Supreme Court UPDATE: Finally Pfizer

Supreme Court rejects Pfizer appeal of Nigerians' lawsuits

Pfizer v. Abdullahi, 09-34.
The Supreme Court is staying out of a dispute between Nigerian families and Pfizer, Inc., over the drug maker's use of a new antibiotic on children during a deadly outbreak of meningitis in the mid-1990s.  Today the justices rejected the pharmaceutical giant's appeal of a court ruling that allowed the lawsuits filed by the Nigerians in U.S. courts to go forward. More...

Supreme Court UPDATE: Extraterritoriality

Today the Supreme Court came down with a significant decision re: extraterritoriality - applicable to ATS cases.
Morrison v. Nat’l Australia Bank Ltd., 561 U.S. ___ (2010)

Plaintiffs are Australian citizens who bought securities in Australia in defendant, an Australian Bank. Plaintiffs alleged that employees of defendant in the United States misrepresented the value of a United States subsidiary of defendant’s, thus falsely inflating defendant’s stock price.

The questions: (1) whether §10b-5 applies extraterritorially pursuant to the conducts and effects test and (2) if not, whether application of §10b-5 in this case is extraterritorial, given that some of the conduct at issue occurred in the United States.

The answers: (1) “It is a ‘longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Slip O. at 5. This principle “rests on the perception that Congress ordinarily legislates with respect to domestic, not foreign matters.” Id. at 5-6. “Thus, unless there is the affirmative intention of the Congress clearly expressed to give a statute extraterritorial effect, we must presume it is primarily concerned with domestic conditions.” Id. at 6. This canon of construction applies regardless of whether applying a law extraterritorially will conflict with the regulations of a foreign nation. Id.

The Second Circuit believed that the silence of §10b with regards to extraterritoriality left it to the court to discern what Congress would have intended had it considered the issue. Id. “[R]ather than courts’ ‘divining what Congress would have wished if it had addressed the problem, [a] more natural inquiry might be what jurisdiction Congress in fact though about and conferred.” Id. at 10 (quoting Zoelsch v. Arthur Andersen & Co., 824 F.2d 27, 32 (D.C. Cir. 1987). “[U]sing congressional silence as a justification for judge-made rules violates the traditional principle that silence means no extraterritorial application.” Id. at 11. “In short, there is no affirmative indication in the Exchange Act that § 10b-5 applies extraterritorially, and we therefore conclude that it does not.” Id. at 16.

(2) That the suit involves some domestic conduct does not defeat the presumption against extraterritoriality. “[T]he presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case.” Id at 17. The question is whether the conduct which is the “focus” of Congressional concern occurred within the United States. Id. The focus of the securities laws is on the purchase and sale of securities, not on the making of misleading statements. Id. Therefore, the fact that misleading statements were purportedly made in the US about a US subsidiary is irrelevant.

Vatican's appeal for immunity over sex abuse case rejected
By Craig McMurtrie

The United States Supreme Court has rejected a Vatican bid for legal immunity over the sexual abuse of children by a priest in the US. [Holy See v. John Doe, 09-1.]
America's highest court refused to hear a Vatican appeal for sovereign immunity over a case involving a priest accused of sexually abusing children.
Father Andrew Ronan, who transferred from Northern Ireland to Chicago and then Portland, Oregon, died in 1992 and left behind a trail of abuse cases in the parishes he was assigned to.
A man identified only as John Doe says he was abused in 1965.
His lawsuit holds the Roman Catholic Church responsible as Father Ronan's employer.
The US Supreme Court rejection of the Vatican appeal means the lawsuit, first filed eight years ago, can now proceed.

See this also.

Pope Lashes Out at Belgium After Raid on Church
NYT
by RACHEL DONADIO

ROME — In a sign of sharply rising tensions between the Vatican and Belgium, Pope Benedict XVI on Sunday criticized as “surprising and deplorable” a raid on church property last week by Belgian police investigating sex abuse by clerics.

