separate concurrence, which I join in its entirety—I concur in the denial of
rehearing en banc.
5
ROSEMARY S. POOLER, Circuit Judge, joined by Judges CHIN and CARNEY,
dissenting from the denial of rehearing en banc:
By denying rehearing en banc in this case, respectfully, this circuit yet
again misses an opportunity to correct the panel’s majority opinion in Kiobel v.
Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010) (“Kiobel I”), an opinion
which is almost certainly incorrect but continues to maintain a needless circuit
split with every other circuit to address the question of whether corporations may
be held civilly liable under the Alien Tort Statute (“ATS”), see Doe I v. Nestle USA,
Inc., 766 F.3d 1013, 1022 (9th Cir. 2014); Al Shimari v. CACI Premier Tech., Inc., 758
F.3d 516, 530‐31 (4th Cir. 2014); Doe VIII v. Exxon Mobil Corp., 654 F.3d 11, 57 (D.C.
Cir. 2011), vacated on other grounds, 527 F. App’x. 7 (D.C. Cir. 2013); Sarei v. Rio
Tinto, PLC, 671 F.3d 736, 747 (9th Cir. 2011), vacated on other grounds, 133 S. Ct.
1995 (2013); Flomo v. Firestone Nat. Rubber Co., 643 F.3d 1013, 1021 (7th Cir. 2011);
Sinaltrainal v. Coca‐Cola Co., 578 F.3d 1252, 1263 (11th Cir. 2009); Romero v.
Drummond Co., 552 F.3d 1303, 1315 (11th Cir. 2008). “[O]n the issue of corporate
liability under the ATS, Kiobel I now appears to swim alone against the tide,” In
re Arab Bank, PLC Alien Tort Statute Litig., 808 F.3d 144, 151 (2d Cir. 2015), and it is
the lone “outlier” among ATS cases, Flomo, 643 F.3d at 1017. 1 When our mistakes
are exceptionally important, we should not let an opportunity to correct them
pass, especially when a flawed opinion categorically bars litigation, thereby
blunting the natural development of the law.
“[W]e have not in the past denied in banc review because the opinion is
too wrong,” United States v. Bert, 814 F.3d 591, 594 (2d Cir. 2016) (Jacobs, J.,
dissenting from the denial of rehearing en banc), and this case presents the same
issue as Kiobel I. Because the issue of corporate liability under the ATS remains a
“matter of extraordinary importance,” Kiobel v. Royal Dutch Petroleum Co., 642
F.3d 379, 380 (2d Cir. 2011) (Katzmann, J., dissenting from the denial of rehearing
en banc); see also id. (Lynch, J., dissenting from the denial of rehearing en banc)
(“[T]his case presents a significant issue and generates a circuit split . . . .”), I
would rehear this case. I therefore respectfully dissent.
1 My colleagues defending the decision to deny rehearing have not even
attempted to explain how the rest of the circuits are incorrect. Instead, they have
focused almost all their attention on their speculative belief that however wrong
Kiobel I may be, we need not correct the opinion because, as a practical matter,
claims against corporations have been entirely foreclosed by the Supreme
Court’s decision upholding our panel’s judgment on entirely different grounds.
See Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659, 1669 (2013) (“Kiobel II”)
(holding that the ATS is subject to the presumption against extraterritorial
application of statutes). This questionable position not only reflects the weakness
of Kiobel I’s holding, it misunderstands Kiobel II, and unfairly blocks litigants
from accessing the courts and developing unsettled law. See infra Part II.
2
I
A
The ATS grants U.S. district courts jurisdiction over “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. “[B]y its terms[,] [the ATS] does not distinguish
among classes of defendants.” Argentine Republic v. Amerada Hess Shipping Corp.,
488 U.S. 428, 438 (1989). And more than a century ago, even forty years before
the wellspring of human rights litigation of the International Military Tribunals
at Nuremberg, the U.S. Attorney General opined that the United States had long
recognized that corporations are capable of violating the law of nations for
purposes of the ATS. See Mexican Boundary‐Diversion of the Rio Grande, 26 U.S.
