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144104(L) Balintulov.FordMotorCo.
In the United States Court of Appeals
for the Second Circuit
AUGUSTTERM2014
Nos.144104(L),143589,143607,144129,144130,
144131,144132,144135,144136,144137,144138,144139
SAKWEBALINTULO,aspersonalrepresentativeofSABABALINTULO,etal.,
PlaintiffsAppellants,
v.
FORDMOTORCO.,INTERNATIONALBUSINESSMACHINESCORP.,DefendantsMovants.
OnAppealfromtheUnitedStatesDistrictCourtfortheSouthernDistrictofNewYork
ARGUED:JUNE24,2015DECIDED:JULY27,2015
Before:CABRANES,HALL,andLIVINGSTON,CircuitJudges.
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This appeal presents the question of whether
plaintiffs,victimsofSouthAfricanapartheid,haveplausiblyallegedrelevantconduct
committed within the United States that is sufficient
torebuttheAlienTortStatutespresumptionagainstextraterritoriality.
Weholdthattheyhavenot. Accordingly,weAFFIRM theAugust 28, 2014
order of theUnitedStatesDistrictCourt for
theSouthernDistrictofNewYork(ShiraA.Sheindlin,Judge).
PAULL.HOFFMAN(DianeE.Sammons,NagelRice,LLP,Roseland,NJ;MichaelD.Hausfeld,KristenM.Ward,Hausfeld,Washington,DC,onthebrief),Schonbrun,Desimone,Seplow,Harris&HoffmanLLP,Venice,CA,forPlaintiffsAppellants.JONATHANHACKER(AntonMelitsky,onthebrief),OMelveny&MyersLLP,NewYork,NY,forDefendantMovantFordMotorCompany.KEITHR.HUMMEL(TeenaAnnV.Sankoorikal,JamesE.Canning,onthebrief),Cravath,Swaine&MooreLLP,NewYork,NY,forDefendantMovantInternationalBusinessMachinesCorporation.
JOSA.CABRANES,CircuitJudge:
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This appeal presents the question of whether
plaintiffs,victimsofSouthAfricanapartheid,haveplausiblyallegedrelevantconduct
committed within the United States that is sufficient
torebuttheAlienTortStatutespresumptionagainstextraterritoriality.
Weholdthattheyhavenot.
Accordingly,weAFFIRM theAugust 28, 2014 order of
theUnitedStatesDistrictCourt for
theSouthernDistrictofNewYork(ShiraA.Sheindlin,Judge).
BACKGROUND
Nearlyadecadeandahalfago,plaintiffsfiledsuitundertheAlien Tort
Statute (ATS)1 against various corporations2 forallegedly aiding
and abetting crimes proscribed by the law ofnations (also called
customary international law)3 committed
1 The ATS states in full: The district courts shall have
originaljurisdictionofanycivilactionbyanalienforatortonly,committedinviolationofthelawofnationsoratreatyoftheUnitedStates.28U.S.C.1350.
2Amongtheoriginaldefendantsinthiscaseweredozensofcorporations,includingmany
prominentmultinational companies.Over time, however,
theDistrictCourtgrantedmanyofthesedefendantsmotionstodismiss,see,e.g.,InreS.AfricanApartheidLitig.,15F.Supp.3d454,455(S.D.N.Y.2014),andplaintiffsdropped
their claims against many others in their subsequent
amendedcomplaints, see, e.g., Balintulo v.Daimler AG, 727 F.3d 174,
183 (2d Cir.
2013)(BalintuloI).Accordingly,thenumberofdefendantshasbeenwhittleddowntotwo:
Ford Motor Co. (Ford) and International Business Machines
Corp.(IBM).
3 See, e.g., Mastafa v. Chevron Corp., 770 F.3d 170, 176 (2d
Cir. 2014)(equating violations of the law of nations with
violations of customary
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during apartheid by the SouthAfrican government against
SouthAfricanswithinSouthAfricassovereignterritory.
