Aziz v. Alcolac, 10–1908.

• Decision Date: 19 September 2011
• Docket Number: No. 10–1908.,10–1908.
• Citation: 658 F.3d 388
• Parties: Mohammed AZIZ; Meran Salih Abdullah; Mossa Abdullah Mossa; Suthi A. Mossa; Zakia Sadulla; Kurdish National Congress of North America, “KNC”, On behalf of themselves and all others similarly situated, Plaintiffs–Appellants,v.ALCOLAC, INCORPORATED, Defendant–Appellee,andRepublic of Iraq, a sovereign nation; VWR International, LLC, a/k/a VWR International Ltd., f/k/a BDH, Ltd.; Thermo Fisher Scientific, Incorporated, f/k/a Oxoid, Ltd., a/k/a Oxoid, Incorporated; John Does # 1–100, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

658 F.3d 388

Mohammed AZIZ; Meran Salih Abdullah; Mossa Abdullah Mossa; Suthi A. Mossa; Zakia Sadulla; Kurdish National Congress of North America, “KNC”, On behalf of themselves and all others similarly situated, Plaintiffs–Appellants,

v.ALCOLAC, INCORPORATED, Defendant–Appellee,andRepublic of Iraq, a sovereign nation; VWR International, LLC, a/k/a VWR International Ltd., f/k/a BDH, Ltd.; Thermo Fisher Scientific, Incorporated, f/k/a Oxoid, Ltd., a/k/a Oxoid, Incorporated; John Does # 1–100, Defendants.

No. 10–1908.

United States Court of Appeals, Fourth Circuit.

Argued: May 12, 2011.Decided: Sept. 19, 2011.

ARGUED: Jeffrey David Katz, JD Katz, PC, Bethesda, Maryland, for Appellants. Stephen James Marzen, Shearman & Sterling LLP, Washington, D.C., for Appellee. ON BRIEF: Kenneth F. McCallion, McCallion & Associates LLP, New York, New York, for Appellants. Jonathan L. Greenblatt, Christopher M. Ryan, Sean G. Arthurs, Shearman & Sterling LLP, Washington, D.C., for Appellee.Before MOTZ and DIAZ, Circuit Judges, and HAMILTON, Senior Circuit Judge.Affirmed by published opinion. Judge DIAZ wrote the opinion, in which Judge MOTZ and Senior Judge HAMILTON concurred.

OPINION

DIAZ, Circuit Judge:

We consider in this case whether the Appellants have alleged viable claims under the Torture Victim Protection Act (“TVPA”), 28 U.S.C. § 1350, note, or the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350. The Appellants filed a class action complaint under these statutes, alleging that Defendant Alcolac, Inc., a chemical manufacturer, sold thiodiglycol (“TDG”) to Saddam Hussein's Iraqi regime, which then used it to manufacture mustard gas to attack Kurdish enclaves in northern Iraq during the late 1980s.¹

In granting Alcolac's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the district court held that corporations are not subject to suit under the TVPA, and that the Appellants had not pleaded facts sufficient to support a reasonable inference that Alcolac provided TDG to Iraq with the purpose of facilitating genocide against the Kurds, which the district court determined was an element of a claim under the ATS.

We agree with the district court that the TVPA excludes corporations from liability. We further conclude that the ATS imposes liability for aiding and abetting violations of international law, but only if the attendant conduct is purposeful. The Appellants, however, have failed to plead facts sufficient to support the intent element of their ATS claims. Accordingly, we affirm the judgment of the district court.

I.

A.

For purposes of resolving this appeal, we accept as true the facts alleged by the Appellants in the Amended Complaint. In the 1980s, the Republic of Iraq, then under the dictatorial control of Saddam Hussein, was embroiled in a long-term armed conflict with Iran. International news media widely reported and the governments of many countries—including the United States, the United Kingdom, and Germany—explicitly condemned the Iraqi regime's large-scale use of mustard gas and other chemical weapons against Iran. Simultaneously, Iraq launched chemical weapon attacks against the Kurds in northern Iraq, whom Hussein accused of collaborating with Iran.

As a result, many international businesses, including commercial chemical manufacturers, cut off ties with Hussein's regime. In April 1984, following the issuance of an investigative report commissioned by the U.N. Secretary General finding that mustard gas and other chemical weapons had been used in the Iraq–Iran war, an international coalition of governments known as the Australia Group ² imposed licensing restrictions on the export of chemicals used in the manufacture of chemical weapons.

Alcolac, then a subsidiary of the British conglomerate Rio Tinto Zinc, began selling TDG under the trade name Kromfax in the early 1980s.³ TDG has many lawful commercial applications; for example, it is used as a solvent in dyeing textiles and producing inks. As early as 1982, however, Alcolac was also aware that TDG could be used to manufacture mustard gas.

Representatives from the U.S. Customs Service and the U.S. State Department specifically warned Alcolac that TDG was subject to export restrictions. Despite these warnings, in late 1987 Alcolac fulfilled an order for 120 tons of Kromfax from Colimex, a German company. This order, about ten times larger than any Alcolac had ever received, was eventually transshipped to Iran via Singapore.

