Corporations Now Immune from Alien Tort Claims Act
- News & Views for Anarchists & Activists:
[Judges now routinely rule that corporations are legally considered
persons -- when this will benefit the corporations. But now, when it
comes to human rights suits against corporations brought under the ATCA,
these judges rule that corporations are immune -- because they aren't
persons. Oh, and how many conservatives have you heard whinging about
this particular act of legislation from the bench?--DC]
Court: Companies Aren’t Subject to Alien Tort Claims Act
By Jaclyn Jaeger
October 26, 2010
The U.S. Second Circuit Court of Appeals ruled by a 2-1 decision in
Kiobel v. Royal Dutch Petroleum that the Alien Tort Claims Act only
applies to individuals, not corporations. Enacted in 1789, the law
allows foreign citizens to file actions in U.S. courts for violations of
“international law” and has increasingly been used by plaintiffs to
target the deep pockets of multinational corporations.
Hardly any suits were filed under the ATCA until 1980, and those
specifically targeting companies for abuses overseas didn’t arise until
the 1990s. Over the last 15 years, however, more than 100 such cases
have been launched against companies, according to a list compiled by
Jonathan Drimmer, a partner in the law firm Steptoe & Johnson. The
majority of the cases have been dismissed, while 13 have settled, and
another 17 are still pending.
“These suits have been the bane of the existence of major corporations,”
not only because they tarnish their reputations, but also because
they’re costly to litigate, says John Bellinger, a partner in
international law at law firm Arnold & Porter.
With the Kiobel decision, the court tossed out a lawsuit against Shell
Oil Co. brought by the families of a group of Nigerians executed by the
Nigerian government for protesting oil exploration in the country. The
plaintiffs sued Shell under the ATCA for aiding and abetting the
Nigerian military in numerous human rights abuses—including arbitrary
arrest and detention, torture, and crimes against humanity—so that it
could explore and extract oil in the area.
In its 50-page decision the court found that while individuals have been
held liable for human rights violations under the law of nations, the
same has never been extended to include a corporation. “No corporation
has ever been subject to any form of liability (whether civil or
criminal) under the customary international law of human rights,” the
court wrote. Translation: Lawsuits against corporations under the Alien
Tort Claims Act should be dismissed because they lack proper
jurisdiction to be heard.
International companies may consider the decision a reprieve, yes—but it
doesn’t let executives involved in such cases off the hook. “The dark
lining of this decision is that we may now see more suits against
officers and directors,” Bellinger says.
The court stressed that actions under ATCA can still be brought against
companies in state court, that Congress remains free to legislate in
this area, and that such claims can still be brought against individual
executives and employees of companies who commit or aid and abet
violations of customary international law.
“The door remains opened under the Alien Tort Statute for individual
officers and directors to be sued,” Bellinger says. “The standard of
proof would be higher to show individual officers and directors were
actually knowledgeable, or intended to aid or abet human rights abuses
in other countries.
In an 88-page concurring opinion, Judge Pierre Leval said he agreed with
the dismissal of the case, but expressed concern about the scope of the
ruling. “The majority opinion deals a substantial blow to international
law, and its undertaking to protect fundamental human rights,” he wrote.
The concern is that ATCA has been effective at forcing companies to rein
in human rights abuses. “Overall, because of this decade of litigation
and a more general sensitivity to human rights and corporate social
responsibility, most major U.S. and foreign companies have been much
more careful about the impact of their activities on human rights,” says
In a separate case, the Second Circuit also unanimously dismissed a
similar lawsuit in Presbyterian Church of Sudan v. Talisman Energy.
Supreme Court Review?
The Kiobel decision is only binding in the 2nd Circuit, but it’s
expected to carry much influence in other jurisdictions as well—and the
2nd Circuit, based in New York, is among the most important in the
country anyway. It could help eliminate the vast majority of alien tort
cases against companies that are currently pending. “I would imagine
over the next few weeks and months, we’ll see a lot more courts tossing
out alien tort cases on this ground,” Drimmer says.
But the final outcome is far from over. The plaintiffs still may still
file for a review from the full court (an “en banc” review), or may
appeal to the Supreme Court. “If it ultimately is appealed and upheld by
the Supreme Court, that would be the end of human rights suits against
corporations under the Alien Tort Statute,” Bellinger says.
Whether the Supreme Court decides to take the case could depend on
several factors, legal experts say, such as the Second Circuit’s en banc
decision (assuming the full panel even decides to hear the case). In
addition, the Seventh and Ninth Circuits also have ATCA cases pending,
so the Supreme Court may wait until other jurisdictions have addressed
this issue themselves.
The Kiobel decision does brings the Second Circuit in conflict with the
11th Circuit in Sinaltrainal v. Coca-Cola, which held that corporations
could be held liable under ATCA. Because of this circuit split, “I
actually think it’s likely that the Supreme Court will take this case on
appeal,” Bellinger says.
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