NEW YORK, July 8 (Reuters) - A federal appeals court revived on Friday a lawsuit against Exxon Mobil Corp by Indonesian villagers who accused the oil giant's security forces of committing murder, torture and other atrocities in the country's Aceh province.
In a 2-1 ruling, the D.C. Circuit Court of Appeals said companies are not immune from liability under a 1789 U.S. law known as the Alien Tort Statute for "heinous conduct" allegedly committed by its agents in violation of human rights norms.
Given that laws in civilized nations hold corporations responsible for lesser wrongs, "it would create a bizarre anomaly to immunize corporations from liability for the conduct of their agents in lawsuits brought for shockingly egregious violations of universally recognized principles of international law," Judge Judith Rogers wrote for the majority.
Friday's decision reversed part of a ruling by the federal district court in Washington, D.C.
It is also at odds with a landmark ruling last September by the federal appeals court in New York, raising the prospect that the U.S. Supreme Court could try to resolve the dispute.
"The ruling basically says that corporations are not above the law," said Jennifer Green, a University of Minnesota law professor and director of that school's human rights litigation clinic, who submitted a brief on the plaintiffs' behalf. "When corporations have knowledge that they are aiding and abetting human rights abuses, they can be held liable in a U.S. court."
Exxon Mobil, based in Irving, Texas, said it is reviewing Friday's decision, calling the plaintiffs' claims "baseless." Indonesia's government has also opposed the lawsuit.
"NOT ABOVE THE LAW"
The case was brought by 15 villagers from the Aceh province over alleged wrongful acts from 1999 to 2001, a period of civil unrest in the region.
They said Exxon Mobil was responsible because it had retained soldiers from Indonesia's military as guards for a natural gas facility in Aceh, despite knowing of past human rights abuses by Indonesia's army and that the contract would lead to human rights violations against Aceh villagers.
According to the decision, some plaintiffs' family members were killed, while other plaintiffs were "beaten, burned, shocked with cattle prods, kicked and subjected to other forms of brutality and cruelty" amounting to torture.
In its ruling, the D.C. Circuit also upheld the district court dismissal of claims under a different law, the Torture Victim Protection Act.
It returned the case to that court, where a jury could decide liability and any compensatory or punitive damages.
"We have fought these baseless claims for many years," Exxon Mobil spokesman Patrick McGinn said in a statement.
"While conducting its business in Indonesia, ExxonMobil has worked for generations to improve the quality of life in Aceh through employment of local workers, provision of health services and extensive community investment. The company strongly condemns human rights violations in any form."
Agnieszka Fryszman, a lawyer for the plaintiffs, said the decision makes clear that corporations would be "as liable as anyone else" for violating international human rights norms.
DISSENT
Friday's decision puts the D.C. Circuit in agreement with the 11th Circuit Court of Appeals, which has jurisdiction in Alabama, Florida and Georgia.
It also put both courts at odds with the 2nd Circuit Court of Appeals, which said companies are not liable in U.S. courts for violating international human rights law.
That case was brought against Royal Dutch Shell Plc by the families of seven Nigerians executed by a former military government. They accused Shell of helping Nigerian authorities violently suppress protests against its oil exploration and development in the 1990s.
The 2nd Circuit decision applies in New York, Connecticut and Vermont.
Judge Brett Kavanaugh dissented from Friday's decision, saying it would be "quite odd" for a U.S. court to allow Alien Tort Statute claims against a corporation based on customary international law, when no international tribunals would.
He also said the ruling could harm U.S.-Indonesian relations, and perhaps damage the war on terrorism.
Kavanaugh was appointed to the bench by President George W. Bush. Rogers and Judge David Tatel, who comprised the majority, were appointed by President Bill Clinton.
The case is John Doe VIII et al v. Exxon Mobil Corp et al, D.C. Circuit Court of Appeals, No. 09-7125.
For John Doe VIII et al: Terrence Collingsworth of Conrad & Scherer; Agnieszka Fryszman and Kathleen Konopka of Cohen Milstein Sellers & Toll; Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison.
For Exxon Mobil Corp et al: Alex Oh and Theodore Wells of Paul Weiss Rifkind Wharton & Garrison; Walter Dellinger and Srikanth Srinivasan of O'Melveny & Myers; Nikhil Singhvi and Martin Weinstein of Willkie Farr & Gallagher.
(Reporting by Jonathan Stempel; Additional reporting by Anna Driver and James Vicini)