Marisol Melo Penaloza v. Drummond Company, Inc. ( 2016 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-10921
Non-Argument Calendar
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D.C. Docket No. 2:13-cv-00393-RDP
MARISOL MELO PENALOZA,
ANA GREGORIA PALOMI ROMERO,
LUZ MARINA CASTILLO MANJARRES,
MILAGRO BOLANO MARQUEZ,
MARIA OTILIA AGUIRRE BALLESTEROS,
AMINTA DOMITILA LAZCAN JUNCO,
JUANA MARIA CONTRERAS DE LOPEZ,
HILDEMARO MELGAREJO MOLINA,
YOLANDA DEL CARMEN SANT OSSA,
CLAUDINA ROSA OROZCO,
FATINIZA ISABEL GUTIERRE BUELVAS,
CARLOS ENRIQUE CARBONO AZUAGA,
MARTHA JOSEFA HERNANDE MARTINEZ,
LUZLENID SILVA MUNOZ,
FRANCIA COLL DE TOVAR,
DOMINGA GUTIERREZ CABALLERO,
JUAN MARIA CONTERERA DE LOPEZ,
MARIA FELICIA MEZA GARCIA,
EVERELY PALOMINO VANEGAS,
GINA PAOLA SANTANA GUTIERREZ,
ADELAIDA ISABEL DE LA ROSA RODRIGUEZ,
C.N.G.R.,
HERMELINDA SARMIENTO DE LA CRUZ,
ANA VIRGINIA OCHOA NAVARRO,
ANA CECILIA PASTOR BARRIOS,
EDYS CORREA CERVANTES,
MANUEL GREGORIO TAPIA VEGA,
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ARMANDO RAFAEL CANDANOZ GUZMAN,
LUZ MARINA ANAYA ROYERO,
N.S.M.A.,
MARIA SUREYA SUESCUN BOTELLO,
EDILMA ISABEL TORRES OZUNA,
ALBA LUZ CABALLERO GOMEZ,
AMPARO DE JESUS FLOREZ TORRES,
J.A.G.F.,
LUZ MARINA PACHECO CANTILLO,
MERILSA FRANCISCA DAZA AMAYA,
JHON ALFER PADILLA DAZA,
MARCOS JOSE PADILLA DAZA,
GICELA MARGARITA PADIL DAZA,
ADRIANA CRISTINA PADILL DAZA,
YARLENYS ROSMIRA PADILLA DAZA,
CARMEN INELMA,
ALFREDO CAMPO MEDINA,
ANA CRISTINA CAMPO MEDINA,
ISABEL MARIA LAZCANO DE CALDERON,
Plaintiffs - Appellants,
versus
DRUMMOND COMPANY, INC.,
DRUMMOND LTD.,
DRUMMOND USA, INC.,
GARRY DRUMMOND,
JAMES MICHAEL TRACY,
Defendants - Appellees.
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Appeal from the United States District Court
for the Northern District of Alabama
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(September 27, 2016)
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Before TJOFLAT, JILL PRYOR and BLACK, Circuit Judges.
PER CURIAM:
This appeal arises out of the fourth of four actions brought in the Northern
District of Alabama by Colombian plaintiffs as legal representatives or wrongful
death beneficiaries of decedents allegedly executed by members of the United Self
Defense Forces of Colombia (AUC), a right-wing paramilitary group, during a
period of heightened conflict between the AUC and the Revolutionary Armed
Forces of Colombia (FARC), a left-wing guerilla group. In this action, the
Plaintiffs sue Drummond Co., Inc. (Drummond), two Drummond subsidiaries, and
two Drummond executives, Garry Drummond and James Michael Tracy, under the
Alien Tort Statute (ATS), 28 U.S.C. § 1350 (Counts One and Two), the Torture
Victims Protection Act (TVPA), 106 Stat. 73, codified at 28 U.S.C. § 1350 note
(Count Three), and Colombian wrongful death law (Count Four). The Plaintiffs
allege that the Defendants provided substantial financial assistance to the Northern
Block of the AUC in return for protection of Drummond’s Colombian assets and
operations. The Defendants’ financial assistance allegedly enabled the Northern
Block to dramatically increase its presence in the Colombian provinces of Cesar
and Magdalena. Each of the decedents was allegedly executed by the AUC in an
extrajudicial killing. The Plaintiffs premise the Defendants’ liability on theories of
agency, aiding and abetting, and conspiracy.
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After this Court affirmed dismissals and summary judgment in two of the
related cases, Doe v. Drummond Co., 782 F.3d 576 (11th Cir. 2015) and Baloco v.
