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Doe v. Exxon Mobil Corp.

August 27, 2008

JOHN DOE I, ET AL., PLAINTIFFS,
v.
EXXON MOBIL CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Louis F. Oberdorfer United States District Judge

MEMORANDUM & OPINION

Eleven Indonesian villagers allege that Exxon Mobil Corporation, two of its U.S. affiliates (Mobil Corporation and ExxonMobil Oil Corporation), and its Indonesian subsidiary, ExxonMobil Oil Indonesia (EMOI), are liable for killings and torture committed by military security forces protecting and paid for by EMOI.

There is evidence that these security forces committed the alleged atrocities; that EMOI paid for the security, which was provided "as may be requested by [EMOI]" under a contract; that EMOI had the right to influence the forces' "deployment logistics" and "to influence the security plan and the development strategy;" and that EMOI "assisted in the management of security affairs . . . on behalf of" the Indonesian government entity that provided these forces. Additionally, there is evidence that EMOI alone was not "equipped to handle all the issues that were cropping up" with security and therefore "went up the chain and request[ed] additional corporate kinds of support" from Exxon Mobil Corporation-which enforced "uncompromising controls" over EMOI's security. In light of this and similar evidence, EMOI's and Exxon Mobil Corporation's ultimate liability is a question entrusted to a finder of fact. Accordingly, the court will deny Exxon Mobil Corporation's and EMOI's motions for summary judgment. Because there is insufficient particularized evidence regarding the other two Defendant affiliates (Mobil Corporation and ExxonMobil Oil Corporation), however, the court will grant their motions for summary judgment.A corresponding order accompanies this memorandum.

I. BACKGROUND

A. Facts

Exxon Mobil's ties to Indonesia trace back more than one hundred years when a predecessor to Mobil Oil Corporation first opened a branch office in Indonesia. Answer ¶ 35 [dkt # 153]. In 1967, Mobil Oil Corporation incorporated Mobil Oil Indonesia Inc. (MOI), a Delaware corporation with a principal place of business in Jakarta, Indonesia. Defs.' Response to Pls.' Counterstatement of Material Facts ("Defs.' SMF Resp.") ¶ 5. MOI's initial capitalization was a paltry $1,000. Pl's. Ex. 77. A few years later, MOI discovered the lucrative Arun gas field in Indonesia's Aceh province on the island of Sumatra. Defs.' SMF Resp. ¶¶ 36, 39. MOI worked as a contractor for Indonesia's state-owned oil and gas company "Pertamina" (the official name is Persusahaan Pertambangan Minyak dan Gasbumi Negara). Id. ¶ 36; Defs.' SMF Resp. ¶ 49. Through a joint venture known as "PT Arun" (officially, PT Arun Natural Gas Liquefaction Company), Mobil Oil Corporation and the Indonesian Government processed the natural gas for shipment. Amended Compl. ¶ 36 [dkt # 123-2].

The Indonesian Government may designate an asset as a "Vital National Object," which requires military security protection. Defs.' SMF Resp. ¶ 54. Defendants contend that, since 1983, the Indonesian Government has designated the Arun Field such a Vital National Object. Defs.' SMF Resp. ¶ 54.Plaintiffs argue, however, that Defendants were not required to contract for the use of the military to protect the Arun Field. Pls.' Mem. at 15.

A Production Sharing Contract ("PSC" or "Contract"), effective as of 1998, governs the relationship between MOI and Pertamina, and provides for military security protection at MOI's discretion. Pls.' Ex. 337. Under the Contract, Pertamina agreed to "assist and expedite[MOI's] execution of" gas extraction and production "by providing . . . security protection . . . as may be requested by [MOI] . . . ." Id. ¶ 5.3(c) (emphasis added). MOI paid Pertamina for these security costs. Id.Security was a particular concern because Aceh was experiencing violent civil conflict as the Geraken Aceh Merdeka ("GAM") separatist movement demanded independence from the Indonesia Government in Jakarta. Defs.' SMF ¶ 60.

Mobil Corporation and Exxon Corporation merged in 1999, creating the corporate entities that include the current "Exxon Defendants." Defs.' SMF Resp. ¶ 8. The new overarching parent corporation of the various Mobil and Exxon affiliates became Defendant Exxon Mobil Corporation.Defendant Mobil Corporation became its wholly-owned subsidiary. Id. Mobil's subsidiary, in turn, is Defendant ExxonMobil Oil Corporation. These three entities-Exxon Mobil Corporation, Mobil Corporation, and ExxonMobil Oil Corporation (in descending hierarchical order)-comprise "the U.S. Defendants." (For simplicity, the court refers to each as "Exxon Mobil," "Mobil," and "ExxonMobil Oil.") Mobil, the second entity in this chain, was also the ultimate parent of MOI, which-after a name change-became EMOI (Exxon Mobil Oil Indonesia Inc.), the fourth Exxon Defendant at issue. Defs.' SMF Resp. ¶ 6. This name change did not alter MOI's corporate structure or its relationship to the U.S. Exxon Defendants. Id.The terms "EMOI" and "MOI" are used interchangeably.

Meanwhile, EMOI's security situation deteriorated. Defs.' SMF Resp. ¶ 60. In December 1999, Robert Haines-Exxon Mobil's Manager of International Government Affairs-sent a memorandum to Mobil's CEO, reporting on his meeting in Indonesia with MOI to discuss the security concerns in Aceh. Pls.' Ex. 15. Haines noted a "complete breakdown of law and order in the province" and that "MOI has asked for the assistance of the military to protect its facilities." Id. Haines also cautioned that "[t]he presence of troops, however, only serves to inflame the population and results in suspicions that MOI is linked to the military." Id.

