International groups have long been using a 1789 tort to sue corporations for acts on foreign soil. An upcoming Supreme Court case might put an end to that.
This past October, a 15-year legal battle between Royal Dutch Petroleum and a Nigerian political movement finally went before the Supreme Court -- of the United States, that is. On October 17, the Court decided to hear a lawsuit filed by Esther Kiobel, whose husband, Dr. Barinem Kiobel, was one of nine activists from the Movement for the Survival of the Ogoni People hanged by Sana Abacha's military government on November 10, 1995. Kiobel alleges Shell was partly responsible for her husband's death, and for other human rights violations committed in the oil-rich Ogoniland region.
Esther Kiobel's lawsuit against Shell is hardly a standard Supreme Court case. After all, Kiobel v. Dutch Royal Petroleum involves a foreign national suing an Anglo-Dutch oil company, and the violations were allegedly committed by a foreign government on foreign soil. But the case landed in U.S. court because of a much-debated, sentence-long statute in the Judiciary Act of 1789, a law whose meaning and scope is still hotly contested.
The Alien Tort Statute states, "The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." In other words, U.S. courts have jurisdiction over cases involving American citizens' alleged violations of "the law of nations," or international law.
The question the Supreme Court will ponder in the Kiobel case is whether American corporations can be held liable under international law -- in this case, a multinational company with a major American presence. Royal Dutch Petroleum is headquartered in The Hague and has its registered office in London. But its U.S. subsidiary, Shell Oil, accounts for 15 percent of its gas and oil business.
The U.S. court system is an imperfect recourse for human rights advocates, but if the Supreme Court affirms the ability to sue multinational corporations, it could become an important one. "U.S. courts are not particularly fabulous with international law," says Kayleen Hartman, a post-graduate fellow at Georgetown University Law School's Human Rights Institute, "but it's important to have a remedy in U.S. courts because every company is here."
On September 17, 2010, the Second Circuit court stunned legal observers by determining that the ATS does not allow individuals to sue corporations. The two-to-one decision, which held that the "law of nations" doesn't include corporate liability, broke with 15 years of case precedent and four other circuit-level federal courts. Maria LaHood of the Center for Constitutional Rights, which submitted an Amicus brief on behalf of Kiobel, disagrees with the court's decision. "You look to general principles of law of nations, and corporations can be held liable," she says. "Nobody even thought this was an open question until the [Second Circuit's] Kiobel decision came down."
Human rights activists have already used the Alien Tort Statute to sue corporations. For instance, in 2004, the non-profit group Earths Rights International successfully sued the energy company Unocal for its alleged cooperation with the Burmese military junta. That same year, the Supreme Court affirmed that human rights violations could be the subject of ATS suits, though only if they were the kinds of very serious abuses banned under "customary international law." In Sosa v. Alvarez-Machain, a partial win for human rights advocates, the Court decreed that rigidly defined crimes like genocide or torture could be the subject of an ATS suit. Less-established legal concepts, such as environmental degradation or violence against women, could not.
If the Supreme Court sides against Kiobel, the scope of the Alien Tort Statute could severely narrow. Paul Hoffman, who is the lead attorney for Kiobel and also argued Sosa v. Alvarez-Machain, says limiting the application of ATS would reinforce the corporations' sense of impunity. "What's at stake is the very important principle that if there's a corporation involved in very serious human rights violations, are we going to shut the courthouse door on the victims trying to get accountability for those violations?" Hoffman, who is a member of Amnesty International's International Executive Committee, adds, "If [the Supreme Court justices] affirm the Second Circuit decision that these cases can't be brought at all, then if there's another IG Farben in today's world, they would get a pass," referring to the German producer of Zyklon B gas used in Nazi concentration camps.
Another possible consequence of the case, according to LaHood, is that if the court decides against Kiobel, it will curtail the accepted principle that international law can and does have a role in U.S. court. As long ago as 1900, in the landmark Paquete Habana v. United States decision, the Supreme Court determined that customary international law is relevant to the U.S. legal system. "It's no different for the court to determine and interpret international law than any other type of law," LaHood says.
