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Corporate liability under the Alien Tort Statute: Initial thoughts on Kiobel v. Royal Dutch Petroleum

As noted in a previous post, a divided panel of the Second Circuit Court of Appeals ruled in Kiobel v. Royal Dutch Petroleum that customary international law does not recognize corporate liability for torts in violation of the law of nations.  Judge Carbranes, writing for the majority (which included Chief Judge Jacobs), succinctly summarized this decision in the conclusion to the opinion:

The ATS [Alien Tort Statute] provides federal district courts jurisdiction over a tort, brought by an alien only,alleging a “violation of the law of nations or a treaty of the United States.” 28 U.S.C. § 1350. When an ATS suit is brought under the “law of nations,” also known as “customary international law,” jurisdiction is limited to those cases alleging a violation of an international norm that is “specific, universal, and obligatory.” Sosa v. Alvarez-Machain, 542 U.S. 692, 732 (2004) (quoting with approval the statement of a lower court); see also Flores v. S. Peru Copper Corp., 414 F.3d 233, 238 (2d Cir. 2003) (“[C]ustomary international law is composed only of those rules that States universally abide by, or accede to, out of a sense of legal obligation and mutual concern.”).

No corporation has ever been subject to any form of liability (whether civil, criminal, or otherwise) under the customary international law of human rights. Rather, sources of customary international law have, on several occasions, explicitly rejected the idea of corporate liability. Thus, corporate liability has not attained a discernable, much less universal, acceptance among nations of the world in their relations inter se, and it cannot not, as a result, form the basis of a suit under the ATS.
Acknowledging the absence of corporate liability under customary international law is not a matter of conferring “immunity” on corporations. It is, instead, a recognition that the States of the world, in their relations with one another, see IIT v. Vencap, Ltd., 519 F.2d 1001, 1015 (2d Cir. 1975) (Friendly, J.), abrogated on other grounds by Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869 (2010), have determined that moral and legal responsibility for heinous crimes should rest on the individual whose conduct makes him or her “‘hostis humani generis, an enemy of all mankind.’” Sosa 542 U.S. at 732 (quoting Filartiga v. Pena-Irala, 630 F.2d 876, 890 (2d Cir. 1980)). Nothing in this opinion limits or forecloses suits under the ATS against a corporation’s employees, managers, officers, directors, or any other person who commits, or purposefully aids and abets, violations of international law. Moreover, nothing in this opinion limits or forecloses corporate liability under any body of law other than the ATS—including the domestic statutes of other States—and nothing in this opinion limits or forecloses Congress from amending the ATS to bring corporate defendants within our jurisdiction. Corporate liability, however, is simply not “accepted by the civilized world and defined with a specificity comparable to the features of the 18th-century paradigms” recognized as providing a basis for suit under the law prescribed by the ATS, customary international law. Sosa, 542 U.S. at 725.
We do not know whether the concept of corporate liability will “gradually ripen[ ] into a rule of international law.” Id. at 715 (quoting The Paquete Habana, 175 U.S. 677, 700 (1900)). It can do so, however, only by achieving universal recognition and acceptance as a norm in the relations of States inter se. For now, and for the foreseeable future, the Alien Tort Statute does not provide subject matter jurisdiction over claims against corporations.
To summarize, we hold as follows:
(1) Since Filartiga, which in 1980 marked the advent of the modern era of litigation for violations of human rights under the Alien Tort Statute, all of our precedents—and the Supreme Court’s decision in Sosa, 542 U.S. at 732 n.20—require us to look to international law to determine whether a particular class of defendant, such as corporations, can be liable under the Alien Tort Statute for alleged violations of the law of nations.
(2) The concept of corporate liability for violations of customary international law has not achieved universal recognition or acceptance as a norm in the relations of States with each other. See Vencap, 519 F.2d at 1015. Inasmuch as plaintiffs assert claims against corporations only, their complaint must be dismissed for lack of subject matter jurisdiction.

A couple of comments.

First, the opinion of the court is very well-written and comprehensive. The methodology the court uses for determining the existence of a rule of customary international law is consistent with what I believe to be the correct, positivist understanding of international law. (An approach that I have elaborated upon in more detail here.)  In order for a rule of custom to exist there must be both state practice and a belief by states that the practice is obligatory, opinio juris. What the court avoids is assuming the existence of a rule of custom because it might seem logical for such rule to exist. In other words, the court will admit that a rule of custom exists if, and only if, it can demonstrate that state practice created such a rule. I think this is the correct method for evaluating the existence of a rule of custom.

Second, while I have not read any of the briefs in the case, nor have I done an independent analysis of state practice relating to potential corporate liability under customary international law, I find the arguments advanced by Judge Carbranes quite persuasive.  That is, the court does seem to demonstrate that states have not created a specific rule of custom establishing corporate liability.

Third,  I am still analyzing Judge Leval’s concurrence, in which he argues that for purposes of applying the ATS, corporations should enjoy liability.  I will follow up with another, more comprehensive post after I have digested his concurrence.

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  • JP says:

    I am unclear. The majority in this opinion is arguing that there is no customary international norm for corporate (criminal) liability. But the ATS allows an alien to bring a civil case into the US federal courts for a violation of “the laws of nations,” which include such elementary considerations of humanity. THIS seems to me where customary norms of international law comes into play – aka in establishing exactly what Shell violated, NOT in creating a remedy. That is what the ATS’s purpose is – to create a civil remedy for violations of international law.

    I would love feed back because perhaps I am misunderstanding. I am just having a very hard time understanding why the majority spent the entire opinion addressing corporate criminal liability under international law when the ATS is to hold an entity civilly liable under US law for violating international law..

  • Amer says:

    I happen to disagree with the majority, and feel this will go to the supreme court. I would love to read your analysis of Judge Leval’s dissent, thanks.

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Welcome! Who am I?

Anthony Clark Arend is Professor of Government and Foreign Service at Georgetown University and the Director of the Master of Science in Foreign Service in the Walsh School of Foreign Service.

Commentary and analysis at the intersection of international law and politics.