In an exceedingly rare personal message and rebuke of a sovereign country, the pontiff also stressed the church’s “autonomy” to conduct its own investigations and criticized the “deplorable methods” of Belgian police who last week detained bishops, confiscated files and even drilled into the tombs of at least one cardinal in the Brussels cathedral in a search for documents.  More...

Judge Kimba Wood Dismisses Defendant from Alien Tort Statute Class Action for Lack of Personal Jurisdiction
Posted on June 25, 2010 by Russell Jackson

Today's featured opinion has a somewhat tortured procedural history, but its ultimate holding -- that U.S. courts lacked personal jurisdiction over a foreign Alien Tort Statute defendant -- provides some encouragement for defendants who become mired in ATS litigation in the U.S. See Kiobel v. Royal Dutch Petroleum Co., 02 Civ. 7618 (KMW) (HBP), Slip op. (S.D.N.Y. June 21, 2010) (Law360 subscription required). Opinion and Order.
 
The dispute in Kiobel and some related litigation centered around allegations that certain oil companies cooperated with agents of the Nigerian government to use violence to suppress protests of oil exploration and development. The district court previously had granted a motion to dismiss brought by a Nigeria company, finding that America lacked personal jurisdiction over the company. Plaintiffs in a related suit appealed an identical decision, and the Second Circuit reversed, ordering the district court to allow discovery into the facts surrounding the jurisdictional issues. After having done so in this case, the court once again considered the defendant's motion to dismiss. Judge Wood held that plaintiffs failed to assert jurisdictional facts sufficient to establish "continuous and systematic general business contacts" with the United States, which is required for the assertion of general jurisdiction. See Slip op. at 2.
 
The Shell Petroleum Development Company of Nigeria ("SPDC") is a Nigerian corporation with its headquarters in Nigeria. It has no office, place of business, address or phone in the U.S., and it is not licensed to business here. Plaintiffs offered three reasons why SPDC should be subject to U.S. jurisdiction.
 
More...

Think Globally, Sue Locally
The plaintiffs bar goes international and focuses on trashing a corporation's image.
 
By JONATHAN DRIMMER

It was no coincidence that a lawsuit filed against Coca Cola this February in New York City's federal court coincided with the release of a documentary called "The Coca Cola Case." The documentary featured the plaintiffs lawyers in the case—concerning allegations of violence against workers at a Guatemala bottling facility—and five others like it in Turkey and Colombia.

It didn't seem to matter that federal appellate courts in New York and Atlanta had already dismissed all five of the earlier lawsuits, or that the alleged violence in Guatemala was perpetrated by individuals not affiliated with Coke. It also didn't seem to matter that a judge had sanctioned the plaintiffs lawyers for violating a confidentiality order involving settlement discussions. The documentary continues to play in North America, Europe, New Zealand and elsewhere, bringing additional publicity and pressure against the company.

Welcome to the Wild West of transnational tort cases, where what happens inside the courtroom is often overshadowed by what happens outside. Old-fashioned motions and pleadings are now accompanied by public-relations campaigns complete with documentaries, community organizing, political lobbying and efforts to drive down stock prices of companies and multinationals with a U.S. presence. It's all part of an effort to inflict maximum punishment on companies that choose to fight, trying to force them into lucrative settlements for alleged conduct overseas, and to pressure foreign courts in cases filed abroad.

Plaintiffs lawyers are filing scores of cases in U.S. and foreign courts against companies in connection with their foreign operations, particularly in emerging markets. The cases filed here often rely on the Alien Tort Statute, an 18th century artifact that allows non-U.S. nationals to file lawsuits in federal courts for certain claimed violations of international law.

One current lawsuit in Indianapolis against Bridgestone/Firestone involves claims of alleged forced labor on a rubber plantation in Liberia. Plaintiffs lawyers have pursued a vigorous campaign that includes video clips, graphic allegations of abuse by nongovernmental organizations (NGOs), lobbying for city resolutions, and calls for the National Football League to cease airing company commercials during games.

