Conference Call: Justices to Consider Another Exxon Petition

The following column, featuring a selected petition up for consideration at the Justices’ private conference on November 9, appears in today’s edition of Legal Times (available to subscribers here). To see the full list of “petitions to watch” for Friday’s conference, click here.

Conference Call: Another Exxon Case Before Supreme Court

Justices are asked to intervene in suit alleging Indonesian guards hired by the oil company violated human rights

Two weeks after agreeing to review a $2.5 billion punitive damages award arising from the Exxon Valdez oil spill, the Supreme Court will consider whether to grant another petition involving unseemly allegations against the oil company — this time regarding alleged human rights violations committed by Indonesian soldiers hired to guard a natural gas facility in the tumultuous Aceh province.

The case presents a narrow legal question: whether the company can immediately appeal a partial denial of a motion to dismiss on political question grounds. But relying on letters submitted by the State Department claiming that the litigation could affect both Indonesia’s cooperation against religious extremists and the country’s attractiveness to foreign investors, Exxon contends that the suit’s foreign policy implications could nonetheless be substantial.

The justices will consider whether to hear the case at their private conference on Nov. 9 and could announce their decision as soon as Nov. 13. (The petition is No. 07-81, Exxon v. Doe.)

According to the allegations, Exxon for years has hired Indonesian soldiers to guard a natural gas facility in the northern Aceh province — a region mired in decades-long violence until shortly after the 2004 tsunami, which killed more than 160,000 people in the province. In June 2001, 11 Acehnese villagers filed a complaint against Exxon and its Indonesian subsidiaries in the U.S. District Court for the District of Columbia, alleging the hired soldiers had murdered, tortured, and sexually assaulted residents near the facility.

Seeking relief under federal law and common law tort claims, the plaintiffs alleged Exxon was aware of the Indonesian army’s human rights record in Aceh yet provided soldiers with weapons and other military equipment. In moving to dismiss the complaint, Exxon contended that because the allegations related to the conduct of a foreign army, they amounted to nonjusticiable political questions.

While the motion was pending, Judge Louis Oberdorfer sought the State Department’s opinion on whether the suit could affect U.S. interests abroad. The department’s legal adviser submitted a statement indicating that the litigation process could pose a “potentially serious adverse impact” on U.S. interests, including Indonesia’s cooperation in fighting Islamic militants and foreign investment in Indonesia.

In 2005, Oberdorfer issued an opinion dismissing the claims under federal law and against an Indonesian-based operation but permitted numerous common law tort claims against one of Exxon’s U.S.-based subsidiaries — ExxonMobil Oil Indonesia Inc. — to go forward. In allowing the suit to proceed, however, the judge cautioned the parties that “discovery should be conducted in such a manner so as to avoid intrusion into Indonesian sovereignty.”

Though the ruling was not final, Exxon immediately appealed to the U.S. Court of Appeals for the D.C. Circuit. Given the Bush administration’s concerns over the potential harm of litigation, Exxon argued, the case should fall under the narrow “collateral order doctrine,” which permits parties to seek immediate review of rulings not otherwise eligible for appeal.

A divided panel denied Exxon’s request. Writing for the majority, Judge David Sentelle found that under Supreme Court precedent, the exception could apply only to rulings involving questions that would be “effectively unreviewable” once a final judgment was in place. The panel found the exception to be suited for only a narrow set of claims — like double jeopardy or sovereign immunity — in which the defendant may be entitled to avoid trial altogether.

While acknowledging the potential harms to U.S. interests, Sentelle concluded that “simply invoking a separation of powers defense does not permit Exxon to pursue an otherwise impermissible appeal.” Over a dissent from Judge Brett Kavanaugh, the panel also denied Exxon’s petition for a writ of mandamus to reverse the district court’s ruling.

In its petition for a writ of certiorari, filed by Martin Weinstein of Willkie Farr & Gallagher in Washington, Exxon primarily argues that once the claim is permitted to go forward, the damage to U.S. interests will already be done. “[E]xposing a foreign sovereign to the indignity of litigation in the United States is a harm that cannot be remedied upon later appeal,” the petition says.

Adopting language from Kavanaugh’s dissent, Weinstein also contends that the circuit panel gave too little deference to the State Department’s concern. Finally, the petition argues that the Supreme Court should provide guidance in the area given the rising number of recent suits against U.S. corporations for alleged complicity in human rights abuses abroad. Among other examples, the petition cites suits against Unocal for actions by the Burmese military and against Yahoo for persecution by the Chinese government.

The brief in opposition, filed by Agnieszka Fryszman of Cohen, Milstein, Hausfeld & Toll in Washington, contends that far from demonstrating a circuit split, Exxon points to no other appellate decisions embracing its theory. Were the justices to adopt Exxon’s approach, Fryszman writes, lower courts would face a difficult task of determining how clear a signal the president must give regarding the potential impact of a suit before allowing it to fall under the collateral order doctrine.

In any event, the opposition says, the discovery process concluded over the summer without incident, and the United States has declined to intervene in the case to seek dismissal. — Ben Winograd

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