14

‐ 4104 (L)

Balintulo v. Ford Motor Co.



## In the



# United States Court of Appeals

**for the Second Circuit**

A UGUST T ERM 2014

Nos. 14

‐ 4104(L), 14

‐ 3589, 14

‐ 3607, 14

‐ 4129, 14

‐ 4130,

14

‐ 4131, 14

‐ 4132, 14

‐ 4135, 14

‐ 4136, 14

‐ 4137, 14

‐ 4138, 14

‐ 4139

S AKWE B ALINTULO

,

as personal representative of S ABA B ALINTULO

, et al.,

Plaintiffs

‐ Appellants

,

v.

F ORD M OTOR C O

., I NTERNATIONAL B USINESS M ACHINES C ORP

., Defendants

‐ Movants

.

On Appeal from the United States District Court

for the Southern District of New York

A RGUED : J UNE 24, 2015

D ECIDED : J ULY 27, 2015

Before: C ABRANES

, H ALL

, and L IVINGSTON

, Circuit Judges

.2 This appeal presents the question of whether plaintiffs,

victims of South African apartheid, have plausibly alleged relevant

conduct committed within the United States that is sufficient to

rebut the Alien Tort Statute’s presumption against extraterritoriality.

We hold that they have not.

Accordingly, we AFFIRM the August 28, 2014 order of the

United States District Court for the Southern District of New York

(Shira A. Sheindlin, Judge ).

P AUL L. H OFFMAN (Diane E. Sammons,

Nagel Rice, LLP, Roseland, NJ; Michael D.

Hausfeld, Kristen M. Ward, Hausfeld,

Washington, DC, on the brief ), Schonbrun,

Desimone, Seplow, Harris & Hoffman LLP,

Venice, CA, for Plaintiffs

‐ Appellants.

J ONATHAN H ACKER (Anton Melitsky, on the

brief ), O’Melveny & Myers LLP, New York,

NY, for Defendant

‐ Movant Ford Motor

Company.

K EITH R. H UMMEL (Teena

‐ Ann V.

Sankoorikal, James E. Canning, on the brief ),

Cravath, Swaine & Moore LLP, New York,

NY, for Defendant

‐ Movant International

Business Machines Corporation.

J OSÉ A. C ABRANES

, Circuit Judge :3 This appeal presents the question of whether plaintiffs,

victims of South African apartheid, have plausibly alleged relevant

conduct committed within the United States that is sufficient to

rebut the Alien Tort Statute’s presumption against extraterritoriality.

We hold that they have not.

Accordingly, we AFFIRM the August 28, 2014 order of the

United States District Court for the Southern District of New York

(Shira A. Sheindlin, Judge ).

BACKGROUND

Nearly a decade and a half ago, plaintiffs filed suit under the

Alien Tort Statute (“ATS”) 1 against various corporations 2 for

allegedly aiding and abetting crimes proscribed by “the law of

nations” (also called “customary international law”) 3 committed

1 The ATS states in full: “The 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.

2 Among the original defendants in this case were dozens of corporations,

including many prominent multinational companies. Over time, however, the

District Court granted many of these defendants’ motions to dismiss, see, e.g

. , In

re S. African Apartheid Litig

., 15 F. Supp. 3d 454, 455 (S.D.N.Y. 2014), and plaintiffs

dropped their claims against many others in their subsequent amended

complaints, see

, e.g

., Balintulo v. Daimler AG

, 727 F.3d 174, 183 (2d Cir. 2013)

(“ Balintulo I ”). Accordingly, the number of defendants has been whittled down to

two: 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 customary4 during apartheid by the South African government against South

Africans within South Africa’s sovereign territory.

The long and complicated procedural history of this

consolidated case involves rulings from all three levels of the federal

judiciary. 4 As relevant here, the District Court, on April 8, 2009, held

that plaintiffs may proceed against defendants Ford and IBM (the

“Companies”) on an agency theory of liability for apartheid era

crimes allegedly committed by their subsidiaries. Thereafter, the

Companies sought a writ of mandamus in this Court. On September

17, 2010, while this case remained pending, we held, in Kiobel v.