Lawsuits have been filed in California against Occidental Petroleum for violence by the Colombian military (allegedly directed by Occidental) near an oil pipeline, for the company's alleged complicity in human-rights violations by paramilitary units guarding a pipeline in Ecuador, and for alleged environmental harms in Peru. Accompanying the suits have been calls for boycotts, staged protests and in the Peru lawsuit a documentary narrated by actress Daryl Hannah.

Some of these transnational tort cases are tainted by fraud. Three separate U.S. courts have now found fraud and unfairness in proceedings against Dole, the Dow Chemical Company and others, arising from the alleged exposure of workers to pesticides on banana plantations in Nicaragua. This fraud includes fabricating injuries, submitting false evidence, conspiring with corrupt foreign laboratories to bolster false claims, suborning perjury, and helping create foreign litigation regimes so overtly hostile to U.S. companies that they violate the most basic notions of due process. Some of the cases are still pending.

A new study I have overseen on behalf of the U.S. Chamber of Commerce's Institute for Legal Reform, "Think Globally, Sue Locally," shows that these transnational lawsuits frequently involve tactics that fall into four categories. There is the media campaign, including full-length films and mini-documentaries, and heavy reliance on print, radio, television and the Internet, including social media websites and shared video sites. There are also investment-related activities, such as stock divestment drives, pressuring institutional investors, feeding harmful information to Wall Street analysts, and attending and participating in shareholder meetings.

There are also political efforts. These include advocating for and testifying at Congressional hearings (increasingly being held as a trial date approaches), soliciting politicians to advocate for the plaintiffs, lobbying for the passage of local city resolutions, and in overseas litigation using political pressure to influence susceptible foreign courts.

Finally, community organizing in the form of protests, boycotts, letter writing, on-campus efforts and other techniques are undertaken to bring pressure on companies.

There is evidence these tactics are effective. In one well-known Alien Tort case, Talisman Energy, listed on the New York Stock Exchange, spent millions of dollars in local development programs in Sudan, assisted in the efforts to bring peace to the civil war ravaged nation, and prevailed in a lawsuit in New York arising from its investment in an oil consortium there. (The case involved allegations the company was complicit in human-rights violations committed by the government.) Yet Talisman succumbed to the political and litigation pressure, selling its interest to an Indian state-controlled oil and gas company rather than continuing to operate.

Companies with U.S. ties considering even relatively small overseas investments must be conscious that a perceived failure to adhere to certain social expectations can lead to high-profile, multimillion dollar lawsuits, and with them an accompanying set of highly aggressive tactics aimed at decimating the company's image.

Mr. Drimmer is an attorney in Washington, D.C., and a former deputy director of the Office of Special Investigations Division at the Justice Department. This op-ed is based on a paper being delivered in New York City today at a conference hosted by the Manhattan Institute. He is not personally involved in any cases discussed here.

Bowoto v. Chevron UPDATE

Daily Journal
9th Circuit Hears Nigerians' Claims

By Fiona Smith

Nigerian activists who accuse Chevron Corp. of human rights abuses hoped to revive their case Monday by arguing before the 9th U.S. Circuit Court of Appeals that a lower court's admission of prejudicial evidence and flawed jury instructions dealt a fatal blow to their case.

Nineteen Nigerians sued the San Ramon-based oil giant in 1999 alleging the company was liable for protestors' deaths and injuries after it called in the Nigerian Navy to clear the activists from an offshore oil platform belonging to the company's Nigerian subsidiary, Chevron Nigeria Limited. A San Francisco jury cleared Chevron on all the counts in 2008 after a five-week trial before Judge Susan Illston.

During oral arguments on Monday, the plaintiffs focused on their allegation that Illston issued flawed jury instructions for assault and battery claims under California and Nigerian law. Plaintiffs' attorney Theresa Traber of Traber & Voorhees in Pasadena said Illston wrongly placed the burden of proof on the plaintiffs to show beyond a reasonable doubt to the jury that the Nigerian Navy had used unreasonable force. The jury instructions should have forced Chevron to prove the navy's use of force was reasonable and justified in the circumstances, Traber said.