Op. Att’y Gen. 250 (1907) (concluding that aliens injured by a corporation’s
conduct in violation of a treaty between Mexico and the United States could
maintain an action under the ATS). But in Kiobel I, though the issue had never
been briefed or raised by either party, a panel majority of this court took it upon
themselves to conclude that “[b]ecause corporate liability is not recognized as a
‘specific, universal, and obligatory’ norm, it is not a rule of customary
international law that we may apply under the ATS.” Kiobel I, 621 F.3d at 145
(citation omitted) (quoting Sosa v. Alvarez‐Machain, 542 U.S. 692, 732 (2004)).
3
From the very outset, the panel majority erred by framing the question in
the wrong way: whether there is a “norm of corporate liability under customary
international law.” Id. at 131. “International law does not work that way.”
William S. Dodge, Corporate Liability Under Customary International Law, 43 Geo. J.
Int’l L. 1045, 1046 (2012). Customary international law does not contain general
norms of liability or non‐liability applicable to actors. Id. As the United States
argued as amicus curiae in Kiobel II, the Kiobel I majority erred by “examin[ing]
the question of corporate liability in the abstract;” rather, the court should have
inquired “whether any of the particular international‐law norms [at issue in the
case] . . . exclude corporations from their scope.” Brief for the United States as
Amicus Curiae Supporting Petitioners at 21, Kiobel II, 133 S. Ct. 1659 (2013), 2011
WL 6425363, at *21 [hereinafter U.S. Amicus Br., Kiobel II]. Other circuits have
correctly observed that the proper mode of inquiry is to apply a “norm‐by‐norm
analysis of corporate liability,” Nestle USA, 766 F.3d at 1021‐22. For each ATS
claim, courts should look to international law and determine whether
corporations are subject to the norms underlying that claim. See Sarei, 671 F.3d at
748 (“Sosa expressly frames the relevant international‐law inquiry to be the scope
of liability of private actors for a violation of the ‘given norm,’ i.e. an
4
international‐law inquiry specific to each cause of action asserted.” (quoting Sosa,
542 U.S. at 733 n.20)). Simply put, there is no categorical rule of corporate
immunity or liability. See id. at 747‐48.
B
The Kiobel I majority’s errors have long been traced to the majority’s
“misreading of footnote 20 in the Sosa opinion.” U.S. Amicus Br., Kiobel II, at *16;
accord Kiobel I, 621 F.3d at 163‐65 (Leval, J., concurring in the judgment). In
footnote 20, the Supreme Court explained that the question related to “the
determination whether a norm is sufficiently definite to support a cause of
action” under the ATS “is whether international law extends the scope of liability
for a violation of a given norm to the perpetrator being sued, if the defendant is a
private actor such as a corporation or individual.” Sosa, 542 U.S. at 732 & n.20.
The thrust of the footnote is that if the defendant is a private actor, the court must
then determine whether private actors are capable of violating the international
norm at issue. U.S. Amicus Br., Kiobel II, at *17. This simply reflects the
established rule in international law that some international norms apply only to
state actors (e.g., torture, which requires some involvement of a state actor or an
individual acting in a public capacity), whereas others, such as genocide, do not
5
require the involvement of state actors. Compare Convention Against Torture and
Other Cruel, Inhuman or Degrading Treatment or Punishment, art. 1, opened for
signature Dec. 10, 1984, 1465 U.N.T.S. 85, 113‐14, available at
www.ohchr.org/EN/ProfessionalInterest/Pages/Cat.aspx (defining torture as
conduct performed “by or at the instigation of or with the consent or
acquiescence of a public official or other person acting in an official capacity”),
with Convention on the Prevention and Punishment of the Crime of Genocide,
art. II, opened for signature Dec. 9, 1948, 102 Stat. 3045, 78 U.N.T.S. 277, 280,
available at http://treaties.un.org/doc/Publication/UNTS/Volume%2078/Volume‐
78‐I‐1021‐English.pdf (defining “genocide” to include “any of the following acts”
committed with intent to destroy a group (emphasis added)). The Kiobel I
majority misread this footnote “as a basis for drawing a distinction between
natural and juridical persons—one that finds no basis in the relevant norms of
international law.” U.S. Amicus Br., Kiobel II, at *18. As the United States noted,
the footnote “groups all private actors together, referring to ‘a private actor such
as a corporation or individual.’” Id. (first emphasis added) (quoting Sosa, 542 U.S.
