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Acuna-Atalaya v. Newmont Mining Corp.

United States District Court, D. Delaware

April 11, 2018

MAXIMA ACUNA-ATALAYA, et al. Plaintiffs,
v.
NEWMONT MINING CORPORATION, et al., Defendants.

          MEMORANDUM

          Gerald Austin McHugh, United States District Judge.

         This case arises out of a land dispute between indigenous subsistence farmers in Peru and the Peruvian subsidiary of a multi-national gold mining company headquartered in the United States. At the forefront is a rancorous struggle over the right to occupy the land in question, amid years-long litigation in Peruvian courts. Plaintiffs Máxima Acuña-Atalaya de Chaupe and her family complain of repeated invasions of their farm, alleging threats on their lives, assaults, and destruction of livestock and crops. They have brought this action in Delaware, seeking to hold the American parent companies responsible for actions taken by their subsidiary on the ground in Peru, contending that Peruvian courts are inadequate to protect them. Defendant Newmont Mining Corporation and its affiliates strongly contest the facts, and have moved to dismiss invoking forum non conveniens (FNC).

         The ultimate question in the underlying dispute-how American corporations conduct their affairs in less developed nations-has profound moral implications. But the issues before me are legal and practical. On the record here, I conclude that this case is centered in Peru. There are intense disputes over baseline facts for which the evidence is in Peru. There is ongoing litigation there, governed exclusively by Peruvian law, and some of the conduct Plaintiffs challenge here would appear to be permissible under that law. And though there are reasons to be concerned about the Peruvian judicial system, I cannot say that it is clearly inadequate as a forum. I will therefore grant Defendants' Motion, but mindful of some of the concerns Plaintiffs raise, address them by attaching conditions to dismissal.

         I. Relevant Facts

         This is an unusual case brought by Peruvian citizens living in a remote, mountainous area against the U.S.-based Newmont Mining Corporation and affiliated entities, which are engaged in the business of mining gold around the world. The area in question was long thought to harbor gold, a suspicion that was confirmed by developmental drilling in the 1980s. In 1993, with the support of the Peruvian government, the International Finance Corporation, an affiliate of the World Bank, made a substantial loan to Newmont and a French-based partner for development of a mine. That mine opened and substantial amounts of gold were recovered, although the venture was affected by disputes between the companies forming the partnership and by environmental damage, resulting in litigation in both the United States and Peru. Local protests erupted, sometimes ending in violence, both as a reaction to the environmental toll exacted by the project and to a proposal to further expand the mining operation. It is that proposed expansion that gives rise to this case.

         Plaintiffs Máxima Acuña-Atalaya de Chaupe and her family are indigenous campesinos residing in the Northern Andes region of Peru on a parcel of land in an area they refer to as “Tragadero Grande.”[1] Máxima and her husband Jaime Chaupe Lozano represent that they purchased possessory rights to that parcel from a family member in 1994. At the time they made that purchase, Tragadero Grande was part of communal land that belonged to the Campesino Community of Sorochuco. Over the next five years, a Peruvian mining company known as Minas Conga underwent an extensive two-part process to acquire that communal land, which it then sold to Defendants' subsidiary, Minera Yanacocha [hereinafter “Yanacocha”] ¶ 2001.[2]Step one involved acquiring the communal land, and Step two purchasing the possessory rights of each individual member of the community. After acquiring the communal land, Minas Conga divided it into two units, and re-named these units to correspond with the two separate land titles, which for our purposes will be referred to as the “Southern Parcel” and the “Northern Parcel.” It then continued with the two-part process by negotiating with individual possessors, like the Chaupes, to purchase their possessory rights. There is a dispute over whether the Chaupes were parties to Minas Conga's negotiations and ultimately sold their possessory rights to Tragadero Grande, which now straddles both the Northern and Southern Parcels. That issue is being litigated in another case in Peru.