The events on trial date back to 1998 when more than 100 Nigerians took boats out to Chevron's oil platform, boarded an adjacent construction barge and remained there for three days. The Nigerians claimed they were engaging in a peaceful protest of Chevron's economic and environmental policies. But Chevron said the Nigerians were violent invaders who took the company's workers hostage and held them for ransom.

On the morning of the fourth day, Chevron asked for the assistance of the Nigerian Navy, which sent soldiers to the platform. In the resulting chaos, two men were killed and two others were injured.

The plaintiffs brought claims of torture and cruel, inhuman or degrading treatment under the rarely used Alien Tort Claims Act. The law, passed in 1789, allows foreigners to seek damages in U.S. courts for alleged human rights abuses abroad. They also brought claims for wrongful death, assault, battery and negligence under California and Nigeria law, Bowoto v. Chevron Corp., 99-2506.

Circuit Judge Jay Bybee, who served on Monday's panel with Circuit Judge Mary Schroeder as well as Oregon District Court Judge Owen Panner, sitting by designation, asked Traber if the court would have to go back for a whole new trial if it agreed with the plaintiffs on the Nigerian battery claims.

Only the specific claims at issue would go back for a re-trial, Traber replied.

Traber further noted that Illston had supported the plaintiffs' arguments over the burden of proof issue in a summary judgment decision in 2007 but changed her position before trial.

Chevron's attorney Craig Stewart with Jones Day in San Francisco countered that the court did not focus on the issue in great detail at the summary judgment stage, but took a detailed look when a briefing was held over the wording of the jury instructions.

Schroeder asked several questions to clarify how Illston's ruling had changed over time, at one point asking Stewart if Illston had issued any intermediary rulings between her summary judgment and jury instructions rulings. She did not, Stewart said.

Schroeder also asked Stewart what Chevron's position was on Nigerian law in relation to the battery claims.

"Our position is that Nigerian law, like California law, puts the burden on the plaintiff in excessive force claims brought by plaintiffs ... and the jury was properly instructed," Stewart said.

The plaintiffs also argued in briefing that they deserved a whole new trial because Illston allowed evidence to be submitted that unfairly portrayed the protestors as violent and full of bloodlust. The disputed evidence included a photograph of protestors butchering a sea turtle for food with a machete. Chevron attorneys argue the photograph was valid evidence that showed the protestors were armed despite their claims to the contrary.

Bowoto v. Chevron UPDATE

Burden of proof at issue in Chevron-Nigeria appeal

[Audio of today's hearing.]

SAN FRANCISCO, June 14 (Reuters) - An appeal of a major case brought by Nigerians against Chevron Corp (CVX.N) hinges on where the burden of proof lies: with forces that landed on an occupied oil platform or the occupiers harmed by them.

In late 2008, a jury in federal court cleared the company of liability arising from the clash a decade earlier between Nigerian state forces and protesters on Chevron's Parabe oil platform, 9 miles (14 km) off Nigeria's coast.

Theresa Traber, representing the villagers who brought the case against the U.S. oil company, argued before the U.S. Ninth Circuit Court of Appeals on Monday that the federal trial court erred by putting the burden of proof on the plaintiffs.

Lawyers for the villagers said Judge Susan Illston set the bar too high in requiring the plaintiffs to prove beyond a reasonable doubt that the Nigerian soldiers acted improperly.

The occupation of Parabe, by about 100 local villagers who were protesting environmental damage and demanding compensation and jobs, ended in a violent clash in May 1998.  [The villagers had threatened Chevron that they would commit "sea piracy" if their demands were not met, and subsequently took hostages back to the mainland.]

Traber said it should be the defense -- including Chevron since it fed and housed the soldiers -- that should demonstrate the troops acted reasonably when firing on the protesters.

But Craig Stewart, representing Chevron, argued it was a "police" action that broke up the three-day occupation, so it was up to the other side to show "excessive force" was used.

