Talisman Energy and the Alien Tort Statute: The Continuing Threat of Secondary Liability

Talisman Energy and the Alien Tort Statute: The Continuing Threat of Secondary Liability

Two recent cases, Abecassis v. Wyatt, 2010 U.S. Dist. LEXIS 32731, and Lev v. Arab Bank, PLC, 2010 U.S. Dist. LEXIS 16887, highlight the enduring enigmatic nature of the "purpose" standard for proving an ATS violation set forth in Presbyterian Church of Sudan v. Talisman Energ, 582 F.3d 244. This Emerging Issues Analysis, prepared by Jonathan Drimmer and Michael Lieberman of Steptoe & Johnson, discusses these decisions and their implications.

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The authors write: The Alien Tort Statute, 28 U.S.C. § 1350 (ATS), which allows aliens to sue in U.S. federal courts for certain violations of international law, has rapidly grown to become a genuine threat to multinational corporations in their overseas operations. Courts have now had the opportunity to address some 150 cases brought against corporate defendants under the ATS, most of which seek to hold corporations liable based the acts of third parties - such as government officials - under theories of secondary liability. Yet courts have offered differing interpretations of these theories, creating a confusing patchwork of legal standards and, ultimately, an unpredictable legal landscape.

In an important 2009 decision, Presbyterian Church of Sudan v. Talisman Energy (enhanced version available to lexis.com subscribers / unenhanced version available to non-subscribers from LexisONE), 582 F.3d 244 (2d Cir. 2009), the U.S. Court of Appeals for the Second Circuit sought to clarify some of this confusion in determining the mens rea standard for certain forms of secondary liability, including aiding and abetting and conspiracy. It held that for a corporation to be liable under the ATS, plaintiffs must show the defendants purposely acted to help the principal commit a human rights violation. A corporation's mere knowledge that its actions contributed to the principal's commission of the offense, held the court, is insufficient.

Commentators widely have claimed, with some merit, that the purpose standard in Talisman sets a high bar for proving accessorial ATS violations. Yet the true practical effect of this heightened mens rea threshold remains far from clear. While Talisman may initially appear to resolve an area of uncertainty in ATS jurisprudence, two subsequent cases, Abecassis v. Wyatt, 2010 U.S. Dist. LEXIS 32371 (S.D. Tex. Mar. 31, 2010), and Lev v. Arab Bank, PLC, 2010 U.S. Dist. LEXIS 16887 (E.D.N.Y. Jan 29, 2010), highlight the enduring enigmatic nature of the purpose standard. Together, even in light of Talisman, they show that corporate compliance regimes, due diligence, and strict monitoring of overseas operations in sensitive regions remain as important as ever.

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Lauren Groth contributed to this article as a summer associate at Steptoe & Johnson, LLP. She received her B.A. from Northwestern University and will receive her J.D. from University of California-Berkeley, School of Law in May 2011.