Tuesday, April 27, 2010

Texas District Court Dismisses Alien Tort Statute Case Against Energy Company

A federal district court in Texas has dismissed claims alleging human rights violations against oil companies and individuals involved in the oil business. Like several other courts, the court in Abecassis v. Wyatt concluded that the plaintiffs failed adequately to plead that the defendants had aided and abetted human rights violations, because the allegations did not establish that the defendants intended to assist the violations.

Between 2000 and 2003, numerous suicide attacks took place during the second major Palestinian uprising in Israel, the Second Intifada. Major news sources began reporting in August 2002 that Saddam Hussein was paying $25,000 to families of suicide bombers and $10,000 to families of other Palestinians who died during the Intifada. Plaintiffs in Abecassis are individuals wounded in those attacks, or family members of victims who were killed. Defendants are a group of companies and related individuals whom plaintiffs alleged paid illegal kickbacks or surcharges to obtain oil from Iraq through the U.N. Oil-for-Food Program.

Plaintiffs sued defendants under the Alien Tort Statute (“ATS”), the Torture Victim Protection Act (“TVPA”) and the Antiterrorism Act (“ATA”). Their theory of liability, which was ultimately rejected by the court, was that: 1) defendants’ kickbacks to Hussein made defendants aiders and abettors of Hussein’s payments to families of suicide bombers, and 2) Hussein’s after-the-fact payments to the families of suicide bombers were a proximate cause of the victims’ deaths in the suicide attacks.

In dismissing the case, the court first noted that all plaintiffs lacked standing to sue under the ATS and TVPA because they had not shown a “causal connection” between the victims’ injuries and defendants’ alleged kickback payments. There was no allegation that the kickbacks were paid to the terrorists’ families, and in fact, the court noted that Hussein had admitted many other uses of the supposed kickbacks. Second, the court relied on international law to determine the standard for aiding and abetting an ATS violation, which requires that plaintiffs allege not only that the defendant knew of the primary violator’s wrongful act but also that the defendant shared the primary violator’s purpose to commit the wrongful acts. Plaintiffs failed on both fronts, and the ATS and TVPA claims were dismissed without leave to replead.

Although complaints invoking the ATS and TVPA to sue multinational energy companies for incidents overseas continue to be filed, claims that rely on attenuated theories of liability have faced increasing obstacles at the motion to dismiss stage. This is particularly true, as illustrated by this opinion, where liability is premised on indirect money payments.