Corporate Liability Under The Alien Tort Statute

Contributed by Lisa Sokolowski

Those hoping that the Supreme Court would finally settle the question of whether a corporation can be liable under the Alien Tort Statute (“ATS”) in Kiobel v. Royal Dutch Petroleum (No. 10-1491) last term had their hopes frustrated when the Supreme Court elected instead to decide the case based on the narrower issue of extraterritoriality.  However, a recent decision from Judge Brian M. Cogan in the Eastern District of New York has affirmed that, at least in New York, “plaintiffs cannot bring claims against corporations under the ATS.”  Linde et al. v. Arab Bank, PLC (No. 1:04-cv-02799).

To review, Kiobel involved the application of the ATS, which allows foreigners to bring civil suits in U.S. courts for torts “committed in violation of the law of nations or a treaty of the United States,” to a lawsuit brought by 12 Nigerians who alleged that Dutch, British, and Nigerian oil companies aided the Nigerian government in the torture and execution of Nigerian activists.  Though certiorari was originally granted to decide whether corporations are subject to liability under the ATS, the Supreme Court asked for supplemental briefing and ultimately decided the case based on the presumption against extraterritoriality.  As a result—and even though corporate liability was fully addressed during the first round of oral arguments (see here)—the Court never decided whether corporations can be liable under the ATS.  For a full discussion of the case, see here.

In Linde et al. v. Arab Bank, PLC, victims of terror attacks in Israel and victims’ families brought suit alleging that Arab Bank violated the ATS and the Anti-Terrorism Act by providing financial support to Hamas and other Palestinian terrorist organizations.  The defendant moved to dismiss the plaintiffs’ ATS claims, and on August 23, 2013, Judge Cogan granted the motion, holding that because the Supreme Court affirmed the Second Circuit’s decision in Kiobel on alternate grounds, the Second Circuit’s holding that there is no corporate liability under the ATS remained intact.

Though the Supreme Court will conceivably have another opportunity to address the issue of corporate liability under the ATS when it hears oral argument on October 15, 2013 in yet another ATS case involving corporations, DaimlerChrysler Corp. v. Bauman (No. 11-965), the Court granted certiorari in that case to decide separate questions of due process and personal jurisdiction (not corporate liability).  As a result, with the District Court rightly following its Second Circuit precedent, it remains to be seen how other jurisdictions will approach corporate liability under the ATS in light of the Supreme Court’s “non-decision” on the issue.