Aziz v. Alcolac, Inc., No. 10-1908

Decided: Sept. 19, 2011

Alcolac, a corporation in the business of manufacturing and selling thiodyglicol (TDG), sold the chemical to various companies, including known “shell corporations,” that eventually sold the TDG to Saddam Hussein and the Iraqi government. At the time, Iraq was at war with Iran and used the TDG to create deadly mustard gas for use against the Iranian people and the Kurdish ethnic group in the northern region of Iraq. A class action suit was brought by the Kurdish victims of the attacks against both Aloclac and the Republic of Iraq; Class A, citizens and permanent residents of the United States, sued under the Torture Victim Protection Act (TVPA) while Class B, foreign nationals, sued under the Alien Tort Statute (ATS). The district court dismissed the claims against Alcolac for failure to state a claim upon which relief can be granted and the plaintiffs appealed.

The TVPA provides for liability against “any individual who . . . subjects an individual to torture . . . [or] subjects and individual to extrajudicial killing.” 28 U.S.C. § 1350. The district court held that the term “individual” did not apply to corporations and made them immune to suit under the statute. Recognizing that the Circuits have split on the issue—the Second Circuit rejecting liability for corporations and the Eleventh Circuit allowing it—the court analyzed the statute and held that “individual” means a natural person absent contrary evidence of Congressional intent. Unlike the broader term “person” that Congress has explicitly defined to include corporations, “individual” does not. Therefore, the court affirmed the dismissal of Class A’s TVPA action against Alcolac.

The district court found that the Class B plaintiffs likely had a valid ATS claim against Iraq but dismissed the aiding and abetting claims against Alcolac for failure to plead the requisite mens rea against the company. The district court applied a specific intent mens rea rather than the more lenient knowledge standard, following Second Circuit precedent. The Second Circuit looked to the Rome Statute—responsible for the creation of the International Criminal Court—for its rule that aiding and abetting claims must show “the purpose of facilitating the commission of [a] crime.” The D.C. Circuit, however, rejected the Rome Statute because, like all international agreements, it only binds the states that have ratified it, and the United States has not. That court found that customary international law should govern the mens rea standard for ATS claims and that decision of several international tribunals showed a propensity for using the knowledge standard.

The Fourth Circuit elected to follow the Second and adopt the heightened specific intent mens rea. It held that statutes and treaties were preferable to customary law because they gave definite standards to follow, while customary law, “a general and consistent practice of states followed by them from a sense of legal obligation,” was too indeterminate to inspire confidence in any particular standard. Because the plaintiffs’ complaint only alleged legal conclusions about Alcolac’s intent to supply Iraq with mustard gas without any corroborating facts, it failed the pleading requirements of Twombly and Iqbal and was not “entitled to the assumption of truth.” Therefore, the plaintiffs’ insufficient complaint was subject to dismissal and the district court’s decision was affirmed.

Full Opinion

-C. Alexander Cable

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