Exxon Shrugged:1 How a 200 Year Old Statute Torments the Titans

By Jones, Rachel A. | Energy Law Journal, July 1, 2012 | Go to article overview

Exxon Shrugged:1 How a 200 Year Old Statute Torments the Titans


Jones, Rachel A., Energy Law Journal


I. INTRODUCTION

In 2001, a group of Indonesian villagers filed suit against Exxon Mobil Corporation (ExxonMobil) in federal court alleging genocide, extrajudicial killing, torture, crimes against humanity, sexual violence, and kidnapping.2 According to the villagers, ExxonMobil's private security forces committed international human rights abuses while acting under the direct control of ExxonMobil.3 Doe VIII v. Exxon Mobil Corp. (Exxon) is part of a recent group of decisions that examined the extent of corporate liability under the Alien Tort Statute (ATS).4

In Exxon, the D.C. Circuit Court held that, under the ATS, ExxonMobil may be held liable for tort violations of customary international law alleged by Indonesian villagers. 5 The divided panel rejected corporate immunity6 and created a split in the circuits. The court in Exxon strongly criticized the Second Circuit's opinion in Kiobel v. Royal Dutch Petroleum Co.,7 which declared corporations immune from ATS tort liability.8 Three days after Exxon, the Seventh Circuit, in Flomo v. Firestone Natural Rubber Co., joined Exxon in rejecting corporate immunity.9 Since then the Fourth and Ninth Circuits have addressed the issue, deepening and complicating the circuit split.10 The Supreme Court has granted certiorari to Kiobel and will consider the issue of corporate liability under the ATS.11 Ultimately, the Supreme Court should adopt the D.C. Circuit's reasoning in Exxon extending liability under the ATS to corporate actors.12

II. BACKGROUND

A. Natural Gas Development, Civil War, and the Ensuing Litigation

In 1971, Mobil Oil Corporation found natural gas in the Aceh province of Indonesia.13 By 1978, it began exporting liquefied natural gas (LNG) from the large Arun field to Japan.14 The field quickly began prolific production,15 and by 2001, Indonesia had become the world's largest exporter of LNG.16 Notwithstanding that success, existing turmoil in the region only escalated with increased production.17 Preceding significant LNG production, the Aceh region of Indonesia was embroiled in decades of bitter civil war.18 The wealth of the Arun field made it a valuable asset contested between warring factions within Indonesia. 19 Despite efforts to maintain stability, escalating violence in March of 2001 forced ExxonMobil to shut down its natural gas operations in Aceh.20

During those tensions, ExxonMobil hired members of the Indonesian military to act as private security personnel to protect its natural gas facilities.21 Allegedly, ExxonMobil knew these individuals were engaging in a campaign of systematic genocide against the Aceh people and that performance under the security contract would likely continue those abuses.22 The private commandos reportedly committed numerous human rights violations with the support of ExxonMobil.23

In response, angry Aceh villagers filed suit against ExxonMobil and several of its subsidiary companies in June of 2001.24 Subsequently, several more groups of villagers filed complaints against ExxonMobil making similar claims.25 Initially, the district court dismissed the statutory claims, ruling that the ATS did not recognize liability for aiding and abetting or for sexual violence.26 As the litigation against ExxonMobil grew over time, the district court dismissed the claims in a piece-meal fashion.

B. The Alien Tort Statute

As part of the Judiciary Act of 1789, the first Congress created the ATS to give non-citizens a narrow path to civil remedy in the new federal courts.27 Relatively unaltered since its creation,28 the statute in its entirety succinctly grants: "The district courts shall have original jurisdiction of any civil action by an alien for tort only, committed in violation of the law of nations or a treaty of the United States."29

1. The Law of Nations

The ATS invokes the authority of the law of nations, a source of law unfamiliar to many modern readers. Drawing largely from natural law,30 the operative jurisprudential model at the time of ATS enactment was strikingly different than our Post-Erie notions. …

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