Second circuit issues divided ruling on 'aiding and abetting' rights violations.

• Author: Crook, John R.

In fragmented opinions in October, the U.S. Court of Appeals for the Second Circuit found that corporations can be liable under the Alien Tort Claims Act (ATCA) (1) for actions that aid and abet violations of international law by other actors. However, the court's four opinions (a 15-page per curiam opinion and separate opinions by each of the judges, totaling 147 pages) set out varying views on the legal test to be applied in determining aiding-and-abetting liability.

Numerous ATCA claims in recent years against multinational banks and businesses have asserted civil liability for human rights or other international law violations committed by governments with which the defendant firms have done business. Rather than alleging that the defendants directly participated in human rights or other violations, plaintiffs in these cases have typically asserted liability on the theory that the defendants aided or abetted the violations. Several district courts have concluded that there can be ATCA liability on this basis. (2)

Khulumani v. Barclay National Bank, Ltd. (3) involved ten separate actions by three groups of plaintiffs against about fifty major multinational banks and corporations (supplemented by numerous "John Doe" corporate defendants) that did business with South Africa during the apartheid years. The plaintiffs variously asserted claims under the ATCA, the Torture Victims Protection Act (TVPA), (4) and the Racketeer Influenced and Corrupt Organizations Act (RICO). (5) The cases were consolidated before Judge John E. Sprizzo in the Southern District of New York.

While the cases were pending in July 2003, South Africa's minister of justice and constitutional development submitted an ex parte declaration stating that South Africa viewed the suit as interfering with its efforts to address matters in which it had the predominant interest, and requesting the court to dismiss the case. The district court also requested the Department of State's views, and the U.S. Department of Justice filed a statement of interest, indicating that adjudication of the case risked serious adverse consequences for significant U.S. interests.

Judge Sprizzo dismissed the plaintiffs' claims under all three acts (ATCA, RICO, TVPA), finding that "aiding and abetting" human rights violations was not itself an actionable tort under the ATCA. (6) The plaintiffs appealed dismissal of the ATCA and TVPA claims.

The court of appeals affirmed the lower court's dismissal of...