Tag: Royal Dutch Petroleum Co.

Re-argument of Important Human Rights Case in U.S. Supreme Court

On October 1, 2012, the U.S. Supreme Court heard re-arguments in an important human rights case, Kiobel v. Royal Dutch Petroleum Co. (Sup. Ct. No. 10-1491).[1]

This case involves claims by a putative class of Nigerians against Netherlands/United Kingdom corporations (Royal Dutch Petroleum Co. and Shell Transport and Trading Company PLC (Shell)) for allegedly assisting in certain human rights violations in Nigeria in 1993-1995.

The claims in this case were asserted under the Alien Tort Statute (ATS) that 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.”[2]

The order for rehearing asked the parties to address the following issue:

  • Whether and under what circumstances the [ATS] . . .  allows courts to recognize a cause of        action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

This issue was addressed in the Petitioners’ Supplemental Opening Brief; the Supplemental Brief for Respondents; the Supplemental Reply Brief for Petitioners; 31 amici curiae briefs supporting the petitioners; 14 amici curiae briefs supporting respondents; and 7 amici curiae briefs supporting neither party.  One of those not supporting either party was the U.S. Government.[3]

During the hour-long hearing the Court heard from lawyers representing the plaintiffs-petitioners, the defendants-respondents and the U.S. Government. They all were actively questioned by eight of the Justices with only Justice Thomas not participating. Those eight Justices all seemed to be searching for a way to limit the reach of the ATS, especially when such cases adversely affected U.S. foreign policy.[4]

I will not attempt to predict how the Court will resolve the case. Instead I will set forth how I think the Court should do so.

First, Corporations are not immune from lawsuits under the ATS.

Second, As the Court held in Sosa v. Alverez-Machain in 2004, the ATS is a jurisdictional statute.[5] The Court’s presumption against extraterritorial application of U.S. statutes (unless Congress specifically states otherwise), applies to statutes that impose substantive U.S. regulatory measures, not to jurisdictional statutes.[6] Therefore, there is no issue of extraterritoriality with respect to the ATS.

Third, there are various existing legal doctrines and jurisprudence that federal courts have used and should use, in appropriate cases, to dismiss ATS cases at the outset upon a motion by the defendant asserting such affirmative defenses. They include the following:

  • The court lacks personal jurisdiction over the defendant because it does not have sufficient contacts with the forum to make litigation consistent with U.S. notions of fair play and substantial justice as guaranteed by the Fifth and Fourteenth Amendments’ due process clauses.[7]
  • The case is not brought within 10 years after the acts in question under the statute of limitations borrowed from the Torture Victims Protection Act unless under established principles of equity the statute of limitations should be tolled or stayed.[8]
  • The plaintiff has failed to exhaust remedies in the country where the acts occurred unless those remedies are unavailable or futile.[9]
  • A foreign court is the more appropriate and convenient forum than an U.S. courts under the established principles of forum non conveniens.[10]
  • An individual defendant is entitled to official immunity according to the U.S. Department of State.[11]
  • A non-individual defendant is entitled to immunity under the Foreign Sovereign Immunities Act.[12]
  • The “act of state” doctrine protects the conduct in question.[13]
  • The case presents a “political question” that is inappropriate for judicial resolution.[14]
  • The case should be rejected because of concerns about its impact on U.S. foreign relations or because of “international comity.”[15]
  • The case presents an issue of U.S. state secrets that prevent adjudication of the case.[16]

Fourth, the affirmative defenses just mentioned were not raised by the defendants-respondents in                     their appeal to the U.S. Court of Appeals for the Second Circuit and, therefore, are not before            the Supreme Court for decision.

Fifth, the Second Circuit is reversed, and the case is remanded to the District Court for further        proceedings in accordance with this opinion.

Within the next four months the Court should issue its opinion(s) in this case.

[1]  Prior posts reviewed the procedural background of this case, the Second Circuit decision rejecting such liability, the initial Supreme Court argument in this case regarding whether corporations could be held liable under the ATS, and the Supreme Court’s order for rehearing in this case.

[2] Earlier posts have reviewed the history of the ATS for the periods 1789-1979, 1980 (Filartigacase), 1980-2004, 2004 (Sosa case) and 2004-present.

[3] All of the briefs in Kiobel are available on the website of the Center for Justice and Accountability, a human rights organization, along with its summary of 18 of the 52 amici curiae briefs.

[4] The transcript of that hearing is available online. Reports about the hearing are available in the New York Times, the Washington Post, the Wall Street Journal and the widely followed U.S. Supreme Court blog. In an editorial the New York Times supported sustaining the ATS in this case; the Wall Street Journal did not.

