Rio Tinto asks US appeals court to dismiss Papua New Guinea human rights lawsuit

Rio Tinto asks US appeals court to dismiss Papua New Guinea human rights lawsuit

By Dan Levine

Reuters

22 September 2010

SAN FRANCISCO - Mining giant Rio Tinto Plc tried to persuade an appeals court on Tuesday to dismiss a long running human rights lawsuit, one of a number of cases to test the reach of U.S. judges over corporations operating on foreign soil.

The lawsuit, a proposed class action, involves Rio Tinto's operations on the island of Bougainville in the South Pacific nation of Papua New Guinea, where it once ran one of the world's largest mines for copper and gold.

According to the lawsuit, Rio Tinto decimated the island and forced its native workers to live in "slave like" conditions. When workers sabotaged the mine, Rio Tinto allegedly goaded the Papua New Guinea government into exacting bloody retribution against residents of Bougainville, court documents said.

Current and former residents of Bougainville are seeking punitive damages and disgorgement of all profits earned from the mine under an 18th century law which allows foreigners to sue in U.S. courts in some matters.

The Rio Tinto case has ping-ponged between the 9th Circuit Court of Appeals and a federal trial court for eight years. The hearing on Tuesday was the second before an 11-judge appellate panel, after a lower court allowed some of the claims against Rio Tinto to proceed. Rio Tinto shuttered the Papua New Guinea mine in 1989.

In a hearing before the 9th Circuit on Tuesday, Rio Tinto attorney Sri Srinivasan said the plaintiffs should have tried to bring their lawsuit in Papua New Guinea before being allowed into an American courtroom.

Because London-based Rio Tinto is not a domestic company and its alleged actions didn't occur on American soil, the case should be thrown out, he said.

"All the facts and evidence are in Papua New Guinea," he said.

The case seeks damages under the Alien Tort Statute, which recently has gained favor among plaintiffs as a vehicle to haul companies into U.S. courts for acts committed overseas.

Last week the 2nd Circuit U.S. Court of Appeals in New York ruled that liability under the law should only apply to individuals, not corporations. Its decision dealt a blow to litigation against Royal Dutch Shell Plc arising from the company's Nigerian operations in the 1990s.

Steve Berman, who represents the Rio Tinto plaintiffs, told the 9th Circuit panel that his clients could not have filed the lawsuit in Papua New Guinea because they left with bounties upon their heads.

"They weren't willing to subject themselves to personal injury to go file a lawsuit in Papua New Guinea," he said.

The 9th Circuit could decide the Rio Tinto suit on narrow grounds, or it could follow the 2nd Circuit and issue broad guidance on how the human rights law applies to corporations.

The case in the 9th Circuit is Sarei v. Rio Tinto, 02-56256.

(Editing by Steve Orlofsky)