Royal Dutch Petroleum Co

. (“ Kiobel I ”), that the ATS does not confer

jurisdiction over claims pursuant to customary international law

against corporations. 5 The Supreme Court granted certiorari and, on

April 17, 2013, affirmed our judgment, while explicitly declining to

international law); Flores v. S. Peru Copper Corp

., 414 F.3d 233, 237 n.2 (2d Cir.

2003) (“In the context of the [ATS], we have consistently used the term

‘customary international law’ as a synonym for the term the ‘law of nations.’”);

see also Hartford Fire Ins. Co. v. California

, 509 U.S. 764, 815 (1993) (Scalia, J.

, dissenting in part) (using the two terms interchangeably when noting that “‘the

law of nations,’ or customary international law, includes limitations on a nation’s

exercise of its jurisdiction to prescribe”).

4 The factual and procedural history of the case—and the various separate

cases that were consolidated to form the current action—is summarized in In re

South African Apartheid Litig., 617 F. Supp. 2d 228, 241–45 (S.D.N.Y. 2009),

Balintulo I, 727 F.3d at 182–85, In re South African Apartheid Litig., 15 F. Supp. 3d at

455–57, and In re South African Apartheid Litig

., 56 F. Supp. 3d 331, 332–36

(S.D.N.Y. 2014).

5 621 F.3d 111 (2d Cir. 2010).5 reach the corporate liability question (“ Kiobel II ”). 6 Instead, the Court

held that “the presumption against extraterritoriality applies to

claims under the ATS” 7 and thus the statute cannot be applied “to

conduct in the territory of another sovereign.” 8

Two days after the Supreme Court released its ruling in Kiobel

II

, we requested supplemental briefing from the parties on the

impact of that decision on the present case. Thereafter, on August

21, 2013, in Balintulo v. Daimler AG

, 727 F.3d 174, 188 (2d Cir. 2013)

(“ Balintulo I ”), we denied the Companies’ request for a writ of

mandamus and remanded to the District Court where the

Companies would be able to “seek the dismissal of all of the

plaintiffs’ claims, and prevail, prior to discovery, through a motion

for judgment on the pleadings.” In so doing, we rejected plaintiffs’

theory of vicarious liability for the Companies based on actions

taken within South Africa by their South African subsidiaries and

concluded that Kiobel II “forecloses the plaintiffs’ claims because the

plaintiffs have failed to allege that any relevant conduct occurred in

the United States.” 9

On remand, the Companies moved for a judgment in their

favor. The District Court ordered the Companies to brief the

question of whether corporations can be held liable under the ATS

6 Kiobel v. Royal Dutch Petroleum Co

., 133 S. Ct 1659, 1663 (2013).

7 Id. at 1669.

8 Balintulo I

, 727 F.3d at 188.

9 Id. at 189.6 following Kiobel II

. On April 17, 2014, the District Court held that the

Supreme Court in Kiobel II

, which, as noted earlier, expressly

declined to address the question of corporate liability under

customary international law, had nonetheless overruled the holding

of Kiobel I and thus altered the law of the Circuit in that respect. 10

The District Court also permitted plaintiffs to move to amend their

complaints in order to allege facts sufficient to overcome the ATS’s

presumption against extraterritoriality. 11 After plaintiffs submitted

their proposed amended complaints, the District Court held that the

proposed amendments were futile because the “relevant conduct”

alleged “all occurred abroad” and because plaintiffs’ theory of

liability was foreclosed by this Court’s decision in Balintulo I

. 12

DISCUSSION

We generally review a district court’s decision to permit or

deny leave to amend a complaint for abuse of discretion, “keeping in

mind that leave to amend should be freely granted when justice so

requires.” 13 However, when denial of leave to file a revised pleading

is based on a legal interpretation, such as futility, a reviewing court

conducts a de novo review. 14 A proposed amendment to a complaint

10 In re S. African Apartheid Litig

., 15 F. Supp. 3d at 460.

11 Id. at 465.

12 In re South African Apartheid Litig

., 56 F. Supp. 3d at 338.

13 Pangburn v. Culbertson

, 200 F.3d 65, 70 (2d Cir. 1999) (internal quotation

marks omitted).

