Ibm Ford Apartheid Afrique du Sud

144104(L) Balintulov.FordMotorCo.

In the United States Court of Appeals

for the Second Circuit

AUGUSTTERM2014

Nos.144104(L),143589,143607,144129,144130,

144131,144132,144135,144136,144137,144138,144139

SAKWEBALINTULO,aspersonalrepresentativeofSABABALINTULO,etal.,

PlaintiffsAppellants,

v.

FORDMOTORCO.,INTERNATIONALBUSINESSMACHINESCORP.,DefendantsMovants.

OnAppealfromtheUnitedStatesDistrictCourtfortheSouthernDistrictofNewYork

ARGUED:JUNE24,2015DECIDED:JULY27,2015

Before:CABRANES,HALL,andLIVINGSTON,CircuitJudges.

Case 14-4104, Document 162-1, 07/27/2015, 1562222, Page1 of 22

2

This appeal presents the question of whether plaintiffs,victimsofSouthAfricanapartheid,haveplausiblyallegedrelevantconduct committed within the United States that is sufficient torebuttheAlienTortStatutespresumptionagainstextraterritoriality. Weholdthattheyhavenot. Accordingly,weAFFIRM theAugust 28, 2014 order of theUnitedStatesDistrictCourt for theSouthernDistrictofNewYork(ShiraA.Sheindlin,Judge).

PAULL.HOFFMAN(DianeE.Sammons,NagelRice,LLP,Roseland,NJ;MichaelD.Hausfeld,KristenM.Ward,Hausfeld,Washington,DC,onthebrief),Schonbrun,Desimone,Seplow,Harris&HoffmanLLP,Venice,CA,forPlaintiffsAppellants.JONATHANHACKER(AntonMelitsky,onthebrief),OMelveny&MyersLLP,NewYork,NY,forDefendantMovantFordMotorCompany.KEITHR.HUMMEL(TeenaAnnV.Sankoorikal,JamesE.Canning,onthebrief),Cravath,Swaine&MooreLLP,NewYork,NY,forDefendantMovantInternationalBusinessMachinesCorporation.

JOSA.CABRANES,CircuitJudge:


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This appeal presents the question of whether plaintiffs,victimsofSouthAfricanapartheid,haveplausiblyallegedrelevantconduct committed within the United States that is sufficient torebuttheAlienTortStatutespresumptionagainstextraterritoriality.

Weholdthattheyhavenot.

Accordingly,weAFFIRM theAugust 28, 2014 order of theUnitedStatesDistrictCourt for theSouthernDistrictofNewYork(ShiraA.Sheindlin,Judge).

BACKGROUND

Nearlyadecadeandahalfago,plaintiffsfiledsuitundertheAlien Tort Statute (ATS)1 against various corporations2 forallegedly aiding and abetting crimes proscribed by the law ofnations (also called customary international law)3 committed

1 The ATS states in full: The district courts shall have originaljurisdictionofanycivilactionbyanalienforatortonly,committedinviolationofthelawofnationsoratreatyoftheUnitedStates.28U.S.C.1350.

2Amongtheoriginaldefendantsinthiscaseweredozensofcorporations,includingmany prominentmultinational companies.Over time, however, theDistrictCourtgrantedmanyofthesedefendantsmotionstodismiss,see,e.g.,InreS.AfricanApartheidLitig.,15F.Supp.3d454,455(S.D.N.Y.2014),andplaintiffsdropped their claims against many others in their subsequent amendedcomplaints, see, e.g., Balintulo v.Daimler AG, 727 F.3d 174, 183 (2d Cir. 2013)(BalintuloI).Accordingly,thenumberofdefendantshasbeenwhittleddowntotwo: Ford Motor Co. (Ford) and International Business Machines Corp.(IBM).

3 See, e.g., Mastafa v. Chevron Corp., 770 F.3d 170, 176 (2d Cir. 2014)(equating violations of the law of nations with violations of customary


4

during apartheid by the SouthAfrican government against SouthAfricanswithinSouthAfricassovereignterritory.

