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Baloco v. Drummond Co., Inc.

United States Court of Appeals, Eleventh Circuit

September 23, 2014

FREDDY LOCARNO BALOCO; KATHERINE PAOLA LOCARNO BALOCO, through her guardian and representative Yaneth Ester Baloco Tapia; AYLEEN PAOLA ORCASITA ALMARALES; STEFANY LOREN ORCASITA CORDOBA; MARLON ALEXI ORCASITA ALMARALES, through his guardian and representative Elisa Almarales Viloria; ASHLY PATRICIA ORCASITA ALMARALES, through her guardian and representative Elisa Almarales Viloria; SERGIO ESTEBAN SOLER URREGO; INGRID KARINA SOLER URREGO; GREYSI PAOLA LOCARNO LARIOS; GUSTAVO ALBERTO LOCARNO LARIOS; LINDA TERESA ORCASITA PINEDA; VANESSA KATHERINE ORCASITA PISCCIOTY, Plaintiffs-Appellants,
v.
DRUMMOND COMPANY, INC.; DRUMMOND LTD.; AUGUSTO JIMENEZ; JAMES ADKINS; MIKE TRACY, Defendants-Appellees

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Appeal fro the United States District Court for the Northern District of Alabama. D.C. Docket No. 7:09-cv-00557-RDP.

For FREDDY LOCARNO BALOCO, through his guardian and representative Yaneth Ester Baloco Tapia, INGRID KARINA SOLER URREGO, through her guardian and representative Nubia Yolanda Urrego Urrea, Ayleen Paoloa Orcasita Almarales, Stefany Loren Orcasita Cordoba, MARLON ALEXI ORCASITA ALMARALES, through his guardian and representative Elisa Almarales Viloria, ASHLY PATRICIA ORCASI ALMARALES, through her guardian and representative, Elisa Almarales Viloria, SERGIO ESTEBAN SOLER URREGO, through her guardian and representative, Nubia Yolanda Urrego Urrea, KATHERINE PAOLA LACARNO BALOCO, through her guardian and representative Yaneth Ester Baloco Tapia, Plaintiffs - Appellants: Terrence Patrick Collingsworth, Christian Levesque, Rachel A. Sheridan, Natacha Thys, Conrad & Scherer, LLP, Washington, DC; Thomas Lavon Carmichael, Carmichael Law Firm, Jasper, AL; Eric J. Hager, Conrad & Scherer, LLP, Quito; William R. Scherer, Conrad & Scherer, LLP, Fort Lauderdale, FL.

For Drummond Company, Inc., Drummond Ltd., Augusto Jimenez, Alfredo Araujo, Defendants - Appellees: William H. Jeffress, Rachel B. Cochran, Noah R. Mink, David A. Super, Baker Botts, LLP, Washington, DC; William Anthony Davis III, Philip Guy Piggott, Benjamin T. Presley, Huey Thomas Wells III, Starnes Davis Florie, LLP, Birmingham, AL.

For Augusto Jimenez, Defendant - Appellee: William H. Jeffress, Rachel B. Cochran, David A. Super, Baker Botts, LLP, Washington, DC; William Anthony Davis III, Philip Guy Piggott, Benjamin T. Presley, Huey Thomas Wells III, Starnes Davis Florie, LLP, Birmingham, AL.

For Alfredo Araujo, Defendant - Appellee: William H. Jeffress, Rachel B. Cochran, Baker Botts, LLP, Washington, DC; William Anthony Davis III, Benjamin T. Presley, Huey Thomas Wells III, Starnes Davis Florie, LLP, Birmingham, AL.

For Mike Tracy, Defendant - Appellee: William H. Jeffress, Rachel B. CochranBaker Botts, LLP, Washington, DC; William Anthony Davis III, Benjamin T. Presley, Starnes Davis Florie, LLP, Birmingham, AL.

Before ED CARNES, Chief Judge, and TJOFLAT, Circuit Judge, and EVANS,[*] District Judge.

OPINION

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EVANS, District Judge

Plaintiffs' First Amended Complaint alleges the following. Plaintiffs/Appellants (hereinafter " Plaintiffs" ) are the children and heirs of three men (Valmore Locarno Rodriquez, Victor Hugo Orcasita Amaya, and Gustavo Soler Mora)[1] who worked for Defendant Drummond Ltd. at Drummond's coal mining operation in Colombia, South America. The three men were officials of a union, Sintramienergetica. They were murdered in 2001 in Colombia.

The central thrust of Plaintiffs' case is that the murders were committed by paramilitaries of the AUC[2] an organization affiliated with Colombia's military and which, together with the military, provided security against guerilla attacks for Drummond's coal mining facility and operations. Plaintiffs claim that the murders occurred in the context of a violent armed conflict between the AUC and the FARC, a leftist guerilla organization; hence, they classify the murders as war crimes. Plaintiffs allege that Drummond aided and abetted or conspired with the AUC by directly funding some of its operations and that it collaborated with the AUC to commit these murders. Plaintiffs' claims were brought under the Alien Tort Statute (" ATS" [3]), 28 U.S.C. § 1350 (Counts One and Two), the Torture Victim Protection Act of 1991 (" TVPA" ), 28 U.S.C. § 1350 note § 2(a) (Count Three), and the wrongful death law of Colombia (Count Four).

