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Penaloza v. Drummond Company, Inc.

United States District Court, N.D. Alabama, Southern Division

May 22, 2019

MARISOL MELO PENALOZA, et al., Plaintiffs,
DRUMMOND COMPANY, INC., et al., Defendants.



         The court has before it the Motion to Dismiss the Second Amended Complaint filed by Defendants Drummond Company, Inc., Drummond Ltd., and Drummond USA (Doc. #80) on October 23, 2018 and the Motion to Dismiss the Second Amended Complaint filed by Defendants J. Michael Tracy and the Estate of Garry N. Drummond (Doc. #81) on October 23, 2018. The Motions (Docs. #80, 81) have been fully briefed (Docs. #82-85, 91) and are properly before the court for review. For the reasons explained below, the court finds that the Motions (Docs. #80, 81) are due to be granted in part and denied in part.

         I. Background

         This case was filed on February 26, 2013. (Doc. #1). After the Supreme Court's decision in Kiobel v. Royal Dutch Petroleum Co., et. al., 569 U.S. 108 (2013), [1] an amended complaint (Doc. #20) was filed. On February 4, 2014, the case was stayed (Doc. #45) due to cases then-pending in the Eleventh Circuit which implicated the claims in the Amended Complaint (Doc. #20). After the Eleventh Circuit issued opinions in Doe et, al. v. Drummond Company, Inc. et. al., 782 F.3d 576 (11th Cir. 2015) (“Doe/Balcero”)[2] and Baloco et al. v. Drummond Company, Inc. et. al., 767 F.3d 1229 (11th Cir. 2014) (“Baloco II”), the court directed the parties to show cause why dismissal was not appropriate in this case. (Doc. #51). Based on the responses to the show cause order and representations by attorneys in conferences, the court dismissed this case in its entirety with prejudice. (Docs. #52, 53, 60).

         The dismissal was appealed. On September 27, 2016, the Eleventh Circuit entered an opinion affirming in part, reversing in part, vacating in part, and remanding in part. Penaloza et al. v. Drummond Company, Inc., et al., 662 Fed.Appx. 673 (11th Cir. 2016). After the Supreme Court denied certiorari in the Doe/Balcero case and interlocutory appeal was ruled on in the companion defamation case (“Collingsworth, ” 2:11-cv-3695-RDP-TMP), the court directed the parties to meet and confer to determine the status of the case. (Doc. #70). After briefing and a hearing, the court determined that a Second Amended Complaint should be filed in this case. (Doc. #75). That Second Amended Complaint (Doc. #75) is the subject of the pending motions to dismiss (Docs. #80, 81).

         II. Standard of Review

         The Alien Tort Statute is a jurisdictional statute. See Sosa v. Alvarez-Machain, 542 U.S. 692, 712-13 (2004). A challenge to subject-matter jurisdiction under Rule 12(b)(1) may be made either as a facial attack or a factual attack. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2006). A facial attack -- the type made by Defendants here -- argues that the complaint itself insufficiently alleges jurisdiction and follows the standard for a motion to dismiss under Rule 12(b)(6).

         Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint for failure to state a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6). A court may dismiss a complaint under Rule 12(b)(6) if a plaintiff fails to provide “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007). That is, if a plaintiff “ha[s] not nudged [her] claims across the line from conceivable to plausible, [her] complaint must be dismissed.” Id.; see Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (complaint must “permit the court to infer more than the mere possibility of misconduct” based upon “judicial experience and common sense”).

         In deciding a Rule 12(b)(6) motion, the court must “accept all well-pleaded factual allegations in the complaint as true and construe the facts in a light most favorable to the non-moving party.” Dacosta v. Nwachukwa, 304 F.3d 1045, 1047 (11th Cir. 2002) (citing GJR Invs., Inc. v. County of Escambia, Fla., 132 F.3d 1359, 1367 (11th Cir. 1998)). “[U]nsupported conclusions of law or of mixed fact and law have long been recognized not to prevent a Rule 12(b)(6) dismissal.” Dalrymple v. Reno, 334 F.3d 991, 996 (11th Cir. 2003) (citing Marsh v. Butler County, 268 F.3d 1014, 1036 n.16 (11th Cir. 2001) (en banc)). Further, “[a] complaint may not be dismissed because the plaintiff's claims do not support the legal theory [s]he relies upon since the court must determine if the allegations provide for relief on any [plausible] theory.” Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997) (emphasis in original) (citing Robertson v. Johnston, 376 F.2d 43 (5th Cir. 1967)). Nevertheless, conclusory allegations, unwarranted deductions of facts, or legal conclusions masquerading as facts will not prevent dismissal. Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002); see Kane Enters. v. MacGregor (USA) Inc., 322 F.3d 371, 374 (5th Cir. 2003) (“[A] plaintiff must plead specific facts, not mere conclusional allegations, to avoid dismissal for failure to state a claim. We will thus not accept as true conclusory allegations or unwarranted deductions of fact.”) (internal citations omitted); Kirwin v. Price Commc'ns. Corp., 274 F.Supp.2d 1242, 1248 (M.D. Ala. 2003) (“[A]lthough the complaint must be read liberally in favor of the plaintiff, the court may not make liberal inferences beyond what has actually been alleged.”), aff'd in part, 391 F.3d 1323 (11th Cir. 2004).