The long and complicated procedural history of
thisconsolidatedcaseinvolvesrulingsfromallthreelevelsofthefederaljudiciary.4Asrelevanthere,theDistrictCourt,onApril8,2009,heldthatplaintiffsmayproceed
againstdefendantsFord and IBM (theCompanies) on an agency theory of
liability for apartheid eracrimes allegedly committed by their
subsidiaries. Thereafter,
theCompaniessoughtawritofmandamusinthisCourt.OnSeptember17, 2010,
while this case remained pending, we held, in Kiobel
v.RoyalDutchPetroleumCo. (Kiobel I), that
theATSdoesnotconferjurisdiction over claims pursuant to customary
international
lawagainstcorporations.5TheSupremeCourtgrantedcertiorariand,onApril17,2013,affirmedour
judgment,whileexplicitlydeclining to
international law);Flores v.S.PeruCopperCorp., 414F.3d 233,
237n.2 (2dCir.2003) (In the context of the [ATS], we have
consistently used the termcustomary international
lawasasynonymforthetermthe lawofnations.);see also Hartford Fire
Ins. Co. v. California, 509 U.S. 764, 815 (1993) (Scalia,
J.,dissentinginpart)(usingthetwotermsinterchangeablywhennotingthatthelawofnations,orcustomaryinternationallaw,includeslimitationsonanationsexerciseofitsjurisdictiontoprescribe).
4ThefactualandproceduralhistoryofthecaseandthevariousseparatecasesthatwereconsolidatedtoformthecurrentactionissummarizedinInreSouth
African Apartheid Litig., 617 F. Supp. 2d 228, 24145 (S.D.N.Y.
2009),BalintuloI,727F.3dat18285,InreSouthAfricanApartheidLitig.,15F.Supp.3dat45557,
and In re South African Apartheid Litig., 56 F. Supp. 3d 331,
33236(S.D.N.Y.2014).
5621F.3d111(2dCir.2010).
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reachthecorporateliabilityquestion(KiobelII).6Instead,theCourtheld
that the presumption against extraterritoriality applies
toclaimsunder theATS7and thus
thestatutecannotbeappliedtoconductintheterritoryofanothersovereign.8
TwodaysaftertheSupremeCourtreleaseditsrulinginKiobelII, we
requested supplemental briefing from the parties on theimpactof
thatdecisionon thepresent case.Thereafter,onAugust21,2013,
inBalintulov.DaimlerAG,727F.3d174,188(2dCir.2013)(Balintulo I), we
denied the Companies request for a writ ofmandamus and remanded to
the District Court where theCompanies would be able to seek the
dismissal of all of theplaintiffsclaims,andprevail,prior
todiscovery, throughamotionfor judgmenton thepleadings.
Insodoing,werejectedplaintiffstheory of vicarious liability for the
Companies based on actionstakenwithin SouthAfricaby their
SouthAfrican subsidiaries
andconcludedthatKiobelIIforeclosestheplaintiffsclaimsbecausetheplaintiffshavefailedtoallegethatanyrelevantconductoccurredintheUnitedStates.9
On remand, the Companies moved for a judgment in theirfavor. The
District Court ordered the Companies to brief
thequestionofwhethercorporationscanbeheld liableunder theATS
6Kiobelv.RoyalDutchPetroleumCo.,133S.Ct1659,1663(2013).7Id.at1669.8BalintuloI,727F.3dat188.9Id.at189.