Troops assigned to EMOI under the Contract, however, allegedly suffered their own breakdown of law and order as they allegedly beat, shot, and tortured Plaintiffs-Indonesian villagers living in Aceh near the Arun Project. See Amended Compl. ¶¶ 67--77. Plaintiff John Doe I alleges that, in January 2001, "ExxonMobil security personnel" accosted him as he rode his bicycle cart to the local market. Id. ¶ 67. He contends that the security personnel shot him in the wrist and threw a hand grenade at him, causing severe injuries. Id. He was allegedly killed in 2003 during a raid on his village. Id.

Plaintiff John Doe II alleges that Exxon Mobil security personnel detained him while he rode his motorbike and that they then tortured him-by beatings and electric shock-over a period of three months. Id. ¶ 68; see also Pl. John Doe II's Supp. Response to ExxonMobil Oil Corporation's First Set of Interrogatories ("John Doe II Supp. Interrogs.") [dkt # 265] at 2--3 (stating that soldiers who work for Defendants detained him as he went about his daily routine; beat him; struck him in the chin with a weapon; then detained him, stripped him naked, and burned him). Similarly, Plaintiff John Doe III alleges that Exxon Mobil's security personnel shot him in his leg as he rode his motorbike; later broke his kneecap and smashed his skull; and tortured him over a period of one month. Id. ¶ 69.

The other Plaintiffs provide similar evidence of beatings, burnings and harm. See id. ¶¶ 70--77 (John Does IV--VIII; Jane Does I--IV); see also John Doe IV's Supp. Interrogs. [dkt # 265] at 2--3 (stating that soldiers who worked for Defendants stopped him while traveling; beat him; and carved the abbreviation GAM into his back with a knife, leaving a visible scar); John Doe V's Supp. Interrogs. [dkt # 265] at 2--3 (stating that soldiers burned approximately 40 houses in his village and that a soldier named "Beni" from Unit 133 beat his son).

The security situation deteriorated to the point where EMOI could no longer operate the production facilities in Aceh. Defs.' SMF Resp. ¶ 60. Accordingly, on March 9, 2001, EMOI shut down operations for approximately three months. Id.

B. Procedural History

On June 19, 2001, Plaintiffs, 11 Indonesian citizens proceeding under pseudonyms, filed their Complaint [dkt # 3] against the four Exxon Defendants and Defendant PT Arun. Plaintiffs asserted 15 claims. These included federal claims under the Alien Tort Claims Act, 28 U.S.C. § 1350, and the Torture Victim Protection Act, 28 U.S.C. § 1350; they also included various state-law tort claims, such as wrongful death, assault, and battery.

On October 14, 2005, this court granted Defendants' motion to dismiss Plaintiffs' federal statutory claims, but allowed Plaintiffs' state-law tort claims against the Exxon Defendants to proceed (with discovery restrictions). Doe, 393 F. Supp. 2d at 21--22.The court dismissed as non-justiciable all claims against the joint venture PT Arun, which was 55% owned by Pertamina, because of "a significant risk of interfering in Indonesian affairs and thus U.S. foreign policy concerns." Id. at 28.The court required the parties to "tread cautiously" with the surviving tort claims and stated that "[d]iscovery should be conducted in such a manner so as to avoid intrusion into Indonesian sovereignty." Id. at 29.

On March 2, 2006, the court granted [dkt # 136] Plaintiffs' motion to amend the Complaint and to file their First Amended Complaint. The Amended Complaint alleged the following ten torts against each of the four Exxon Defendants:

(1) wrongful death (Jane Does II, III, and IV, on behalf of their husbands, John Does II, III, and IV);

(2) battery (John Does I--VII, and Jane Doe I);

(3) assault (John Does I--VII, and Jane Doe I);

(4) arbitrary arrest, detention, and false imprisonment (John Does I--VII);

(5) negligence (all Plaintiffs);

(6) intentional infliction of emotional distress (all Plaintiffs);

(7) negligent infliction of emotional distress (all Plaintiffs);

(8) negligent hiring (all Plaintiffs);

(9) negligent supervision (all Plaintiffs); and

(10) conversion (John Does II and V).

The court, however, granted Defendants' motion to dismiss Plaintiffs' claims of intentional infliction of emotional distress, leaving nine torts. The court also concluded that D.C. law applied to the surviving claims except the wrongful-death claim, to which Delaware law applied.

Discovery was limited to two issues: (1) personal jurisdiction over EMOI; and (2) the Exxon Defendants' knowledge of, and proximate cause of, Plaintiffs' alleged injuries. See Orders of March 6, 2006 [dkt # 138] and May 3, 2006 [dkt # 158]. The governing discovery Order also "avoided discovery in Indonesia, except that it required defendants to produce any documents they intend to use in their defense." May 3, 2006 Mem. at 2.

When discovery closed, EMOI moved to dismiss for lack of personal jurisdiction and all four Exxon Defendants moved for summary judgment. The court recently denied EMOI's motion for lack of personal jurisdiction [dkt #339], leaving the pending summary judgment motions for this separate resolution. A few discovery disputes are pending, but the court has concluded that the summary judgment motions are ripe for resolution. See Ernie Haire Ford, Inc. v. Ford Motor Co., 260 F.3d 1285, 1290 n.2 (11th Cir. 2001) (upholding district court's decision to rule on summary judgment during pending discovery dispute that was "unlikely to produce a genuine issue of material fact").

II. DISCUSSION

Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the discovery and disclosure materials that it believes demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court draws all inferences from the ...


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