Drummond Co., 767 F.3d 1229 (11th Cir. 2014) (“Baloco II”), the district court
ordered the parties to show cause why this case should not be dismissed on the
authority of this Court’s recent decisions. The parties briefed numerous issues
arising out of Doe and Baloco II as well as issues unique to this case. On January
26, 2016, the district court dismissed with prejudice all of the Plaintiffs’ claims.
The district court did not elaborate upon the grounds for dismissal other than to
state that the dismissal was “[b]ased on the decisions entered by this court and the
Eleventh Circuit in [Doe and Baloco II].” After review, we affirm in part, reverse
in part, vacate in part, and remand in part with instructions.
I. BACKGROUND
In 2003 and 2004, a Colombian union and the families of three deceased
Colombian union leaders sued Drummond, Drummond Ltd., Garry Drummond,
and Augusto Jimenez in several separate actions. The plaintiffs claimed that the
defendants employed or contracted with paramilitary members to murder, torture,
and otherwise silence union leaders, including the decedent union leaders, in
violation of the ATS, the TVPA, and Colombian wrongful death law. The district
court consolidated the actions in 2004. In 2006, the plaintiffs voluntarily
dismissed with prejudice their claims against Garry Drummond. In 2007, after
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pre-trial orders narrowed the issues, the case proceeded to trial on the plaintiffs’
claims under the ATS. The jury rendered a verdict for the defense, and this Court
affirmed in Romero v. Drummond Co., 552 F.3d 1303 (11th Cir. 2008).
In March 2009, the children and heirs of the same three union leaders whose
deaths were the subject of Romero sued Drummond, Drummond Ltd., Jimenez,
Tracy, Alfredo Araujo, and James Adkins. The plaintiffs alleged that the
defendants aided and abetted or conspired with the AUC by funding its operations
and collaborated with the AUC to murder the plaintiffs’ decedents in violation of
the ATS, the TVPA, and Colombian wrongful death law. The district court
dismissed five of the eight plaintiffs on res judicata grounds, finding that the
plaintiffs were parties to Romero under “Jane Doe” pseudonyms. The district court
also dismissed the ATS and TVPA claims for lack of standing and declined to
exercise its supplemental jurisdiction over the wrongful death claims. This Court
reversed, holding that the plaintiffs had standing and that the res judicata
determination was premature at the motion-to-dismiss stage. Baloco ex rel. Tapia
v. Drummond Co., 640 F.3d 1338, 1345, 1350–51 (11th Cir. 2011) (“Baloco I”).
On remand, the district court conducted further proceedings and ultimately granted
the defendants’ motion for summary judgment on res judicata grounds. This Court
affirmed, finding that (1) under Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct.
1659 (2013), the district court lacked subject matter jurisdiction to consider the
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plaintiffs’ ATS claims and (2) the district court correctly determined that res
judicata barred the plaintiffs’ remaining claims. Baloco II, 767 F.3d at 1239,
1247–48, 1251.
In May 2009, just two months after the Baloco litigation commenced, the
legal heirs of 144 decedents sued Drummond, Drummond Ltd., Jimenez, Araujo,
and Adkins. As with each preceding action, the plaintiffs sought relief under the
ATS, the TVPA, and Colombian wrongful death law. As with the present action,
the plaintiffs alleged that the defendants financed the Northern Block of the AUC,
members of which killed each decedent in violation of the law of nations. Early in
the litigation, the district court declined to exercise supplemental jurisdiction over
the wrongful death claims. Upon the defendants’ motions for summary judgment,
the district court dismissed the ATS claims based on Kiobel, dismissed the TVPA
claims against corporate defendants based on Mohammad v. Palestinian Authority,
132 S. Ct. 1702 (2012), and granted summary judgment in favor of the individual
defendants on the TVPA claims. This Court affirmed in Doe v. Drummond Co.,
782 F.3d 576 (11th Cir. 2015).
In February 2013, the Plaintiffs, legal representatives or wrongful death
beneficiaries of 34 decedents, commenced the present action against Drummond,
Drummond Ltd., Drummond USA, Inc., Garry Drummond, and Tracy. The
Supreme Court decided Kiobel on April 17, 2013, and the Plaintiffs filed an
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amended complaint nine days later. In February 2014, with the parties’ consent,
the district court stayed this action pending this Court’s resolution of Baloco II and
Doe. Due to the stay, the district court administratively denied without prejudice
the Defendants’ pending motion to dismiss, to which the Plaintiffs had responded.