The Defendants/Appellees (hereinafter " Defendants" ) are: Drummond Company, Inc., a closely-held corporation with its principal place of business in Birmingham, Alabama; Drummond Ltd., a wholly-owned subsidiary of Drummond Company, Inc., which has its principal place of business in Alabama and which manages Drummond's day-to-day coal mining operation in Colombia; Augusto Jimenez, a domiciliary of Colombia, who at relevant times was the President of Drummond, Ltd.'s Colombia branch; and Mike Tracy[4] who at relevant times was the Director of Mining Operations for Drummond Company, Inc. Defendant James Adkins, the former Director of Security for either Drummond Company, Inc. or Drummond Ltd., was dismissed without prejudice on July 6, 2012. Alfredo Araujo, the Director of Community Relations for Drummond Ltd., was once a Defendant but was dropped from the case when the complaint was amended.

Plaintiffs appeal the district court's September 12, 2012 order which (a) struck declarations filed in opposition to Defendants' motion for summary judgment, (b)

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granted the motion for summary judgment (which pertained to all claims of the first eight Plaintiffs), and (c) granted Defendants' motion to dismiss (which pertained to all claims of the remaining four Plaintiffs). They appeal the final judgment in Defendants' favor which was entered on September 12, 2012. The district court's reasoning in granting Defendants' motions was that all of Plaintiffs' claims are barred by res judicata.

Before turning to analysis of Plaintiffs' claims of error, we will first consider the impact of the United States Supreme Court's April 13, 2013 decision in Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659, 185 L.Ed.2d 671, on Counts One and Two, both of which were brought under the jurisdictional aegis of the ATS. Following resolution of that issue, we will turn to Plaintiffs' claims of error. For the reasons set forth below, we conclude that the district court did not abuse its discretion in striking the declarations and that it did not err in granting Defendants' motion for summary judgment and Defendants' motion to dismiss. For the reasons set forth below, we affirm the district court's rulings dismissing the TVPA and Colombian wrongful death claims. The ATS claims are dismissed without prejudice under Rule 12(b)(1), Federal Rules of Civil Procedure. We affirm the judgment in Defendants' favor.

THE IMPACT OF KIOBEL

The ATS provides that " [t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." 28 U.S.C. § 1350. While the ATS grants jurisdiction to pursue a violation of the law of nations, it is well settled that it does not empower a cause of action for just any alleged violation of the law of nations. Rather, " [t]he [ATS's grant of jurisdiction] is best read as having been enacted on the understanding that the common law would provide a cause of action for the modest number of international law violations with a potential for personal liability at the time [of its enactment]." Sosa v. Alvarez-Machain, 542 U.S. 692, 724, 124 S.Ct. 2739, 2761, 159 L.Ed.2d 718 (2004); Baloco ex rel. Tapia v. Drummond Co., Inc., 640 F.3d 1338, 1344 (11th Cir. 2011) (hereinafter " Baloco" ) (citation omitted).

The Supreme Court in Sosa identified only three cognizable violations of the law of nations under the ATS: (1) violations of safe conducts; (2) offenses against ambassadors; and (3) piracy. Sosa, 542 U.S. at 724, 124 S.Ct. at 2761. It did leave " the door . . . ajar [for the judicial power to consider further law of nations violations] subject to vigilant doorkeeping." Id. at 729, 124 S.Ct. at 2764. This circuit has recognized torture and extrajudicial killing as violations of the law of nations, thus expanding the " very limited category" of cognizable claims under the ATS allowed by Sosa. Id. at 720, 124 S.Ct. at 2759; see, e.g., Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1265-66 & n.15 (11th Cir. 2009) (torture and murder of Colombian trade union leaders perpetrated in the course of war crimes violates the law of nations and is actionable under the ATS) abrogated in part by Mohamad v. Palestinian Auth., 132 S.Ct. 1702, 182 L.Ed.2d 720 (2012); Romero v. Drummond Co., 552 F.3d 1303, 1316 (11th Cir. 2008) (extrajudicial killing is actionable under the ATS if committed in violation of the law of nations); Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1247 (11th Cir. 2005) (torture claims, unlike arbitrary detention and cruel, inhuman, degrading or punishment claims, can support a cause of action under the ATS); Cabello v. Fernandez-Larios, 402 F.3d 1148, 1154, 1158

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(11th Cir. 2005) (torture and extrajudicial killing).

Pursuant to the ATS's grant of jurisdiction and this circuit's precedent, the district court had subject matter jurisdiction over Plaintiffs' claims alleging violation of the law of nations based on torture and extrajudicial killings in the course of war crimes. In Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659, 185 L.Ed.2d 671 (Apr. 17, 2013), the United States Supreme Court determined that the ATS may not be used to sue for violations of the law of nations occurring within the territory of a sovereign other than the United States where the ATS claim does not " touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application." Id. at 1669. When Kiobel was announced, the briefing in this case had already concluded. We directed the parties to address the effect of Kiobel in additional briefs. After considering the parties' arguments, we conclude, as explained below, that the claimed violations of the law of nations do not meet the test established by Kiobel; those claims must be dismissed.