The long and complicated procedural history of thisconsolidatedcaseinvolvesrulingsfromallthreelevelsofthefederaljudiciary.4Asrelevanthere,theDistrictCourt,onApril8,2009,heldthatplaintiffsmayproceed againstdefendantsFord and IBM (theCompanies) on an agency theory of liability for apartheid eracrimes allegedly committed by their subsidiaries. Thereafter, theCompaniessoughtawritofmandamusinthisCourt.OnSeptember17, 2010, while this case remained pending, we held, in Kiobel v.RoyalDutchPetroleumCo. (Kiobel I), that theATSdoesnotconferjurisdiction over claims pursuant to customary international lawagainstcorporations.5TheSupremeCourtgrantedcertiorariand,onApril17,2013,affirmedour judgment,whileexplicitlydeclining to

international law);Flores v.S.PeruCopperCorp., 414F.3d 233, 237n.2 (2dCir.2003) (In the context of the [ATS], we have consistently used the termcustomary international lawasasynonymforthetermthe lawofnations.);see also Hartford Fire Ins. Co. v. California, 509 U.S. 764, 815 (1993) (Scalia, J.,dissentinginpart)(usingthetwotermsinterchangeablywhennotingthatthelawofnations,orcustomaryinternationallaw,includeslimitationsonanationsexerciseofitsjurisdictiontoprescribe).

4ThefactualandproceduralhistoryofthecaseandthevariousseparatecasesthatwereconsolidatedtoformthecurrentactionissummarizedinInreSouth African Apartheid Litig., 617 F. Supp. 2d 228, 24145 (S.D.N.Y. 2009),BalintuloI,727F.3dat18285,InreSouthAfricanApartheidLitig.,15F.Supp.3dat45557, and In re South African Apartheid Litig., 56 F. Supp. 3d 331, 33236(S.D.N.Y.2014).

5621F.3d111(2dCir.2010).


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reachthecorporateliabilityquestion(KiobelII).6Instead,theCourtheld that the presumption against extraterritoriality applies toclaimsunder theATS7and thus thestatutecannotbeappliedtoconductintheterritoryofanothersovereign.8

TwodaysaftertheSupremeCourtreleaseditsrulinginKiobelII, we requested supplemental briefing from the parties on theimpactof thatdecisionon thepresent case.Thereafter,onAugust21,2013, inBalintulov.DaimlerAG,727F.3d174,188(2dCir.2013)(Balintulo I), we denied the Companies request for a writ ofmandamus and remanded to the District Court where theCompanies would be able to seek the dismissal of all of theplaintiffsclaims,andprevail,prior todiscovery, throughamotionfor judgmenton thepleadings. Insodoing,werejectedplaintiffstheory of vicarious liability for the Companies based on actionstakenwithin SouthAfricaby their SouthAfrican subsidiaries andconcludedthatKiobelIIforeclosestheplaintiffsclaimsbecausetheplaintiffshavefailedtoallegethatanyrelevantconductoccurredintheUnitedStates.9

On remand, the Companies moved for a judgment in theirfavor. The District Court ordered the Companies to brief thequestionofwhethercorporationscanbeheld liableunder theATS

6Kiobelv.RoyalDutchPetroleumCo.,133S.Ct1659,1663(2013).7Id.at1669.8BalintuloI,727F.3dat188.9Id.at189.