In April 2015, upon this Court’s deciding Doe, the district court ordered the
parties to show cause why this action should not be dismissed in light of Baloco II
and Doe. The Defendants argued that (1) this Court’s decisions in Baloco II and
Doe foreclosed any argument that the Plaintiffs had invoked the district court’s
subject matter jurisdiction as to the ATS claims, (2) the Plaintiffs failed to state a
claim under Doe’s articulation of the standard for indirect liability under the
TVPA, and (3) the Plaintiffs’ wrongful death claims are barred by the Alabama
statute of limitations. The Plaintiffs responded to the show-cause order, arguing
that (1) the district court should permit them to conduct discovery on the issue of
U.S.-based conduct, (2) because Baloco II and Doe were decided at summary
judgment, the decisions did not impact the Plaintiffs’ TVPA claims against Garry
Drummond and Tracy, and (3) neither Baloco II nor Doe affected the Plaintiffs’
wrongful death claims, which, unlike those in Baloco and Doe, were premised on
diversity jurisdiction. Because of the timing of the show-cause order, neither party
had the opportunity to respond to the other’s argument.
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On January 26, 2016, the district court dismissed with prejudice all of the
Plaintiffs’ claims. The district court did not explain the basis for its dismissal other
than to reference Baloco II, Doe, and the district court’s previous decisions. On
January 29, 2016, the district court issued an amended order, the pertinent
language of which was identical to the January 26 order. The Plaintiffs appeal.
II. STANDARD OF REVIEW
We review de novo a district court’s dismissal with prejudice, applying the
same standards used by the district court. Young Apartments, Inc. v. Town of
Jupiter, Fla., 529 F.3d 1027, 1037 (11th Cir. 2008). We likewise review de novo a
district court’s determination of its subject matter jurisdiction. Chhetri v. United
States, 823 F.3d 577, 582 (11th Cir. 2016). We review for abuse of discretion,
however, a district court’s case management decisions, such as the denial of a
request for jurisdictional discovery and the denial of a request for leave to amend a
complaint. See Culverhouse v. Paulson & Co., 813 F.3d 991, 993 (11th Cir. 2016).
III. DISCUSSION
A. Counts One and Two: ATS
Under Kiobel, a federal court’s jurisdiction under the ATS is subject to the
presumption against extraterritoriality. 133 S. Ct. at 1664. A federal court lacks
jurisdiction over an ATS claim with an extraterritorial component unless the claim
“touch[es] and concern[s] the territory of the United States . . . with sufficient force
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to displace the presumption.” Id. at 1669. Baloco II addressed and Doe elaborated
upon the standard for extraterritorial application of the ATS. Baloco II emphasized
that, to invoke subject matter jurisdiction under the ATS, the claims must “touch
and concern” the territory of the United States and must allege conduct “focused in
the United States.” 767 F.3d at 1239. Doe construed Kiobel and Baloco II, among
other ATS cases, to hold that “claims will only displace the presumption against
extraterritoriality if enough of the relevant conduct occurs domestically and if the
allegations of domestic conduct are supported by a minimum factual predicate.”
Doe, 782 F.3d at 598 (emphasis in original).
Both Baloco II and Doe held that the plaintiffs’ allegations failed to
overcome the presumption against extraterritoriality and that the plaintiffs had
therefore failed to invoke federal court subject matter jurisdiction under the ATS.
See Doe, 782 F.3d at 600; Baloco II, 767 F.3d at 1239. As the Plaintiffs concede,
the operative complaint in this action is nearly identical in pertinent part to the
complaint deemed insufficient in Doe. Absent any meritorious distinction, we
must conclude in accordance with Doe that the Plaintiffs fail to invoke the district
court’s subject matter jurisdiction under the ATS. Therefore, the district court
appropriately dismissed Counts One and Two on the authority of Baloco II and
Doe.
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On appeal, the Plaintiffs focus their argument not on the merits of the
dismissal but on the district court’s implicit denial of the Plaintiffs’ request for
discovery on the Defendants’ U.S.-based conduct. But the Plaintiffs have
identified no reason to conclude that the district court abused its discretion in
declining to permit jurisdictional discovery. Counsel for the Plaintiffs first sued
three of the five Defendants in 2003 on similar allegations and identical legal
bases. The Plaintiffs filed the operative complaint after Kiobel was decided and
with the benefit of ten years of evidence obtained from the preceding related cases.
The Plaintiffs therefore had ample opportunity to plead allegations that “touch[ed]
and concern[ed] the territory of the United States.” Kiobel, 133 S. Ct. at 1669.