14 Hutchison v. Deutsche Bank Sec. Inc.

, 647 F.3d 479, 490 (2d Cir. 2011).7 is futile when it “could not withstand a motion to dismiss.” 15 In

order to survive a motion to dismiss, “a complaint must contain

sufficient factual matter, accepted as true, to ‘state a claim to relief

that is plausible on its face.’” 16 And while a court must accept all of

the allegations contained in a complaint as true, “that tenet is

inapplicable to legal conclusions, and threadbare recitals of the

elements of a cause of action, supported by mere conclusory

statements, do not suffice.” 17

I. The ATS Claims

On appeal, plaintiffs claim that they have alleged extensive

new facts demonstrating that the Companies’ U.S.

‐ based actions

constituted unlawful aiding and abetting of crimes in violation of

the law of nations. They allege that the Companies’ “specialized

product development, sales of such tailored products, and provision

of expertise and training” were aimed at facilitating abuses

committed in South Africa. 18 Specifically, plaintiffs allege that

defendant Ford (1) provided specialized vehicles to the South

African police and security forces to enable these forces to enforce

apartheid, 19 and (2) shared information with the South African

15 Lucente v. IBM Corp

., 310 F.3d 243, 258 (2d Cir. 2002).

16 Ashcroft v. Iqbal

, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly

, 550 U.S. 544, 570 (2007)).

17 Mastafa

, 770 F.3d at 177.

18 Appellants’ Br. 3.

19 Id

. at 15–21.8 regime about anti

‐ apartheid and union activists, thereby facilitating

the suppression of anti

‐ apartheid activity. 20 As for IBM, plaintiffs

claim that the company (1) designed specific technologies that were

essential for racial separation under apartheid and the

denationalization of black South Africans; 21 (2) bid on, and executed,

contracts in South Africa with unlawful purposes such as

“denationalization” 22 of black South Africans; 23 and (3) provided

training, support, and expertise to the South African government in

using IBM’s specialized technologies. 24

In turn, the Companies assert that the District Court properly

denied plaintiffs’ motion for leave to amend their complaints

because (1) plaintiffs cannot satisfy the ATS’s territoriality and mens

rea requirements; (2) corporations cannot be sued under the ATS;

and (3) there is no aiding and abetting liability under the ATS.

II. Jurisdiction Under the ATS

Our inquiry begins by assessing whether the ATS grants us

jurisdiction over plaintiffs’ action. The Alien Tort Statute contains

numerous jurisdictional predicates, each of which must be satisfied

20 Id

. at 21–23.

21 Id

. at 12–13.

22 By “denationalization,” plaintiffs refer to the “stripp[ing] of

. . . South

African nationality and/or citizenship by South African security forces during the

period from 1960 to 1994.” J.A. 403.

23 Appellants’ Br. 11–12.

24 Id

. at 13.9 before a court may properly assume jurisdiction over an ATS

claim. 25 Thus, at the outset, a court must assure itself that: “(1) the

complaint pleads a violation of the law of nations; (2) the

presumption against the extraterritorial application of the ATS,

announced by the Supreme Court in Kiobel [ II ], does not bar the

claim; (3) customary international law recognizes [the asserted]

liability [of a] defendant; and (4) the theory of liability alleged by

plaintiffs ( i.e

., aiding and abetting, conspiracy) is recognized by

customary international law [or ‘the law of nations’].” 26 And while a

defect in any of these jurisdictional predicates would be fatal to a

plaintiff’s claims, courts retain discretion regarding the order and

manner in which they undertake these inquiries. 27

Here, we begin by addressing the question of whether

plaintiffs, in their proposed amended complaints, allege sufficient

conduct to displace the ATS’s presumption against

extraterritoriality. Because we agree with the District Court’s

conclusion that they do not, we need not address the other

jurisdictional predicates. 28

25 Mastafa

, 770 F.3d at 179.

26 Id. (internal citations omitted).

27 Id

.

28 Though we dispose of plaintiffs’ claims on other jurisdictional grounds,

we note that plaintiffs fail to surmount another obstacle as well: they cannot

establish jurisdiction under the ATS for claims against corporations. As

previously discussed, the Supreme Court’s decision in Kiobel II explicitly did not

reach the corporate liability issue and did not modify the precedent of this10 A. ATS and the Presumption Against Extraterritoriality

As noted above, the Supreme Court in Kiobel II made clear

that claims under the ATS cannot be brought for violations of the

law of nations occurring within the territory of a sovereign nation

other than the United States. 29 The Court explained that it was

dismissing the plaintiffs ʹ claims because “all the relevant conduct

took place outside the United States.” 30 The wholly extraterritorial

nature of the Kiobel plaintiffs’ claims was “a dispositive fact” for the

Kiobel II Court and so it had no reason to explore how courts should

proceed where, as here, some of the “relevant conduct” occurred in

the United States. 31

Circuit that “corporate liability is not recognized as a ‘specific, universal, and

obligatory norm’

. . . [and] is not a rule of customary international law that we

may apply under the ATS.” Kiobel I

, 621 F.3d at 145 (internal citation omitted).