         Meanwhile, the Chaupe family has a cottage on the Northern Parcel. Defendants contend that Plaintiffs illegally occupied the land in 2011. See Defs.' P.I. Resp. Ex. 1A, ECF No. 38-1. Plaintiffs counter that they have lived and farmed on that parcel since they purchased their possessory rights in 1994. But, according to Plaintiffs, beginning in 2011, security personnel consisting of Yanacocha staff, the contracted Peruvian National Police (PNP), and the private security company Securitas threatened, and continued their assault on various other family members. Id. at 4-5. Plaintiffs allege that some combination of these entities physically attacked, destroyed the property of, and terrorized Plaintiffs. Pls.' P.I. Mot. 4, ECF No. 28. For example, Plaintiffs contend that in August 2011, Yanacocha security personnel destroyed their huts, removed crops they had planted, struck Plaintiff Máxima on her arms and legs with sticks, and knocked Plaintiff Jilda unconscious with the same sticks. Plaintiffs further allege that the purpose of these attacks was to dispossess them of their portion of the land in order to facilitate the development of the proposed new gold mine, referred to as the Conga Project, operated by Defendants and their Peruvian subsidiary.

         That project would represent a $4.8 billion expansion to Yanacocha's operations. As proposed, the expansion would eradicate four mountain lakes, raising concerns that it would threaten the water supply serving over 200 communities in the region, particularly in light of earlier problems. The Peruvian government initially approved the project over “broad community opposition” in 2010. Compl. ¶¶ 55-56, ECF No. 1. But about a year later, that widespread community opposition, coupled with public demonstrations, resulted in the government doubling back and suspending the operation. In part as a result, Defendant Newmont Mining Corporation told the SEC in 2016 that “it does not anticipate being able to develop Conga for at least the next five years.” Id. ¶ 62. But Plaintiffs allege that none of that has stopped the abuses and efforts to dispossess them.

         They have therefore brought this action in Delaware against Newmont Mining Corporation and three of its subsidiaries: Newmont Second Capital Corporation, Newmont USA Limited, and Newmont Peru Limited. They contend that Defendants are aware of such abuses, and exercise sufficient control over Yanacocha and its operations in Peru to be able to stop them. All of the Defendants are incorporated in Delaware and headquartered in Denver, Colorado. Plaintiffs aver that they chose to sue in the United States because justice cannot be had for them in Peru, given Yanacocha's influence over the government and judiciary.

         Defendants contend that Plaintiffs overstate the extent of Defendants' direct involvement with and control over Yanacocha and its security personnel overseas. They strongly dispute Plaintiffs' factual account, alleging that Plaintiffs “omitted key facts and created or exaggerated others.” Defs.' P.I. Resp. 2, ECF No. 37. Specifically, Defendants dispute that Plaintiffs occupied any portion of Tragadero Grande at any point between 2001 and 2011. According to Defendants, Yanacocha has been engaged in preliminary mining activities on the land since 2001, including by placing checkpoints to control access, but did not encounter Plaintiffs until May 2011. Defendants stress that the most prominent incident occurred in August 2011, and reject Plaintiffs' factual account. Defendants also assert that Yanacocha's actions are legally necessary to protect their possessory rights to the portion they occupy while the years-long litigation over who has legal right continues.[3] Nonetheless, Yanacocha decided to not interfere with Plaintiffs' activities in the portion of the Northern Parcel Plaintiffs now occupy. Defendants contend that they did not attempt to dislodge Plaintiffs until Plaintiffs sought to expand their occupancy. In addition, Yanacocha has purportedly established a procedure to allow Plaintiffs access through Yanacocha's checkpoints, and has provided Plaintiffs the direct phone number of high-ranking Yanacocha executives whom they can call for immediate authorization of entry.

         II. Procedural Posture

         Plaintiffs seek both injunctive relief and damages. Defendants move to dismiss, arguing that Delaware is an inconvenient forum because the relevant evidence, witnesses, and actors essential to adjudicating this case are in Peru. In their response to this Motion, Plaintiffs urge that I first address their motion for preliminary injunction, which, in part, asks that I order Defendants and their agents to cease the alleged harassment of Plaintiffs, bar Defendants and their subsidiaries from entering Tragadero Grande[4] without Plaintiffs' permission, and bar them from attempts to communicate with Plaintiffs except through counsel.

         As an initial matter, I note that a district court has the power to address FNC at the outset of the case. Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422 (2007). I hesitate to address the petition for injunctive relief before resolving venue, because the injunction requested is one that might alter the status quo, rather than merely preserve it. That is so because I cannot definitively determine whether prohibiting Defendants' subsidiary from engaging in what they contend are lawful self-help remedies would prejudice their rights under Peruvian law. Furthermore, because there is litigation currently pending in Peru, any order I enter will necessarily impact that litigation.

