Second Circuit Adopts Purpose Test for ATS Corporate Liability

Today the Second Circuit issued the long-awaited decision of Presbyterian Church of Sudan v. Talisman Energy. The case–written by a Bush 41 appointee (Jacobs) and joined by two Clinton appointees (Leval and Cabranes)–is important for many reasons, but it is especially important in (1) accepting the possibility of corporate liability under the ATS, (2) accepting that international law rather than domestic law is the source for determining aiding and abetting liability, and (3) limiting such liability to corporate conduct that has the purpose of aiding and abetting the government in violating human rights. Here is the key excerpt:

[A]pplying international law, we hold that the mens rea standard for aiding and abetting liability in ATS actions is purpose rather than knowledge alone. Even if there is a sufficient international consensus for imposing liability on individuals who purposefully aid and abet a violation of international law, no such consensus exists for imposing liability on individuals who knowingly (but not purposefully) aid and abet a violation of international law…. Only the purpose standard … has the requisite ‘acceptance among civilized nations’ for application in an action under the ATS…. Therefore, in reviewing the district court’s grant of summary judgment to Talisman, we must test plaintiffs’ evidence to see if it supports an inference that Talisman acted with the ‘purpose’ to advance the Government’s human rights abuses.

My initial impression of the opinion is that it creates an intent hurdle that will be extraordinarily difficult for plaintiffs to overcome. Plaintiffs must show that a corporation had the intent to assist in the violation of human rights. The Court went further and held that while “there may well be an ATS case in which a genuine issue of fact as to a defendant’s intent to aid and abet the principal could be inferred; but in this case, there were insufficient facts or circumstances suggesting that Talisman acted with the purpose to advance violations of international humanitarian law.”

If this case stands, it will be the death knell for most corporate liability claims under the Alien Tort Statute. It will be especially difficult to sustain such a burden when one combines the Iqbal pleading standard of plausibility with the Talisman standard of purposeful intent to commit a human rights violation.