We need not delve deeply into the corporate liability question here to

note the obvious error of the District Court in its holding that the Supreme Court

in Kiobel II overturned our Court’s holding in Kiobel I

. See In re South African

Apartheid Litig., 15 F. Supp. 3d 454, 460–61 (S.D.N.Y. 2014). There is no authority

for the proposition that when the Supreme Court affirms a judgment on a

different ground than an appellate court it thereby overturns the holding that the

Supreme Court has chosen not to address. To hold otherwise would undermine

basic principles of stare decisis and institutional regularity.

29 133 S. Ct. at 1669.

30 Id. at 1669.

31 Balintulo I

, 727 F.3d at 191.11 In Mastafa v. Chevron Corporation

, we applied the Supreme

Court’s rulings in Morrison v. National Australia Bank Limited 32 and

Kiobel II to clarify that the “focus” of the ATS inquiry is on the nature

and location of the conduct constituting the alleged offenses under

the law of nations. 33 Accordingly, to determine whether specific

claims can be brought under the ATS, a court must isolate the

“relevant conduct” of a defendant—conduct that is alleged to be

either a direct violation of the law of nations or the aiding and

abetting of another’s violation of the law of nations—in a complaint

and then conduct a two

‐ step jurisdictional analysis.

Step one is a determination of whether that “relevant

conduct” sufficiently “touches and concerns” the United States so as

to displace the presumption against extraterritoriality. Step two is a

determination of whether that same conduct states a claim for a

violation of the law of nations or aiding and abetting another’s

violation of the law of nations. 34

In order to satisfy the second step of this analysis, a plaintiff

stating a claim under an aiding and abetting theory must

demonstrate that the defendant “’(1) provides practical assistance to

the principal which has a substantial effect on the perpetration of the

32 561 U.S. 247 (2010) (after determining that the presumption against

extraterritoriality applied to the Securities Exchange Act of 1934, the Court then

determined which “territorial event[s]” or “relationship[s]” were the “focus” of

the Act).

33 Mastafa

, 770 F.3d at 185

‐ 86.

34 Id. at 186.12 crime, and (2) does so with the purpose of facilitating the

commission of that crime.’” 35 The mens rea standard for accessorial

liability in ATS actions is “purpose rather than knowledge alone.” 36

Knowledge of or complicity in the perpetration of a crime—without

evidence that a defendant purposefully facilitated the commission of

that crime—is thus insufficient to establish a claim of aiding and

abetting liability under the ATS. 37

B. Analysis of Plaintiffs’ Complaints

Turning to the complaints in the instant case, plaintiffs assert

that the following conduct by defendant Ford is sufficient to

displace the ATS’s presumption against extraterritoriality: (1) Ford

provided specialized vehicles to the South African security forces

that enabled these forces to violently suppress opposition to

35 Presbyterian Church of Sudan v. Talisman Energy, Inc

., 582 F.3d 244, 259

(2d Cir. 2009) (quoting and adopting the reasoning of Judge Katzmann’s

concurrence in Khulumani v. Barclay Nat’l Bank Ltd

., 504 F.3d 254, 277 (2d Cir.

2007), which laid out the standard for a plaintiff to plead a theory of aiding and

abetting liability under the ATS).

36 Id

. at 259.

