February 28, 2012

Supreme Court Hears Major Corporate Human Rights Case

Alien Tort Statute, corporate accountability, Corporations and the Courts, Kiobel v. Royal Dutch Petroleum


By Susan Farbstein and Tyler Giannini, Associate Clinical Director and Clinical Director of Harvard Law School’s Human Rights Program. Farbstein and Giannini are co-counsel in two Alien Tort Statute cases and have submitted amicus curiae briefs in numerous others, including in support of the petitioners in Kiobel v. Royal Dutch Petroleum Co.

Today, the U.S. Supreme Court hears the most important human rights case of the term. Kiobel v. Royal Dutch Petroleum Co. will determine the fate of corporate liability under the Alien Tort Statute (“ATS”), a 1789 law passed by the First Congress. The plaintiffs allege Shell’s complicity in killings and crimes against humanity committed in Nigeria during the 1990s. Now the Supreme Court must decide whether corporations who profit from human rights abuse are exempt from civil liability for these activities — even though natural persons are unquestionably liable for the same acts.

The case has attracted a slew of amicus briefs and recent press coverage. On one side, those like John Bellinger, a former U.S. State Department Legal Advisor, argue for completely exempting corporations from suit under the ATS. On the other side are those like Ka Hsaw Wa, the Executive Director of EarthRights International, who notes the importance of these cases to survivors of corporate abuse, and Peter Weiss, the Vice President of the Center for Constitutional Rights, who rightly points out that total corporate immunity would give corporations more rights and legal protections than people.

The debate stems from a 2010 Second Circuit Court of Appeals decision, which held that people could be sued under the ATS, but corporations could not. That ruling broke with more than a decade of jurisprudence in which numerous courts had repeatedly found or assumed that corporations could be sued under the statute.

Mr. Bellinger asserts that because the alleged violations often take place abroad, corporate ATS cases should not be allowed in U.S. courts. Corporations, however, routinely answer in U.S. courts for their activities overseas, whether in contract cases or run-of-the-mill product liability claims. And when there is a better forum to hear a case, defendants can — and do — request that the case be moved. Yet under Mr. Bellinger’s view even when there is no alternate forum, a suit still should not be allowed to proceed here against U.S.-based corporations. He would deny survivors of human rights abuses even this last resort. 

Furthermore, Mr. Bellinger argues that these cases categorically implicate foreign affairs. Plainly put, Mr. Bellinger would have it that his corporate clients are better placed to advise courts regarding foreign relations than the U.S. government itself, which has filed a brief in support of the Kiobel plaintiffs on the grounds that a corporate exemption contradicts America’s “legal culture.” Foreign governments have also approved of these cases. For example, in a case against multinationals that facilitated apartheid-era abuses, the South African government stated that a U.S. District Court “is an appropriate forum to hear the remaining claims of aiding and abetting in violation of international law.” The government noted that the plaintiffs’ claims “are based on aiding and abetting very serious crimes, such as torture [and] extrajudicial killing committed in violation of international law by the apartheid regime.” 

These governments have recognized that the simple act of incorporation should not curtail justice for those who have suffered horrific tragedies. While these cases cannot bring a lost family member back, they empower survivors and provide a measure of accountability otherwise unavailable in places like Burma or Nigeria. A categorical corporate immunity from suit will undermine the rule of law, benefitting human rights abusers by shielding profits earned through exploitation. Why should corporations that profit from human rights abuse enjoy an exemption from liability when natural persons do not? As Mr. Weiss concludes, “A more startling paradox is difficult to imagine.”