Kiobel v. Royal Dutch Petroleum: Are Corporations Immune From Accountability For International Human Rights Violations?

January 22, 2013

shell oil flaringEditor’s note: This month, law students have the chance to weigh in on how the court should rule in Kiobel v Royal Dutch Petroleum by entering the ABA Section of International Law’s Rona R. Mears Student Writing Competition & Scholarship Awards. The winners will receive their award directly from Associate Justice Antonin Scalia during a United States Supreme Court evening reception on Thursday, April 25, 2013 during the ABA International Section Spring 2013 Meeting.

Kiobel, pending in the US Supreme Court, arose from alleged human rights violations in Nigeria.  In the 1990s, Nigerian residents protested against environmental devastation caused by the oil industry.  Government officials, allegedly supported by multinational oil companies, imprisoned, tortured, and killed protestors.  The protestors’ families filed suit in the US under the Alien Tort Statute (ATS) against the oil companies for their alleged role in the atrocities.

The facts are covered in a more detail in a prior blog post.

Kiobel presents two primary issues in the Supreme Court: (1) are corporations immune from accountability in US courts under the ATS; and (2) does the ATS permit US courts to hear cases involving international law violations occurring abroad.

This article focuses on the corporate liability issue.  A future post will focus on the extraterritorial application of the ATS.

The Second Circuit Dismisses

Following the district court’s partial dismissal, the Second Circuit dismissed the families’ claims in their entirety. The court held:

  • Courts must look to international law to determine whether corporate liability is within the scope of the ATS;
  • International law, as embodied in customs, treaties, and scholarly work, does not recognize corporate liability;  and
  • Therefore, the ATS does not provide subject matter jurisdiction.

In finding that international law does not recognize corporate liability, the majority noted that the Nuremburg Tribunals and later international criminal tribunals did not authorize criminal prosecution of corporations. The majority also stated that, although international treaties provide “some” evidence that international law recognizes corporate liability, there have not been enough treaties, ratified by the right states, to establish corporate liability as an international legal norm.  Finally, the court cited legal scholars, primarily two law professors, who argued that international law does not recognize corporate liability for international law violations.

Judge Leval filed an impassioned concurrence, disagreeing with the majority’s reasoning and calling its opinion “illogical,” “strange,” and “internally inconsistent.”  Judge Leval opined that corporations could be liable under the ATS, noting that the ATS was held to apply to corporations as early as 1795 and every court ruling on the issue has rejected corporate immunity.  Judge Leval cast the relative silence in international law as an indication that international law takes no position on corporate liability and, instead, leaves the question to each nation to resolve.  The remedy for international law violations– such as corporate liability for money damages – is for domestic law to provide.

The Supreme Court Takes The Case

The Supreme Court granted certiorari, initially focusing on the corporate liability question.  The Court heard oral argument in February 2012. The parties’ positions largely mirrored the Second Circuit’s majority and concurring opinions.

Six days after oral argument, the Court ordered the parties to file additional briefs addressing whether the ATS allows US courts to decide cases involving violations of international law occurring abroad.  The Court is expected to issue an opinion in 2013.