18-3187 Chen Gang, et al v. Zhao Zhizhen 18‐3187‐cv Chen Gang, et al v. Zhao Zhizhen

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 13th day of Januaury, two thousand twenty.

PRESENT: ROBERT D. SACK, BARRINGTON D. PARKER, DENNY CHIN, Circuit Judges. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

CHEN GANG, ZOU WENBO, Plaintiffs‐Appellants,

FANG LIN, LU FENG, JANE DOE, DOES, 1‐3, Plaintiffs,

v. 18‐3187‐cv

ZHAO ZHIZHEN, Defendant‐Appellee,

DOES, 1‐5 INCLUSIVE, Defendants. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

 The Clerk of the Court is respectfully directed to amend the official caption to conform to the above. FOR PLAINTIFFS‐APPELLANTS: TERRI E. MARSH, Human Rights Law Foundation, Washington, D.C.

FOR DEFENDANT‐APPELLEE: BRUCE S. ROSEN (Zachary D. Wellbrock, on the brief), McCusker, Anselmi, Rosen & Carvelli, P.C., Florham Park, New Jersey.

Appeal from an order of the United States District Court for the District of

Connecticut (Chatigny, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the order of the district court is AFFIRMED.

Plaintiffs‐appellants Chen Gang and Zou Wenbo (together, ʺplaintiffsʺ)

appeal from a ruling and order entered September 30, 2018, denying their motion for

leave to file a third amended complaint. We assume the partiesʹ familiarity with the

underlying facts, the procedural history of the case, and the issues on appeal.

The following factual allegations are drawn from the proposed third

amended complaint and are presumed to be true.1 Plaintiffs, followers of the spiritual

practice and religion called Falun Gong, brought this action on behalf of themselves and

others alleging that they had been tortured in the Peopleʹs Republic of China due to

their religious beliefs. Defendant‐appellee Zhao Zhizhen founded the China Anti‐Cult

Association (ʺCACAʺ) in China and has served as a member of the Executive Council

since November 2000. Zhao was also an executive of radio and television stations in

1 Plaintiffs actually filed two proposed third amended complaints: one on October 11, 2013 and one on October 30, 2017. The latter is the subject of this appeal.

2 China from 1986 to at least 2003. CACA is a not‐for‐profit association created by Zhao

and other Communist Party members ʺto develop and disseminate anti‐Falun Gong

propaganda, and torture and interrogation methods and techniques for use by police

and other security personnel to ʹtransformʹ Falun Gong practitioners.ʺ J. Appʹx at 429.

Plaintiffs allege that Zhao directed and participated in training conferences, lectures,

and classes held by CACA. Plaintiffs also allege that Zhao published ʺbooks, manuals,

and reports that stressed the need to use torture and violence to ʹtransformʹ Falun Gong

practitioners.ʺ J. Appʹx at 429. More generally, plaintiffs assert that Zhao used ʺhis

position as an influential figure in Chinese societyʺ to call for the sustained persecution

and torture of Falun Gong practitioners. J. Appʹx at 430. Plaintiffs represent a putative

class of Falun Gong practitioners who have resided or currently reside in China, and

have been subjected to forms of persecution and abuse due to their religious beliefs.

Plaintiffs filed their original complaint in 2004, asserting claims based on

the Alien Tort Statute (ʺATSʺ) and the Torture Victim Protection Act (ʺTVPAʺ), against

Zhao and unidentified individuals. In the intervening years, the complaint was

amended and the parties engaged in motion practice. The proceedings were delayed in

part because of developments in the law with respect to the ATS. On September 20,

2013, the district court dismissed the second amended complaint for lack of subject

matter jurisdiction. After an initial motion for leave to amend was denied, in October

2017, plaintiffs filed a second motion for leave to amend. On September 30, 2018, the

3 district court issued the ruling that is the subject of this appeal. The district court

denied leave to amend on the grounds of futility and prejudice to Zhao.

DISCUSSION

We review a district courtʹs denial of leave to amend on the basis of

futility de novo, Nielsen v. Rabin,

(2d Cir. 2014), and denial of leave to

amend on the basis of undue prejudice for abuse of discretion, Knife Rights, Inc. v. Vance,

(2d Cir. 2015). Upon such review, we conclude that the district court

properly denied the motion for leave to amend on the basis that the proposed

amendment would have been futile and the filing of an amended pleading would

substantially prejudice Zhao. We consider first the viability of plaintiffsʹ proposed third

amended complaint and second the prejudice to Zhao if leave were to be granted.

A. Futility

Plaintiffs allege that Zhao violated the TVPA by aiding and abetting

torture that they were subjected to in China. As a threshold matter, the TVPA, unlike

the ATS, ʺhas extraterritorial application.ʺ Chowdhury v. Worldtel Bangladesh Holding,

Ltd.,

(2d Cir. 2014). This Court has declined to decide, however, whether

the TVPA recognizes aiding and abetting liability. See

at 53 n.10. We need not

answer that question today. Even assuming, without deciding, that the TVPA provides

for aiding and abetting liability, plaintiffsʹ allegations are insufficient to state a claim.