         The leading case where an injunction was issued despite a pending FNC motion is Republic of the Philippines v. Marcos, 862 F.2d 1355 (9th Cir. 1988). There, Ferdinand Marcos, the former President of the Republic of the Philippines, left the Philippines when he realized his regime was nearing its end. Republic of Philippines v. Marcos, 818 F.2d 1473, 1475 (9th Cir. 1987), on reh'g, 862 F.2d 1355. The United States government immediately recognized his successor, and when the Marcoses arrived in Hawaii with numerous crates of currency, jewels, precious metals and the like, the United States Customs Service impounded them. Id. At the same time, other assets allegedly belonging to the Marcos family were turning up around the world. Id. The Republic of the Philippines launched civil suits in several countries to recover or freeze specific assets it regarded as property of the Philippines. Id. In the United States action, the district judge granted the Republic's motion for preliminarily injunction, despite the pending FNC motion, in order to prevent the assets from being transferred. The Ninth Circuit affirmed, because “it was imperative for the district court to preserve the status quo lest the defendants prevent resolution of the case by putting their property beyond the reach of the court.” Republic of Philippines, 862 F.2d at 1364. It also bears mention that the party seeking the injunction was the newly recognized government of the Philippines.

         The situation here is different. Indeed, if Defendants' version is true and Yanacocha has to engage in these possessory defenses in order to continue its activities on the portion of the land it now occupies, a preliminary injunction risks altering the merits of the underlying land dispute before the court in Peru. See Defs.' P.I. Resp. 4, ECF No. 37 (stating that “the owner must take action, known as a ‘possessory defense, ' within 15 days of learning of the trespass”). According to the defense, uprooting crops and displacing newly erected structures is something that they must do or risk their legal rights. Although Plaintiffs argue that Yanacocha need not exercise this defense and suggest that Defendants would be able to recover any lost land regardless, the competing experts make that issue a difficult one. In either case, the injunction sought would by definition change, not preserve, the situation on the ground in Peru, and thereby potentially impact the legal proceedings there.

         Further, there are practical concerns about the requested relief that are also relevant to the discussion of whether Delaware is a convenient forum. Even assuming that neither party would willfully act in contravention of an order from this court, I remain skeptical of the practical impact of an injunction from a federal judge in Delaware over the actions of third parties in Peru. That skepticism is especially warranted where, as here, Defendants represent that they have taken affirmative steps to protect the rights of the Plaintiffs, and had limited success. Indeed, Defendants have presented evidence that security personnel have been instructed to exercise the utmost restraint in carrying out these possessory defenses. In fact, nothing in the video evidence provided by either side shows the type of abuse asserted by Plaintiffs. Plaintiffs insist otherwise, contending that abuses similar to those alleged in their Complaint have continued even during this case. But if these additional abuses have continued to occur contrary to Yanacocha's instruction, and despite cameras placed by both parties and journalists documenting the various encounters, it underscores the limited ability of an American judge to influence local behavior. And, as discussed below, part of Plaintiffs' argument is that local courts have not implemented Peruvian appellate court rulings that were in their favor. To the extent that is true, an American court's order entered against Yanacocha's parent company here is unlikely to have greater effect.

         Similar concerns exist with respect to another aspect of Plaintiffs' proposed injunction: Plaintiffs' allegations that they have faced significant difficulties when attempting to access their cottage as a result of Yanacocha's security checkpoints. Those allegations persist despite the fact that Defendants presented to the court established procedures for admitting Plaintiffs through those checkpoints, and a means of recourse if Yanacocha's instructions regarding access are being violated by the contracted security personnel on the ground.

         For these reasons, I will not decide the pending motion for an injunction before first considering whether Delaware is an appropriate forum, which requires further consideration of many of the same practical considerations reviewed above.