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followingKiobelII.OnApril17,2014,theDistrictCourtheldthattheSupreme
Court in Kiobel II, which, as noted earlier, expresslydeclined to
address the question of corporate liability
undercustomaryinternationallaw,hadnonethelessoverruledtheholdingofKiobel
Iand thusaltered the lawof theCircuit in that
respect.10TheDistrictCourtalsopermittedplaintiffstomovetoamendtheircomplaints
inordertoallegefactssufficienttoovercometheATSspresumption against
extraterritoriality.11 After plaintiffs
submittedtheirproposedamendedcomplaints,theDistrictCourtheldthattheproposed
amendmentswere futile because the relevant conductalleged all
occurred abroad and because plaintiffs theory
ofliabilitywasforeclosedbythisCourtsdecisioninBalintuloI.12
DISCUSSION
Wegenerally review adistrict courtsdecision
topermitordenyleavetoamendacomplaintforabuseofdiscretion,keepinginmindthat
leavetoamendshouldbefreelygrantedwhen
justicesorequires.13However,whendenialofleavetofilearevisedpleadingisbasedonalegalinterpretation,suchasfutility,areviewingcourtconductsadenovoreview.14Aproposedamendmenttoacomplaint
10InreS.AfricanApartheidLitig.,15F.Supp.3dat460.11Id.at465.12InreSouthAfricanApartheidLitig.,56F.Supp.3dat338.13Pangburnv.Culbertson,200F.3d65,70(2dCir.1999)(internalquotation
marksomitted).14Hutchisonv.DeutscheBankSec.Inc.,647F.3d479,490(2dCir.2011).
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is futile when it could not withstand a motion to dismiss.15
Inorder to survive a motion to dismiss, a complaint must
containsufficient factualmatter,acceptedas true, to stateaclaim to
reliefthatisplausibleonitsface.16Andwhileacourtmustacceptallofthe
allegations contained in a complaint as true, that tenet
isinapplicable to legal conclusions, and threadbare recitals of
theelements of a cause of action, supported by mere
conclusorystatements,donotsuffice.17
I. TheATSClaims
On appeal, plaintiffs claim that they have alleged extensivenew
facts demonstrating that the Companies U.S.based
actionsconstitutedunlawful aiding and abetting of crimes in
violation ofthe law of nations. They allege that the Companies
specializedproductdevelopment,salesofsuchtailoredproducts,andprovisionof
expertise and training were aimed at facilitating abusescommitted
in South Africa.18 Specifically, plaintiffs allege thatdefendant
Ford (1) provided specialized vehicles to the SouthAfricanpoliceand
security forces toenable these forces toenforceapartheid,19 and (2)
shared information with the South African
15Lucentev.IBMCorp.,310F.3d243,258(2dCir.2002).16 Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly,550U.S.544,570(2007)).17Mastafa,770F.3dat177.18AppellantsBr.3.19Id.at1521.
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regimeaboutantiapartheidandunionactivists,therebyfacilitatingthe
suppression of antiapartheid activity.20 As for IBM,
plaintiffsclaimthatthecompany(1)designedspecifictechnologiesthatwereessential
for racial separation under apartheid and
thedenationalizationofblackSouthAfricans;21(2)bidon,andexecuted,contracts
in South Africa with unlawful purposes such asdenationalization22
of black South Africans;23 and (3)
providedtraining,support,andexpertisetotheSouthAfricangovernmentinusingIBMsspecializedtechnologies.24
Inturn,theCompaniesassertthattheDistrictCourtproperlydenied
plaintiffs motion for leave to amend their
complaintsbecause(1)plaintiffscannotsatisfytheATSsterritorialityandmensrea
requirements; (2) corporations cannot be sued under
theATS;and(3)thereisnoaidingandabettingliabilityundertheATS.
II. JurisdictionUndertheATS
Our inquirybeginsby assessingwhether theATSgrantsusjurisdiction
over plaintiffs action. TheAlien Tort Statute containsnumerous
jurisdictionalpredicates,eachofwhichmustbesatisfied
20Id.at2123.21Id.at1213.22Bydenationalization,plaintiffsrefer to
thestripp[ing]of . . .South
Africannationalityand/orcitizenshipbySouthAfricansecurityforcesduringtheperiodfrom1960to1994.J.A.403.
23AppellantsBr.1112.24Id.at13.