at 732 n.20). “Both natural persons and corporations can violate international‐law
norms that require state action. And both natural persons and corporations can
6
violate international‐law norms that do not require state action.” Id. at *21. “The
majority’s partial quotation out of context, interpreting the Supreme Court as
distinguishing between individuals and corporations, misunderstands the
meaning of the passage.” Kiobel I, 621 F.3d at 165 (Leval, J., concurring in the
judgment).
C
The Kiobel I majority also justified its conclusion by noting that “no
international tribunal has ever held a corporation liable for a violation of the law
of nations” and that “no corporation has ever been subject to any form of liability
under the customary international law of human rights.” Kiobel I, 621 F.3d at 120,
121. But as Justice Kagan remarked, simply because there is no case in
international law “about Norwegians,” that does not mean that a particular norm
“does not apply to Norwegians.” Transcript of Oral Argument held on Feb. 28,
2012 at 27, Kiobel II, 133 S. Ct. 1659 (2013) (No. 10‐1491).
Indeed, “[t]here is always a first time for litigation to enforce a norm; there
has to be.” Flomo, 643 F.3d at 1017; accord Sarei, 671 F.3d at 761 (“We cannot be
bound to find liability only where international fora have imposed liability.”);
Nestle USA, 766 F.3d at 1021 (“[A] norm c[an] form the basis for an ATS claim
7
against a corporation even in the absence of a decision from an international
tribunal enforcing that norm against a corporation.”); id. (stating that “the
absence of decisions finding corporations liable does not imply that corporate
liability is a legal impossibility under international law . . . and . . . that the lack
of decisions holding corporations liable could be explained by strategic
considerations”).
In any event, “[t]he factual premise of the majority opinion in [Kiobel I] is
incorrect.” Flomo, 643 F.3d at 1017. Violations of the law of nations have been
brought against juridical entities, including against ships, throughout history in
both domestic and international tribunals. See, e.g., The Malek Adhel, 43 U.S. (2
How.) 210, 233 (1844) (“It is not an uncommon course in the admiralty, acting
under the law of nations, to treat the vessel in which or by which, or by the
master or crew thereof, a wrong or offen[s]e has been done as the offender,
without any regard whatsoever to the personal misconduct or responsibility of
the owner thereof.”); Flomo, 643 F.3d at 1021 (“[I]f precedent for imposing
liability for a violation of customary international law by an entity that does not
breathe is wanted, we point to in rem judgments against pirate ships.”); see also id.
8
at 1017 (discussing the application of international legal norms against
corporations in the aftermath of World War II).
D
Finally, the majority’s policy concern, that recognizing corporate liability
under the ATS “would potentially create friction in our relations with foreign
nations and, therefore, would contravene the international comity the [ATS] was
enacted to promote,” Kiobel I, 621 F.3d at 141; see also Kiobel v. Royal Dutch
Petroleum Co., 642 F.3d 268, 271 (2d Cir. 2011) (Jacobs, J., concurring in the denial
of panel rehearing), is sufficiently mitigated by the Supreme Court’s decision that
the ATS is subject to the presumption against extraterritoriality that can only be
displaced where the relevant claim touches and concerns the United States with
sufficient force, see Kiobel II, 133 S. Ct. at 1669; see also id. at 1664 (stating that by
applying the presumption against extraterritoriality, the court was construing the
ATS to “protect against unintended clashes” between U.S. and foreign law and
avoid “international discord” and “the danger of unwarranted judicial
interference in the conduct of foreign policy” (internal quotation marks
omitted)).
