Published February 28, 2012
WASHINGTON – The Supreme Court's conservative justices sounded skeptical Tuesday about allowing multinational corporations to be sued in American courts over claims that they were complicit in human rights abuses in foreign countries.
The court heard arguments over whether a 223-year-old law gives foreign victims of abuses the right to use U.S. courts to try to prove that companies played a role in atrocities and should pay damages.
Justice Anthony Kennedy, whose vote often decides closely contested cases, appeared ready to join his four fellow Republican appointees in ruling out lawsuits against corporations under the Alien Tort Statute.
The issue is at the heart of a lawsuit by 12 Nigerians who want to hold oil giant Royal Dutch Shell liable for aiding the Nigerian government's deadly crackdown on protests in the Niger Delta in the 1990s.
In the second case argued Tuesday, the justices indicated they would rule that a 20-year-old law that allows victims of torture to pursue civil lawsuits against those responsible can only be invoked against individuals, not organizations or corporations.
The dispute over the reach of the Alien Tort Statute has drawn intense interest from businesses, human rights groups and even U.S. allies that oppose a broad interpretation of the law. The Obama administration is siding with the Nigerian plaintiffs.
The Alien Tort Statute went unused for most of American history until rights lawyers dusted it off beginning in the late 1970s. Lawsuits have been brought against individuals who allegedly took part in abuses and, more recently, against companies that do business in places where abuses occur and in the United States.
Arguments over who may be sued under the law turn in part on how other countries and international courts treat human rights violations. Business interests say that corporations can't be sued in most of the rest of the world.
"But, counsel, for me, the case turns in large part on this," Kennedy said, referring to the Shell's legal brief. "It says, "International law does not recognize corporate responsibility for the alleged offenses here."
He also worried that a broad ruling in favor of allowing the lawsuits could open up American companies to lawsuits in foreign countries.
Kennedy spoke of an American company accused of human trafficking in the United States. "In your view, the company can be sued in every country in the world," he said to Deputy Solicitor General Edwin Kneedler, representing the United States.
Kennedy's point underscored another lurking issue that has the potential to wipe out almost all lawsuits under the 1789 law. It is a minor part of Shell's case, but other companies supporting Shell said the law never was intended to apply to conduct by a foreign government against its own citizens within its own borders.
A couple of briefs supporting the Nigerians mentioned Kennedy's majority in the Supreme Court's 5-4 ruling in the Citizens United case in 2010 that said corporations have the same constitutional rights as people to speak and spend freely to influence elections.
The same five justices could rule in favor of corporations in the Shell case — essentially that they are different from individuals under this law. Unlike Citizens United, this case turns on the meaning of a statute, not the Constitution, and Congress could always change the law specifically to bring corporations under it.
The court's four Democratic appointees sounded much more willing to allow for corporate liability under the law.
Justice Stephen Breyer said that Shell's position would not permit corporations to be sued over allegations involving slavery or piracy.
"The law of nations is uniform. It rejects corporate liability," said Kathleen Sullivan, representing Shell.
Breyer suggested he would take a less categorical view of the matter. "In certain circumstances, there could be a suit against a corporation. You just have to be careful," he said, as if trying out something he might later put in an opinion.
Other cases pending in U.S. courts seek to hold accountable Chiquita Brands International for its relationship with paramilitary groups in Colombia; Exxon and Chevron for abuses in Indonesia and Nigeria, respectively; Britain-based mining concern Rio Tinto for allegedly aiding the Papua New Guinea government in a civil war; and several companies for their role in old racial apartheid system in South Africa.
The second case dealt with the Torture Victims Protection Act, which uses the word "individual" to describe who may sue and who can be sued. The family of a naturalized U.S. citizen who died in the custody of Palestinian intelligence officers in Jericho in 1995 is trying to sue the Palestinian Authority and Palestine Liberation Organization under the law.
But the justices seemed to have little question that individual "means what it means," as Justice Elena Kagan said.
In this case, unlike the Shell lawsuit, the administration supports limiting the law to suits against people.
The apparent difference in positions caught the attention of Justice Samuel Alito.
"Suppose two people are tortured, and one is an alien who has never been within 10,000 miles of the United States, and the other is a U.S. citizen. The position of the United States is that the alien can sue, but the U.S. citizen can't?" Alito asked.
Justice Department lawyer Curtis Gannon said the two laws employ different language, although they deal with similar subjects. Gannon also said the court eventually might drastically cut back lawsuits under the Alien Tort Statute.
Visiting judges from the European Court of Human Rights watched Tuesday's session in which eight of the nine justices asked questions. Justice Clarence Thomas has not asked a question at the court in more than six years.
A decision in both cases is expected by late June.
The cases are Kiobel v. Royal Dutch Petroleum, 10-1491, and Mohamad v. Palestinian Authority, 11-88.