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before a court may properly assume jurisdiction over an
ATSclaim.25Thus,at theoutset,acourtmustassure itself that:(1)
thecomplaint pleads a violation of the law of nations; (2)
thepresumption against the extraterritorial application of the
ATS,announced by the Supreme Court in Kiobel [II], does not bar
theclaim; (3) customary international law recognizes [the
asserted]liability [of a]defendant; and (4) the theory of liability
allegedbyplaintiffs (i.e., aiding and abetting, conspiracy) is
recognized
bycustomaryinternationallaw[orthelawofnations].26Andwhileadefect in
anyof these jurisdictionalpredicateswouldbe fatal to aplaintiffs
claims, courts retain discretion regarding the order
andmannerinwhichtheyundertaketheseinquiries.27
Here, we begin by addressing the question of whetherplaintiffs,
in their proposed amended complaints, allege sufficientconduct to
displace the ATSs presumption againstextraterritoriality. Because
we agree with the District Courtsconclusion that they do not, we
need not address the otherjurisdictionalpredicates.28
25Mastafa,770F.3dat179.26Id.(internalcitationsomitted).27Id.
28Thoughwedisposeofplaintiffsclaimsonotherjurisdictionalgrounds,we
note that plaintiffs fail to surmount another obstacle as well:
they cannotestablish jurisdiction under the ATS for claims against
corporations.
Aspreviouslydiscussed,theSupremeCourtsdecisioninKiobelIIexplicitlydidnotreach
the corporate liability issue and did not modify the precedent of
this
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A. ATSandthePresumptionAgainstExtraterritoriality
As noted above, the SupremeCourt inKiobel IImade clearthat
claimsunder theATS cannotbebrought forviolationsof
thelawofnationsoccurringwithin the territoryofa
sovereignnationother than the United States.29 The Court explained
that it wasdismissing the plaintiffs claims because all the
relevant conducttookplaceoutside theUnitedStates.30Thewholly
extraterritorialnatureoftheKiobelplaintiffsclaimswasadispositivefactfortheKiobelIICourtandsoithadnoreasontoexplorehowcourtsshouldproceedwhere,ashere,someoftherelevantconductoccurredintheUnitedStates.31
Circuit that corporate liability is not recognized as a
specific,universal, andobligatorynorm . . . [and]
isnotaruleofcustomary international law
thatwemayapplyundertheATS.KiobelI,621F.3dat145(internalcitationomitted).
We need not delve deeply into the corporate liability question here
tonotetheobviouserroroftheDistrictCourtinitsholdingthattheSupremeCourtinKiobel
II overturned ourCourts holding inKiobel I. See In re
SouthAfricanApartheidLitig.,15F.Supp.3d454,46061(S.D.N.Y.2014).Thereisnoauthorityfor
the proposition that when the Supreme Court affirms a judgment on
adifferentgroundthananappellatecourtittherebyoverturnstheholdingthattheSupremeCourthaschosennottoaddress.Toholdotherwisewouldunderminebasicprinciplesofstaredecisisandinstitutionalregularity.
29133S.Ct.at1669.30Id.at1669.31BalintuloI,727F.3dat191.
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InMastafa v. Chevron Corporation, we applied the SupremeCourts
rulings inMorrison v.NationalAustraliaBankLimited32
andKiobelIItoclarifythatthefocusoftheATSinquiryisonthenatureand
locationof theconductconstituting theallegedoffensesunderthe law of
nations.33 Accordingly, to determine whether specificclaims can be
brought under the ATS, a court must isolate therelevant conduct of
a defendantconduct that is alleged to beeither a direct violation
of the law of nations or the aiding
andabettingofanothersviolationofthelawofnationsinacomplaintandthenconductatwostepjurisdictionalanalysis.
Step one is a determination of whether that
relevantconductsufficientlytouchesandconcernstheUnitedStatessoastodisplacethepresumptionagainstextraterritoriality.Steptwoisadetermination
of whether that same conduct states a claim for aviolation of the
law of nations or aiding and abetting
anothersviolationofthelawofnations.34
Inorder tosatisfy thesecondstepof thisanalysis,aplaintiffstating
a claim under an aiding and abetting theory
mustdemonstratethatthedefendant(1)providespracticalassistancetotheprincipalwhichhasasubstantialeffectontheperpetrationofthe
32 561 U.S. 247 (2010) (after determining that the presumption
againstextraterritorialityappliedtotheSecuritiesExchangeActof1934,theCourtthendeterminedwhichterritorialevent[s]orrelationship[s]were
thefocusoftheAct).
