Federal Court Adopts “Purpose” Test for Alien Tort Statute, “Knowledge” Test for Antiterrorism Act

A federal district court in Texas has held that the Alien Tort Statute (“ATS”) requires allegations of intent to violate international law. The mere knowledge that such violation was occurring, or would occur, is insufficient to support a claim under the ATS.

The complaint in Abecassis v. Wyatt alleges that various corporations and individuals purchased oil from Iraq and made payments that violated the United Nations Oil-for-Food (“OFP”) program. The plaintiffs allege that the oil companies were involved in buying Iraqi oil with payments to a secret bank account in Jordan controlled by Hussein. Hussein used these funds from this account to make reward payments to the families of suicide bombers and others who engaged in terrorist attacks in Israel. The also allege violations of the TVPA and the Antiterrorism Act (“ATA”).

With respect to the ATS, the court dismissed the ATS claim, finding that that the requisite allegations of corporate intent to violate international law were not alleged:

It is not sufficient to allege facts showing that the defendants intended to violate the OFP or to assist Hussein in violating the OFP. That, while unlawful, is not a violation of the type of definite, universally accepted norm of international law that Sosa would include among the small set of norms giving rise to ATS jurisdiction. The allegation would have to be that the defendants acted with the purpose of assisting terrorists to murder or maim innocent civilians. No such factual allegations appears in the complaint…. The factual allegations in this case do not support a plausible inference that any defendant acted with the purpose of assisting terrorist attacks. The absence of any such allegations defeats aiding and abetting and conspiracy liability under the ATS. [pp. 51-52].

With respect to the ATA claim, the court applied a different standard, essentially a knowledge standard, but tweaked to require evidence that the defendant must know that money will be used to support terrorism against Americans:

The defendant must collect funds willfully but the only required knowledge is that the funds will be used for terrorism. Knowledge is sufficient. But … it is not enough to know the character of the ultimate organization. The defendant must know (or intend) that its money is going to a group engaged in terrorist acts or is being used to support terrorist acts…. [T]he plaintiffs have not … sufficiently alleged that any defendant had the knowledge necessary for liability. The only relevant allegations are either wholly conclusory or inadequate. The plaintiffs must allege, at a minimum, that each defendant knew that the oil it was buying through the OFP was tied to a kickback to Hussein and that Hussein was using OFP kickback money to fund terrorism that targeted American nationals…. There are no allegations that, if proven, would show that the defendants had information that Hussein was using OFP kickback money to fund terrorism targeting Americans. [pp. 67-68].

I’m not keeping score, but there seems to be a strong movement afoot for the ATS to require purposeful intent on the part of corporate defendants. With the heightened pleading standard of Iqbal, it seems increasingly likely that this standard could shut down most ATS claims. How does a plaintiff properly allege corporate intent in a complaint in order to survive the purpose test?