In this month’s column, we discuss Kiobel v. Royal Dutch Petroleum Co.,1 in which the U.S. Court of Appeals for the Second Circuit earlier this month reversed a district court’s affirmance of a magistrate judge’s Rule 11 order sanctioning attorneys for making allegedly baseless statements in a court filing. In a brief decision written by Judge José Cabranes and joined by Chief Judge Dennis Jacobs and Judge Pierre Leval, the court ruled that an attorney has not made a baseless statement if any reasonable inference can be drawn from record evidence to support the statement, and that an unintentional overstatement, lacking in material impact, cannot constitute a breach of Rule 11. Notably, each judge also wrote a concurrence on the issue of whether magistrate judges have authority to decide non-dispositive Rule 11 motions and, relatedly, the standard that district courts are to apply in reviewing magistrate judges’ Rule 11 decisions. The panel decided the case without resolving these broader issues.
Procedural History
Defendants in the underlying action are Royal Dutch Petroleum, Shell Transport & Trading, and Shell Petroleum Development Company of Nigeria, three affiliated oil companies that led a consortium that pursued oil exploration and extraction in Nigeria during the 1990s. Plaintiffs, residents of Ogoniland in Nigeria, allege that after the population engaged in protests and civil unrest against the consortium’s despoliation of the environment, defendants responded by obtaining military assistance from the Nigerian government to quell and displace the Ogoni population; engaging in the use of force against the population; and encouraging, through bribery and other means, extrajudicial killings, arbitrary arrests, and sham judicial proceedings, such as the trial that resulted in the execution of activist Ken Saro-Wiwa. Plaintiffs filed a complaint in the Southern District of New York, asserting violations of customary international law and seeking relief under the Alien Tort Claims Act. Defendants retained Cravath, Swaine & Moore.
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