33Mastafa,770F.3dat18586.34Id.at186.
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crime, and (2) does so with the purpose of facilitating
thecommissionof thatcrime.35Themens rea standard
foraccessorialliabilityinATSactionsispurposeratherthanknowledgealone.36Knowledgeoforcomplicityintheperpetrationofacrimewithoutevidencethatadefendantpurposefullyfacilitatedthecommissionofthat
crimeis thus insufficient to establish a claim of aiding
andabettingliabilityundertheATS.37
B. AnalysisofPlaintiffsComplaints
Turningtothecomplaintsintheinstantcase,plaintiffsassertthat the
following conduct by defendant Ford is sufficient todisplace
theATSspresumptionagainstextraterritoriality: (1)Fordprovided
specialized vehicles to the SouthAfrican security forcesthat
enabled these forces to violently suppress opposition to
35PresbyterianChurchofSudanv.TalismanEnergy,
Inc.,582F.3d244,259
(2d Cir. 2009) (quoting and adopting the reasoning of Judge
Katzmannsconcurrence inKhulumani v.BarclayNatlBank Ltd., 504 F.3d
254, 277
(2dCir.2007),whichlaidoutthestandardforaplaintifftopleadatheoryofaidingandabettingliabilityundertheATS).
36Id.at259. 37Mastafa,770F.3dat192 (Accordingly, thedefendants
complicity
inthegovernmentsabusesinPresbyterianChurch,withoutmore,wasinsufficienttoestablish
a claim of aiding and abetting or conspiracy under the
ATS.);PresbyterianChurch,582F.3dat263 (It is thereforenotenough
forplaintiffs toestablishTalismans complicity indepopulating areas
inor around
theHegligandUnitycamps:plaintiffsmustestablishthatTalismanactedwiththepurposetoassisttheGovernmentsviolationsofcustomaryinternationallaw.).
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apartheid;38and(2)FordwasresponsibleforaidingandabettingthesuppressionofitsownworkforceinSouthAfrica.39
As for IBM,plaintiffs allege that (1) IBM employees
trainedemployees of the South African government on how to use
theirhardware and software to create identity documentsthe
verymeansbywhichblackSouthAfricansweredeprivedoftheirSouthAfricannationality;40(2)IBMbidoncontractsinSouthAfricawithunlawfulpurposes
such asdenationalizingblack SouthAfricans;41and (3) IBMdesigned
specific technologies thatwere essential
forracialseparationunderapartheidandthedenationalizationofblackSouthAfricans.42
In Balintulo I, we reasoned that the Companies
allegeddomesticconduct lackedaclearnexus to thehuman
rightsabusesoccurringinSouthAfrica.43Heretoo,plaintiffsamendedpleadingsdonotestablishfederal
jurisdictionundertheATSbecausetheydonotplausiblyallegethattheCompaniesthemselvesengagedinanyrelevant
conduct within the United States to overcome
thepresumptionagainstextraterritorialapplicationoftheATS.
38AppellantsBr.36;seealsoJ.A.507,51317,551.39AppellantsBr.37n.16;seealsoJ.A.52122.40AppellantsBr.35;seealsoJ.A.547.41AppellantsBr.34;seealsoJ.A.528,534,544,54648.42AppellantsBr.3435;seealsoJ.A.535,54647.43727F.3dat192.
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1. AllegationsAgainstFord
Beginning with the allegations against Ford, plaintiffs
onlyallegerelevantconductthatoccurredinSouthAfrica,thusfailingto
satisfy steponeofMastafas twostep jurisdictional analysis.44
ItwasFords subsidiary inSouthAfrica,notFord, that is alleged
tohaveassembledandsold thespecializedvehicles
toSouthAfricasgovernment,with parts shipped principally fromCanada
and theUnited Kingdomnot from the United States.45 Similarly, it
wasFordsSouthAfrican subsidiary,notFord,
thatallegedlyprovidedinformation to the apartheid government about
antiapartheidactivistsinSouthAfrica.46Althoughplaintiffsrepeatedlyallegenoless
than six times in their proposed amended
complaint47thatFordcontrolledtheirSouthAfricansubsidiary,wehavepreviouslyrejectedavicarious
liability
theorybasedonallegationsmateriallyidenticaltothoseassertedhere.48
44SeeMastafa,770F.3dat186.