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followingKiobelII.OnApril17,2014,theDistrictCourtheldthattheSupreme Court in Kiobel II, which, as noted earlier, expresslydeclined to address the question of corporate liability undercustomaryinternationallaw,hadnonethelessoverruledtheholdingofKiobel Iand thusaltered the lawof theCircuit in that respect.10TheDistrictCourtalsopermittedplaintiffstomovetoamendtheircomplaints inordertoallegefactssufficienttoovercometheATSspresumption against extraterritoriality.11 After plaintiffs submittedtheirproposedamendedcomplaints,theDistrictCourtheldthattheproposed amendmentswere futile because the relevant conductalleged all occurred abroad and because plaintiffs theory ofliabilitywasforeclosedbythisCourtsdecisioninBalintuloI.12

DISCUSSION

Wegenerally review adistrict courtsdecision topermitordenyleavetoamendacomplaintforabuseofdiscretion,keepinginmindthat leavetoamendshouldbefreelygrantedwhen justicesorequires.13However,whendenialofleavetofilearevisedpleadingisbasedonalegalinterpretation,suchasfutility,areviewingcourtconductsadenovoreview.14Aproposedamendmenttoacomplaint

10InreS.AfricanApartheidLitig.,15F.Supp.3dat460.11Id.at465.12InreSouthAfricanApartheidLitig.,56F.Supp.3dat338.13Pangburnv.Culbertson,200F.3d65,70(2dCir.1999)(internalquotation

marksomitted).14Hutchisonv.DeutscheBankSec.Inc.,647F.3d479,490(2dCir.2011).


7

is futile when it could not withstand a motion to dismiss.15 Inorder to survive a motion to dismiss, a complaint must containsufficient factualmatter,acceptedas true, to stateaclaim to reliefthatisplausibleonitsface.16Andwhileacourtmustacceptallofthe allegations contained in a complaint as true, that tenet isinapplicable to legal conclusions, and threadbare recitals of theelements of a cause of action, supported by mere conclusorystatements,donotsuffice.17

I. TheATSClaims

On appeal, plaintiffs claim that they have alleged extensivenew facts demonstrating that the Companies U.S.based actionsconstitutedunlawful aiding and abetting of crimes in violation ofthe law of nations. They allege that the Companies specializedproductdevelopment,salesofsuchtailoredproducts,andprovisionof expertise and training were aimed at facilitating abusescommitted in South Africa.18 Specifically, plaintiffs allege thatdefendant Ford (1) provided specialized vehicles to the SouthAfricanpoliceand security forces toenable these forces toenforceapartheid,19 and (2) shared information with the South African

15Lucentev.IBMCorp.,310F.3d243,258(2dCir.2002).16 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly,550U.S.544,570(2007)).17Mastafa,770F.3dat177.18AppellantsBr.3.19Id.at1521.


8

regimeaboutantiapartheidandunionactivists,therebyfacilitatingthe suppression of antiapartheid activity.20 As for IBM, plaintiffsclaimthatthecompany(1)designedspecifictechnologiesthatwereessential for racial separation under apartheid and thedenationalizationofblackSouthAfricans;21(2)bidon,andexecuted,contracts in South Africa with unlawful purposes such asdenationalization22 of black South Africans;23 and (3) providedtraining,support,andexpertisetotheSouthAfricangovernmentinusingIBMsspecializedtechnologies.24

Inturn,theCompaniesassertthattheDistrictCourtproperlydenied plaintiffs motion for leave to amend their complaintsbecause(1)plaintiffscannotsatisfytheATSsterritorialityandmensrea requirements; (2) corporations cannot be sued under theATS;and(3)thereisnoaidingandabettingliabilityundertheATS.

II. JurisdictionUndertheATS

Our inquirybeginsby assessingwhether theATSgrantsusjurisdiction over plaintiffs action. TheAlien Tort Statute containsnumerous jurisdictionalpredicates,eachofwhichmustbesatisfied

20Id.at2123.21Id.at1213.22Bydenationalization,plaintiffsrefer to thestripp[ing]of . . .South

Africannationalityand/orcitizenshipbySouthAfricansecurityforcesduringtheperiodfrom1960to1994.J.A.403.

23AppellantsBr.1112.24Id.at13.