37 Mastafa

, 770 F.3d at 192 (“Accordingly, the defendant’s ‘complicity’ in

the government’s abuses in Presbyterian Church

, without more, was insufficient to

establish a claim of aiding and abetting or conspiracy under the ATS.”);

Presbyterian Church

, 582 F.3d at 263 (“It is therefore not enough for plaintiffs to

establish Talisman’s complicity in depopulating areas in or around the Heglig

and Unity camps: plaintiffs must establish that Talisman acted with the purpose

to assist the Government’s violations of customary international law.”).13 apartheid; 38 and (2) Ford was responsible for aiding and abetting the

suppression of its own workforce in South Africa. 39

As for IBM, plaintiffs allege that (1) IBM employees trained

employees of the South African government on how to use their

hardware and software to create identity documents—“the very

means by which black South Africans were deprived of their South

African nationality”; 40 (2) IBM bid on contracts in South Africa with

unlawful purposes such as denationalizing black South Africans; 41

and (3) IBM designed specific technologies that were essential for

racial separation under apartheid and the denationalization of black

South Africans. 42

In Balintulo I

, we reasoned that the Companies’ alleged

domestic conduct lacked a clear nexus to the human rights abuses

occurring in South Africa. 43 Here too, plaintiffs’ amended pleadings

do not establish federal jurisdiction under the ATS because they do

not plausibly allege that the Companies themselves engaged in any

“relevant conduct” within the United States to overcome the

presumption against extraterritorial application of the ATS.

38 Appellants’ Br. 36; see also J.A. 507, 513–17, 551.

39 Appellants’ Br. 37 n.16; see also J.A. 521–22.

40 Appellants’ Br. 35; see also J.A. 547.

41 Appellants’ Br. 34; see also J.A. 528, 534, 544, 546–48.

42 Appellants’ Br. 34–35; see also J.A. 535, 546–47.

43 727 F.3d at 192.14 1. Allegations Against Ford

Beginning with the allegations against Ford, plaintiffs only

allege “relevant conduct” that occurred in South Africa, thus failing

to satisfy step one of Mastafa ’s two

‐ step jurisdictional analysis. 44 It

was Ford’s subsidiary in South Africa, not Ford, that is alleged to

have assembled and sold the specialized vehicles to South Africa’s

government, with parts shipped principally from Canada and the

United Kingdom—not from the United States. 45 Similarly, it was

Ford’s South African subsidiary, not Ford, that allegedly provided

information to the apartheid government about anti

‐ apartheid

activists in South Africa. 46 Although plaintiffs repeatedly allege—no

less than six times in their proposed amended complaint 47 —that

Ford controlled their South African subsidiary, we have previously

rejected a vicarious liability theory based on allegations materially

identical to those asserted here. 48

44 See Mastafa

, 770 F.3d at 186.

45 J.A. 506–07, 514.

46 J.A. at 519–21.

47 J.A. at 455–68.

48 Balintulo I

, 727 F.3d at 192 (holding that because the complaint alleged

only actions taken within South Africa by defendants’ South African subsidiaries

and because these “putative agents did not commit any relevant conduct within

the United States giving rise to a violation of customary international law—that

is, because the asserted violation[s] of the law of nations occurr[ed] outside the

United States—the defendants cannot be vicariously liable for that conduct under

the ATS” (internal quotation marks and citation omitted)).15 Plaintiffs contend that their amended pleadings demonstrate

that the Companies controlled their South African subsidiaries from

the United States such that they could be found directly—and not

just vicariously—liable for their subsidiaries’ conduct under the

ATS. But holding Ford to be directly responsible for the actions of

its South African subsidiary, as plaintiffs would have us do, would

ignore well

‐ settled principles of corporate law, which treat parent

corporations and their subsidiaries as legally distinct entities. 49

While courts occasionally “pierce the corporate veil” and ignore a

subsidiary’s separate legal status, they will do so only in

extraordinary circumstances, such as where the corporate parent

excessively dominates its “subsidiary in such a way as to make it a

‘mere instrumentality’ of the parent.” 50

Here, plaintiffs present no plausible allegations—indeed, they

present no allegations—that would form any basis for us to “pierce

[Ford’s] corporate veil.” 51 The complaints do not suggest that Ford’s

control over its subsidiaries differed from that of most companies

headquartered in the United States with subsidiaries abroad.

Allegations of general corporate supervision are insufficient to rebut

49 Carte Blanche (Singapore) Pte., Ltd. v. Diners Club Int’l, Inc

., 2 F.3d 24, 26

(2d Cir. 1993) (“Generally speaking, a parent corporation and its subsidiary are

regarded as legally distinct entities.”).