         III. Analysis

         Plaintiffs have asserted a number of claims. The court addresses them below.

         A. Plaintiffs' Claims Brought Pursuant to the Alien Tort Claims Act, 28 U.S.C. § 1350 (First and Second Causes of Action)

         Plaintiffs bring two claims against all defendants pursuant to the Alien Tort Claims Act, 28 U.S.C. § 1350 - one for war crimes (First Cause of Action), and one for extrajudicial killings (Second Cause of Action). All defendants seek dismissal of these claims for lack of jurisdiction. (Doc. #80 at 5-10; Doc. #81 at 3). For the reasons explained below, the ATS claims are due to be dismissed without prejudice.

         The Alien Tort Statute[3] states in its entirety: “The 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. Therefore, by its terms, the ATS is a “strictly jurisdictional” statute. Sosa, 542 U.S. at 713. It empowers federal courts to recognize private claims under federal common law, when those claims sufficiently state an international law violation “with the requisite definite content and acceptance among civilized nations.” Kiobel, 569 U.S. at 108.

         To state a claim for relief under the ATS, a plaintiff must be “(1) an alien, (2) suing for a tort, which was (3) committed in violation of international law.” Doe/Balcero, 782 F.3d at 583-84 (quoting Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.2d 1242, 1246 (11th Cir. 2005) (per curiam)). In addressing a motion to dismiss under the ATS, the court must undertake “a more searching review of the merits” than under “the more flexible ‘arising under' formula.” Aldana v. Fresh Del Monte Produce, Inc., 305 F.Supp.2d 1285, 1292 (S.D. Fla. 2003); see also Aldana, 416 F.3d at 1248 (holding than in an ATS case, “[p]leadings must be something more than an ingenious academic exercise in the conceivable”); In re Sinaltrainal Litig., 474 F.Supp.2d 1273, 1284, 1287 (S.D. Fla. 2006) (“heightened pleading standard” is required in ATS case, and court must engage in “a searching review, particularly with regard to allegations concerning conspiracy or joint action”).

         These statutory requirements are not the only requirements for jurisdiction. Id. at 584. Here, because aspects of Plaintiffs' claims occurred outside of the United States, the jurisdictional predicate of Kiobel must also be met. Id. And, under Kiobel, a federal court's jurisdiction under the ATS is subject to the presumption against extraterritoriality. Kiobel, 569 U.S. at 124. A federal court lacks jurisdiction over an ATS claim with a territorial component unless the claim “touch[es] and concern[s] the territory of the United States … with sufficient force to displace the presumption.” Id. Baloco II and Doe/Balcero each considered Kiobel under the lens of ATS claims with domestic and extraterritorial aspects. Doe/Balcero, 782 F.3d at 592; Baloco, 767 F.3d at 1235-36. In Doe/Balcero, the Eleventh Circuit determined that “actions under the ATS with an extraterritorial component must touch and concern the territory of the United States with sufficient force to displace the presumption in order for jurisdiction to be proper. Displacement of the presumption will be warranted if the claims have a U.S. focus and adequate relevant conduct occurs within the United States.” 782 F.3d at 592.

         Both Baloco II and Doe/Balcero held that Plaintiffs' allegations failed to overcome the presumption against extraterritoriality and that Plaintiffs had failed to invoke federal court subject matter jurisdiction under the ATS. See Doe/Balcero, 782 F.3d at 600; Baloco II, 767 F.3d at 1239.[4] Because Plaintiffs conceded that the Amended Complaint in this case was nearly identical to the complaints in Doe/Balcero and Baloco II, the Eleventh Circuit held that this court properly dismissed Plaintiffs' ATS claims in the Amended Complaint. Penaloza, 662 Fed.Appx. at 677-78. Therefore, the only question left for this court to consider is whether the Second Amended Complaint includes new allegations which overcome the presumption against extraterritoriality. It does not.