9

before a court may properly assume jurisdiction over an ATSclaim.25Thus,at theoutset,acourtmustassure itself that:(1) thecomplaint pleads a violation of the law of nations; (2) thepresumption against the extraterritorial application of the ATS,announced by the Supreme Court in Kiobel [II], does not bar theclaim; (3) customary international law recognizes [the asserted]liability [of a]defendant; and (4) the theory of liability allegedbyplaintiffs (i.e., aiding and abetting, conspiracy) is recognized bycustomaryinternationallaw[orthelawofnations].26Andwhileadefect in anyof these jurisdictionalpredicateswouldbe fatal to aplaintiffs claims, courts retain discretion regarding the order andmannerinwhichtheyundertaketheseinquiries.27

Here, we begin by addressing the question of whetherplaintiffs, in their proposed amended complaints, allege sufficientconduct to displace the ATSs presumption againstextraterritoriality. Because we agree with the District Courtsconclusion that they do not, we need not address the otherjurisdictionalpredicates.28

25Mastafa,770F.3dat179.26Id.(internalcitationsomitted).27Id.

28Thoughwedisposeofplaintiffsclaimsonotherjurisdictionalgrounds,we note that plaintiffs fail to surmount another obstacle as well: they cannotestablish jurisdiction under the ATS for claims against corporations. Aspreviouslydiscussed,theSupremeCourtsdecisioninKiobelIIexplicitlydidnotreach the corporate liability issue and did not modify the precedent of this


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A. ATSandthePresumptionAgainstExtraterritoriality

As noted above, the SupremeCourt inKiobel IImade clearthat claimsunder theATS cannotbebrought forviolationsof thelawofnationsoccurringwithin the territoryofa sovereignnationother than the United States.29 The Court explained that it wasdismissing the plaintiffs claims because all the relevant conducttookplaceoutside theUnitedStates.30Thewholly extraterritorialnatureoftheKiobelplaintiffsclaimswasadispositivefactfortheKiobelIICourtandsoithadnoreasontoexplorehowcourtsshouldproceedwhere,ashere,someoftherelevantconductoccurredintheUnitedStates.31

Circuit that corporate liability is not recognized as a specific,universal, andobligatorynorm . . . [and] isnotaruleofcustomary international law thatwemayapplyundertheATS.KiobelI,621F.3dat145(internalcitationomitted). We need not delve deeply into the corporate liability question here tonotetheobviouserroroftheDistrictCourtinitsholdingthattheSupremeCourtinKiobel II overturned ourCourts holding inKiobel I. See In re SouthAfricanApartheidLitig.,15F.Supp.3d454,46061(S.D.N.Y.2014).Thereisnoauthorityfor the proposition that when the Supreme Court affirms a judgment on adifferentgroundthananappellatecourtittherebyoverturnstheholdingthattheSupremeCourthaschosennottoaddress.Toholdotherwisewouldunderminebasicprinciplesofstaredecisisandinstitutionalregularity.

29133S.Ct.at1669.30Id.at1669.31BalintuloI,727F.3dat191.


11

InMastafa v. Chevron Corporation, we applied the SupremeCourts rulings inMorrison v.NationalAustraliaBankLimited32 andKiobelIItoclarifythatthefocusoftheATSinquiryisonthenatureand locationof theconductconstituting theallegedoffensesunderthe law of nations.33 Accordingly, to determine whether specificclaims can be brought under the ATS, a court must isolate therelevant conduct of a defendantconduct that is alleged to beeither a direct violation of the law of nations or the aiding andabettingofanothersviolationofthelawofnationsinacomplaintandthenconductatwostepjurisdictionalanalysis.

Step one is a determination of whether that relevantconductsufficientlytouchesandconcernstheUnitedStatessoastodisplacethepresumptionagainstextraterritoriality.Steptwoisadetermination of whether that same conduct states a claim for aviolation of the law of nations or aiding and abetting anothersviolationofthelawofnations.34

Inorder tosatisfy thesecondstepof thisanalysis,aplaintiffstating a claim under an aiding and abetting theory mustdemonstratethatthedefendant(1)providespracticalassistancetotheprincipalwhichhasasubstantialeffectontheperpetrationofthe

32 561 U.S. 247 (2010) (after determining that the presumption againstextraterritorialityappliedtotheSecuritiesExchangeActof1934,theCourtthendeterminedwhichterritorialevent[s]orrelationship[s]were thefocusoftheAct).

