Procedural Background for U.S. Supreme Court Argument in Kiobel Case on Corporate Liability for Foreign Human Rights Violations

On February 28th, the U.S. Supreme Court will hear oral arguments on the following two issues in a case from the U.S. Court of Appeals for the Second Circuit, Kiobel v. Royal Dutch Petroleum (Sup. Ct. No. 10-1491):

1. Whether the issue of corporate civil tort liability under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, is a merits question, as it has been treated by all courts prior to the decision below, or an issue of subject matter jurisdiction, as the court of appeals held for the first time.
2. Whether corporations are immune from tort liability for violations of the law of nations such as torture, extrajudicial executions or genocide, as the court of appeals decisions provides, or if corporations may be sued in the same manner as any other private party defendant under the ATS for such egregious violations, as the [U.S.] Eleventh Circuit [Court of Appeals] has explicitly held.

The Supreme Court’s resolution of these issues is expected by the end of the current term at the end of June 2012.

The ATS provides that U.S. federal district courts have “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.” (Earlier posts have reviewed the history of the ATS for the periods 1789-1979, 1980, 1980-2004, the U.S. Supreme Court decision in 2004 and 2004-present.)

This post will provide the procedural background for the Kiobel case. Subsequent posts will examine the substantive issues in the Second Circuit and before the Supreme Court.

The facts giving rise to the lawsuit took place in Nigeria in 1993-1995, when the Movement for the Survival of the Ogoni People and other Ogoni groups demanded an end to oil development in their region and were met with a violent military crackdown. Shell allegedly aided and abetted the crackdown.

Thereafter representatives of the Ogoni people, including Dr. Barinem Kiobel, commenced a putative class action against Shell under the ATS for allegedly aiding and abetting various human rights violations by the Nigerian government.

The case was brought in the federal court in New York City (the U.S. District Court for the Southern District of New York). After various pretrial motions and other proceedings, that court in September 2006 denied Shell’s motion to dismiss the claims with respect to alleged aiding and abetting crimes against humanity, torture and arbitrary arrest and detention. (Other claims were dismissed.)

The case then went up on appeal to the Second Circuit in New York City. Nearly four years later, September 2010, a three-judge panel of that court reversed the district court’s denial of the dismissal motion on the ground (2 to 1) that corporations could not be held liable under the ATS. (621 F.3d 111 (2d Cir. 2010).)

In February 2011, the Second Circuit’s original three-judge panel denied, 2 to 1, the plaintiffs’ petition for rehearing, and the entire Second Circuit denied, 6 to 4, the petition for rehearing en banc.

In October 2011, the Supreme Court granted the plaintiffs’ petition for a writ of certiorari to review the Second Circuit’s decision. The following briefing then took place:

• In December 2011 the plaintiffs-petitioners submitted their brief supported by 19 amici curiae (friends of the court) briefs, including the U.S. Government, the U.N. High Commissioner for Human Rights, Joseph Stieglitz (Nobel Prize economist), law professors, human rights centers and plaintiffs in similar cases.

• In January 2012 Shell filed its respondent’s brief supported by 16 amici curiae briefs, including the Federal Republic of Germany, the United Kingdom and the Netherlands, the U.S. Chamber of Commerce and other business organizations, other law professors, the Cato Institute and defendants in similar cases.

• In early February the plaintiffs-petitioners submitted their reply brief.

This procedural background by itself illustrates the importance of this issue for the parties, for the enforcement of international human rights and for governments and businesses around the world. Nevertheless, remember that this is a case of statutory interpretation coupled with federal common law under the 2004 Sosa case, and at any time the Congress with a presidential signature could amend the statute to make corporate liability express or to exclude such liability specifically.