45J.A.50607,514. 46J.A.at51921.
47J.A.at45568.
48BalintuloI,727F.3dat192(holdingthatbecausethecomplaintallegedonlyactionstakenwithinSouthAfricabydefendantsSouthAfricansubsidiariesandbecausetheseputativeagentsdidnotcommitanyrelevantconductwithintheUnitedStatesgivingrisetoaviolationofcustomaryinternationallawthatis,because
theassertedviolation[s]of the lawofnationsoccurr[ed]outside
theUnitedStatesthedefendantscannotbevicariouslyliableforthatconductundertheATS(internalquotationmarksandcitationomitted)).
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Plaintiffscontend that
theiramendedpleadingsdemonstratethattheCompaniescontrolledtheirSouthAfricansubsidiariesfromtheUnitedStates
such that they couldbe founddirectlyandnotjust vicariouslyliable
for their subsidiaries conduct under theATS.
ButholdingFordtobedirectlyresponsiblefortheactionsofitsSouthAfricansubsidiary,asplaintiffswouldhaveusdo,wouldignorewellsettledprinciples
of corporate law,which treatparentcorporations and their
subsidiaries as legally distinct entities.49While
courtsoccasionally pierce the corporateveil and ignore asubsidiarys
separate legal status, they will do so only inextraordinary
circumstances, such as where the corporate
parentexcessivelydominatesitssubsidiaryinsuchawayastomakeitamereinstrumentalityoftheparent.50
Here,plaintiffspresentnoplausibleallegationsindeed,theypresentnoallegationsthatwouldformanybasisforustopierce[Fords]corporateveil.51ThecomplaintsdonotsuggestthatFordscontrol
over its subsidiariesdiffered from that ofmost
companiesheadquartered in the United States with subsidiaries
abroad.Allegationsofgeneralcorporatesupervisionareinsufficienttorebut
49CarteBlanche(Singapore)Pte.,Ltd.v.DinersClubIntl,Inc.,2F.3d24,26
(2dCir.1993)(Generallyspeaking,aparentcorporationand
itssubsidiaryareregardedaslegallydistinctentities.).
50NewYorkStateElec.&GasCorp.v.FirstEnergyCorp.,766F.3d212,224(2dCir.2014).
51Id.
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the presumption against territoriality and establish aiding
andabettingliabilityundertheATS.
2. AllegationsAgainstIBM
Plaintiffs first allegation against IBM also fails because
therelevant conduct all occurred within South Africa and so
theycannotsatisfysteponeofMastafastwostepjurisdictionalanalysis.52JustasinthecaseofFord,itisIBMsSouthAfricansubsidiarynotIBMthat
is alleged to have trained South African governmentemployees to use
IBM hardware and software to create
identitymaterials.53Theseallegationscannotrebut
thepresumptionagainstextraterritoriality as they do not
sufficiently tie[ ] the
relevanthumanrightsviolationstoactionstakenwithintheUnitedStates.54
Plaintiffs second allegation against IBMthat the companybid on
contracts meant to further the denationalization of SouthAfrican
blacksfalls short of alleging a violation of the law ofnations for
a simple reason: IBMdidnotwin the contract for
theonlybidspecificallyallegedtohavebeenmadebyIBM,ratherthanIBMs
South African subsidiary.55 Indeed, even according
toplaintiffs,another company, ICL,won thepassbooks contractover
52SeeMastafa,770F.3dat186.
53J.A.547;seealsoJ.A.446. 54BalintuloI,727F.3dat192.
55J.A.528
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IBM.56Itissimplynotaviolationofthelawofnationstobidon,andlose, a
contract that arguablywouldhelp a
sovereigngovernmentperpetrateanassertedviolationofthelawofnations.