33Mastafa,770F.3dat18586.34Id.at186.


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crime, and (2) does so with the purpose of facilitating thecommissionof thatcrime.35Themens rea standard foraccessorialliabilityinATSactionsispurposeratherthanknowledgealone.36Knowledgeoforcomplicityintheperpetrationofacrimewithoutevidencethatadefendantpurposefullyfacilitatedthecommissionofthat crimeis thus insufficient to establish a claim of aiding andabettingliabilityundertheATS.37

B. AnalysisofPlaintiffsComplaints

Turningtothecomplaintsintheinstantcase,plaintiffsassertthat the following conduct by defendant Ford is sufficient todisplace theATSspresumptionagainstextraterritoriality: (1)Fordprovided specialized vehicles to the SouthAfrican security forcesthat enabled these forces to violently suppress opposition to

35PresbyterianChurchofSudanv.TalismanEnergy, Inc.,582F.3d244,259

(2d Cir. 2009) (quoting and adopting the reasoning of Judge Katzmannsconcurrence inKhulumani v.BarclayNatlBank Ltd., 504 F.3d 254, 277 (2dCir.2007),whichlaidoutthestandardforaplaintifftopleadatheoryofaidingandabettingliabilityundertheATS). 36Id.at259. 37Mastafa,770F.3dat192 (Accordingly, thedefendants complicity inthegovernmentsabusesinPresbyterianChurch,withoutmore,wasinsufficienttoestablish a claim of aiding and abetting or conspiracy under the ATS.);PresbyterianChurch,582F.3dat263 (It is thereforenotenough forplaintiffs toestablishTalismans complicity indepopulating areas inor around theHegligandUnitycamps:plaintiffsmustestablishthatTalismanactedwiththepurposetoassisttheGovernmentsviolationsofcustomaryinternationallaw.).


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apartheid;38and(2)FordwasresponsibleforaidingandabettingthesuppressionofitsownworkforceinSouthAfrica.39

As for IBM,plaintiffs allege that (1) IBM employees trainedemployees of the South African government on how to use theirhardware and software to create identity documentsthe verymeansbywhichblackSouthAfricansweredeprivedoftheirSouthAfricannationality;40(2)IBMbidoncontractsinSouthAfricawithunlawfulpurposes such asdenationalizingblack SouthAfricans;41and (3) IBMdesigned specific technologies thatwere essential forracialseparationunderapartheidandthedenationalizationofblackSouthAfricans.42

In Balintulo I, we reasoned that the Companies allegeddomesticconduct lackedaclearnexus to thehuman rightsabusesoccurringinSouthAfrica.43Heretoo,plaintiffsamendedpleadingsdonotestablishfederal jurisdictionundertheATSbecausetheydonotplausiblyallegethattheCompaniesthemselvesengagedinanyrelevant conduct within the United States to overcome thepresumptionagainstextraterritorialapplicationoftheATS.

38AppellantsBr.36;seealsoJ.A.507,51317,551.39AppellantsBr.37n.16;seealsoJ.A.52122.40AppellantsBr.35;seealsoJ.A.547.41AppellantsBr.34;seealsoJ.A.528,534,544,54648.42AppellantsBr.3435;seealsoJ.A.535,54647.43727F.3dat192.


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1. AllegationsAgainstFord

Beginning with the allegations against Ford, plaintiffs onlyallegerelevantconductthatoccurredinSouthAfrica,thusfailingto satisfy steponeofMastafas twostep jurisdictional analysis.44 ItwasFords subsidiary inSouthAfrica,notFord, that is alleged tohaveassembledandsold thespecializedvehicles toSouthAfricasgovernment,with parts shipped principally fromCanada and theUnited Kingdomnot from the United States.45 Similarly, it wasFordsSouthAfrican subsidiary,notFord, thatallegedlyprovidedinformation to the apartheid government about antiapartheidactivistsinSouthAfrica.46Althoughplaintiffsrepeatedlyallegenoless than six times in their proposed amended complaint47thatFordcontrolledtheirSouthAfricansubsidiary,wehavepreviouslyrejectedavicarious liability theorybasedonallegationsmateriallyidenticaltothoseassertedhere.48

44SeeMastafa,770F.3dat186.

