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Analysis: Window narrows in U.S. for human rights abuse lawsuits

U.S. Supreme Court Justices Chief Justice John Roberts, Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kaga
U.S. Supreme Court Justices Chief Justice John Roberts, Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kaga

By Jonathan Stempel

(Reuters) - A U.S. Supreme Court decision to limit the sweep of a 1789 law used to fight human rights abuses worldwide left a window slightly ajar for victims to sue companies, especially U.S. companies, accused of aiding such abuses.

"A majority of these cases are against U.S. companies, and it still means they can be held accountable," said Jennifer Green, a University of Minnesota law professor and director of the school's human rights litigation clinic.

While the court unanimously threw out a lawsuit by 12 people from Nigeria accusing Royal Dutch Shell Plc of aiding state-sponsored torture and murder, Chief Justice John Roberts set a high bar for future cases under the Alien Tort Statute.

In an opinion joined by the other four justices on the court's conservative wing, Roberts wrote that the law was presumed to cover only violations of international law occurring in the United States.

Violations elsewhere, he said, must "touch and concern" U.S. territory "with sufficient force to displace the presumption."

Wednesday's holding likely means victory for at least one of the two companies, mining giant Rio Tinto Plc, whose Supreme Court appeal in a similar case has been pending, and could help the other, German automaker Daimler AG.

But it was unclear whether the decision would spare such U.S. companies as Exxon Mobil Corp and Chiquita Brands International Inc from having to defend against similar claims involving their alleged misconduct.

All the companies have vigorously defended against the claims they were complicit in the alleged abuses.

CORPORATE PRESENCE

In Kiobel et al v. Royal Dutch Petroleum Co et al, No. 10-1491, which upheld a 2011 ruling by a federal appeals court in New York, Roberts said a company's mere "corporate presence" in the United States was insufficient to force it to defend against an Alien Tort Statute lawsuit.

The four more liberal justices on the nine-member court, led by Justice Stephen Breyer, thought the law should be available when the alleged misconduct took place in the United States, the defendant was a U.S. national, or the misconduct "substantially and adversely" affected a U.S. interest.

Justice Anthony Kennedy noted that the majority opinion, which he joined, left open questions about the statute's reach. Those questions could easily allow reasoning closer to Breyer's to prevail, given the right facts.

That might not be enough to save the case against Rio Tinto by some 10,000 current and former residents of the South Pacific island of Bougainville.

They contended that after workers in 1988 began to sabotage a polluting copper and gold mine, the Anglo-Australian company goaded the Papua New Guinea government to exact retribution and conspired to impose a blockade, resulting in thousands of civilian deaths by 1997.

In October 2011, the 9th U.S. Circuit Court of Appeals in San Francisco voted 6-5 to permit the lawsuit.

But the dissenters complained that the majority exercised "unlimited authority" to decide cases from "over all the earth." After Kiobel, U.S. courts don't have that power.

"It is obvious that the court has an agenda that is anti individual rights," Steve Berman, a lawyer for the Rio Tinto plaintiffs, said in an email, referring to the Supreme Court and Kiobel decision. "The result is not surprising." He declined to discuss the next step in the Rio Tinto case.

Daimler, meanwhile, had been accused by 22 residents of Argentina of conspiring with a military dictatorship during that country's "Dirty War" three decades ago to kidnap, torture and kill workers at a Mercedes-Benz plant near Buenos Aires.

But in allowing the case to go forward, a federal appeals court in California said Mercedes-Benz had "pervasive" contacts with that state, bringing the case into U.S. jurisdiction.

Daimler welcomed the Kiobel decision. "Our position was always that U.S. courts did not have jurisdiction," spokesman Han Tjan said. "The Supreme Court has confirmed our position."

But Terry Collingsworth, a lawyer for the Daimler plaintiffs, said the Kiobel decision did not end his case, given the lack of clarity as to where Daimler's challenged decision making took place.

"The court has added an element to bringing these cases that requires that you demonstrate a U.S. connection," he said. "I expect it added a step that we will be able to satisfy."

CHIQUITA, EXXON

Collingsworth also handles the Chiquita case, representing family members of banana plantation workers, political organizers and others who were allegedly killed by a Colombian paramilitary group during the 1990s and through 2004.

In 2007, Chiquita pleaded guilty and paid a $25 million fine for violating U.S. law over its payments to the group United Self-Defense Forces of Colombia, known in Spanish as Autodefensas Unidas de Colombia, or AUC.

Family members of victims claim that Chiquita made decisions in the United States that materially advanced the killings.

The Charlotte, North Carolina-based company's appeal of a June 2011 ruling allowing Alien Tort Statute claims is pending before a federal appeals court based in Atlanta.

Claims against Chiquita "will easily satisfy any of the tests announced by the court," in Kiobel, Collingsworth said. "With Daimler, it's a closer case. I can't candy-coat that."

John Hall, a lawyer representing Chiquita, disagreed, saying Kiobel now makes clear that claims over alleged violent acts by Colombians in Colombia with the Colombian government's alleged complicity "should not be heard in an American court."

Exxon, meanwhile, faces a lawsuit by 15 Indonesian villagers who sought to hold it responsible for deaths and torture, including shocks with cattle prods, by security forces in that country's Aceh province between 1999 and 2001.

Villagers claimed that the Irving, Texas-based company hired soldiers to guard a natural gas facility there despite knowing of past abuses by Indonesia's army.

A federal appeals court in Washington, D.C., let that case go forward in July 2011. The court put Exxon's request to revisit that decision on hold while the Kiobel case was pending.

Exxon and a lawyer for the Indonesian villagers did not immediately respond on Thursday to requests for comment.

In his majority opinion in Kiobel, Roberts said opening U.S. courts too readily to abuse cases could have "serious foreign policy consequences," including diplomatic clashes or exposing U.S. citizens to being haled into courts across the world.

But Green, who submitted a brief on behalf of the Indonesian villagers in the Exxon case, said the opinion could also have the reverse effect: ensuring that some cases never make it to court at all, anywhere.

"It effectively gave some corporations immunity for accountability in human rights abuses, especially in cases where plaintiffs are unable to sue anywhere else," Green said.

(Reporting by Jonathan Stempel in New York; Additional reporting by Lawrence Hurley in Washington, D.C.; Editing by Howard Goller and Kenneth Barry)

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