Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Tuesday, June 25, 2024 | Back issues
Courthouse News Service Courthouse News Service

Corporate Crimes Abroad Face Legal Reckoning

(CN) - The Supreme Court on Monday agreed to review decisions that found corporations cannot be sued in U.S. civil courts for atrocities committed overseas, consolidating for oral argument cases involving the Palestinian Authority and companies that explored Nigeria for oil.

Last year, the 2nd Circuit booted all claims in Kiobel v. Royal Dutch Petroleum, a case alleging that the oil giant conspired with the Nigerian government to brutally suppress dissent against oil exploration in the country's Ogoni region.

In a 50-page majority opinion, two judges said that American courts did not have jurisdiction because the Alien Torts Statute applies only to individuals. Enacted in 1789, the statute lay mostly dormant until the late 20th century. The first such case brought against a corporate defendant was filed in 1997.

That case, Doe v. Unocal, involved 13 villagers from Burma (renamed Myanmar by a military dictatorship in 2010) alleging that the Californian energy company engaged in forced labor when constructing an oil pipeline through their country. The parties settled after the 9th Circuit revived the case from a lower court's dismissal, creating a precedent that let foreign citizens to sue American corporations for more than a decade.

When the 2nd Circuit threw out the case against Royal Dutch, Judge Pierre Leval wrote an 86-page opinion that said the majority had reasoned incorrectly but was right to dismiss. He warned that the current holding would let unscrupulous businesses like slave traffickers and pirates off the hook, so long as they incorporate.

"By adopting the corporate form, such an enterprise could have hired itself out to operate Nazi extermination camps or the torture chambers of Argentina's dirty war, immune from civil liability to its victims," Leval wrote.

Leval alone dissented in February when the full court declined to rehear the case en banc.

Five groups including the Center for Constitutional Rights filed amicus briefs for the lead plaintiffs in July, asking the Supreme Court to take up the case. In granting that request Monday, the justices agreed to rehear another case from Washington that also deals with foreign atrocities.

The D.C. Circuit ruled in March that only natural persons can be sued under the Torture Victim Protection Act, affirming dismissal of a family's claims that the Palestinian Authority abducted Azzam Rahim, a U.S. citizen visiting the West Bank, imprisoned him, tortured him and eventually killed him.

There was no comment accompanying the Supreme Court's order, which noted simply that the cases are to be argued "in tandem."

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.