MANHATTAN (CN) – Human rights groups, led by the Center for Constitutional Rights, have asked the Supreme Court to void a 2nd Circuit decision finding that corporations cannot be sued in U.S. civil courts for atrocities committed overseas.
At the heart of the controversy is the Alien Tort Statute, a more than 200-year-old legislation allowing American courts to hear foreign citizens’ claims against Americans violating international laws and treaties abroad.
Enacted in 1789, the statute lay mostly dormant until the late-20th century, and 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. On appeal, the 9th Circuit reversed a lower court’s dismissal of the case, and the parties settled.
The Center for Constitutional Rights gave legal aid to the villagers in their claims, and that case established a precedent allowing foreign citizens to sue American corporations for more than a decade.
Then, on Sept. 17, 2010, the 2nd Circuit Court of Appeals unanimously booted all claims in the case Kiobel v. Royal Dutch Petroleum, alleging that the oil giant conspired with the Nigerian government to brutally suppress dissent against oil exploration in the country’s Ogoni region.
(Shell, born of the merger between Royal Dutch Petroleum Company and the Shell Transport and Trading Company, settled a related case for $15.5 million in 2009.)
In a 138-page ruling, two of the three appellate judges argued that American courts did not have jurisdiction because the Alien Torts Statute only applied to individuals.
U.S. Circuit Judge Pierre Leval, who agreed that the case should be tossed for different reasons, blasted the majority’s argument.
“The majority opinion deals a substantial blow to international law and its undertaking to protect fundamental human rights,” Leval wrote. “According to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victims’ claims for compensation simply by taking the precaution of conducting the heinous operation in the corporate form.”
Leval offered several examples of cruelties he believed such an exemption could allow.
“The new rule offers to unscrupulous businesses advantages of incorporation never before dreamed of. So long as they incorporate (or act in the form of a trust), businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy – all without civil liability to victims. 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.
He asserted that this rule could be successfully applied to génocidaires, child sex-traffickers and even Somali pirates that took the “precaution” to incorporate.
Written months before the government renewed anti-piracy criminal prosecutions, Leval added in a footnote that it is “not far-fetched” to imagine roving bands of incorporated pirates.
“According to a recent United Nations report, Somali pirates essentially operate as limited partnerships, in which investors make investments of money, weaponry, and equipment in exchange for ‘Class A’ and ‘Class B’ participations in the profits of piracy operations,” Leval wrote. “The profits of such an operation can be substantial, as in the case of the MV Faina, which was released in February 2009 for $3.2 million ransom.”
On July 8, the DC Circuit Court of Appeals bolstered Leval’s arguments in a 2-to-1 decision finding that Exxon Mobil could be sued for hiring Indonesian soldiers to guard the Arun natural gas field. The 11 villagers that filed the lawsuit say that Exxon Mobil knew the Indonesian military used its resources to engage in genocide in the country’s Aceh region, where local residents were slaughtered, tortured and raped.
The DC majority favorably quoted Leval’s analysis in the Kiobel dissent, while picking apart the 2nd Circuit majority’s opinion.
Late last week, four human rights groups and two international law professors submitted an amicus brief asking the Supreme Court to review and vacate the 2nd Circuit’s decision.
Katherine Gallagher, a senior staff attorney at the Center for Constitutional Rights, said in a statement that doing so would prevent the United States from becoming an “outlier and enabler of corporate immunity.”
“Corporations, like individuals, cannot and should not expect the benefits of legal rights without any obligation to act within the bounds of the law,” Gallagher said. “The Second Circuit’s decision undermines fundamental concepts of accountability and leaves victims of the most serious human rights violations without a remedy.”
The Center for Constitutional Rights’ amicus brief was one of five in support of a request by the lead plaintiffs of Kiobel v. Royal Dutch Petroleum, asking the Supreme Court to hear the case.