(Reuters) -Indonesian villagers who accused Exxon Mobil Corp's security forces of murder,torture and other atrocities have regained their right to sue the giant oilcompany in the United States.
A federalappeals court said on Friday that companies are not immune from liability undera 1789 U.S. law known as the Alien Tort Statute for "heinous conduct"allegedly committed by its agents in violation of human rights norms.
The 15villagers contended in their lawsuit that family members were killed and thatothers were "beaten, burned, shocked with cattle prods, kicked, andsubjected to other forms of brutality and cruelty" amounting to torture inIndonesia's Aceh province between 1999 and 2001, a period of civil unrest.
A dividedpanel of the D.C. Circuit Court of Appeals said Exxon Mobil should be forced todefend against such charges.
Given thatlaws in civilized nations hold corporations responsible for lesser wrongs,"it would create a bizarre anomaly to immunize corporations from liabilityfor the conduct of their agents in lawsuits brought for shockingly egregiousviolations of universally recognized principles of international law,"Judge Judith Rogers wrote for a 2-1 majority.
Friday'sdecision reversed part of a ruling by the federal district court in Washington,D.C.
It is alsoat odds with a landmark ruling last September by the federal appeals court inNew York, raising the prospect that the U.S. Supreme Court could try to resolvethe dispute.
"Theruling basically says that corporations are not above the law," saidJennifer Green, a University of Minnesota law professor and director of thatschool's human rights litigation clinic, who submitted a brief on theplaintiffs' behalf. "When corporations have knowledge that they are aidingand abetting human rights abuses, they can be held liable in a U.S.court."
ExxonMobil, based in Irving, Texas, said it is reviewing Friday's decision, callingthe plaintiffs' claims "baseless." Indonesia's government has alsoopposed the lawsuit.
"NOTABOVE THE LAW"
Thevillagers sought to hold Exxon Mobil responsible for having retained soldiersfrom Indonesia's military as guards for a natural gas facility in Aceh, despiteknowing of past human rights abuses by Indonesia's army and that the contractwould lead to human rights violations against Aceh villagers.
In itsruling, the D.C. Circuit also upheld the district court dismissal of claimsunder a different law, the Torture Victim Protection Act.
It returnedthe case to that court, where a jury could decide liability and anycompensatory or punitive damages.
"Wehave fought these baseless claims for many years," Exxon Mobil spokesmanPatrick McGinn said in a statement.
"Whileconducting its business in Indonesia, ExxonMobil has worked for generations toimprove the quality of life in Aceh through employment of local workers,provision of health services and extensive community investment. The companystrongly condemns human rights violations in any form."
AgnieszkaFryszman, a lawyer for the plaintiffs, said the decision makes clear thatcorporations would be "as liable as anyone else" for violatinginternational human rights norms.
DISSENT
Friday'sdecision puts the D.C. Circuit in agreement with the 11th U.S. Circuit Court ofAppeals, which has jurisdiction in Alabama, Florida and Georgia.
It also putboth courts at odds with the 2nd U.S. Circuit Court of Appeals, which saidcompanies are not liable in U.S. courts for violating international humanrights law.
That casewas brought against Royal Dutch Shell Plc by the families of seven Nigeriansexecuted by a former military government. They accused Shell of helpingNigerian authorities violently suppress protests against its oil explorationand development in the 1990s. [ID:nN04244684]
The 2ndCircuit decision applies in New York, Connecticut and Vermont.
Judge BrettKavanaugh dissented from Friday's decision, saying it would be "quiteodd" for a U.S. court to allow Alien Tort Statute claims against acorporation based on customary international law, when no internationaltribunals would.
He alsosaid the ruling could harm U.S.-Indonesian relations, and perhaps damage thewar on terrorism.
Kavanaughwas appointed to the bench by President George W. Bush. Rogers and Judge DavidTatel, who comprised the majority, were appointed by President Bill Clinton.
Exxonshares closed up 6 cents at $82.42 on the New York Stock Exchange.
The case isJohn Doe VIII et al v. Exxon Mobil Corp et al, D.C. Circuit Court of Appeals,No. 09-7125.
(Reportingby Jonathan Stempel; additional reporting by Anna Driver in Houston and JamesVicini in Washington, D.C.; editing by Tim Dobbyn, Andre Grenon and Matthew Lewis)
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