Sarei v. Rio Tinto, Plc.

Decision Date07 August 2006
Docket NumberNo. 02-56390.,No. 02-56256.,02-56256.,02-56390.
Citation456 F.3d 1069
PartiesAlexis Holyweek SAREI; Paul E. Nerau; Thomas Tamausi; Phillip Miriori; Gregory Kopa; Methodius Nesiko; Aloysius Moses; Rapheal Niniku; Gabriel Tareasi; Linus Takinu; Leo Wuis; Michael Akope; Benedict Pisi; Thomas Kobuko; John Tamuasi; Norman Mouvo; John Osani; Ben Korus; Namira Kawona; Joanne Bosco; John Pigolo; Magdalene Pigolo, individually and on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. RIO TINTO, PLC; Rio Tinted Limited, Defendants-Appellees. Alexis Holyweek Sarei; Paul E. Nerau; Thomas Tamausi; Phillip Miriori; Gregory Kopa; Methodius Nesiko; Aloysius Moses; Rapheal Niniku; Gabriel Tareasi; Linus Takinu; Leo Wuis; Michael Akope; Benedict Pisi; Thomas Kobuko; John Tamuasi; Norman Mouvo; John Osani; Ben Korus; Namira Kawona; Joanne Bosco; John Pigolo; Magdalene Pigolo, individually and on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. Rio Tinto, PLC; Rio Tinted Limited, Defendants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

Steve W. Berman (argued), R. Brent Walton and Nicholas Styant-Browne, Hagens Berman Sobol Shapiro LLP; Paul N. Luvera, Jr. and Joel D. Cunningham, Luvera, Barnett, Brindley, Beninger & Cunningham, Seattle, WA; and Paul Stocker, Mill Creek, WA, for the plaintiffs-appellants/cross-appellees.

James J. Brosnahan, Jack W. Londen (argued) and Peter J. Stern, Morrison & Foerster LLP, San Francisco, CA, and Charles E. Patterson, Morrison & Foerster LLP, Los Angeles, CA, for the defendants-appellees/cross-appellants.

Sir Ninian M. Stephen, Melbourne, Australia, and Judge Stephen M. Schwebel, Washington, DC, as amici curiae in support of the defendants-appellees/cross-appellants.

Appeal from the United States District Court for the Central District of California; Margaret M. Morrow, District Judge, Presiding. D.C. No. CV-00-11695-MMM.

Before RAYMOND C. FISHER and JAY S. BYBEE, Circuit Judges, and JAMES C. MAHAN,* District Judge.

FISHER, Circuit Judge.

This appeal presents questions of justiciability and exhaustion in the context of the Alien Tort Claims Act, 28 U.S.C. § 1350 ("ATCA"). Plaintiffs are current or former residents of Bougainville, Papua New Guinea ("PNG"), who allege that they or their family members were the victims of numerous violations of international law as a result of defendant mining corporation Rio Tinto, PLC's ("Rio Tinto") Bougainville mining operations and the 10-year civil conflict that followed an uprising at the Rio Tinto mine.1 The plaintiffs appeal the district court's dismissal of their lawsuit seeking redress under the ATCA, which 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.

Although several different doctrines of justiciability are at issue here—the political question doctrine, the act of state doctrine and the doctrine of international comity—all in effect provide different ways of asking one central question: are United States courts the appropriate forum for resolving the plaintiffs' claims? The answer to this question turns in part on the weight to be given to a statement of interest submitted by the United States Department of State ("State Department") asserting that continuation of the lawsuit "would risk a potentially serious adverse impact . . . on the conduct of [United States] foreign relations." Rio Tinto's cross-appeal also argues that the ATCA requires exhaustion of local remedies—yet another way of questioning whether there is a different and more appropriate forum to develop and try these claims.

We conclude that most of the plaintiffs' claims may be tried in the United States. We hold that the district court erred in dismissing all of the plaintiffs' claims as presenting nonjusticiable political questions, and in dismissing the plaintiffs' racial discrimination claim under the act of state doctrine. We also vacate for reconsideration the district court's dismissal of the plaintiffs' United Nations Convention on the Law of the Sea ("UNCLOS") claim under the act of state doctrine, and its dismissal of the racial discrimination and UNCLOS claims under the international comity doctrine. Although Rio Tinto and amicus curiae have asserted several plausible rationales in support of an exhaustion requirement, we affirm the district court's conclusion that no such requirement presently exists, and leave it to Congress or the Supreme Court to alter the status quo if warranted.


