By Jonathan Stempel
(Reuters) - A federal appeals court has revived a lawsuit seeking to hold Rio Tinto Plc responsible for human rights violations and thousands of deaths linked to a Papua New Guinea copper and gold mine it once ran.
A divided 9th U.S. Circuit Court of Appeals in San Francisco reversed a lower court's dismissal of claims against the mining giant for genocide and war crimes, while upholding the dismissal of claims for racial discrimination and crimes against humanity.
"The complaint alleges purposeful conduct undertaken by Rio Tinto with the intent to assist in the commission of violence, injury, and death, to the degree necessary to keep its mines open," Judge Mary Schroeder wrote.
Some dissenting judges protested against allowing a lawsuit to proceed in federal courts brought by non-U.S. residents against a non-U.S. companies such as Rio Tinto, which has corporate offices in London and in Melbourne, Australia.
The 6-5 decision on Tuesday revives an 11-year-old lawsuit on behalf of about 10,000 current and former residents of the South Pacific island Bougainville, where a late 1980s uprising led to the use of military force and many deaths.
It is one of several cases in which non-U.S. residents seek to hold companies responsible in U.S. courts for alleged human rights violations on foreign soil, under a 1789 U.S. law known as the Alien Tort Statute.
Last week, the U.S. Supreme Court agreed to consider in its current term the reach of that statute, in a lawsuit accusing Royal Dutch Shell Plc of helping Nigeria violently suppress protests in the 1990s.
A federal appeals court in New York had ruled that Shell was not liable under the statute. It is unclear how the pendency of that case will affect the Rio Tinto proceedings.
Tony Shaffer, a Rio Tinto spokesman, declined to comment. Rio Tinto is one of the world's largest mining companies, with a market value exceeding US$100 billion, Reuters data shows.
Steve Berman, a lawyer for the plaintiffs, said: "My clients believe Rio has been covering up its complicity in war crimes and genocide. We're pleased to be able to return to the district court and begin proving our case."
The Bougainville residents claimed that Rio Tinto's Panguna mine operations polluted the island and that the company forced native workers to live in "slave like" conditions.
They also contended that after workers began to sabotage the mine in 1988, Rio Tinto goaded the government into exacting retribution and conspired to impose a blockade that resulted in the deaths of some 10,000 civilians by 1997.
Rio Tinto shut the mine in 1989.
Writing for the 9th Circuit, Schroeder said the complaint's allegation that Rio Tinto's "worldwide modus operandi" was to treat indigenous non-Caucasians as "expendable" justified restoring the genocide claim to the case.
She also said the allegation that Rio Tinto acted for its own private ends in inducing Papua New Guinea's military to murder civilians justified restoring the war crimes claim.
The appeals court returned the case to U.S. District Judge Margaret Morrow in Los Angeles for further proceedings.
In a dissent, Judge Sandra Ikuta wrote that the Alien Tort Statute gave the court no authority to hear a case between the non-U.S. plaintiffs and Rio Tinto over non-U.S. activity.
"The majority sees fit to brush past these limitations and give itself unlimited authority to adjudicate suits between aliens for torts arising anywhere in the world," she wrote.
Another dissenting judge, Andrew Kleinfeld, wrote: "This case calls for judicial humility. Instead, we arrogate to ourselves imperial authority over the whole world."
Berman is a partner at Hagens Berman in Seattle. Rio Tinto's defense has been handled by O'Melveny & Myers and, until recently, been overseen by Sri Srinivasan, a partner who in August was appointed deputy U.S. solicitor general.
The case is Sarei et al v. Rio Tinto Plc et al, 9th U.S. Circuit Court of Appeals, No. 02-56256.
(Reporting by Jonathan Stempel in New York; additional reporting by Dan Levine in San Francisco; editing by Dave Zimmerman and Andre Grenon)