Lawyers for Exxon Mobil Corp. have asked the full U.S. Court of Appeals for the D.C. Circuit to reject a panel decision that exposed the oil giant to corporate liability for alleged atrocities in Indonesia.
Exxon's lawyers, including Sri Srinivasan of O’Melveny & Myers, said in a petition (PDF) that the three-judge panel got it wrong when it found Exxon can be held liable under the Alien Tort Statute.
The 2-1 panel decision “vastly expanded” the statute to find that corporations can be liable for violent acts committed abroad, Srinivasan said.
Srinivasan, chair of O’Melveny’s appellate and Supreme Court practice, said the panel decision, if it is not overturned, “threatens to unleash a flood of litigation in U.S. court for actions lacking any salient connection to the United States.”
Exxon’s lawyers said the D.C. Circuit decision conflicts with a ruling in the U.S. Court of Appeals for the 2nd Circuit. Srinivasan argued in Exxon’s petition that under customary international law only individuals, not corporations, can be held accountable for human rights violations.
“There is a strong presumption in American law that statutes do not apply extraterritorially, even where an express cause of action exists,” Srinivasan said. “There is nothing in the text or statutory history of the ATS sufficient to trump this strong presumption.”
The attorneys for Exxon urged the appeals court to “reject the notion that the ATS can be used as a vehicle to bring suit in U.S. courts for alleged misconduct that occurred abroad.”
Two suits against Exxon in Washington federal district court merged into the single appellate case. The plaintiffs alleged Indonesian military, serving for Exxon to protect facilities there, tortured civilians in a village there over many years.
In a divided ruling, the D.C. Circuit in July revived the civil action. Lawyers for the plaintiffs had argued Exxon was in control of the military personnel and therefore the company is responsible for the alleged crimes the security forces committed.
“The law of the United States has been uniform since its founding that corporations can be held liable for the torts committed by their agents,” Judge Judith Rogers of the D.C. Circuit said in the majority opinion. “This is confirmed in international practice, both in treaties and in legal systems throughout the world.”
A lawyer for the plaintiffs, Agnieszka Fryszman of Cohen Milstein Sellers & Toll, said the D.C. Circuit ruling is consistent with how the law has been interpreted in courts across the country. Fryszman called the 2nd Circuit decision "a novel shift in the law."
The U.S. Court of Appeals for the 7th Circuit said in a ruling in July, Fryszman noted, that corporations are not exempt from liability under the Alien Tort Statute.
The appeals court in that case, Flomo et al. v. Firestone Natural Rubber Co., also said "no court to our knowledge has ever held that [the statute] doesn’t apply extraterritorially."
The D.C. Circuit today issued an order directing the Indonesian plaintiffs to file a response to Exxon's petition for a rehearing en banc.