45J.A.50607,514. 46J.A.at51921.

47J.A.at45568. 48BalintuloI,727F.3dat192(holdingthatbecausethecomplaintallegedonlyactionstakenwithinSouthAfricabydefendantsSouthAfricansubsidiariesandbecausetheseputativeagentsdidnotcommitanyrelevantconductwithintheUnitedStatesgivingrisetoaviolationofcustomaryinternationallawthatis,because theassertedviolation[s]of the lawofnationsoccurr[ed]outside theUnitedStatesthedefendantscannotbevicariouslyliableforthatconductundertheATS(internalquotationmarksandcitationomitted)).


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Plaintiffscontend that theiramendedpleadingsdemonstratethattheCompaniescontrolledtheirSouthAfricansubsidiariesfromtheUnitedStates such that they couldbe founddirectlyandnotjust vicariouslyliable for their subsidiaries conduct under theATS. ButholdingFordtobedirectlyresponsiblefortheactionsofitsSouthAfricansubsidiary,asplaintiffswouldhaveusdo,wouldignorewellsettledprinciples of corporate law,which treatparentcorporations and their subsidiaries as legally distinct entities.49While courtsoccasionally pierce the corporateveil and ignore asubsidiarys separate legal status, they will do so only inextraordinary circumstances, such as where the corporate parentexcessivelydominatesitssubsidiaryinsuchawayastomakeitamereinstrumentalityoftheparent.50

Here,plaintiffspresentnoplausibleallegationsindeed,theypresentnoallegationsthatwouldformanybasisforustopierce[Fords]corporateveil.51ThecomplaintsdonotsuggestthatFordscontrol over its subsidiariesdiffered from that ofmost companiesheadquartered in the United States with subsidiaries abroad.Allegationsofgeneralcorporatesupervisionareinsufficienttorebut

49CarteBlanche(Singapore)Pte.,Ltd.v.DinersClubIntl,Inc.,2F.3d24,26

(2dCir.1993)(Generallyspeaking,aparentcorporationand itssubsidiaryareregardedaslegallydistinctentities.).

50NewYorkStateElec.&GasCorp.v.FirstEnergyCorp.,766F.3d212,224(2dCir.2014).

51Id.


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the presumption against territoriality and establish aiding andabettingliabilityundertheATS.

2. AllegationsAgainstIBM

Plaintiffs first allegation against IBM also fails because therelevant conduct all occurred within South Africa and so theycannotsatisfysteponeofMastafastwostepjurisdictionalanalysis.52JustasinthecaseofFord,itisIBMsSouthAfricansubsidiarynotIBMthat is alleged to have trained South African governmentemployees to use IBM hardware and software to create identitymaterials.53Theseallegationscannotrebut thepresumptionagainstextraterritoriality as they do not sufficiently tie[ ] the relevanthumanrightsviolationstoactionstakenwithintheUnitedStates.54

Plaintiffs second allegation against IBMthat the companybid on contracts meant to further the denationalization of SouthAfrican blacksfalls short of alleging a violation of the law ofnations for a simple reason: IBMdidnotwin the contract for theonlybidspecificallyallegedtohavebeenmadebyIBM,ratherthanIBMs South African subsidiary.55 Indeed, even according toplaintiffs,another company, ICL,won thepassbooks contractover

52SeeMastafa,770F.3dat186.

53J.A.547;seealsoJ.A.446. 54BalintuloI,727F.3dat192. 55J.A.528


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IBM.56Itissimplynotaviolationofthelawofnationstobidon,andlose, a contract that arguablywouldhelp a sovereigngovernmentperpetrateanassertedviolationofthelawofnations.