In late 1987 and early 1988, Alcolac also delivered four shipments of Kromfax totaling over one million pounds to NuKraft Mercantile Corporation, a company in Brooklyn, New York, with whom Alcolac had not previously done business. Alcolac knew that NuKraft was a shell corporation created to facilitate the purchase of Kromfax for shipment to Europe and transshipment elsewhere via a Swiss company identified as “Companies Inc.,” and that NuKraft intended to place further orders in the three to six million pound range annually.

In February 1989, Alcolac pleaded guilty to a single count of violating the Export Administration Act, 50 U.S.C. app. § 2410(a), in connection with the 1987 Kromfax order to Colimex. During the plea hearing, the government also proffered facts relating to a sale of Kromfax to NuKraft that the government believed ultimately reached Iraq; however, Alcolac was not prosecuted for that sale.

The four Kromfax shipments that Alcolac delivered to NuKraft did reach Iraq, where they were processed to manufacture mustard gas used to attack the Kurds. The Iraqi regime's use of chemical weapons against the Kurds left thousands dead, maimed, or suffering from physical and psychological trauma.

B.

The Appellants are individuals of Kurdish descent who are either victims of mustard gas attacks or family members of deceased victims. The Amended Complaint identifies two classes of plaintiffs. The Class A Plaintiffs, who are U.S. citizens and permanent residents, advance claims against Alcolac under the TVPA. The Class B Plaintiffs, who are foreign nationals, assert claims against Alcolac under the ATS. The district court granted Alcolac's motion to dismiss by memorandum and order dated June 9, 2010. The Appellants filed this timely appeal.

II.

We review de novo a district court's decision to dismiss for failure to state a claim, assuming all well-pleaded, nonconclusory factual allegations in the complaint to be true. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868 (2009); U.S. Airline Pilots Ass'n v. Awappa, LLC, 615 F.3d 312, 317 (4th Cir.2010). To survive a motion to dismiss pursuant to Rule 12(b)(6), plaintiffs' “[f]actual allegations must be enough to raise a right to relief above the speculative level,” thereby “nudg[ing] their claims across the line from conceivable to plausible.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While a court must accept the material facts alleged in the complaint as true, Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir.1999), statements of bare legal conclusions “are not entitled to the assumption of truth” and are insufficient to state a claim, Iqbal, 129 S.Ct. at 1950.

III.

A.

We first address the district court's dismissal of the TVPA claims. Enacted in 1992, the TVPA provides “a civil action for recovery of damages from an individual who engages in torture or extrajudicial killing.” Pub.L. No. 102–256, 106 Stat. 73 (codified at 28 U.S.C. § 1350, note). In pertinent part, the TVPA states as follows:

(a) Liability.—An individual who, under actual or apparent authority, or color of law, of any foreign nation— (1) subjects an individual to torture shall, in a civil action, be liable for damages to that individual; or

(2) subjects an individual to extrajudicial killing shall, in a civil action, be liable for damages to the individual's legal representative, or to any person who may be a claimant in an action for wrongful death.

Id. § 2(a).

The district court determined that Alcolac, as a corporation, is not an “individual” subject to liability under the TVPA. The district court noted the absence of Fourth Circuit precedent and the presence of a circuit split on this question. Compare Khulumani v. Barclay Nat'l Bank Ltd., 504 F.3d 254, 323–24, 337 (2d Cir.2007) (dismissing TVPA claim against corporation “for the additional reason that only natural persons are subject to liability under it”) (Korman, J., concurring in part and dissenting in part), aff'd for lack of en banc quorum sub nom., Am. Isuzu Motors, Inc. v. Ntsebeza, 553 U.S. 1028, 128 S.Ct. 2424, 171 L.Ed.2d 225 (2008),⁴ with Romero v. Drummond Co., 552 F.3d 1303, 1315 (11th Cir.2008) (allowing TVPA claim to proceed against a corporation). See also Aldana v. Del Monte Fresh Produce, N.A., 416 F.3d 1242 (11th Cir.2005). Here, the district court applied what it found to be “the more persuasive view” found in Judge Korman's concurring opinion in Khulumani. J.A. 408. The district court reasoned that the term “individual” referred in ordinary usage to a human being, described those who can both perpetrate and suffer torture, and should not have a different meaning depending on whether the term identified the perpetrator or the victim of torture.

B.

Whether Alcolac is an “individual” within the meaning of the TVPA is a question of statutory interpretation. Our objective in all such cases is “to ascertain and implement the intent of Congress,” and Congress's intent “can most easily be seen in the text of the Acts it promulgates.” Broughman v. Carver, 624 F.3d 670, 674–75 (4th Cir.2010) (internal citations and quotations omitted). In that regard, the Supreme Court has instructed that “ ‘courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: judicial inquiry is complete.’ ” Crespo v. Holder, 631 F.3d 130, 136 (...