Is there corporate liability under the Alien Tort Statute?September 17, 2010 # 6:36 pm # Armed Conflict, Human Rights, International Law, Supreme Court # No Comment
If this holds up, it’s going to be very big news:
In a blockbuster opinion that could spell the end of the vast bulk of Alien Tort Statute litigation, the U.S. Court of Appeals for the Second Circuit has held that corporations cannot be liable for violations of customary international law under the Alien Tort Statute. The decision, Kiobel v. Royal Dutch Petroleum, dismisses an ATS lawsuit against Royal Dutch Shell for allegedly aiding and abetting the Nigerian government in the commission of serious human rights violations. Writing for two members of the panel, Judge Jose Cabranes held that (in my very quick and dirty summary):
1) International Law governs the scope of liability for violations of international law, hence the question of whether a corporation is liable for violating international law is itself governed by international law.
2) Under Supreme Court precedent, the Alien Tort Statute requires courts to apply norms of international law, and not domestic law, to the scope of defendants’ liabilities. Such norms must be “specific, universal, and obligatory.”
3) Under international law, corporations are not liable for violations, and any such norm of corporate liability is far from “specific, universal, and obligatory.”
The ATS (a.k.a. the Alien Tort Claims Act or ATCA) “was adopted in 1789 as part of the original Judiciary Act“:
In its original form, it made no assertion about legal rights; it simply asserted that “[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” 28 U.S.C. 1350. For almost two centuries, the statute lay relatively dormant, supporting jurisdiction in only a handful of cases. … As the result of increasing international concern with human rights issues, however, litigants have recently begun to seek redress more frequently under the ATCA.
These suits produced several important decisions interpreting the meaning and scope of the 1789 Act. For example, in [Filartiga v. Pena-Irala], “this court held that deliberate torture perpetrated under the color of official authority violates universally accepted norms of international human rights law, and that such a violation of international law constitutes a violation of the domestic law of the United States, giving rise to a claim under the ATCA whenever the perpetrator is properly served within the borders of the United States. More recently, we held in [Kadic v. Karadzic], that the ATCA reaches the conduct of private parties provided that their conduct is undertaken under the color of state authority or violates a norm of international law that is recognized as extending to the conduct of private parties.”
A while back, our friend Jim Copland noted the release of “a new paper entitled “Think Globally, Sue Locally: Out-of-Court Tactics Employed by Plaintiffs, Their Lawyers, and Their Advocates in Transnational Tort Cases” (PDF).
In cases involving the 1789 Alien Tort Statute as well as other litigation — including U.S. litigation to enforce dubious, fraudulently obtained foreign verdicts — plaintiffs’ lawyers are increasingly trying to use American courts to recover for alleged conduct that happened overseas. As the report documents, such litigation is typically accompanied by out-of-court media, community organizing, investor-relations, and political tactics.
There’s going to be a huge reduction in such litigation if this holds up.
In response to the new decision, Kenneth Anderson writes that:
The question of corporate liability thus has always been two distinct issues — the question of whether there is such a thing as civil liability in international law (or at least for non-state actors) and whether there is liability of any kind for corporate or private entity actors, as opposed to individual persons for whom there is sometimes individual criminal liability. The court seems, on my first read, to have rejected each of those propositions.
As far as I’m concerned, of course, it is the second proposition that is especially interesting; i.e., that there is no corporate law liability under international law. The Second Circuit decision acknowledges the corporation’s status as a juridical person, but states that customary international law imposes liability only on natural persons. This is significant, among other reasons, because of the recent debate in the USA over corporate personhood occasioned by the Citizens United case. Just as US law recognizes juridical persons as “persons” for certain purposes, so does international law. It seems to me that this strengthens the position of those of us who supported the majority view in Citizens United.
I don’t think I can overestimate the significance of this decision for international law. I am just beginning to analyze the decision, but will do a full post as soon as possible,