9
II
Even though Kiobel I is almost certainly incorrect, a majority of this court
seems to believe that rehearing in this case would be a fruitless endeavor
because, as a practical matter, the class of cases foreclosed by Kiobel I have been
foreclosed by Kiobel II. Not only is this pure speculation, but just because Kiobel II
erected a sluice where Kiobel I built a dam does not mean we should not
dismantle Kiobel I’s barrier to viable cases under the ATS—even if they amount to
just a trickle, the litigants in those cases should have access to the courts.
If anything, Kiobel II strongly suggests that corporate liability does exist
under the ATS. The Court’s concluding discussion in Kiobel II, particularly its
statement that “it would reach too far to say that mere corporate presence
suffices” to displace the presumption of extraterritoriality, would be utterly
incomprehensible to include if the Court also believed corporations were
categorically immune from suit under the ATS. See 133 S. Ct. at 1669.
In any event, the insistence by some members of this court that Kiobel II
forecloses this case and others like it seeks to draw far too much guidance from
an opinion as split and abstruse as Kiobel II.2 The Court’s “touch and concern”
2 For example, Justice Kennedy’s concurrence confirms that Kiobel II “leave[s]
open a number of significant questions regarding the reach and interpretation of
10
test is cryptic and has understandably divided the circuits.3 See Tymoshenko v.
Firtash, 2013 WL 4564646, at *4 (S.D.N.Y. Aug. 28, 2013) (“[T]he [Supreme] Court
failed to provide guidance regarding what is necessary to satisfy the ‘touch and
concern’ standard.”). My colleagues voting against rehearing want clarity from
the Alien Tort Statute.” 133 S. Ct. at 1669 (Kennedy, J., concurring). And it clearly
establishes that the ATS might still apply to “human rights abuses committed
abroad.” Id. Additionally, if Justice Kennedy made certain to note that the door
was still ajar to lawsuits against corporations, or at least certain cases concerning
conduct on foreign soil, so did Justice Alito’s concurrence, which argued the
majority did not go far enough. See Kiobel II, at 1669‐70 (Alito, J., concurring).
3 In this circuit, we have held that “neither the U.S. citizenship of defendants, nor
their presence in the United States, is of relevance for jurisdictional purposes,”
Mastafa v. Chevron Corp., 770 F.3d 170, 188 (2d Cir. 2014), and that “if all the
relevant conduct occurred abroad, that is simply the end of the matter under
Kiobel,” Balintulo v. Daimler AG, 727 F.3d 174, 190 (2d Cir. 2013). The Fourth,
Ninth, and Eleventh Circuits have held to the contrary, holding that U.S.
nationality of the defendant is relevant to the “touch and concern” inquiry even
if it is not conclusive. See Doe v. Drummond Co., 782 F.3d 576, 596 (11th Cir. 2015)
(“Although the U.S. citizenship of Defendants is relevant to our inquiry, this
factor is insufficient to permit jurisdiction on its own.”); Mujica v. AirScan Inc.,
771 F.3d 580, 594 (9th Cir. 2014) (“[T]he fact that Defendants are both U.S.
corporations . . . , without more, is not enough to establish that the ATS claims
here ‘touch and concern’ the United States with sufficient force.”); Al‐Shimari, 758
F.3d at 527 (“[C]ourts must consider all the facts that give rise to ATS claims,
including the parties’ identities and their relationship to the causes of action.”).
Further, the Fourth Circuit has noted that “it is not sufficient merely to say that
because the actual injuries were inflicted abroad, the claims do not touch and
concern United States territory.” Id. at 528; see also Drummond, 782 F.3d at 593
n.24 (“[I]t would reach too far to find that the only relevant factor is where the
conduct occurred, particularly the underlying conduct.”).
11
an opinion that does not offer it. What is clear is that Kiobel II did not shut the
door to all cases against corporations or cases involving violations of
international legal norms outside the United States. By categorically excluding
corporations as a class of defendants, the Kiobel I majority is preventing the
natural development of the law among the circuits as to the implications of the
Kiobel II “touch and concern” test.
