One of the most closely watched cases by corporate general counsel – and here at the Product Liability Monitor – is Kiobel v. Royal Dutch Petroleum Co., which is currently pending in the Supreme Court. In Kiobel, the plaintiffs allege that Royal Dutch Shell PLC (Shell) facilited the Nigerian military’s human rights abuses, including murder, rape, and torture, of Nigerian civilians protesting the activities of Shell and others in the region. The Kiobel case, which is only the second opportunity the Supreme Court has taken to analyze the Alien Tort Statute (ATS), has the potential to severely limit plaintiffs’ lawyers’ favorite new vehicle for going after deep-pocketed multi-national companies that do business abroad, particularly in areas with questionable human rights records. In September 2010, the Second Circuit struck a huge blow in favor of corporate ATS defendants, ruling that the ATS was limited to suits against individual defendants, not corporate defendants. This decision created a circuit split regarding the viability of ATS suits against corporations, and the Supreme Court granted certiorari to resolve the question.
The Supreme Court held oral argument in March to answer the question of whether the ATS conferred jurisdiction against corporate defendants. However, in an unusual move, the Court requested supplemental briefing on the question of “[w]hether 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.” This issue, which is much broader than the question of whether corporations may be sued under the ATS, has the potential to effectively eviscerate the ATS from contemporary litigation. It may also allow the Supreme Court to avoid answering the question of corporate liability under the ATS, an issue which has potential pitfalls associated with how corporations are defined under U.S. law. (For a discussion of the potential impact of the Supreme Court’s actions, see the post by my colleague Lisa Sokolowski, here.)
On June 6, the Nigerian plaintiffs filed their supplemental brief arguing that the ATS’s reach spans the globe and is not limited to activities taking place in the United States or in international waters. The plaintiffs point to the Supreme Court’s decision in Sosa v. Alvarez-Machain – the Court’s only previous pronouncement on the scope of the ATS – to argue that the Court has already determined that the ATS extends to activities taking place outside U.S. borders. Given that the ATS confers liability for violation of international law, rather than domestic U.S. law, the concerns about imposing U.S. legal norms on the citizens of other countries is minimal, according to the Nigerian plaintiffs. Moreover, they argue, other jurisdictional defenses, such as personal jurisdiction, forum non conveniens, and political question or comity, can be used by the courts to weed out cases that do not properly below in U.S. courts. As a result, they argue, the Supreme Court should not adopt a rule limiting the ATS to activities occurring within the United States.
Shell’s supplemental brief is due on August 1, 2012.
The Supreme Court’s decision in Kiobel will be closely watched by both plaintiffs’ lawyers and corporate counsel and defense lawyers. The case has the potential to eliminate what has become a favorite vehicle for plaintiffs’ lawyers to attack global corporations doing business abroad. The concern expressed by many general counsel regarding the ATS, a concern which was echoed by some of the Justices at oral argument, is the fact that many of the current corporate ATS cases have virtually nothing to do with the United States. In fact, in many cases, the only tie to the United States is a corporate defendant with some relationship to the entity alleged to have been engaged in human rights violations abroad. The Supreme Court has recognized this concern, and corporate general counsel are waiting anxiously to see whether the Court will rectify the concern. We will continue to monitor the progress of the Kiobel case and any other notable corporate ATS cases.