Alien tort statute

• Pages: 66-73

66 Volume 20, October–December 2014 international law update

© 2014 International Law Group, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com

ALIEN TORT STATUTE

In action brought by Iraqi torture

victims, Second Circuit ponders

whether and under what circumstances

the Alien Tort Statute provides a cause

of action for violations of the Law of

Nations occurring within the territory

of a sovereign country other than the

United States

Plaintis, Iraqi women who were victims of

torture by agents of the Saddam Hussein Regime or

whose husbands were the victims of such torture,

led the instant case seeking compensatory and

punitive damages on their own behalf and as a

putative class action on behalf of those similarly

situated. ey claimed that defendants, Chevron

Corporation (“Chevron”) and Banque National de

Paris Paribas (“BNP”) illicitly diverted money to the

Saddam Hussein Regime in violation of customary

international law. ey alleged that the defendants

aided and abetted the abuses of the Saddam

Hussein Regime by paying the regime kickbacks

and other unlawful payments, which enabled the

regime to survive and perpetrate the abuses suered

by plaintis or their husbands. e allegations stem

from the United Nations’ Oil for Food Programme

(“OFP”) which “permitted the export of oil from

Iraq in exchange for food, medicine, and other

basic civilian necessities by allowing the purchase

of Iraqi oil to proceed through an escrow account,

into which purchasers submitted payments and

from which providers of civilian necessities received

payment.” Mastafa v. Chevron Corp., 759 F. Supp.

2d 297, 298-99 (S.D.N.Y. 2010). Plaintis alleged

that the Saddam Hussein Regime misused the OFP

in order to generate income outside the United

Nations’ oversight and fund its regime and its

campaign of human rights abuses against its people.

In regards to Chevron, the complaint alleged

that the Iraqi regime imposed illegal “surcharges” of

10 to 30 cents per barrel on oil sold pursuant to the

OFP. Chevron knowingly paid the illegal surcharges

on 9,533,690 barrels of oil and acted as a nancer

to many oil contracts. at way, Chevron allegedly

paid $20 million in illicit surcharge payments

through third parties, and knew that the premiums

it paid to the third parties were passed through to

the Saddam Hussein Regime.

In regards to BNP, the complaint alleged that,

pursuant to a Banking Agreement between BNP

and United Nations, BNP was the sole escrow

bank for the OFP and was responsible for policing

nancial transactions associated with it. Its role as

escrow agent for the United Nations was to ensure

that nancial transactions were in compliance with

the United Nations Security Council resolution

that had created the program. Plaintis asserted

that BNP knew that the true nature of the nancial

transactions included illicit payments to the Saddam

Hussein Regime and failed to disclose or interrupt

the payments; that some of the surcharges were

paid by BNP through customer accounts; and that

in at least one transaction, BMP hid the identity of

oil nanciers as participants in an oil transaction, in

violation of the Banking Agreement.

e Plaintis did not allege that Chevron or

BNP, or their employees, directly engaged in the

human rights abuses allegedly committed by the

Saddam Hussein Regime. ey alleged that the

surcharge payments nanced the torture and other

atrocities inicted on them or their husbands,

and that through the alleged exploitations of the

OFP, Chevron and BNP aided and abetted the

Saddam Hussein Regime’s abuses, which made

their claims actionable under Alien Tort Statute of

1789 (“ATS”) (28 U.S.C. § 1350), and the Torture

Victim Protection Act of 1991 (“TVPA”) (106

Stat. 73).

e U.S. District Court for the Southern

District of New York dismissed plaintis’ complaint

with prejudice. e District Court’s dismissal was

based on the conclusions that (1) the ATS claims

were barred by the Second Circuit’s opinion in

Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111

(2d Cir. 2010), which held that the ATS does not

confer jurisdiction for claims alleging violations of

the “law of nations” (that is, customary international

law) against corporate defendants; (2) plaintis had

failed adequately to plead negligence under state

law, and other state law claims were time-barred;