Plaintiffs final allegation against IBM, on the other hand,appears to touch and concern the United States with sufficientforce to displace the presumption against extraterritoriality. Theirproposedamendedcomplaintreads,inrelevantpart,asfollows:

In theUnited States, IBMdeveloped boththe hardware and the softwareboth amachine and a programto create theBophuthatswana ID. Once IBM haddevelopedthesystem,itwastransferredtothe Bophuthatswana government forimplementation.57

Identity documents, like those allegedly created by IBM andtransferred to theBophuthatswana government,were an essentialcomponentofthesystemofracialseparationinSouthAfrica.58And

56J.A.at16970,258. 57J.A.at546. 58AppellantsBr. 89.Bophuthatswanawas aBantustan, a territory setasidebytheSouthAfricangovernmentforparticularethnicgroups.Id.Giventheoutcomeofouranalysis,weneednot reach thequestionofwhetherplaintiffsallegations regarding racial separation systems in South Africa constitute aviolation of the law of nations.Cf.Mastafa, 770 F.3d at 181 (undertaking thatanalysis in the contextof crimes allegedly committedby the SaddamHusseinregime).Ofcourse,whetheraviolationofthelawofnationshasindeedoccurredisanindependent jurisdictionalpredicate,seeinfran.27andaccompanyingtext,


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so,designingparticulartechnologiesintheUnitedStatesthatwouldfacilitate SouthAfrican racial separationwould appear to be bothspecificanddomestic59conductthatwouldsatisfythefirstofthetwo steps of our jurisdictional analysis.60 Accordingly, if thisallegation is able to also satisfy the second prong of ourextraterritorialityinquirythatis,ifsuchconductaidedandabetteda violation of the law of nationsthe presumption againstextraterritoriality would be displaced and we would be able toestablishjurisdictionforthisparticularclaimundertheATS.

Upon an initial review of the relevant conduct in thecomplaint,however,weconclude thatplaintiffsclaimagainst IBMdoes not meet the mens rea requirement for aiding and abettingliability established by our Court. While the complaint mustsupport [] an inference that [IBM] acted with the purpose toadvance[SouthAfricas]humanrightsabuses,61itplausiblyalleges,atmost,thatthecompanyactedwithknowledgethatitsactsmightfacilitatetheSouthAfricangovernmentsapartheidpolicies.But,aswe noted earlier, mere knowledge without proof of purpose is and one inextricably intertwined with the extraterritoriality analysis that weconducthere. 59Mastafa,770F.3dat191. 60 See supra II.A.; see also Mastafa, 770 F.3d at 191 (finding multipledomesticpurchasesandfinancingtransactionsbyonedefendantandnumerousdomesticpayments and financing arrangements by anotherdefendant to besufficientlyspecificanddomestictosatisfythefirstprongofthejurisdictionalanalysis). 61PresbyterianChurch,582F.3dat260.


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insufficienttomakeoutthepropermensreaforaidingandabettingliability.62

Moreover, where the language in the complaint seems tosuggest that IBM acted purposefully,63 it does so in conclusorytermsandfailstoestablishevenabaselinedegreeofplausibilityofplaintiffsclaims.64Acomplaintwillnotsufficeifittendersnakedassertions devoid of further factual enhancement.65 Indeed,plaintiffsdonotandcannotplausiblyallege thatbydevelopinghardwareandsoftwaretocollectinnocuouspopulationdata,IBMspurposewas todenationalizeblackSouthAfricansand further theaims of a brutal regime.66 This absence of a connection betweenIBMs relevant conduct and the allegedhuman rights abuses oftheSouthAfricangovernmentmeansthatplaintiffs,evenifallowed