Because this case arises from a dismissal under Federal Rule of Civil Procedure 12(b)(6), we accept all facts alleged in the plaintiffs' complaint as true and construe them in the light most favorable to the plaintiffs. Transmission Agency v. Sierra Pac. Power Co., 295 F.3d 918, 923 (9th Cir.2002).

If plaintiffs' allegations are believed, the defendant Rio Tinto, an international mining company, with the assistance of the PNG Government, committed various egregious violations of jus cogens norms and customary international law including racial discrimination, environmental devastation, war crimes and crimes against humanity, with severe repercussions for many citizens of PNG.2

A. The Bougainville Civil Uprising

Rio Tinto is an international mining group headquartered in London. During the 1960s, Rio Tinto sought to build a mine in the village of Panguna on Bougainville, an island province of PNG. Rio Tinto offered the PNG government 19.1 percent of the mine's profits to obtain its assistance in this venture.

Operations commenced in 1972. Each day, approximately 300,000 tons of ore and waste rock were blasted, excavated and removed from the mine, producing 180,000 tons of copper concentrate and 400,000 ounces of gold annually. The resulting waste products from the mine polluted Bougainville's waterways and atmosphere and undermined the physical and mental health of the island's residents. In addition, the islanders who worked for Rio Tinto, all of whom were black, were paid lower wages than the white workers recruited off island and lived in "slave-like" conditions.

In November 1988, Bougainvilleans engaged in acts of sabotage that forced the mine to close. Rio Tinto sought the assistance of the PNG government to quell the uprising and reopen the mine. The PNG army mounted an attack on February 14, 1990, killing many civilians. In response, Bougainvilleans called for secession from PNG, and 10 years of civil war ensued.

During the 10-year struggle, PNG allegedly committed atrocious human rights abuses and war crimes at the behest of Rio Tinto, including a blockade, aerial bombardment of civilian targets, burning of villages, rape and pillage. Plaintiffs assert that the war has ravaged the island and devastated its inhabitants. Thousands of Bougainville's residents have died; those who survived suffer health problems, are internally displaced and live in care centers or refugee camps or have fled the island.

The plaintiffs filed suit in federal district court seeking compensatory, punitive and exemplary damages, as well as equitable and injunctive relief on environmental contamination and medical monitoring claims, and attorney's fees and costs. They also seek disgorgement of all profits earned from the mine.

B. The State Department's Statement of Interest

After Rio Tinto moved to dismiss the first amended complaint, the district court, by letter dated August 30, 2001, sought guidance from the State Department "as to the effect, if any, that adjudication of this suit may have on the foreign policy of the United States."

On November 5, 2001, the State Department filed a statement of interest ("SOI"). After noting that the district court had not asked the United States to comment on the act of state and political question doctrines, the State Department reported that "in our judgment, continued adjudication of the claims . . . would risk a potentially serious adverse impact on the peace process, and hence on the conduct of our foreign relations," and that PNG, a "friendly foreign state," had "perceive[d] the potential impact of this litigation on U.S.-PNG relations, and wider regional interests, to be `very grave.'" Attached to the SOI was the PNG government's communique stating that the case "has potentially very serious social, economic, legal, political and security implications for" PNG, including adverse effects on PNG's international relations, "especially its relations with the United States."

The plaintiffs responded by submitting as offers of proof declarations from peace agreement participants stating that the agreement would not be affected by the litigation, and in fact would be strengthened. The plaintiffs later asked the State Department to "clarify" its submission to the court. The State Department on May 20, 2002 informed the district court that it "did not intend to file another statement of interest" in response.

C. The District Court's Dismissal

The district court dismissed the first amended complaint in a comprehensive and thoughtful ruling on March 20, 2002. It issued an amended opinion on July 9, 2002. Sarei v. Rio Tinto, PLC, 221 F.Supp.2d 1116 (C.D.Cal.2002). The court found that the plaintiffs had stated cognizable ATCA claims for racial discrimination, crimes against humanity and violations of the laws of war, but that of the environmental claims, only the violation of the United Nations Convention on the Law of the Sea ("UNCLOS") was cognizable under the ATCA. Id. at 1139-1163. The court further held that if proven, the allegations supported liability against Rio Tinto for certain acts committed by the PNG government. Id. at 1148-49. The court, however, dismissed all of the...

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    ...difference between the Executive's second submission in Whiteman and the Statement of Interest here, Plaintiffs cite Sarei v. Rio Tinto, PLC, 456 F.3d 1069 (9th Cir.2006), vacated and superceded, 487 F.3d 1193 (9th Cir.2007), reh'g en banc granted, 499 F.3d 923 (9th Cir.2007). The supersedi......
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