         The Second Amended Complaint contains three new allegations that Plaintiffs contend involve United States conduct.

• The Drummond Defendants used their political power, their significant resources, and their expertise at operating within the corrupt climate of Colombia to avoid accountability for their crimes going back 20 years or more. Indeed, the Drummond Defendants consistently operate this way, even in their own backyard. On July 20, 2018, an Alabama jury convicted Drummond Vice President, David Roberson, who was acting on behalf of Drummond, as well as Drummond's counsel, of bribing an Alabama state legislator to obtain his assistance in stopping the Environmental Protection Agency from expanding a Superfund toxic cleanup site in North Alabama. The Drummond Defendants have no regard for the law or the public interest if their profit is at stake. (Doc. #78-1 at ¶ 2).
• Virtually every major decision concerning Drummond's Colombian mine operations was made or approved by Garry Drummond. He made these decisions from his headquarters in Alabama. While he did visit Colombia on occasion, he had his main corporate lieutenants, including Defendant Tracy and James Adkins, come to him in Alabama. (Doc. #78-1 at ¶ 3).
El Tiempo, the major Colombian newspaper, reported that Drummond's U.S. attorneys Baker Botts held negotiations in Washington, DC with Commander Barbie (Hugues Rodriguez) to facilitate Drummond's purchase of some of the land taken from the displaced people. (Doc. #78-1, ¶ 153).

         These allegations add nothing to overcome the presumption against extraterritoriality. Doe/Balcero, 782 F.3d at 599-600 (“[W]e must find that Plaintiffs' allegations regarding Defendants' domestic conduct do not meet the requisite factual predicate or act with the forcefulness envisioned by Baloco II to warrant displacement.”). They fail to focus the court on actions in Alabama which relate to any plot with the AUC to kill Plaintiffs' decedents in Colombia. Id. at 592-93 (“In weighing the pertinent facts, the site of the conduct alleged is relevant and carries significant weight. … When the claim is for secondary responsibility, we must also consider the location of any underlying conduct, such as where the actual injuries were inflicted.”). The new allegations reference actions in Washington, DC and conduct surrounding an investigation by the Environmental Protection Agency, which have nothing to do with the killings at issue in this case. Here, as in Doe/Balcero and Baloco II, the tort at issue occurred abroad, not in Alabama. Plaintiffs advance no allegations sufficient to overcome the presumption against extraterritoriality as required by Kiobel.[5] Id. at 598 (“In light of our precedent, the domestic location of the decision-making alleged in general terms here does not outweigh the extraterritorial location of the rest of Plaintiffs' claims.”).

         Plaintiffs alternatively argue that they should be allowed jurisdictional discovery on the issues surrounding Kiobel. (Doc. #83 at 19-22). They argue that “there is ample and growing evidence that the Drummond Defendants were major funders of and collaborators with the AUC's war crimes” but that “until Kiobel, Plaintiffs were properly indifferent to the key issue of Kiobel - whether Defendants' wrongful acts occurred within the territory of the United States.” (Doc. #83 at 19-20).

         But allowing jurisdictional discovery would “needlessly extend this litigation, ” which, to be sure, began some fifteen years ago. Baloco II, 767 F.3d at 1239. Since at least that time, Plaintiffs have pursued cases against Drummond utilizing “similar allegations and identical legal bases” with “the benefit of ten years of evidence obtained from preceding related cases.” Penaloza, 662 Fed.Appx. at 677-78. And in fact, the original complaint in this action was filed after Kiobel was decided; therefore, it is “telling that the operative complaint continues to plead sparse allegations of U.S.-based conduct and that the Plaintiffs fail to offer any indication that they could in good faith plead additional U.S.-based conduct.” Id.; see also Doe/Balcero, 782 F.3d 576 (11th Cir. 2015) (“In order for jurisdictional discovery to be appropriate, there must be a genuine issue of fact to be resolved. Plaintiff's speculative ‘hunch' that Adkins might have stayed for longer periods of time in Alabama is simply not enough to open this issue up to discovery.”) (internal citation omitted). Jurisdictional discovery is not appropriate in this case.

         For all of the foregoing reasons, the ATS claims outlined in the First and Second Causes of Action of the Second Amended Complaint are due to be dismissed without prejudice.