62SeeMastafa,770F.3dat19294. 63See,e.g.,J.A.534. 64Mastafa,770F.3dat194. 65Iqbal,556U.S.at678(quotationmarks,brackets,andcitationomitted). 66SeeMastafa,770F.3dat194(Plaintiffsneverelaborateupon[asimilarlyconclusory] assertion in any way that establishes the plausibility of a largeinternational corporation intendingand taking deliberate steps with thepurposeofassistingtheSaddamHussein regimes tortureandabuseof Iraqipersons.);seealsoKiobel,621F.3dat192(Leval,J.,concurring inthe judgment)([The complaint] pleads also in conclusory form that the Nigerian militaryscampaign of violence against the [victimplaintiffs] was instigated, planned,facilitated, conspired and cooperated in by [defendant corporation]. SuchpleadingsaremerelyaconclusoryaccusationofviolationofalegalstandardanddonotwithstandthetestofTwomblyandIqbal.).


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toamendtheircomplaint,willbeunabletostateavalidATSclaimagainstIBM.

Accordingly,becauseplaintiffsfailplausiblytopleadthatanyU.S.based conduct on the part of either Ford or IBM aided andabettedSouthAfricasassertedviolationsofthelawofnations,theirclaimscannotformthebasisofour jurisdictionundertheATS.Wethereforeaffirm theDistrictCourtsdenialofplaintiffsmotion forleave to file an amended complaint because the proposedamendmentsarefutileasamatteroflaw.

CONCLUSION

Tosummarize,weholdthat:

(1) Knowledgeoforcomplicityintheperpetrationofacrimeunderthelawofnations(customaryinternationallaw)absentevidencethatadefendantpurposefullyfacilitatedthecommissionofthatcrimeisinsufficienttoestablishaclaimofaidingandabettingliabilityundertheATS.

(2) Itisnotaviolationofthelawofnationstobidon,andlose,acontractthatarguablywouldhelpasovereigngovernmentperpetrateanassertedviolationofthelawofnations.

(3) AllegationsofgeneralcorporatesupervisionareinsufficienttorebutthepresumptionagainstextraterritorialityandestablishaidingandabettingliabilityundertheATS.


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(4) Here,plaintiffsamendedpleadingsdonotestablishfederaljurisdictionundertheATSbecausetheydonotplausiblyallegethattheCompaniesthemselvesengagedinanyrelevantconductwithintheUnitedStatestoovercomethepresumptionagainstextraterritorialapplicationoftheATS.

a. HoldingFordtobedirectlyresponsiblefortheactionsofitsSouthAfricansubsidiary,asplaintiffswouldhaveusdo,ignoreswellsettledprinciplesofcorporatelaw,whichtreatparentcorporationsandtheirsubsidiariesaslegallydistinctentities.

b. Plaintiffshaveplausiblyallegedsomespecific,domesticconductinthecomplaintnamely,thatIBMintheUnitedStatesdesignedparticulartechnologiesintheUnitedStatesthatfacilitatedSouthAfricanapartheid.ThisconductsatisfiesthefirstprongofourextraterritorialityanalysisasittouchesandconcernstheUnitedStates.

c. PlaintiffscomplaintagainstIBMfailsonthesecondprongoftherequiredjurisdictionalanalysis:itdoesnotplausiblyallegethatIBMsconductpurposefullyaidedandabettedSouthAfricasallegedviolationsofcustomaryinternationallaw.


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d. Accordingly,theallegedconductcannotstateaclaimforaidingandabettingliabilityundertheATSandcannotformthebasisforourjurisdiction.

(5) Becausewedecidethecaseonthebasisofthepresumptionagainstextraterritoriality,weneednotaddresswhetherplaintiffscomplaintsatisfiestheATSsotherjurisdictionalpredicates,includingwhetherthecomplaintpleadsaviolationofthelawofnations;whethercustomaryinternationallawrecognizestheassertedliabilityoftheCompanies;andwhetherthetheoryofliabilityallegedbyplaintiffsisrecognizedbycustomaryinternationallaw.

For the reasons set forthabove,weAFFIRM theAugust28,2014orderoftheDistrictCourt.


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