In Kiobel, the petitioners--a group of Nigerian nationals residing in the United States--filed suit in the United States District Court for the Southern District of New York against certain Dutch, British, and Nigerian corporations under the ATS. 133 S.Ct. at 1662. The petitioners alleged that those corporations " aided and abetted the Nigerian Government in committing violations of the law of nations in Nigeria." Id. The question before the Supreme Court was " whether and under what circumstances courts may recognize a cause of action under the [ATS], for violations of the law of nations occurring within the territory of a sovereign other than the United States." Id. at 1662.

Chief Justice Roberts, writing for the Court, determined that the presumption against extraterritorial application applies to claims brought under the ATS. Id. at 1664-65, 1669.[5] With this in mind, the Supreme Court affirmed the dismissal of the petitioners' claims, concluding:

" [T]here is no clear indication of extraterritoriality here," and petitioners' case seeking relief for violations of the law of nations occurring outside the United States is barred.
. . . .
On these facts, all the relevant conduct took place outside the United States. And even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application. Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices. . . .

Id. at 1669 (internal citations omitted).

After careful consideration of the parties' briefs, we conclude that allowing

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Plaintiffs' ATS claims to proceed under the facts of this case would run afoul of the presumption against extraterritorial application.

While the presumption can be defeated by claims that " touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application," id., these circumstances are not present here. First, the extrajudicial killings and war crimes asserted in the First Amended Complaint occurred in Colombia. Second, although the two Drummond entities, Adkins, and Tracy are United States nationals, the majority in Kiobel did not place significant weight on the defendants' nationality; certainly none sufficient to warrant the extraterritorial application of the ATS to situations in which the alleged relevant conduct occurred abroad.[6]

It is undisputed that the killings in this case occurred in Colombia; however, Plaintiffs contend that at least some of the relevant conduct transpired in the United States. The First Amended Complaint asserts that " Adkins obtained consent in Alabama from Garry Drummond and other Drummond officials to provide substantial support to the AUC."

Assuming, without deciding, that the " relevant conduct" inquiry extends to the place of decision-making--as opposed to the site of the actual " extrajudicial killing" --the allegations in the First Amended Complaint still fall short of the minimum factual predicate warranting the extraterritorial application of the ATS. To begin, the First Amended Complaint fails to allege any facts supporting a purported express agreement between Defendants and the AUC to execute Locarno, Orcasita, and Soler on Drummond's behalf. Morever, mere consent to support the AUC does not necessarily suggest any conduct in the United States directed at the murders of the union leaders, nor is it indicative of an express quid pro quo understanding that Drummond would finance AUC operations in exchange for the AUC carrying out the killings. On the contrary, the First Amended Complaint clearly states that the Drummond companies took a side in the civil conflict as early as 1999--two years before the murders.

We are mindful that the First Amended Complaint alleges that Adkins and Araujo attended meetings in Colombia in 2000-2001 where there were discussions of paying the AUC to commit the murders and where money allegedly was paid; also, a meeting in which an AUC leader congratulated AUC members for carrying out the murders of Locarno and Orcasita. This allegedly occurred in the presence of Adkins and Araujo. These allegations, if true, are extremely disturbing. However, the issue is not whether the murders " touch and concern" the United States, as Plaintiffs suggest, but rather whether the murders " touch and concern the territory of the United States." Kiobel, 133 S.Ct. at 1669 (emphasis added).

The Court in Kiobel looked to Morrison v. National Australia Bank Ltd., 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010), for a discussion of when claims that " touch and concern the territory of the United States" do so " with sufficient force to displace the presumption against extraterritorial application." Kiobel, 133 S.Ct. at 1669. Morrison considered the issue

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whether section 10(b) of the Securities Exchange Act of 1934 has extraterritorial application. 130 S.Ct. at 2875. In answering this question in the negative, the Court there noted:

[I]t is a rare case of prohibited extraterritorial application that lacks all contact with the territory of the United States. But the presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case.

Id. at 2884 (emphasis in original).

Under the Morrison analysis, the extraterritoriality inquiry turns on where the transaction that is the focus of the statute at issue occurred. Id. In Morrison, the focus of section 10(b) was determined to be the place where the securities were purchased and sold (in Australia). See id. The fact that deceptive conduct originated in the United States did not defeat the presumption against extraterritorial application. Id. at 2884-88. Importantly, the Supreme Court clarified that " to ask what conduct [the ATS] reaches is to ask what conduct [it] prohibits, which is a merits question. Subject-matter jurisdiction, by contrast, refers to a tribunal's power to hear a case." Id. at 2877 (internal quotation marks and citation omitted). Accordingly, the Supreme Court in Morrison proceeded to address whether the allegations in the complaint stated a claim upon which relief could be granted and concluded that they did not because the presumption against extraterritorial application had not been overcome. Id. at 2877, 2883, 2888. The petitioners asked the Supreme Court to remand the case that had been dismissed for lack of subject matter jurisdiction by the district court. Id. at 2875-77. After correcting " a threshold error in ...


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