Given the tremendous volume of information available to the Plaintiffs, it is telling
that the operative complaint continues to plead sparse allegations of U.S.-based
conduct and that the Plaintiffs fail to offer any indication that they could in good
faith plead additional U.S.-based conduct. Under these circumstances, the district
court did not abuse its discretion by implicitly declining to permit jurisdictional
discovery. See Butler v. Sukhoi Co., 579 F.3d 1307, 1314 (11th Cir. 2009)
(“Inasmuch as the complaint was insufficient as a matter of law to establish a
prima facie case that the district court had jurisdiction, the district court abused its
discretion in allowing the case to proceed and granting discovery on the
jurisdictional issue.”).
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The district court did err, however, in dismissing with prejudice the
Plaintiffs’ ATS claims. The ATS is a jurisdictional statute.1 Because the
presumption against extraterritoriality limits the scope of the ATS’s jurisdictional
reach, a dismissal for failure to rebut the presumption is a dismissal for failure to
invoke the district court’s subject matter jurisdiction. Baloco II, 767 F.3d at 1239
(dismissing the plaintiffs’ ATS claims for failure to overcome the presumption
against extraterritoriality and describing dismissal as “without prejudice . . . for
lack of subject matter jurisdiction”). Thus, while the district court may in its
discretion deny the Plaintiffs another opportunity to plead federal court subject
matter jurisdiction, the district court may not otherwise prejudice the Plaintiffs’
rights with respect to claims over which it lacks jurisdiction. See Stalley ex rel.
United States v. Orlando Reg’l Healthcare Sys., Inc., 524 F.3d 1229, 1234–1235
(11th Cir. 2008) (“[T]he district court lacked subject matter jurisdiction over the
complaint, and it had no power to render a judgment on the merits. Consequently,
the district court should have dismissed the complaint without prejudice, and we
remand in part so that the district court can reenter its dismissal order without
prejudice.” (citation omitted)). Therefore, the district court’s dismissal of the ATS
claims, while proper, should not have been characterized as a dismissal with
1
While we refer to Counts One and Two as “ATS claims,” they are more appropriately
described as claims under the law of nations over which a federal court may have subject matter
jurisdiction under the ATS.
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prejudice. We reverse the district court’s dismissal with prejudice of Counts One
and Two and remand with instructions to dismiss without prejudice Counts One
and Two.
B. Count Three: TVPA
We first note that the Plaintiffs challenge the district court’s dismissal of
Count Three only as it relates to Defendants Garry Drummond and James Michael
Tracy. Because the Plaintiffs have waived any challenge to the district court’s
dismissal with prejudice of Count Three as to the three corporate defendants, we
affirm that aspect of the district court’s order without further discussion. See
Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004); cf.
also Doe, 782 F.3d at 602 n.36 (“The TVPA does not authorize liability against
corporate entities.”). We now proceed to discuss the Plaintiffs’ TVPA claims
against Garry Drummond and Tracy.
Baloco II held that claims preclusion and issue preclusion barred the
plaintiffs’ TVPA claims. 767 F.3d at 1248, 1251. The Baloco plaintiffs had a
substantive legal relationship with the Romero plaintiffs, and the issues and claims
were identical in the two actions. See generally id. This action, while similar,
involves distinct plaintiffs and distinct claims. Neither before the district court nor
on appeal do the Defendants argue that this case is barred by res judicata.
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Therefore, Baloco II does not appear to be the basis upon which the district court
dismissed with prejudice Count Three.
Doe held that the plaintiffs failed to establish a genuine dispute of material
fact supporting their theories that the individual defendants were indirectly liable
for the AUC’s alleged extrajudicial killings. 782 F.3d at 604. Specifically, this
Court found no genuine dispute of fact regarding (1) the individual defendants’
knowledge of Drummond’s payments to the AUC; (2) the individual defendants’
knowledge that the AUC was murdering noncombatants along rail lines; or (3) the
individual defendants de facto or de jure authority or control over the actors who
committed extrajudicial killings. Id. at 604–05, 610 n.48. The absence of
evidence supporting (1) and (2) precluded an aiding and abetting theory of liability,
and the absence of evidence supporting (3) precluded a command responsibility
theory of liability. See id. at 608, 610.
When the district court dismissed this case, discovery had not commenced,
and there was no pending motion for summary judgment. Before the stay, the
district court had before it the Defendants’ motions to dismiss, which the district
court administratively terminated without prejudice in light of the stay. In the
district court’s post-stay show-cause order, the district court did not notify the
parties that it intended to consider matters outside the pleadings other than this
Court’s published decisions in Baloco II and Doe. See Fed. R. Civ. P. 12(d) (If a
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district court intends to treat a motion to dismiss as a motion for summary
judgment, “[a]ll parties must be given a reasonable opportunity to present all the
material that is pertinent to the motion.”); Fed. R. Civ. P. 56(f) (“After giving
notice and a reasonable time to respond, the court may: (1) grant summary
judgment for a nonmovant; (2) grant the motion on grounds not raised by a party;
or (3) consider summary judgment on its own after identifying for the parties
material facts that may not be genuinely in dispute.”). Therefore, the district court
could not have based its dismissal of Count Three on the absence of a genuine
dispute of material fact.