* * *
In short, Kiobel I was wrong. Every circuit to address the matter agrees that
it is wrong. It is a disservice to the litigants in this case, and every other litigant
with a potentially viable ATS case against corporate defendants, to rely on the
Supreme Court to fix our error. Kiobel I places an unnecessary roadblock in front
of litigation that can continue to help clarify a statute that, since Filartiga v. Pena‐
Irala, 630 F.2d 876 (2d Cir. 1980), has proven to be an essential tool for victims of
egregious human rights abuses perpetrated by both corporations and natural
persons.
12
DENNY CHIN, Circuit Judge, joined by Judge CARNEY, dissenting from the
denial of rehearing en banc:
I respectfully dissent from the denial of rehearing en banc, for the
reasons set forth in Judge Poolerʹs dissent, the panel decision in this case, In re
Arab Bank, PLC Alien Tort Statute Litigation, 808 F.3d 144 (2d Cir. 2015), and Judge
Levalʹs concurrence in Kiobel I, Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111,
149 (2d Cir. 2010). As a member of the panel, I write to respond briefly to certain
observations in Judge Jacobsʹs concurrence in the denial of rehearing en banc.1
Judge Jacobs writes that the panel ʺsteered deliberately into
controversyʺ by deciding the appeal on the basis of Kiobel I when it could have
affirmed ʺstraightforwardlyʺ on the basis of Kiobel II, Kiobel v. Royal Dutch
Petroleum Co., 133 S. Ct. 1659 (2013), or on the basis that plaintiffs failed to
sufficiently plead mens rea. Jacobs, J., op. at 2, 4‐5. Alternatively, Judge Jacobs
contends that the appeal was subject to the ʺeasyʺ disposition of a remand to the
district court to consider the case under Kiobel II. Id. at 2, 5.
First, as to affirmance, the district court dismissed plaintiffsʹ claims
under the Alien Tort Statute (the ʺATSʺ) solely on the basis of Kiobel I. The
1 Because he is a senior judge, the author of the panel opinion could not
vote on whether to rehear this case en banc. Had the active judges voted in favor of such
a rehearing, however, he would have been entitled to sit on the en banc court.
district court ruled after Kiobel II was decided, but rather than apply Kiobel II, it
ruled on the basis of Kiobel I, holding that ʺ[t]he law of this Circuit is that
plaintiffs cannot bring claims against corporations under the ATS.ʺ Pls.ʹ Special
App. at 1. It did not consider whether plaintiffsʹ claims touched and concerned
the United States. Likewise, the district court did not consider the mens rea
question,2 nor did any of the parties brief the question on appeal. It did not make
sense for the panel to delve into these factual issues in the first instance on
appeal, see Eric M. Berman, P.C. v. City of New York, 796 F.3d 171, 175 (2d Cir.
2015) (ʺ[I]t is this Courtʹs usual practice to allow the district court to address
arguments in the first instance.ʺ (quoting Dardana Ltd. v. Yuganskneftegaz, 317
F.3d 202, 208 (2d Cir. 2003))), when the appeal could be disposed of as a matter of
law. If Kiobel I is indeed good law, there is no reason why we should not have
applied it as a precedential decision to obviate the need for factual inquiries and
additional briefing and litigation.
Second, as to remand, if Kiobel I were correctly decided, this case
would be over and there would be no reason to remand. If Kiobel I were correctly
decided, there would be no reason to ask the district court and the parties to
2 The district court in a similar case against Arab Bank held that the
plaintiffs there met the mens rea threshold. See Lev v. Arab Bank, PLC, No. 08 CV 3251
(NG), 2010 WL 623636 (E.D.N.Y. Jan. 29, 2010) (Gershon, J.).
2
probe into the complex and fact‐intensive issues of corporate presence and
corporate intent, for there would be no subject matter jurisdiction under the ATS.
If the bright‐line rule is that corporations may not be sued under the ATS, there
would be no reason to remand the case for further expensive and time‐
consuming litigation, including discovery and further motions. Moreover, if, on
remand, the district court were to conclude that the claims met the requirements
of Kiobel II, the corporate liability issue would still have to be decided, and all of
the effort on remand would have been for naught.