[5]  Sosa v. Alvarez-Machain, 542 U.S.692, 713 (2004).

[6] Morrison v. Australia Nat’l Bank, 130 S. Ct. 2869, 2877 (2010).

[7]  In one of the most recent Supreme Court cases on personal jurisdiction in another context, the Court unanimously determined, in an opinion by Justice Ginsburg, that the South Carolina courts did not have personal jurisdiction over  three corporations that were organized and operating in France, Luxembourg and Turkey, but were not registered to do business in South Carolina, had no place of business, employees or bank accounts in the state, did not design, manufacture or advertise its products in the state and did not solicit business in the state or sell or ship products to customers in the state. (Goodyear Dunlop Tires Operations, S.A. v. Brown, No. 10-76 (Sup. Ct. June 27, 2011). This defense has ended ATS cases for some foreign corporate defendants. (E.g., Doe v. Unocal Corp., 248 F.3d 915, 930-31 (9th Cir. 2001) (French corporation).) However, Shell and the other defendants in the Kiobel case did not raise this defense and thereby waived it under Fed. R. Civ. Pro. 12 (h)(1); another defendant (a Nigerian subsidiary) was dismissed from this case on this ground.

[8] E.g., Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 462 (D.N.J. 1999); Doe v. Saravia, 348 F. Supp. 2d 1112, 1146-48 (E.D.. Cal. 2005)(10-year period tolled or stayed because plaintiff could not have obtained justice due to legitimate fear of being killed for making a claim).

[9] This defense was suggested by the Supreme Court in Sosa, 542 U.S. at 733 n.21, and the lower courts are split as to whether it is appropriate in ATS cases. (E.g., Lizarbe v. Rondon, 642 F. Supp. 2d 473 (D. Md. 2009)(civil remedy in Peru inadequate because it is contingent on conclusion of criminal charges that can take years and because civil damages are ineffective).)

[10] Here are two examples of dismissal of ATS cases on the forum non conveniens ground. (Aldana v. Del Monte Fresh Produce N.A., 578 F.3d 1283 (11th Cir. 2009), cert.denied, 549 U.S. 1032 (2010) (litigation in Guatemala, but with the proviso that the motion would be reconsidered if plaintiffs had to return to Guatemala where they feared for their safety); Turedi v. Coca-Cola Co., 343 Fed. Appx. 623 (2d Cir. 2009) (litigation in Turkey).) But such a dismissal was rejected in Licea v. Curacao Drydock Co., 537 F. Supp. 2d 1270, 1274 (S.D. Fla. 2008) (Cuban plaintiffs would be in danger if forced to litigate in Curaco where they had been subjected to slavery-like conditions). In Kiobel,  Shell did not assert the forum non conveniens defense and, therefore, waived it. Shell did do so in a parallel case, but the court rejected the defense. (Wiwa v. Royal Dutch Pet. Co., 226 F.3d 88, 108 (2d Cir. 2000), cert. denied, 532 U.S. 941 (2001).)

[11]  For example, the issue of official immunity for former government officials of Somalia and Mexico has been examined in prior posts.

[12] A prior post looked at some of the basic provisions of the Foreign Sovereign Immunities Act while another post discussed the Supreme Court case that decided that his statute did not protect former foreign government officials.

[13] This defense was suggested by the Supreme Court in Sosa, 542 U.S. at 733 n.21, and it has been used in ATS cases. E.g., Doe v. Israel, 400 F. Supp. 2d 86, 114 (D.D.C. 2005) (acts of Israeli government).

[14] This defense was suggested by the Supreme Court in Sosa, 542 U.S. at 733 n.21, and it has been used in ATS cases. E.g., Corrie v. Caterpiller, 503 f. 3d 974 (9th Cir. 2007) (dismissal of ATS claim for selling bulldozers to Israeli Defense Force);  Schneider v. Kissinger, 412 F.3d 190 (D.C. Cir. 2005), cert. denied, 547 U.S. 1069 (2006) (dismissal on political question ground of ATS case against former U.S. National Security Advisor over killing of Chilean general in 1970 coup d’etat).

[15] E.g., Ungaro-Benages v. Dresdner Bank AG, 379 F. 3d 1227, 1237-39 (11th Cir. 2004).

[16] Foreigners sued an U.S. corporation under the ATS and TVPA for allegedly aiding and abetting the CIA’s extraordinary rendition of five foreign nationals to other countries for torture and interrogation when the corporation provided flight training and logistical and support services to the aircraft and crew. Before the defendant answered the complaint, the U.S. Government intervened and moved to dismiss the complaint under the state secrets doctrine. The district court granted the motion, which the Ninth Circuit, en banc, ultimately affirmed, 6 to 5. The court held that the state secret privilege established by United States v. Reynolds, 348 U.S. 1 (1953), required dismissal because “there is no feasible way to litigate [the defendant’s] alleged liability without creating un unjustifiable risk of divulging state secrets.” (Mohamed v. Jeppesen Dataplan, Inc., 614 F.3d 1070 (9th Cir. 2010) (en banc).)

