Court Seems Poised to Limit Corporate Liability for Human Rights Abuses

By Billy Corriher

If the comments at oral argument are any indication, the Supreme Court will soon overrule several lower court rulings that held corporations liable for violations of international law under the Alien Tort Statute (ATS), a law passed by the first Congress. The ATS granted federal courts jurisdiction to hear lawsuits by foreign persons for torts that violate international law.

The scope of liability under the ATS has been the subject of some debate. The Ninth Circuit recently ruledthat corporations can be liable. The Second Circuit in Kiobel, however, dismissed an ATS lawsuit against corporations, a decision the Court seems inclined to affirm. Justice Kennedy said no source of international law “recognizes corporate responsibility” for human rights abuses, concluding that “the case turns in large part” on that fact. Justice Alito was skeptical that any federal court should hear such a lawsuit: “There’s no connection between these events and the United States.”

Congress passed the ATS to create a cause of action for violations of international laws, like the ban on piracy and the rights of ambassadors. The Supreme Court said that modern international laws as “specific, universal, and obligatory” as these rules can form the basis of ATS lawsuits.

The plaintiffs in Kiobel alleged that foreign oil companies assisted Nigeria’s military dictatorship in a brutal crackdown on the Ogoni people after they organized to protest the environmental impacts of oil exploration.  The court discussed charges that the military engaged in the murder of thousands of Ogoni – “beating, raping, and arresting” them. The oil companies allegedly gave the soldiers transportation, food, and monetary compensation.

Dismissing the charges, the Second Circuit cited the lack of international law imposing liability on corporations. The court said international law, not U.S. law, defines the scope of liability under the ATS. The majority found no treaties or international tribunals that imposed liability on corporations.

The dissent relied on “jus cogens” international norms, those that are so universally condemned that they even apply to nations that do not consent to them. These norms are, by definition, universal and obligatory. Because jus cogens norms are defined by international case law, however, can a rule that imposes corporate liability be “specific” without a treaty or a ruling by an international tribunal? (The Justices cautioned lower courts hearing ATS suits to exercise restraint, but the reasons for caution in Sosa, the potential impact on foreign affairs, are not present in suits against corporate defendants.)

Can courts hearing ATS lawsuits use domestic law to fill in the blanks? The Kiobel dissent noted that international law does not impose civil liability on anyone – natural persons or corporations. International law defines the type of conduct prohibited (torture, genocide, war crimes, etc.), but countries must ratify and implement the treaties they sign.

While the majority focused on the international character of the claims, the dissent emphasized the tort aspect of ATS claims. Conservatives bemoan the application of international law in federal courts as some loss of national sovereignty, but the Second Circuit’s approach means that international law would define the scope of a federal tort.

The Roberts Court seems likely to – once again – come down on the side of corporations.  The Court has given corporations robust constitutional rights, while “slamming the courthouse doors” for those who sue corporations for wrongdoing.


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