The District of Columbia Circuit has held that ʺ[a]iding‐abetting includes the following

4 elements: (1) the party whom the defendant aids must perform a wrongful act that

causes an injury; (2) the defendant must be generally aware of his role as part of an

overall illegal or tortious activity at the time that he provides the assistance; (3) the

defendant must knowingly and substantially assist the principal violation.ʺ Halberstam

v. Welch,

(D.C. Cir. 1983).2

The district court held that the ʺallegations of the [complaint fail to] satisfy

the third requirement,ʺ that the defendant substantially assist in the violation. S. Appʹx

at 5. We agree. For example, plaintiffs failed to allege that Zhao directly participated in

the torture, ordered any Chinese police or prison guards to carry out the torture, or

assisted in the torture in any way, other than creating a propaganda polemic expressing

anti‐Falun Gong sentiments that some officials used in carrying out Chinese torture

practices targeting Falun Gong members.3 Plaintiffsʹ repeated references to Zhaoʹs

2 The parties dispute the standard that applies to an aiding and abetting claim under the TVPA (assuming such a claim exists). Zhao claims that the standard should mirror the aiding and abetting standard under the ATS. On the other hand, plaintiffs argue that the standard announced by the D.C. Circuit in Halberstram should apply. This Court need not and does not decide which standard applies to plaintiffsʹ aiding and abetting claim, because plaintiffsʹ claim is deficient even under their preferred standard. 3 Plaintiffsʹ reliance on In re South African Apartheid Litigation is misplaced.

, 265 (S.D.N.Y. 2009). In In re South African Apartheid Litigation, the court found that defendants aided and abetted the denationalization of black South Africans when they created computer programs ʺspecifically designed to produce identity documents and effectuate denationalization.ʺ Id. These programs ʺwere indispensable to the organization and implementation of a system of geographic segregation and racial discrimination.ʺ Id. Here, while plaintiffs allege that the CACA website (created by Zhao) disseminated and collected ʺtransformation manualsʺ that advocated for the torture of Falun Gong followers, plaintiffs

5 ʺpropaganda polemicʺ do not strengthen their argument because plaintiffs failed to

plausibly allege that Zhao ʺsubstantially assistedʺ in the torture plaintiffs suffered. For

these reasons, we agree with the district court that plaintiffs failed to state a plausible

claim for aiding and abetting liability under the TVPA.

Plaintiffs also allege that Zhao agreed to participate in a conspiracy to

torture plaintiffs due to their Falun Gong beliefs. In comparison to aiding and abetting

actions, ʺ[t]he element of agreement is a key distinguishing factor for a civil conspiracy

action.ʺ Halberstam,

. To maintain a civil conspiracy action, the plaintiff

ʺmust provide some factual basis supporting a meeting of the minds, such that

defendants entered into an agreement, express or tacit, to achieve the unlawful end.ʺ

Webb v. Goord,

, 110‐11 (2d Cir. 2003). The district court concluded that

plaintiffs failed to allege the existence of an ʺagreement to commit tortureʺ between

Zhao and the Chinese Communist Party. S. Appʹx at 7. For this reason, the district

court held that plaintiffs failed to sufficiently allege a civil conspiracy claim under the

Twombly pleading standards. S. Appʹx at 8. We agree.4

have failed to allege that Zhao ʺspecifically designedʺ these manuals for torture purposes or that the manuals were ʺindispensableʺ to the implementation of the Falun Gong crackdown.

4 Plaintiffs argue that the district court erred in dismissing their conspiracy claim because, under standards established by our sister Circuits, plaintiffs have sufficiently alleged an agreement to satisfy the conspiracy pleading requirements. Both cases, from the D.C. Circuit and the Seventh Circuit, describe a relaxed standard for finding an agreement under civil conspiracy claims and have not been adopted by this circuit. Nonetheless, even assuming, without deciding, that a relaxed standard applies here, plaintiffs still fail to allege the existence of an agreement sufficient to sustain a civil conspiracy claim. Plaintiffsʹ reliance on Halberstam is

6 B. Substantial Prejudice

Finally, we conclude that the district court did not abuse its discretion in

finding that Zhao would be prejudiced if plaintiffs were permitted to file another

amended complaint. We agree that permitting plaintiffs to now add new allegations to

a complaint that was originally filed over fifteen years ago would prejudice the

defendant. ʺ[C]onsiderations of undue delay, bad faith, and prejudice to the opposing

party [are] touchstones of a district courtʹs discretionary authority to deny leave to

amend.ʺ Barrows v. Forest Labs., Inc.,

, 58 (2d Cir. 1984). Moreover, ʺ[o]ne of

the most important considerations in determining whether amendment would be

prejudicial is the degree to which it would delay the final disposition of the action.ʺ

Krumme v. WestPoint Stevens Inc.,

(2d Cir. 1998). Here, while this case

was delayed in part because of developments in the law surrounding the ATS, the

passage of time is undoubtedly prejudicial to Zhao. Accordingly, the district court did

not abuse its discretion in concluding that adding new allegations in a fifteen‐year‐old

case would be substantially prejudicial.

flawed because plaintiffs failed to plausibly allege that Zhao was connected to any of the tortfeasors, such as the Chinese police or prison guards. While the plaintiffsʹ allegations describe Zhao as an active member in the Chinese Communist Party who expressed anti‐Falun Gong sentiments, association with a political party is insufficient to support an inference of a conspiracy to torture. Similarly, plaintiffsʹ reliance on Quinones v. Szorc,

, 290‐91 (7th Cir. 1985), is also deficient because plaintiffs fail to allege that Zhao met with any of the Chinse prison guards carrying out the torture or entered any agreement to persecute Falun Gong members.

7 * * *

We have considered plaintiffsʹ remaining arguments and find them to be

without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O=Hagan Wolfe, Clerk of Court

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