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Supreme Court Preview: Kiobel v. Royal Dutch Petroleum

Next week, the Supreme Court will hear arguments in Kiobel v. Royal Dutch Petroleum Co., a case that has enormous implications for plaintiffs’ ability to hold corporations liable for human rights violations committed outside the United States.

Published: February 24, 2012

Next week, the Supreme Court will hear arguments in Kiobel v. Royal Dutch Petroleum Co., a case that has enormous implications for plaintiffs’ ability to hold corporations liable for human rights violations committed outside the United States.

The case springs from a 2002 complaint by 12 Nigerian plaintiffs who allege that Royal Dutch Petroleum and related companies violated the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350. The ATS grants federal district courts jurisdiction over claims “by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” Plaintiffs claim that the defendant corporations aided and abetted the Abacha dictatorship in the Ogoni region of the Niger Delta in committing human rights violations, including prolonged arbitrary detention, torture, and extrajudicial and arbitrary killings.

Prior to trial, the district court granted respondents’ motion to dismiss the complaint with respect to several of these claims because plaintiffs had failed to meet the ATS standard for identifying norms of customary international law violated by defendants’ actions. The remainder of plaintiffs’ claims were allowed to go forward, but the district court certified its entire order for immediate interlocutory appeal.

On appeal, the principal issue before the Second Circuit was whether plaintiffs had met the standard set out by the Supreme Court in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), which required them to identify a norm of customary international law “accepted by the civilized world” that prohibits the human rights violations they allege. The court, however, decided the case on the ground that it did not have subject matter jurisdiction. Writing for the majority, Judge Cabranes framed the question as whether the court’s ATS jurisdiction extended to civil actions against corporations. He read Sosa and other precedents as requiring the court to base its decision on customary international law (as opposed to federal law). Canvassing various sources of customary international law – e.g., the statutes of international criminal tribunals since Nuremberg, treaties and the works of jurists – he concluded that this body of law did not yet recognize corporate liability for human rights violations. Consequently, respondents could not be held liable under the ATS.

Judge Leval, in a lengthy concurring opinion, disagreed that the ATS did not permit corporate liability. He argued that international law does not address whether corporations can be held liable for human rights violations, but instead leaves the issue to be decided by each individual state when it implements its international obligations. In other words, while nation states collectively create international norms – e.g., the prohibitions on genocide, crimes against humanity and torture – international law leaves the matter of enforcement, and question of private civil liability, up to individual states. Since the United States had enacted the ATS, and the ATS does not distinguish between natural persons and corporations, Judge Leval concluded that it is permissible to hold corporations liable for violations of customary international law.

Certiorari was granted and the case is now before the Supreme Court.

In their brief to the Court, petitioners first argued that the issue of whether a corporation may be sued under the ATS is a substantive rather than subject matter jurisdiction issue. Turning to the issue of whether corporations should be excluded from ATS liability, petitioners argue that the text, history and purpose of the statute do not support distinguishing between individual and corporate defendants. In addition, under Sosa, in deciding whether petitioners’ claim was permissible under ATS, the Second Circuit should have looked to international law only for purposes of deciding whether there was a cognizable violation. Whether a corporation can be held liable for such violation is a matter of domestic law. Petitioners also argue that corporate civil liability is not unique to the United States but is instead a universally accepted principle of all modern legal systems and therefore is a norm of customary international law.

The United States filed an amicus brief supporting petitioners’ arguments. This brief is consistent with the United States’ long-standing position that domestic law governs the contours of remedies for violations of international law.

For their part, the respondents vigorously defend the Second Circuit’s holding that international law controls on the issue of whether they may be sued under the ATS. They point to a number of sources, ranging from the Torture Victims Protection Act to the decisions of international criminal tribunals and courts in support of their position that international law contains no clear norm requiring corporate responsibility.

The Court’s decision in Kiobel will be one of the most critical rulings this term. The ATS has been a key tool in efforts to obtain accountability for human rights violations. Moreover, the possibility of this type of liability incentivizes businesses to take responsibility for the human rights impact of their actions overseas and promotes greater respect for these fundamental norms. From the point of view of the United States government, a ruling that international rather than domestic law is the touchstone for deciding on the availability of a remedy for violations of international standards may have far reaching consequences.  

As Amicus Curiae, the Brennan Center has argued in support of the petitioners that corporations can be sued under the ATS because corporate civil liability is universally recognized as a remedial element of a claim arising under customary international law. The brief traces the rise of the business corporation, noting that it was accompanied by the recognition that a corporation could be held civilly liable for the unlawful employment-related acts of its employees. Although there may be no formal pronouncement on this score, such liability is recognized by every legal system. Alternately and in addition, the Brennan Center’s amicus brief asserts that following Sosa the Second Circuit had a common law obligation to shape the remedial and procedural contours of the litigation. By failing to consider whether corporate liability existed as a matter of federal common law, the Second Circuit did not fulfill this duty.  

In our view, the Second Circuit’s decision in Kiobel should be overturned because it comports with neither universally accepted general principles of law nor federal common law, both of which allow civil corporate liability for human rights violations. The removal of this remedy would severely compromise our already fragile and incomplete system for holding accountable those who violate fundamental human rights.