50 New York State Elec. & Gas Corp. v. FirstEnergy Corp

., 766 F.3d 212, 224

(2d Cir. 2014).

51 Id

.16 the presumption against territoriality and establish aiding and

abetting liability under the ATS.

2. Allegations Against IBM

Plaintiffs’ first allegation against IBM also fails because the

“relevant conduct” all occurred within South Africa and so they

cannot satisfy step one of Mastafa ’s two

‐ step jurisdictional analysis. 52

Just as in the case of Ford, it is IBM’s South African subsidiary—not

IBM—that is alleged to have trained South African government

employees to use IBM hardware and software to create identity

materials. 53 These allegations cannot rebut the presumption against

extraterritoriality as they do not sufficiently “tie[ ] the relevant

human rights violations to actions taken within the United States.” 54

Plaintiffs’ second allegation against IBM—that the company

bid on contracts meant to further the denationalization of South

African blacks—falls short of alleging a violation of the law of

nations for a simple reason: IBM did not win the contract for the

only bid specifically alleged to have been made by IBM, rather than

IBM’s South African subsidiary. 55 Indeed, even according to

plaintiffs, another company, ICL, won the passbooks contract over

52 See Mastafa

, 770 F.3d at 186.

53 J.A. 547; see also J.A. 446.

54 Balintulo I

, 727 F.3d at 192.

55 J.A. 52817 IBM. 56 It is simply not a violation of the law of nations to bid on, and

lose, a contract that arguably would help a sovereign government

perpetrate an asserted violation of the law of nations.

Plaintiffs final allegation against IBM, on the other hand,

appears to “touch and concern” the United States with sufficient

force to displace the presumption against extraterritoriality. Their

proposed amended complaint reads, in relevant part, as follows:

In the United States, IBM developed both

the hardware and the software—both a

machine and a program—to create the

Bophuthatswana ID. Once IBM had

developed the system, it was transferred to

the Bophuthatswana government for

implementation. 57

Identity documents, like those allegedly created by IBM and

transferred to the Bophuthatswana government, were an essential

component of the system of racial separation in South Africa. 58 And

56 J.A. at 169–70, 258.

57 J.A. at 546.

58 Appellant’s Br. 8–9. Bophuthatswana was a Bantustan, a territory set

aside by the South African government for particular ethnic groups. Id

. Given the

outcome of our analysis, we need not reach the question of whether plaintiffs’

allegations regarding racial separation systems in South Africa constitute a

violation of the law of nations. Cf. Mastafa

, 770 F.3d at 181 (undertaking that

analysis in the context of crimes allegedly committed by the Saddam Hussein

regime). Of course, whether a violation of the law of nations has indeed occurred

is an independent jurisdictional predicate, see infra n.27 and accompanying text,18 so, designing particular technologies in the United States that would

facilitate South African racial separation would appear to be both

“specific and domestic” 59 conduct that would satisfy the first of the

two steps of our jurisdictional analysis. 60 Accordingly, if this

allegation is able to also satisfy the second prong of our

extraterritoriality inquiry—that is, if such conduct aided and abetted

a violation of the law of nations—the presumption against

extraterritoriality would be displaced and we would be able to

establish jurisdiction for this particular claim under the ATS.

Upon an initial review of the “relevant conduct” in the

complaint, however, we conclude that plaintiffs’ claim against IBM

does not meet the mens rea requirement for aiding and abetting

liability established by our Court. While the complaint must

“support [] an inference that [IBM] acted with the ‘purpose’ to

advance [South Africa’s] human rights abuses,” 61 it plausibly alleges,

at most, that the company acted with knowledge that its acts might

facilitate the South African government’s apartheid policies. But, as

we noted earlier, mere knowledge without proof of purpose is

and one inextricably intertwined with the extraterritoriality analysis that we

conduct here.

59 Mastafa

, 770 F.3d at 191.

60 See supra II.A.; see also Mastafa

, 770 F.3d at 191 (finding multiple

domestic purchases and financing transactions by one defendant and numerous

domestic payments and “financing arrangements” by another defendant to be

sufficiently “specific and domestic” to satisfy the first prong of the jurisdictional

analysis).

