Supreme Court Widens Scope of Case on Corporate Accountability for Human Rights

March 5, 2012

by Nicole Flatow

A case that started out as potentially the most significant test of corporate personhood since Citizens United v. FEC may now be decided on other grounds.

The U.S. Supreme Court has ordered another round of arguments in Kiobel v. Shell Petroleum, this time on the question of whether the 200-year-old Alien Tort Statute applies to human rights violations that occur outside the United States.

The ATS and another related statute, the Torture Victim Protection Act, have been used to hold corporations accountable when they commit or are complicit in human rights abuses that include genocide, war crimes and forced labor.

The Supreme Court initially granted review of Kiobel on the question of whether the corporate entities themselves could be held accountable.

But as Bloomberg’s Greg Stohr points out, a ruling on the broader issue of whether U.S. courts can review actions arising elsewhere would “potentially impose more sweeping limits on lawsuits, shielding corporate officers as well as the companies themselves.”

During the first set of oral arguments last week, the justices raised a number of questions about the extraterritoriality issue. In response, plaintiffs’ lawyer Paul Hoffman explained that there is nothing unusual about “transnational” litigation.

But the lawyers had not submitted briefs to the Supreme Court on this question, since it was not at issue in the lower court’s decision, which held that corporations were not subject to suit under the ATS.

Writing for The Huffington Post, EarthRights International’s Katie Redford explains that “the legal justification for hearing cases between foreigners based on foreign conduct, so long as the defendant is found in the U.S., is well established.” She continues:

Foreigners have always been able to sue other foreigners in U.S. courts over conduct that occurred anywhere in the world. Our courts have doctrines to deal with these sorts of cases and can dismiss them if they truly don't belong here. Based on his own comments, even Justice Kennedy seemed to recognize that Filartiga v. Peña-Irala -- the first modern ATS lawsuit, in which a foreigner successfully sued a foreigner over torture that happened in Paraguay, and which has previously been endorsed by the Supreme Court -- was rightly heard and decided in the United States.

According to Stohr, the “court’s briefing schedule means the new argument will take place during the nine-month term that starts in October,” and the case will not be decided this term.

The new briefing schedule will not, however, affect a second case that considers whether corporations and organizations can be sued under the Torture Victim Protection Act.