On February 28, 2012, the Supreme Court heard oral arguments in the case of Kiobel v. Royal Dutch Petroleum. The case involves three questions: whether corporate civil liability under the Alien Tort Statute (ATS) is a question of merits or of subject matter jurisdiction; whether corporations can be held accountable for tort liability for violations of the law of nations; and whether and under what circumstances the ATS allows courts to recognize a cause of action for violations of the law of nations occurring outside the U.S. Despite that the central focus of the case was initially whether a corporation has civil tort liability under the ATS, the oral arguments indicate the Justices are instead focused on the extraterritoriality of the statute itself. The Court ultimately ordered Kiobel to be reheard on the question of extraterritoriality in the fall of 2012.
The ATS, which was enacted in 1789, gave federal courts jurisdiction to hear lawsuits filed by non-U.S. citizens for torts committed in violation of the law of nations. Initially, it regulated diplomatic relations between States and addressed crimes with international consequences, such as piracy. Modern application of the ATS in cases such as Filártiga v. Peña-Irala (1980) and Doe v. Karadžic (2000) have expanded the ATS to hold individuals accountable for egregious human rights violations, including genocide, torture, war crimes, and crimes against humanity, but there has been a split in federal circuit courts over whether corporations can be held liable for these same crimes. Due to their status as extraterritorial entities, corporations have escaped international legal bodies designed to deliver justice for grave breaches of human rights.
Kiobel is a class action suit against Royal Dutch Shell Petroleum Co. (Royal Dutch) and Shell Transport and Trading Co. The plaintiffs aimed to hold the companies accountable for aiding and abetting armed forces in the alleged killing, torture, and cruel, inhuman and degrading treatment of a group of Nigerians in the Ogonia region. The issue in Kiobel was whether U.S. federal common law or international law is the proper source of law for determining whether corporate liability attaches under the ATS. Counsel for Royal Dutch, Kathleen Sullivan, argued that the proper source is customary international law, which has not held corporations as entities liable for committing or aiding and abetting human rights violations. Though the ATS involves civil liability, Sullivan based this argument on the jurisdiction of international criminal courts.
On this issue, the Second Circuit had previously held that corporate liability does not exist under the ATS because corporate liability is not recognized as a “specific, universal, and obligatory” norm of customary international law. However, subsequent decisions by the D.C. Circuit in Doe v. Exxon, the Seventh Circuit inFlomo v. Firestone, and the Ninth Circuit in Sarei v. Rio Tinto explicitly rejected the Second Circuit’s reasoning, finding that the courts do have jurisdiction under the ATS in suits against corporations. Kiobel is the first such case to come before the Supreme Court.
Some proponents of the notion that courts do, in fact, have jurisdiction point to the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission. In that case, the Supreme Court extended certain First Amendment protections to corporate entities, thereby extending rights traditionally reserved for persons. Since corporate entities enjoy some rights as persons, Kiobel stood to hold corporations responsible as persons where they commit or aid in crimes punishable under ATS. If the Supreme Court affirms the Second Circuit’s holding in Kiobel, the ATS will not be applicable to corporations for claims of civil liability, even for the most atrocious acts.
However, during the Kiobel oral arguments before the Supreme Court, the Justices did not focus solely on the issue of whether corporate persons are liable under the ATS—much to the frustration of Petitioner’s Counsel Paul Hoffman—instead turning their attention to the implications of the extraterritoriality of the statute. Throughout the argument, the Justices honed in on whether the ATS allows U.S. courts to hear lawsuits for violations of international law on foreign soil at all, for natural or corporate persons. Justice Alito was particularly skeptical, asking: “[w]hat business does a case like [Kiobel] have in the courts of the United States?” and further commented that finding liability in this case would only create international tension.”
After the arguments, the Court took the rarely used step of requesting that counsel brief a new question: whether the ATS “allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.” Now, not only corporate accountability under ATS at risk, but the very fate of the ATS itself. The ATS has been a useful tool for protecting human rights, and without it, victims of grave human rights abuses may be left without legal recourse. Yet among the varying arguments about domestic law versus international customary law, only Justice Breyer brought up the question of human rights. As both a survivor of torture and the United Nations Special Rapporteur on Torture, Juan Mendez, noted in his remarks on the case that he “hope[s] that the Supreme Court will uphold the promise of these laws, and fulfill the United States’ commitment to protect human rights, and not allow corporations to get away—literally—with torture.”