61 Presbyterian Church

, 582 F.3d at 260.19 insufficient to make out the proper mens rea for aiding and abetting

liability. 62

Moreover, where the language in the complaint seems to

suggest that IBM acted purposefully, 63 “it does so in conclusory

terms and fails to establish even a baseline degree of plausibility of

plaintiffs’ claims.” 64 A complaint will not “suffice if it tenders naked

assertions devoid of further factual enhancement.” 65 Indeed,

plaintiffs do not—and cannot—plausibly allege that by developing

hardware and software to collect innocuous population data, IBM’s

purpose was to denationalize black South Africans and further the

aims of a brutal regime. 66 This absence of a connection between

IBM’s “relevant conduct” and the alleged human rights abuses of

the South African government means that plaintiffs, even if allowed

62 See Mastafa

, 770 F.3d at 192–94.

63 See

, e.g., J.A. 534.

64 Mastafa

, 770 F.3d at 194.

65 Iqbal

, 556 U.S. at 678 (quotation marks, brackets, and citation omitted).

66 See Mastafa

, 770 F.3d at 194 (“Plaintiffs never elaborate upon [a similarly

conclusory] assertion in any way that establishes the plausibility of a large

international corporation intending—and taking deliberate steps with the

purpose of assisting—the Saddam Hussein regime’s torture and abuse of Iraqi

persons.”); see also Kiobel

, 621 F.3d at 192 (Leval, J.

, concurring in the judgment)

(“[The complaint] pleads also in conclusory form that the Nigerian military’s

campaign of violence against the [victim

‐ plaintiffs] was ‘instigated, planned,

facilitated, conspired and cooperated in’ by [defendant corporation]. Such

pleadings are merely a conclusory accusation of violation of a legal standard and

do not withstand the test of Twombly and Iqbal .”).20 to amend their complaint, will be unable to state a valid ATS claim

against IBM.

Accordingly, because plaintiffs fail plausibly to plead that any

U.S.

‐ based conduct on the part of either Ford or IBM aided and

abetted South Africa’s asserted violations of the law of nations, their

claims cannot form the basis of our jurisdiction under the ATS. We

therefore affirm the District Court’s denial of plaintiffs’ motion for

leave to file an amended complaint because the proposed

amendments are futile as a matter of law.

CONCLUSION

To summarize, we hold that:

(1) Knowledge of or complicity in the perpetration of a crime

under the law of nations (customary international law)—

absent evidence that a defendant purposefully facilitated

the commission of that crime—is insufficient to establish a

claim of aiding and abetting liability under the ATS.

(2) It is not a violation of the law of nations to bid on, and lose,

a contract that arguably would help a sovereign

government perpetrate an asserted violation of the law of

nations.

(3) Allegations of general corporate supervision are

insufficient to rebut the presumption against

extraterritoriality and establish aiding and abetting liability

under the ATS.21 (4) Here, plaintiffs’ amended pleadings do not establish

federal jurisdiction under the ATS because they do not

plausibly allege that the Companies themselves engaged in

any “relevant conduct” within the United States to

overcome the presumption against extraterritorial

application of the ATS.

a. Holding Ford to be directly responsible for the

actions of its South African subsidiary, as plaintiffs

would have us do, ignores well

‐ settled principles of

corporate law, which treat parent corporations and

their subsidiaries as legally distinct entities.

b. Plaintiffs have plausibly alleged some specific,

domestic conduct in the complaint—namely, that

IBM in the United States designed particular

technologies in the United States that facilitated

South African apartheid. This conduct satisfies the

first prong of our extraterritoriality analysis as it

“touches and concerns” the United States.

c. Plaintiffs’ complaint against IBM fails on the second

prong of the required jurisdictional analysis: it does

not plausibly allege that IBM’s conduct purposefully

aided and abetted South Africa’s alleged violations

of customary international law.22 d. Accordingly, the alleged conduct cannot state a

claim for aiding and abetting liability under the ATS

and cannot form the basis for our jurisdiction.

(5) Because we decide the case on the basis of the presumption

against extraterritoriality, we need not address whether

plaintiffs’ complaint satisfies the ATS’s other jurisdictional

predicates, including whether the complaint pleads a

violation of the law of nations; whether customary

international law recognizes the asserted liability of the

Companies; and whether the theory of liability alleged by

plaintiffs is recognized by customary international law.

For the reasons set forth above, we AFFIRM the August 28,

2014 order of the District Court.