Doe v. Exxon Mobil Corp.
573 F. Supp. 2d 16 (2008)
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Rule of Law:
A corporation may be held vicariously liable for torts committed by security forces it pays and controls, even if they are government military personnel. A parent corporation may also be liable for its subsidiary's actions under an agency theory if the parent exercises direct and significant control over the specific operations at issue.
Facts:
- Mobil Oil Indonesia Inc. (MOI), later renamed ExxonMobil Oil Indonesia (EMOI), operated the Arun gas field in Indonesia's Aceh province as a contractor for Indonesia's state-owned oil company, Pertamina.
- A Production Sharing Contract allowed EMOI to request and pay for military security protection at its discretion.
- Amidst a violent civil conflict involving a separatist movement, EMOI hired Indonesian military forces to provide armed security for its gas extraction and production facilities.
- Between 1999 and 2003, eleven Indonesian villagers (Plaintiffs) living near the Arun Project alleged that these military security personnel, paid by EMOI, subjected them to acts of killing, torture, beatings, and other severe abuses.
- EMOI influenced the military's 'deployment logistics,' had the 'right to influence the security plan,' and 'assisted in the management of security affairs.'
- EMOI's ultimate parent company, Exxon Mobil Corporation, exercised 'uncompromising controls' over EMOI's security, as EMOI was not 'equipped to handle' the security issues and requested 'corporate kinds of support' from the parent.
Procedural Posture:
- On June 19, 2001, eleven Indonesian citizens (Plaintiffs) filed a complaint in the U.S. District Court for the District of Columbia against four Exxon Defendants and PT Arun.
- The initial complaint included claims under federal statutes and various state-law torts.
- On October 14, 2005, the district court granted the defendants' motion to dismiss the federal claims but allowed the state-law tort claims against the Exxon Defendants to proceed.
- The court dismissed all claims against PT Arun as nonjusticiable.
- Plaintiffs filed a First Amended Complaint, and the court later dismissed one of the ten tort claims, leaving nine.
- After limited discovery, defendant EMOI moved to dismiss for lack of personal jurisdiction, and all four Exxon Defendants moved for summary judgment.
- The court denied EMOI's motion to dismiss for lack of personal jurisdiction.
- The current opinion addresses the four Exxon Defendants' pending motions for summary judgment.
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Issue:
Does sufficient evidence exist to create a genuine issue of material fact for trial regarding whether a corporation and its parent company are liable for torts committed by military security forces that the corporation hired and controlled?
Opinions:
Majority - Oberdorfer, J.
Yes. Sufficient evidence exists for a finder of fact to conclude that EMOI and its parent, Exxon Mobil Corporation, are liable for the alleged torts, precluding summary judgment. EMOI may be vicariously liable under the doctrine of respondeat superior because a master-servant relationship could be found based on its right to control the military security forces. Evidence shows EMOI paid the soldiers, requested their presence, influenced their deployment, and managed security affairs, making the soldiers' tortious acts potentially within the foreseeable scope of armed security employment. EMOI could also be directly liable for negligent hiring and supervision, as it knew the military had a poor human rights record and posed a significant threat. Furthermore, the parent company, Exxon Mobil Corporation, can be held liable under an agency theory because it exercised direct and substantial control over EMOI’s security operations, stepping in because EMOI lacked the resources to manage the situation alone. However, there is insufficient evidence to hold the two intermediary U.S. affiliates, Mobil Corporation and ExxonMobil Oil Corporation, liable.
Analysis:
This decision is significant for corporate accountability, particularly in the context of international human rights. It establishes that corporations cannot use the corporate form or subcontracting arrangements with state security forces as a complete shield against liability for abuses. The ruling affirms that traditional common law tort principles, such as respondeat superior and agency theory, can be applied to hold both a foreign subsidiary and its U.S. parent corporation accountable for the actions of security personnel they control. This precedent strengthens the legal avenues for victims of corporate-related human rights abuses to seek remedy in U.S. courts, emphasizing that direct operational control is a key factor in establishing liability up the corporate chain.