Arguably, closing U.S. courts to foreign nationals suing American-based companies goes against the long-accepted idea that international law has a place in the American legal system. LaHood believes that in this case, a limited view of the role of international law in the U.S. would simply be a means of protecting corporations from civil exposure. "Indigenous Ogoni people, most of whom probably live in villages in rural Nigeria, are challenging one of the most powerful entities in the world," says LaHood. "Corporations don't like it. They don't want to be held accountable for how they behave in developing countries."
But how exactly did Shell "behave," and does that particular behavior make the company liable? In 1990, the Ogoni people, an ethnic group with about 500,000 members living in an oil-producing region of the eastern Niger Delta, spearheaded a major protest movement. Their activism targeted both the oil companies and the Nigerian military government, which owned 55 percent of Shell's Nigerian subsidiary. "They felt as if they needed to have control over their land, their resources and their political autonomy" says Deirdre LaPin, a development scholar who worked with both USAID and Shell in Nigeria during the 1990s. "It was something of an Arab Spring. There are strong parallels."
Although the Ogoni were a relatively small population in a region of over 30 million people, eloquent and charismatic Ogoni leaders, like writer and television personality Ken Saro-Wiwa, help popularize the movement. In 1993, about 300,000 people attended an Ogoni Day rally in the Nigerian town of Bori; later that year, amid increasing unrest, Shell suspended all of its operations in Ogoni areas.
The Abacha dictatorship was keen on preventing the situation in Ogoniland from spiraling out of control, regardless of the cost. "Gradually there was a larger and larger presence of the military in the region and there was a joint task force which was assigned to the Ogoni area," says LaPin. In 1995, Abacha ordered the execution of the nine most prominent members of the Movement for the Survival of the Ogoni People, including Ken Saro-Wiwa.
The Kiobel suit holds that the oil company played a key role in the chain of events leading up to the execution of the Ogoni activists. "The allegations are that Shell, through its subsidiary, was in very close cooperation with the Abacha regime," says Hoffman. "The end point of that was the execution of the Ogoni Nine." LaHood alleges that Shell had actually paid the Nigerian military to go into parts of Ogoniland, and had called in the army to suppress protests against the oil industry. Shell was possibly even involved in bribing witnesses in the trial of the Ogoni Nine.
But there are still several ambiguities in the Kiobel case, and it's unclear if the suit will be successful even if the Supreme Court decides that corporations can be sued under the ATS. To be held liable, Shell's activity must qualify as "aiding and abetting" human rights abuses, according to the liability standard set in Presbyterian Church of Sudan v. Talisman Energy Inc., another landmark ATS decision. And the alleged actions of Shell and the Abacha government must meet the Sosa standard as a violation of customary international law. Currently, ATS cases are difficult to prosecute because even terms like "aiding and abetting" and "violation of customary international law" are subject to radically different interpretations.
As University of California law professor Chimène Keitner explains, the legislative branch could help clarify how and when the ATS should be used. "At some point, Congress should probably take up the question of tort liability for corporations aiding egregious misconduct overseas," she says. But in such a polarized political environment, she doesn't expect this to happen. "That's the challenge of the Supreme Court more broadly in this political climate. On the one hand, they have to give guidance to parties in lawsuits, without on the other hand doing what Congress is supposed to do, which is figure out these difficult social tradeoffs." With ATS cases, the courts are forced to negotiate such tradeoffs with only one sentence worth of legislative guidance.
The Supreme Court's consideration of the Kiobel case will be one small part of this process. Keitner says that she expects a party-line vote when the case comes before the Supreme Court this February, although she says that some conservative justices, like those who sided with the plaintiffs in the controversial Citizens United case, might be swayed by the idea that corporations are "are private actors within the domestic legal system." Says Keitner, "I'm not the first observer to note that there is some incongruity in saying that corporations have First Amendment rights but can't be sued for violations of international law."