In Sarei v. Rio Tinto, No. 09-56381 (9th Cir. 10/26/10), the Ninth Circuit, en banc (meaning the full court of appeals (12 judges) rather than the typical panel of three judges), addressed for at least the third time claims arising out of events on the island of Bougainville in Papua New Guinea. Plaintiffs, non-U.S. residents, sued under the Alien Tort Statute, 28 U.S.C. § 1350, and alleged that Rio Tinto, also an non-U.S. entity (it is a British-Australian company with headquarters in London and Melbourne), mined copper in the village of Panguna in Bougainville since 1972. As part of class action complaint, plaintiffs alleged that Rio Tinto seriously damaged the environment and allegedly harmed the indigenous population to the point of sparking a civil war and participated in war crimes. The complaint sought class certification for a “War Crimes Class” and an “Environmental Right to Life Class”, which would include more than 10,000 claimants. The pleading also sought compensatory and punitive damages as well as disgorgement of Rio Tinto’s profits.
In the most recent Ninth Circuit decision, the en banc Court of Appeals referred to mandatory mediation an appeal from the district court’s determination that the plaintiffs’ claims should not be subjected to the requirement of prudential exhaustion and therefore might proceed. There is no opinion in chief in the case, just a reference to mediation. What is remarkable about the decision is the long dissent and additional Statement generated by the reference of the case to mediation.
Dissenting, Judge Kleinfeld decried the reference to mediation prior to the Court’s determination of whether it had jurisdiction over the dispute. Judge Kleinfeld believed it likely that the Court would find there was no jurisdiction, both because the dispute involved a nonjusticiable political question and because of the wholly extraterritorial nature of the claims. For the latter view the Judge relied on Morrison v. Nat’l Australia Bank, Ltd., 130 S.Ct 2869 (2010), on which we posted blogs in July. It may be that Judge Kleinfeld felt that Morrison sounded the death-knell for application of the Alien Tort Statute to wholly extraterritorial conduct and claims against corporations. The Second Circuit recently so held, but the reasoning in that case was not the extraterritoriality analysis of Morrison, since the ATS has been applied to extraterritorial claims against individuals. Judge Kleinfeld also said that the ATS “was promulgated as a means of keeping us out of foreign conflicts”. The Judge does not cite anything for that proposition.
What Judge Kleinfeld was most critical of was sending the claims to mediation, not because it would have no effect on the ultimate outcome but precisely because it might have an effect, which the Court should not be doing prior to determining if it had jurisdiction. The Judge was not prepared to say that any settlement would be good – he compared that view to one praising the Union for having settled the Civil War by ending the bloodshed but continuing slavery.
Judge Kleinfeld’s dissent prompted a Statement by Judge Reinhardt, in which four other Judges joined. The Statement promoted the utility of mediation in the settlement of disputes. A short dissent was also filed by Judge Callahan, who is concerned about referring a case to mediation prior to determining the question of jurisdiction.