Ninth Circuit en banc Rio Tinto Decision Finally Available

The Court held that certain ATS claims are appropriately considered for exhaustion under both domestic prudential standards and core principles of international law. Defendant bears the burden to plead and justify an exhaustion requirement, including the availability of local remedies.

Link to Opinion: http://www.ca9.uscourts.gov/ca9/newopinions.nsf/34621A54B725188A882575210059A416/$file/0256256.pdf?openelement

Members of En Banc Court: Mary M. Schroeder, Harry Pregerson, Stephen R. Reinhardt, Andrew J. Kleinfeld, Barry G. Silverman, M.M. McKeown, Marsha S. Berzon, Johnnie B. Rawlinson, Consuelo M. Callahan, Carlos T. Bea, Sandra S. Ikuta.

1. The majority opinion (by Judge McKeown and joined by Judges Schroeder and Silverman): The majority opinion holds that under the ATS there is no "absolute requirement of exhaustion," but that "certain ATS claims are appropriately considered for exhaustion under both domestic prudential standards and core principles of international law."

The Court found that exhaustion is a "prudential" principle, rather than a substantive requirement, for several reasons. First, it read Sosa footnote 21 to suggest this result (a very questionable reading, as Judge Bea points out). Second, it avoids having to determine "whether exhaustion is a substantive norm of international law, to which the ‘requirement of clear definition’ applies; or if it is nonsubstantive, what source of law—federal common law or international law—illuminates the content."

To determine whether prudential exhaustion should be applied in ATS cases, the majority directed district courts to examine (1) the degree of "United States ‘nexus’" at issue and (2) the "gravity of the potential violations of international law. On the former issue, the Court noted that the allegations in Sarei involve "a foreign corporation’s complicity in acts on foreign soil that affected aliens," and thus have no significant U.S. nexus. On the latter issue, the Court held that the claims for torture, war crimes and crimes against humanity may implicate matters of universal concern because universal criminal jurisdiction is permitted for such claims. However, the Court noted that "simply because universal jurisdiction might be available does not mean that we should exercise it. Indeed, the basis for exercising universal civil jurisdiction, such as under the ATS, is not as well-settled as the basis for universal criminal jurisdiction."
Thus, the Court held that the nexus test militates in favor of prudential exhaustion and that the gravity of the potential violations militate against exhaustion. It then remanded to the district court without significant guidance on how to resolve this tension.

The Court did not say anything about political question—which was the grounds on which the district court dismissed the case—act of state, international comity or aiding abetting. It appears that the Court wants the district court to reconsider these issues—with no new guidance—if it determines that prudential exhaustion is either not required, or would be futile.

2. Judge Bea’s Concurrence: Judge Bea concurs in the result, but writes separately to argue that exhaustion should not be left to the district court’s prudential discretion, but rather it should be required. He writes that "[t]he plurality’s reasoning seems to be that although the ATS incorporates causes of action recognized by the law of nations, it does not incorporate required limitations on those causes of action also recognized by the law of nations. This doesn’t seem logical to me."

3. Judge Ikuta’s Dissent (joined by Kleinfeld): Judge Ikuta disagrees with the majority on two grounds. First, he finds that the district court has discretion to choose among threshold grounds for denying audience to a case on the merits, and therefore it did not err in dismissing the case on political question and act of state grounds, even though it failed to consider exhaustion.
Second, and most significantly, he finds that the ATS does not extend to disputes not involving United States territory or citizens. He finds that this limitation is (1) required by separation of powers concerns; (2) that it is supported by the history of the ATS because no case prior to Filartiga applied the ATS to extraterritorial matters concerning noncitizens; (3) that it furthers the purpose of the ATS, which is to avoid giving offense to foreign nations.

4. Judge Reinhardt’s Dissent (jointed by Judges Pregerson, Berzon and Rawlinson): Judge Reinhardt argues that this is not an appropriate case to consider exhaustion, because the record shows that exhaustion would be futile. Plaintiffs filed declarations stating that they feared for their safety if they returned to Papua New Guinea to litigate these claims. Reinhardt further argues that if this were an appropriate case to consider the issue, an exhaustion requirement should be rejected. First, he argues that in the human rights context, the requirement is supported only by international conventions, not customary law (but this is because the conventions are the only "custom" in this area). Second, he argues that exhaustion is required under international law only for suits before international tribunals, not domestic courts. Third, he argues that the U.S. has a strong interest in adjudicating claims for "heinous offenses like genocide, crimes against humanity, and war crimes." Fourth, he argues that Courts already have many available abstention doctrines to prevent interference with foreign affairs.