Because the district court could not have based its dismissal of Count Three
on the holdings of Baloco II and Doe, we are left rudderless on appeal. The
Defendants argued both before the district court and on appeal that, given Doe’s
extensive discussion of the standard for aiding and abetting liability and command
responsibility doctrine liability under the TVPA, Doe supports dismissal of Count
Three for failure to state a claim. While this may be so, the district court failed to
discuss this issue at all.
We have the discretion to affirm an order of the district court on any grounds
supported by the record but may “decline to do so when appellate review would
benefit from reasoned deliberation by the district court.” Palmyra Park Hosp. Inc.
v. Phoebe Putney Mem’l Hosp., 604 F.3d 1291, 1306 n.15 (11th Cir. 2010)
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(citations omitted). Here, where the 112-page, 210-paragraph operative complaint
alleges wrongful conduct by five defendants (and numerous non-parties) resulting
in the extrajudicial killing of 34 people, we decline to consider in the first instance
whether the complaint states a claim for two defendants’ indirect liability. The
initial resolution of that issue is better left to the district court, which has grown
intimately familiar with the allegations in this case. 2
We therefore vacate the district court’s dismissal of Count Three (except as
to the corporate defendants) and remand with instructions for the district court to
either permit the Plaintiffs to proceed against the individual Defendants on Count
Three or to reinstate the dismissal along with an articulation of the basis and
reasoning for the dismissal.
C. Count Four: Wrongful Death
As in this case, both Baloco and Doe included wrongful death claims under
Colombian law. In Baloco and Doe, however, the plaintiffs, all Colombian
citizens, sued several American defendants and Jimenez, a Colombian citizen. The
wrongful death claims were therefore premised upon supplemental jurisdiction. In
Doe, the district court declined to exercise supplemental jurisdiction over the
wrongful death claims and declined the plaintiffs’ post-judgment motion to amend
2
We acknowledge that the district court may consider itself to have already decided this
issue on the Defendants’ proffered basis, and we do not intend to suggest that the district court
erred on the merits or is generally obligated to state the reasons for its decision. In this case,
however, “appellate review would benefit from reasoned deliberation by the district court.”
Palmyra Park Hosp. Inc., 604 F.3d at 1306 n.15.
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the complaint to create complete diversity. See Doe, 782 F.3d at 581. This Court
found no abuse of discretion in the district court’s decision. Id. at 613. Baloco II
likewise affirmed the res judicata holding as to the plaintiffs’ wrongful death
claims. 767 F.3d at 1252.
In this action, because res judicata does not apply and the Plaintiffs’
wrongful death claims are premised on mandatory diversity jurisdiction neither
Baloco II nor Doe support the district court’s dismissal with prejudice of Count
Four. Before both the district court and this Court, the Defendants argued not that
Baloco II or Doe mandate dismissal of Count Four but that the Alabama statute of
limitations bars Count Four. The Plaintiff countered that the Colombian statute of
limitations applies and that the Plaintiffs are in any event entitled to equitable
tolling due to the Colombian political environment and Drummond’s alleged
concealment.
As with Count Three, the Defendants argue a plausible basis to affirm. As
with Count Three, it is unclear whether the district court dismissed on the
Defendants’ articulated basis. As with Count Three, we decline to address this
complicated issue in the first instance on appeal. See Palmyra Park Hosp. Inc.,
604 F.3d at 1306 n.15.
We therefore vacate the district court’s dismissal of Count Four and remand
with instructions for the district court to either permit the Plaintiffs to proceed on
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this count or to reinstate the dismissal along with an articulation of the basis and
reasoning for the dismissal.
IV. CONCLUSION
For the foregoing reasons, we affirm the district court’s dismissal with
prejudice of Count Three as to Defendants Drummond Co., Inc., Drummond Ltd.,
and Drummond USA, Inc. We reverse the district court’s dismissal with prejudice
of Counts One and Two and remand with instructions for the district court to
dismiss Counts One and Two without prejudice. We vacate the district court’s
dismissal with prejudice of Count Four and of the remaining portions of Count
Three and remand with instructions for the district court to either proceed with the
litigation as to those claims or to reinstate the dismissal and articulate the basis and
reasoning for the dismissal.
AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART,
AND REMANDED IN PART WITH INSTRUCTIONS.
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