Judge Jacobs also contends that there is no circuit split and that
ʺ[t]he panel opinion conjures up a circuit split.ʺ Jacobs, J., op. at 6. The cases
speak for themselves, and they are clearly at odds with our holding in Kiobel I:
● The D.C. Circuit has held that corporate defendants are
subject to liability under the ATS, observing that ʺ[t]here are a number of
problems with the analysis in [Kiobel I]ʺ and explicitly declining to follow it, Doe
VIII v. Exxon Mobil Corp., 654 F.3d 11, 50, 54‐55 (D.C. Cir. 2011), although the
decision was later vacated for further consideration, in part because of Kiobel II,
527 F. Appʹx 7 (D.C. Cir. 2013).
3
● The Seventh Circuit has held that ʺcorporate liability is
possible under the [ATS].ʺ Flomo v. Firestone Nat. Rubber Co., 643 F.3d 1013, 1021
(7th Cir. 2011).
● The Ninth Circuit has held that ʺthere is no categorical rule of
corporate immunity or liabilityʺ under the ATS, relying on Judge Levalʹs
concurrence in Kiobel I. Doe I v. Nestle USA, Inc., 766 F.3d 1013, 1022 (9th Cir.
2014).3
● The Eleventh Circuit has held that ʺ[t]he text of the [ATS]
provides no express exception for corporations, and the law of this Circuit is that
this statute grants jurisdiction from complaints of torture against corporate
defendants.ʺ Romero v. Drummond Co., 552 F.3d 1303, 1315 (11th Cir. 2008)
(citation omitted).
● The Fourth Circuit has permitted ATS claims to proceed
against a corporate defendant. In Al Shimari v. CACI Premier Technology, Inc., the
Fourth Circuit reviewed the district courtʹs dismissal of the plaintiffsʹ ATS claims
for lack of jurisdiction. 758 F.3d 516, 524 (4th Cir. 2014). Applying Kiobel II, the
3 While the Ninth Circuit did remand for the district court to consider Kiobel
II, it noted that ʺthe plaintiffs contend that part of the conduct underlying their claims
occurred within the United States.ʺ 766 F.3d at 1028. The corporate liability issue was
squarely part of its holding in the case. Id. at 1020‐23.
4
Fourth Circuit held that ʺthe district court erred in concluding that it lacked
subject matter jurisdiction under the ATSʺ and vacated the dismissal of the ATS
claims, remanding for further proceedings. Id. at 531. While the Fourth Circuit
did not explicitly address the issue of corporate liability under the ATS, see id. at
525 n.5, the principal defendant was a corporation, id. at 520, 530, and clearly
there would have been no reason to remand the case for further proceedings if
jurisdiction over corporations did not exist under the ATS.4
While it is true, as Judge Jacobs notes, that some of these cases have
been or could be resolved on Kiobel II grounds, there is no reason, again, why the
courts and litigants in these cases should be litigating the complex, factual ʺtouch
and concernʺ issues if, indeed, corporations are not liable under the ATS as a
matter of law.
Finally, the concurrence suggests that there is no reason for en banc
review because ʺ[t]he principle of Kiobel I has been largely overtaken, and its
importance for outcomes has been sharply eroded.ʺ Jacobs, J., op. at 2. This
argument, it seems to me, assumes that no ATS case will present claims that
4 See also Beanal v. Freeport–McMoran, Inc., 197 F.3d 161, 163 (5th Cir. 1999)
(dismissing ATS claims against corporate defendants under Rule 12(b)(6), and to that
extent appearing to implicitly assume that jurisdiction existed over ATS claims against
corporate defendants).
5
touch and concern the United States. That is not so, as Al Shimari and Doe I v.
Nestle USA show. There will be cases where plaintiffs can meet the requirements
of Kiobel II. And in those cases, even assuming the claims are meritorious, in this
Circuit the plaintiffs will be precluded from seeking relief under this Courtʹs
ruling in Kiobel I that corporations categorically are not subject to suit under the
ATS. We are the only Circuit to reach that conclusion, and we should have taken
this opportunity to reconsider the matter.
I would grant the petition for rehearing en banc.
6