(CN) - Legal observers say they are puzzled by the U.S. Supreme Court's call for a second round of arguments concerning corporate liability for overseas wrongdoing.
The Nigerian plaintiffs in Kiobel v. Royal Dutch Petroleum claim that the oil giant colluded with their government to torture environmental activists in the country's Ogoni region.
But before the case could be argued on its merits, Royal Dutch got the case tossed on procedural grounds, saying that U.S. courts had no business examining the case.
The 2nd Circuit went one step further in September 2010, holding that corporations could not be sued under the Alien Torts Act.
In a minority opinion, Circuit Judge Pierre Leval told his colleagues that their decision would open the floodgates to corporate impunity abroad.
"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," Leval wrote. "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."
The case went up to the Supreme Court, which seemed divided on traditional lines at a Feb. 28 hearing.
A week later, the justice told the parties that they would hear arguments and solicit supplemental briefs addressing the question, "Whether and under what circumstances the Alien Tort Statute, 28 U.S.C. §1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States."
The court has already received 30-plus amicus briefs on the case, including from a coalition of legal observers, Corporate Accountability Now, which parsed the request.
"This highly unusual move may indicate that the Supreme Court is not willing to rule that corporations cannot be sued for human rights abuses, and also is not willing to consider the other issues raised by Shell and its amici without full briefing and argument," the organization wrote in a statement. "Some of the Kiobel argument did focus on questions other than the question presented in this case - whether corporations could ever be sued for violations of international human rights law - and Shell attempted to have the court decide the case on those grounds, without giving the plaintiffs an adequate chance to respond. Now, these issues (which have also been raised in other petitions pending before the Supreme Court) will get the full hearing they warrant."
The Nigerians suing Royal Dutch must submit its supplemental brief before May 3.
The oil giant, now owned by Shell, must respond before June 4.
A rebuttal from the Nigerians is due June 29.
No date has been set for the new arguments.
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