U.S. Supreme Court To Hear Cases Challenging Whether Corporations Can Be Held Liable for Aiding and Abetting Foreign Human Rights Violations

On October 17th the U.S. Supreme decided to hear two cases challenging whether corporations can be held liable for aiding and abetting foreign human rights abuses.[1] As a result, the Supreme Court should hear oral arguments and render decisions in the cases before the end of this term of the Court in late June 2012.

1. The Royal Dutch Petroleum Company or Shell Case

In the first of these cases, the Royal Dutch Petroleum Co. or Shell case, a group of Nigerians sued several Shell subsidiaries for money damages. They alleged that the companies had enlisted the aid of the Nigerian government to suppress local opposition to oil exploration and that government forces had killed and abused certain Nigerians and destroyed their property.[2] The complaint was brought under a U.S. federal statute known as the Alien Tort Statute, which simply provides that the U.S. district courts have “original jurisdiction of any civil action by an alien [non-U.S. citizen] for a tort only, committed in violation of the law of nations or a treaty of the United States.”[3]

In the Shell case, the U.S. Court of Appeals for the Second Circuit in New York City, in a lengthy opinion by Judge Cabranes, held, 2 to 1, that (a) that international law was the relevant law for determining whether corporations (or other legal entities) could be held liable under ATS for alleged violations of the law of nations; and (b) that customary international law and hence ATS did not recognize or allow corporate direct or accessory civil liability for human rights violations. [4]

The Second Circuit in Kiobel also said it was not prevented from so holding by its own precedents. Although at least five prior such precedents had not rejected ATS cases against corporations on that ground, according to Kiobel, they merely had assumed the viability of such suits for various reasons.

One of the judges in the three-judge panel in Kiobel, Judge Leval, submitted an even lengthier concurring opinion. He agreed that the complaint in its entirety had to be dismissed because it did not allege that the corporate defendants had purposefully aided and abetted the Nigerian government’s alleged violations of human rights. But Judge Leval concluded that international law left to domestic law the issue of whether corporations were civilly liable for aiding and abetting violations of international law and that U.S. law allowed for such liability.

2. Mohammad v. Jabril Rajoub

The second of these two cases raises a similar issue under another U.S. federal statute, the Torture Victims Protection Act (TVPA). That statute imposes civil liability for money damages on an “individual who, under actual or apparent authority, or color of law, of any foreign nation–(1) subjects an individual to torture . . . or (2) subjects an individual to extrajudicial killing . . . .” (Emphasis added.)[5]

Thus, the issue in the second case is whether a corporation or other legal entity is an “individual” within the meaning of the TVPA. In the Rajoub case, the U.S. Court of Appeals for the District of Columbia Circuit held that such entities were not “individuals” within the meaning of the TVPA and, therefore, could not be sued under that statute.[6]

[1] Reuters, U.S. Court to Hear Shell Nigeria Human Rights Case, N.Y. Times (Oct. 17, 2011); Kendall, High Court to Hear Shell-Nigeria Rights Case, W.S.J. (Oct. 17, 2011). See Post: Alien Tort Statute: Important Cases Heading to U.S. Supreme Court, (July 9, 2011).

[2] Id., Kiobel v. Royal Dutch Pet. Co., 621 F.3d 111 (2d Cir. 2010), pet. for reh’g denied, 642 F.3d 268 (2d Cir. 2011), pet. for reh’g en banc denied, 642 F.3d 379 (2d Cir. 2011), cert. granted (U.S. Sup. Ct. No. 10-1491 Oct. 7, 2011).

[3] 28 U.S.C. § 1350.

[4]  Kiobel v. Royal Dutch Pet. Co., 621 F.3d 111 (2d Cir. 2010). Another recent federal appellate court came to the opposite conclusion, holding, 2 to 1, that corporations could be liable under the ATS. (Doe v. Exxon Mobil Corp., 2011 WL 2652384 (D.C. Cir. 2011).) I am surprised that Exxon Mobil has not filed a request for the Supreme Court to review the case.

[5] 28 U.S.C. § 1350 footnote.

[6]  Mohammad v. Rajoub, 634 F.3d 604 (D.C. Cir. 2011), cert. granted (U.S. Sup. Ct. No. 11-88 Oct. 17, 2011). There is a split of authority in the lower federal courts on the issue of whether corporations may be held liable under the TVPA.