February 28, 2012
The Supreme Court answered this question in 2010’s Citizens United v. FEC, at least in regards to political speech rights, holding that corporations are entitled to as expansive of such rights as individuals.
That same question is before the Supreme Court again in Kiobel v. Royal Dutch Petroleum, which the Court will hear oral arguments on today.
However, it is unlikely that the Court will see corporations as people this time around.
Because, while Citizens United’s ruling expanded corporate rights, a similar ruling in Kiobel – i.e. one that recognizes corporations as people – will expand corporate legal liability instead.
The dispute in Kiobel is over how to interpret the Alien Tort Statute (ATS), a law enacted in 1789.
The text of the ATS seems fairly simple.
It gives U.S. district courts “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.”
There are a number of theories as to Congress’s original purpose in enacting the Statute.
It is highly unlikely, though, that the ATS was specifically intended to be used as it has been in the past 32 years – allowing U.S. courts to hear human rights cases from foreign citizens for conduct committed internationally.
For example, in 2007, using the ATS, the World Organization for Human Rights USA filed suit against Yahoo! on behalf of several Chinese dissidents who had been apprehended and tortured thanks to identifying information provided by a Yahoo! Chinese subsidiary.
Although a plethora of such cases have been filed under the ATS, very few have ever made it to the appeals court level, and only one has ever made it to the Supreme Court (mainly because they are settled, which was what happened with the Yahoo! case).
Despite this relatively limited record of court rulings, the federal circuits have still managed to split on the issue.
The only Supreme Court case on the ATS, 2004’s Sosa v. Alvarez-Machain, involved liability of the U.S. government, not a corporation, so it’s not entirely surprising that lower courts are lacking clear guidance.
Nevertheless, Sosa did establish a solid framework for applying the ATS otherwise, so the only question for SCOTUS to answer will be its application to corporations.
That question simply asks whether corporations are immune to liability under the ATS.
Put into the context of the facts of the Kiobel case currently before the Court, the Court has to determine whether Shell Oil and several of its subsidiaries are liable for aiding and abetting the Nigerian government in committing human rights abuses.
By “aiding and abetting” in committing “human rights abuses,” I am referring to Shell Oil’s requesting and receiving assistance from the Nigerian military in suppressing local opposition to oil exploration and production in Nigeria’s Ogoni region.
“Suppressing” here means a campaign lasting from 1993 to 1994 that found the Nigerian military killing, raping, and torturing members of the local opposition (and destroying their property) while being stationed on Shell Oil premises and operating on Shell Oil’s funding.
If this lawsuit were being brought against an individual instead of a corporation, there wouldn’t be a legal question; the individual would invariably be liable.
So how will SCOTUS decide?
Though the majority in Kiobel will likely be identical to that of Citizens United, it will likely be the opposite result.
In other words, the majority will find that corporations are people, unless such a benefit means that they have to take responsibility for actions internationally recognized as reprehensible.
(1) Whether the issue of corporate civil tort liability under the Alien Tort Statute, 28 U.S.C. § 1350, is a merits question (instead of an issue of subject matter jurisdiction); and
(2) whether corporations may be sued for tort liability for violations of the law of nations such as torture, extrajudicial executions or genocide, like any other private party defendant under the ATS who may be sued in the same manner as for such egregious violations.
Lower Court’s Decision
No; and no.
AFFIRM 5-4 (Majority: Roberts, Alito, Kennedy, Scalia and Thomas; Dissent: Kagan, Ginsburg, Breyer, and Sotomayor).
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Also check out Reuters’s new website: Case by Case: The Supreme Court 2011-2012 Term