         III. Analysis

         FNC is a discretionary tool that empowers a district court “to dismiss an action on the ground that a court abroad is the more appropriate and convenient forum for adjudicating the controversy.” Sinochem, 549 U.S. at 425. To decide whether FNC dismissal is appropriate, district courts engage in a three-step analysis. First, the court must determine “whether an adequate alternate forum” exists to entertain the case. Eurofins Pharma U.S. Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 160 (3d Cir. 2010). If so, the court must next determine “the appropriate amount of deference to be given the plaintiff's choice of forum.” Id. Finally, the court must weigh “the relevant public and private interest factors”-discussed below-to determine whether, on balance, “trial in the chosen forum would result in oppression or vexation to the defendant out of all proportion to the plaintiff's convenience.” Id. If so, or if the chosen forum is “inappropriate” in light of the court's own “administrative and legal problems, ” the court “may, in its discretion, ” dismiss the case. Windt v. Qwest Commc'ns Int'l, Inc., 529 F.3d 183, 189 (3d Cir. 2008) (citing Koster v. (Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)). Defendants seeking dismissal on the basis of FNC bear the burden of persuasion at every stage of this analysis, Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43-44 (3d Cir. 1988) (Lacey I), against the backdrop of a generally “strong presumption” in favor of the plaintiff's choice of forum, see Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981).[5]

         As an initial matter, it must be noted that what is at issue here is not the ultimate legal question of the parties' rights with respect to Tragadero Grande. Indeed, the case before me is ancillary to that fundamental underlying dispute. Unlike some other cases filed in American courts seeking damages for past unlawful acts of American corporations overseas, Plaintiffs here seek detailed injunctive relief affecting an ongoing dispute, even as Peruvian courts attempt to resolve that dispute. Moreover, this action does not focus on the broader impact of Newmont's mining activities in Peru, such as pollution of the watershed or treatment of workers; it focuses on multiple discrete encounters replete with complex factual disputes, many of which involve third parties, including local authorities. And, as noted above, some of the challenged conduct- clearing crops, destroying structures-is characterized as a permissible remedy under Peruvian law. Thus, the specialized nature of this case has unique implications for whether Delaware is a convenient forum.

         As to these highly specific issues, the parties present competing accounts and, in support of both this Motion and Plaintiffs' Preliminary Injunction motion, have submitted extensive documentation. I am therefore “thrust into the merits of the underlying dispute, ” Van Cauwenberghe v. Biard, 486 U.S. 517, 528 (1988), and have necessarily availed myself of the full scope of all of these submissions, from affidavits submitted specifically for the FNC motion to all evidence pertaining to the motion for preliminary injunction.[6] Because it is necessary to “‘generally become[ ] entangled in the merits' to the extent required to ‘scrutinize the substance of the dispute'” on an FNC motion, Path to Riches, LLC ex rel. M.M.T. Diagnostics (2014), Ltd. v. CardioLync, Inc., 2018 WL 993752, at *3 (D. Del. 2018) (quoting Van Cauwenberghe, 486 U.S. at 528), I consider evidence from that broader record.

         A. Adequacy of the Peruvian Court System

         In many respects, this is the critical issue. The adequacy of an alternative forum is determined by a defendant's amenability to process in that forum and a plaintiff's opportunity for redress there. The Supreme Court has observed that it is the “rare circumstance[] . . . where the remedy offered by the other forum is clearly unsatisfactory.” See Piper, 454 U.S. at 254 n.22. Defendants have met their burden to demonstrate that an adequate alternative forum exists in Peru because, for the purposes of this action only, Defendants have stipulated to service of process, consented to jurisdiction in Peru, and agreed to have those be conditions of dismissal. In addition, Plaintiffs conceded that Peruvian law recognizes a cause of action and offers a remedy for the property damage and personal injuries alleged here.

         For their part, Plaintiffs argue that Defendants have not met their burden because first, they have not demonstrated that Peruvian courts have jurisdiction over all Defendants, and second, Defendants' improper influence over the Peruvian judiciary renders the forum inadequate, relying primarily on Eastman Kodak Company v. Kavlin, 978 F.Supp. 1078, 1085- 86 (S.D. Fla. 1997).[7]

         1) The Potential for Jurisdiction over Defendants in Peru

         Plaintiffs base their first contention on the declaration of Juan Carlos Ruiz Molleda, a Peruvian attorney specializing in, inter alia, human rights and access to justice and the law governing indigenous peoples. Pls.' FNC Resp. Ex. 17, ¶ 1, ECF No. 43-1. Ruiz is also the author of numerous publications and specialized legal articles in Peru and abroad. Id. Based on Article 2058 of the Peruvian Civil Code, Ruiz attests that “there is no guarantee” that a Peruvian civil court ...


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