         B. Plaintiffs' Claim Brought Pursuant to the Torture Victims Protection Act, 28 U.S.C. § 1350 (Third Cause of Action)

         Plaintiffs' Third Cause of Action alleges violations of the Torture Victims Protection Act (“TVPA”) under 28 U.S.C. § 1350 by two individual defendants. The TVPA authorizes a cause of action against “[a]n individual” for acts of extrajudicial killing and torture committed under authority of color or law of any foreign nation.[6] 28 U.S.C. § 1350 Note. By its terms, the Act contemplates claims based on secondary, or indirect, theories of liability. Doe/Balcero, 782 F.3d at 603; Sinaltrainal, 578 F.3d at 1258 n.5. The Act defines “extrajudicial killing” as “a deliberated killing not authorized by a previous judgment pronounced by a regularly constituted court affording all the judicial guarantees which are recognized as indispensable by civilized people.” Id. In this case, Plaintiffs allege that each of the killings at issue was an “extrajudicial killing” in “violation of the law of nations” under the TVPA, and that the individual defendants are legally responsible because they conspired with, aided and abetted, or were engaged in joint actions with AUC paramilitaries who carried out the murders. (Doc. #78-1, ¶¶ 258-267).

         1. Plausibility

         In the Second Amended Complaint, Plaintiffs allege that Garry Drummond and Michael Tracy aided and abetted, and conspired with, the AUC to commit extrajudicial killings of innocent civilians. (Doc. #78-1 at ¶¶ 258-67). To survive the motion to dismiss, Plaintiffs must present “more than a sheer possibility that [defendants have] acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A plausible claim for relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence to support the claim.” Twombly, 550 U.S. at 556. Naked assertions devoid of further factual enhancement are insufficient to state a plausible claim. Iqbal, 556 U.S. at 678. Determining whether this standard has been met is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

         a. Defendant the Estate of Garry Drummond

         As to Garry Drummond, the Second Amended Complaint alleges:

• Virtually every major decision concerning Drummond's Colombian operations was made by or approved by Garry Drummond. He made these decisions from his headquarters in Alabama. (Doc. #78-1, ¶ 3).
• Garry Drummond approved plans to support and fund the AUC, and gave the approval to Drummond's Security Advisor, Adkins. (Doc. #78-1, ¶ 7).
• Garry Drummond approved a scheme in which Drummond provided funds to Jaime Blanco, who then channeled the funds to the AUC. (Doc. #78-1, ¶ 8).
• Defendant DCI is a closely-held corporation owned by the Drummond family, and, until his death, was controlled in its day-to-day operations by Garry N. Drummond. (Doc. #78-1, ¶ 55).
• Garry Drummond was the Chairman and Chief Executive Officer of DCI until he died on July 13, 2016. … While residing in Alabama, he personally approved the plan proposed by Adkins and others to have Drummond provide material support to the AUC so that the AUC would drive the FARC and other guerilla groups out of the areas of Drummond's operation in Colombia. Drummond received regular visits from Adkins, often on a monthly basis, in which Adkins briefed him on all security issues, including the progress of the AUC's efforts on behalf of Drummond to drive the guerilla groups out of the areas of Drummond's operations. Defendant [Garry] Drummond also made frequent trips to Colombia and was able to observe first hand the presence of the AUC around the Drummond facilities, and he was briefed by Adkins and others as to all aspects of security in the areas around Drummond's Colombian operations. (Doc. #78-1, ¶ 58).
• During his years of service for Drummond, between 1995-2002, Adkins traveled to Alabama every 4-6 weeks to brief Garry Drummond and other Drummond officials on security issues, including Drummond's support for the AUC. … Adkins told the AUC leaders and their intermediaries that he went to Alabama regularly to brief Garry Drummond and obtain his consent to key strategic issues, including providing support to the AUC. Adkins obtained consent in Alabama from Garry Drummond to provide substantial support to the AUC. (Doc. #78-1, ¶ 59).
• For its part, Drummond financed a significant expansion of the AUC's Northern Block, including the Juan Andres Alvarez Front, based in Cesar Province. Along with providing this Front with significant funds to arm and supply over 165 new soldiers, Drummond provided it with day-to-day operating expenses. Garry Drummond expressly approved this plan, and gave the approval to Drummond's head of security, Adkins. (Doc. #78-1, ¶ 92).
• According to Blanco, who has now admitted his role in arranging for Drummond to finance the AUC, he and Adkins devised a scheme for Adkins to make payments to the AUC through Blanco. When Adkins brought Garry Drummond the idea, Drummond agreed to make payments to the AUC. (Doc. #78-1, ¶ 104).
• Adkins, Defendant Tracy, Drummond Executive Mike Zervos, and Garry Drummond all acknowledged in their depositions that Drummond provided the military with millions of dollars and that they had no idea what the military did with the money. Given that the military specifically asked Drummond for funds to support the AUC, there is no question that these Drummond officials knew ...

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