Plaintiffs final allegation against IBM, on the other
hand,appears to touch and concern the United States with
sufficientforce to displace the presumption against
extraterritoriality.
Theirproposedamendedcomplaintreads,inrelevantpart,asfollows:
In theUnited States, IBMdeveloped boththe hardware and the
softwareboth amachine and a programto create theBophuthatswana ID.
Once IBM haddevelopedthesystem,itwastransferredtothe Bophuthatswana
government forimplementation.57
Identity documents, like those allegedly created by IBM
andtransferred to theBophuthatswana government,were an
essentialcomponentofthesystemofracialseparationinSouthAfrica.58And
56J.A.at16970,258. 57J.A.at546. 58AppellantsBr.
89.Bophuthatswanawas aBantustan, a territory
setasidebytheSouthAfricangovernmentforparticularethnicgroups.Id.Giventheoutcomeofouranalysis,weneednot
reach thequestionofwhetherplaintiffsallegations regarding racial
separation systems in South Africa constitute aviolation of the law
of nations.Cf.Mastafa, 770 F.3d at 181 (undertaking thatanalysis in
the contextof crimes allegedly committedby the
SaddamHusseinregime).Ofcourse,whetheraviolationofthelawofnationshasindeedoccurredisanindependent
jurisdictionalpredicate,seeinfran.27andaccompanyingtext,
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so,designingparticulartechnologiesintheUnitedStatesthatwouldfacilitate
SouthAfrican racial separationwould appear to be
bothspecificanddomestic59conductthatwouldsatisfythefirstofthetwo
steps of our jurisdictional analysis.60 Accordingly, if
thisallegation is able to also satisfy the second prong of
ourextraterritorialityinquirythatis,ifsuchconductaidedandabetteda
violation of the law of nationsthe presumption
againstextraterritoriality would be displaced and we would be able
toestablishjurisdictionforthisparticularclaimundertheATS.
Upon an initial review of the relevant conduct in
thecomplaint,however,weconclude thatplaintiffsclaimagainst IBMdoes
not meet the mens rea requirement for aiding and abettingliability
established by our Court. While the complaint mustsupport [] an
inference that [IBM] acted with the purpose
toadvance[SouthAfricas]humanrightsabuses,61itplausiblyalleges,atmost,thatthecompanyactedwithknowledgethatitsactsmightfacilitatetheSouthAfricangovernmentsapartheidpolicies.But,aswe
noted earlier, mere knowledge without proof of purpose is and one
inextricably intertwined with the extraterritoriality analysis that
weconducthere. 59Mastafa,770F.3dat191. 60 See supra II.A.; see also
Mastafa, 770 F.3d at 191 (finding
multipledomesticpurchasesandfinancingtransactionsbyonedefendantandnumerousdomesticpayments
and financing arrangements by anotherdefendant to
besufficientlyspecificanddomestictosatisfythefirstprongofthejurisdictionalanalysis).
61PresbyterianChurch,582F.3dat260.
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insufficienttomakeoutthepropermensreaforaidingandabettingliability.62
Moreover, where the language in the complaint seems tosuggest
that IBM acted purposefully,63 it does so in
conclusorytermsandfailstoestablishevenabaselinedegreeofplausibilityofplaintiffsclaims.64Acomplaintwillnotsufficeifittendersnakedassertions
devoid of further factual enhancement.65
Indeed,plaintiffsdonotandcannotplausiblyallege
thatbydevelopinghardwareandsoftwaretocollectinnocuouspopulationdata,IBMspurposewas
todenationalizeblackSouthAfricansand further theaims of a brutal
regime.66 This absence of a connection betweenIBMs relevant conduct
and the allegedhuman rights abuses
oftheSouthAfricangovernmentmeansthatplaintiffs,evenifallowed
62SeeMastafa,770F.3dat19294. 63See,e.g.,J.A.534.
64Mastafa,770F.3dat194.
65Iqbal,556U.S.at678(quotationmarks,brackets,andcitationomitted).