"The burden rests on plaintiffs in that case," he told the court in San Francisco.

More...

See also.

Abdullahi: Pfizer Response to SG

Pfizer filed its response to the Solicitor General's recent brief suggesting to the Supreme Court that a lawsuit filed against Pfizer by several Nigerians over the 1996 Trovan scandal should not proceed: Pfizer Response

Pfizer and SCOTUS: SG does not express any substantive views on the ATS

Should A Nigerian Lawsuit Against Pfizer Proceed?
pharmalot.com

The US Solicitor General has filed a brief suggesting to the US Supreme Court that a lawsuit filed against Pfizer by several Nigerians over the 1996 Trovan scandal should not proceed. Essentially, some blogs report that this means the Solicitor General disagrees with Pfizer’s interpretation of a law that has been relied upon to claim US companies committed eggregious behavior overseas, and that the Supreme Court should not bother to hear the case (see the brief). More...http://www.pharmalot.com/2010/06/should-a-nigerian-lawsuit-against-pfizer-proceed/

But this is not the case...  The SG brief argues that Pfizer's petition is not cert worthy because there is no circuit split, and that the procedural posture counsel against cert because there are many potential grounds on which the district court could dismiss the case (which would moot the need for Supreme Court review) and a decision by the Supreme Court on the issues raised in the cert petition likely would not be dispositive. The SG did not express any substantive views on the ATS or imply that Pfizer's interpretations were wrong.

Ex-Somali official Mohamed Ali Samantar may be sued in U.S., Supreme Court rules
By Robert Barnes
Washington Post Staff Writer - Wednesday, June 2, 2010

[UPDATE: June 28, 2010: Ruling burdens State Dept. Samantar held foreign officials are not immune from human rights suits, so State will have to decide whether to assert immunity and will be subject to lobbying; by John B. Bellinger III]

A group of Somalis who allege torture and killings by the former government of their homeland may pursue their lawsuit against a former prime minister now living in Fairfax County, the Supreme Court ruled Tuesday.

The justices ruled unanimously that a federal law that protects foreign governments from lawsuits filed in the United States does not cover individuals such as Mohamed Ali Samantar, who was defense minister and prime minister in the 1980s and early 1990s in the now-ousted government of Mohamed Siad Barre.

While Samantar's interpretation of the Foreign Sovereign Immunities Act is "literally possible," Justice John Paul Stevens wrote for the court, a close reading "supports the view of respondents and the United States that the Act does not address an official's claim to immunity."

The court warned that its decision was narrow and that Samantar might have other legal claims of immunity when a district court reconsiders the suit. "Whether petitioner [Samantar] may be entitled to immunity under common law, and whether he may have other valid defenses to the grave charges against him, are matters to be addressed" by lower courts, Stevens wrote.

More... (also see this previous ATS Today post)

SCOTUS and the ATS: June 1, 2010

Samantar v. Yousuf, No. 08–1555. Argued March 3, 2010—Decided June 1, 2010

Held: The FSIA does not govern petitioner’s claim of immunity.  (See UPI story)
Respondents, who were persecuted by the Somali government during the 1980’s, filed a damages action alleging that petitioner, who then held high level government positions, exercised command and control over the military forces committing the abuses; that he knew orshould have known of these acts; and that he aided and abetted in their commission. The District Court concluded that it lacked sub-ject-matter jurisdiction and granted petitioner’s motion to dismiss the suit, resting its decision on the Foreign Sovereign Immunities Act of1976 (FSIA or Act), which provides that a “foreign state shall be im-mune from the jurisdiction” of both federal and state courts except asprovided in the Act, 28 U. S. C. §1604. The Fourth Circuit reversed, holding that the FSIA does not apply to officials of a foreign state.  More...

STEVENS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, GINSBURG, BREYER, ALITO, and SOTOMAYOR, JJ., joined. ALITO, J., filed a concurring opinion. THOMAS, J., filed an opin-ion concurring in part and concurring in the judgment. SCALIA, J., filed an opinion concurring in the judgment.