Can foreigners sue international corporations in US courts?

The lawyer for a group of Nigerian villagers seeking to sue a multinational corporation for alleged human rights violations received a chilly reception at the US Supreme Court Tuesday.

Paul Hoffman, a California appellate lawyer, endured a relentless barrage of blunt questions from the bench about whether a similar lawsuit could be filed in any other country in the world.

“I don’t know if this precise case could be brought,” Mr. Hoffman finally conceded.

“If there is no other country where this suit could have been brought ... isn’t it a legitimate concern that allowing the suit itself contravenes international law,” Chief Justice John Roberts asked.

The exchange came during an hour-long oral argument in a potential landmark case that could set the contours of corporate liability under an unusual 223-year-old American law.

The so-called Alien Tort Statute allows non-US citizens to file lawsuits in American courts for alleged violations of international law. Rather than filing their case in Nigeria, lawyers for the villagers decided to bring their fight to the US courts under the Alien Tort Statute.

There is just one problem. It is not clear that the enigmatic statute permits lawsuits against corporations.

A federal judge in New York allowed a portion of the suit to move forward, but a federal appeals court threw the entire case out. The Supreme Court agreed to take up the appeal.

At issue in Kiobel v. Royal Dutch Petroleum (10-1491) is whether international corporations may be held responsible in an American courtroom for allegedly aiding and abetting human rights abuses that take place in a foreign country.

Lawyers for Royal Dutch Petroleum maintain that the statute only permits lawsuits against individuals who personally perpetrate human rights violations, rather than the corporation that employs them.

The appeal stems from a 2002 civil lawsuit filed on behalf of 12 residents of the oil-rich Ogoni region of the Niger River delta.

The residents charge that from 1992 to 1995 Royal Dutch Petroleum and its subsidiaries aided and abetted the Nigerian military in conducting a campaign of terror and intimidation through the use of extrajudicial killings, torture, and other tactics to protect the oil company’s operations from the grassroots opposition of the Ogoni people. The company has denied involvement in atrocities.

Normally, such a suit would be filed in Nigeria, where the events took place, or in the Netherlands or the United Kingdom where the corporate subsidiaries are based.

But lawyers for the villagers decided to base their suit on the Alien Tort Statute which permits non-US citizen “aliens” to sue other foreign residents for egregious violations of international law such as genocide, extra-judicial killing, torture, and slavery.

The Alien Tort Statute was adopted by the first Congress in 1789. It was largely ignored for nearly two centuries, but since 1980, lawyers have been trying to establish it as a vehicle to fight human rights abuses around the world.

At first, foreign plaintiffs went after individual foreign torturers and abusive officials. But since the late 1990s, the trend has been to target deep pocket corporations doing business in countries ruled by oppressive governments.

According to one analyst, 120 lawsuits have been filed in US courts against 59 corporations for alleged violations in 60 foreign countries.

Although four members of the high court’s conservative wing expressed significant skepticism about the tactic of charging corporations under the ATS, not all justices were openly opposed to the concept.

Justice Stephen Breyer hypothesized about a group of incorporated criminals operating as Pirates, Inc. Would they be immune from a civil lawsuit under ATS, he wondered.

“Yes, the corporation would not be liable,” Appellate lawyer Kathleen Sullivan replied. She said the lawsuit could seek to seize the ship the pirates had used to carry out their illicit piracy, but the ATS would not permit a litigant to seize the corporate assets of Pirates, Inc.

Justice Elena Kagan asked what would happen in an ATS lawsuit if the French ambassador to the US was assaulted by a corporate agent. “Would we say that the corporation there cannot be sued under the Alien Tort Statute,” she asked.

There is no internationally-accepted norm concerning corporate assaults on ambassadors that would govern the case, Sullivan said.

But she added that the ambassador would not be without recourse. He could use the ATS to sue the individual who carried out the assault, she said.

Sullivan said ATS lawsuits must be based on violations of the law of nations. “There is no country in the world that provides a civil cause of action against a corporation under their domestic law for a violation of the law of nations,” she said.

Sullivan’s point is counterintuitive to many Americans who understand that corporations have long been subject to liability under US law. But the ATS operates under international law, not US domestic law, she said.

Violations of international law are crimes that are so egregious and universally condemned that a perpetrator could rightly be classified as an enemy of mankind.

The Obama administration is arguing the case on the side of the Nigerian villagers and against the coporations.

Deputy Solicitor General Edwin Kneedler told the justices that the ATS should be viewed as a reflection of US domestic law which permits lawsuits against corporations.

Corporations were subject to civil suit in 1789 and they still are under domestic US law, he said.

Some analysts have suggested the case represents something of a reprise of the Citizens United case in which the court’s conservatives ruled 5-4 that the First Amendment protects a corporation’s right to engage in political speech.

But Citizens United was not discussed during the oral argument.

During a second hour of argument, the high court heard a similar case, Mohamad v. Palestinian Authority (11-88), examining whether the Torture Victim Protection Act could be enforced against an organization in addition to an individual who allegedly carried out acts of torture or extra-judicial killing of a US citizen.

The issue arises in the case of Azzam Rahim, a US citizen of Palestinian heritage who died while being questioned by security officials on the West Bank.

Mr. Rahim, a successful businessman in Dallas, was picked up by Palestinian security officials while on a visit to his boyhood village on the West Bank. Two days later his body was delivered to his family. It was bruised and included cigarette burns and broken bones, suggesting he had been tortured prior to his death.

Rahim’s son, Asid Mohamad, filed a lawsuit in federal court in the US against three Palestinian officials, the Palestinian Authority and the Palestine Liberation Organization. He charged that his father had been subjected to torture and extrajudicial killing in violation of the 1993 Torture Victim Protection Act.

A federal judge and a federal appeals court panel dismissed all charges against the Palestinian Authority and the PLO. The judge said the TVPA was only enforceable against individuals personally responsible for Mr. Rahim’s torture and death.

At issue before the Supreme Court is whether the lower courts were correct that only individuals may be sued under  the TVRA, or whether organizations may also be held liable.

Decisions in both cases are expected by late June.