66SeeMastafa,770F.3dat194(Plaintiffsneverelaborateupon[asimilarlyconclusory]
assertion in any way that establishes the plausibility of a
largeinternational corporation intendingand taking deliberate steps
with thepurposeofassistingtheSaddamHussein regimes
tortureandabuseof
Iraqipersons.);seealsoKiobel,621F.3dat192(Leval,J.,concurring inthe
judgment)([The complaint] pleads also in conclusory form that the
Nigerian militaryscampaign of violence against the
[victimplaintiffs] was instigated, planned,facilitated, conspired
and cooperated in by [defendant corporation].
SuchpleadingsaremerelyaconclusoryaccusationofviolationofalegalstandardanddonotwithstandthetestofTwomblyandIqbal.).
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toamendtheircomplaint,willbeunabletostateavalidATSclaimagainstIBM.
Accordingly,becauseplaintiffsfailplausiblytopleadthatanyU.S.based
conduct on the part of either Ford or IBM aided
andabettedSouthAfricasassertedviolationsofthelawofnations,theirclaimscannotformthebasisofour
jurisdictionundertheATS.Wethereforeaffirm
theDistrictCourtsdenialofplaintiffsmotion forleave to file an
amended complaint because the
proposedamendmentsarefutileasamatteroflaw.
CONCLUSION
Tosummarize,weholdthat:
(1)
Knowledgeoforcomplicityintheperpetrationofacrimeunderthelawofnations(customaryinternationallaw)absentevidencethatadefendantpurposefullyfacilitatedthecommissionofthatcrimeisinsufficienttoestablishaclaimofaidingandabettingliabilityundertheATS.
(2)
Itisnotaviolationofthelawofnationstobidon,andlose,acontractthatarguablywouldhelpasovereigngovernmentperpetrateanassertedviolationofthelawofnations.
(3)
AllegationsofgeneralcorporatesupervisionareinsufficienttorebutthepresumptionagainstextraterritorialityandestablishaidingandabettingliabilityundertheATS.
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(4)
Here,plaintiffsamendedpleadingsdonotestablishfederaljurisdictionundertheATSbecausetheydonotplausiblyallegethattheCompaniesthemselvesengagedinanyrelevantconductwithintheUnitedStatestoovercomethepresumptionagainstextraterritorialapplicationoftheATS.
a.
HoldingFordtobedirectlyresponsiblefortheactionsofitsSouthAfricansubsidiary,asplaintiffswouldhaveusdo,ignoreswellsettledprinciplesofcorporatelaw,whichtreatparentcorporationsandtheirsubsidiariesaslegallydistinctentities.
b.
Plaintiffshaveplausiblyallegedsomespecific,domesticconductinthecomplaintnamely,thatIBMintheUnitedStatesdesignedparticulartechnologiesintheUnitedStatesthatfacilitatedSouthAfricanapartheid.ThisconductsatisfiesthefirstprongofourextraterritorialityanalysisasittouchesandconcernstheUnitedStates.
c.
PlaintiffscomplaintagainstIBMfailsonthesecondprongoftherequiredjurisdictionalanalysis:itdoesnotplausiblyallegethatIBMsconductpurposefullyaidedandabettedSouthAfricasallegedviolationsofcustomaryinternationallaw.
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d.
Accordingly,theallegedconductcannotstateaclaimforaidingandabettingliabilityundertheATSandcannotformthebasisforourjurisdiction.
(5)
Becausewedecidethecaseonthebasisofthepresumptionagainstextraterritoriality,weneednotaddresswhetherplaintiffscomplaintsatisfiestheATSsotherjurisdictionalpredicates,includingwhetherthecomplaintpleadsaviolationofthelawofnations;whethercustomaryinternationallawrecognizestheassertedliabilityoftheCompanies;andwhetherthetheoryofliabilityallegedbyplaintiffsisrecognizedbycustomaryinternationallaw.
For the reasons set forthabove,weAFFIRM
theAugust28,2014orderoftheDistrictCourt.
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