Supreme Court makes it difficult to hold corporations or individuals liable for committing human rights violations in foreign countries.
The Issue: Nigerian nationals sued several international oil companies in the Shell family alleging complicity in – indeed, orchestration of – human rights violations. The corporate defendants allegedly knew of and participated in killings, torture and unlawful detentions during the Nigerian military’s crackdown in 1992-1995 on protests against environmental destruction and community disruption caused by the oil companies. The suits were brought under the Alien Tort Statute (ATS), which has long been taken to allow foreign citizens to bring actions in United States courts for human rights violations committed outside the United States. After eight years of litigation, a divided Second Circuit panel surprisingly ruled that corporations could not be held liable under ATS. The panel ruled this way notwithstanding that the Second Circuit – and all other Courts of Appeal that had faced the issue – had been assuming ATS jurisdiction over corporate defendants for years, and that the possibility that corporations were immune had not been raised, much less briefed, by any of the parties.
Why It Matters: As noted in the panel dissent, “the majority opinion deal[t] a substantial blow to international law and its undertaking to protect fundamental human rights.” Numerous cases of multinational corporations abetting state-sponsored torture, extrajudicial killing, and other human rights violations have been credibly alleged and documented in a variety of countries in Asia, Africa, and South and Central America. In many cases, the ATS has provided victims their only legal recourse anywhere, and has given corporations an incentive not to continue to enable – or even instigate – such abuses in foreign countries. In conjunction with the Supreme Court’s decisions in Citizens United (see below) and a number of other significant cases finding corporations to be protected by various constitutional and other legal guarantees of rights, the Second Circuit decision points toward a disturbing regime in which the legal rights of persons apply to corporations, but the legal responsibilities do not. Indeed, as pointed out in the panel dissent, under the rule of the Second Circuit, international slave traders, pirates, or perpetrators of genocide would be able to immunize their profits as long as these outlaws are part of an incorporated entity. Under the Supreme Court’s final decision, they do not even need to incorporate.
Contribution of Public Good: Public Good filed a brief in support of en banc review. Our brief demonstrated that the decision marked a clear departure from applicable Second Circuit precedent; circuit court precedents may be overturned only by en banc review. In addition, Public Good argued that en banc review was called for because the decision created a split of authority with other circuits that had either explicitly recognized or assumed ATS jurisdiction over corporate defendants.
Outcome: Seven amicus briefs in favor of rehearing en banc were filed on behalf of various groups of legal scholars and public interest organizations. The same panel that decided the case rejected all the briefs, apparently preventing them from ever reaching the other judges voting on whether to grant rehearing. The final vote on whether to grant en banc review was 5-5; since supporters of rehearing failed to gain a majority, rehearing was denied. The Supreme Court subsequently granted certiorari. After oral argument, the Court requested supplementary briefing on the question of whether ATS applies at all to violations committed outside the United States, and subsequently ruled that it did not. The Court thereby severely curtailed the scope of the statute, albeit without ruling on the initial question of whether the statute applies to corporate defendants as well as individuals. While the decision seems to leave open the possibility that some claims for extraterritorial offenses could still be brought, provided the events or the parties bear sufficient relation to the United States, it makes it much harder for charges of foreign human rights violations to be heard. It is noteworthy that no appellate court had previously found the statute to be limited in this way. The result is that victims like the Nigerian plaintiffs in this case are likely to have little recourse anywhere, given the corrupt judicial systems and immense influence of large international corporations in countries such as Nigeria.
621 F.3d 111 (2d Cir. 2010), rehearing denied, 642 F.3d 268 (2d Cir. 2011), and rehearing en banc denied, 642 F.3d 379 (2d Cir. 2011), and judgment affirmed, 133 S.Ct. 1659 (2013).