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Alien Tort Statute provides no jurisdiction against corporations under customary international law, Second Circuit holds.

Various Dutch, British, and Nigerian corporations, through the subsidiary Shell Petroleum Development Company of Nigeria, Ltd. (SPDC), had been engaged in oil exploration and production in the Ogoni region of Nigeria since 1958. In response, residents of the region organized to protest the environmental impacts and, in 2004, filed a putative class action complaint under the Alien Tort Statute, 28 U.S.C. [section] 1350 (ATS). The complaint alleged SPDC had aided and abetted the Nigerian government in suppressing the resistance by committing violations of the law of nations, including extrajudicial killing; crimes against humanity; torture or cruel, inhuman, and degrading treatment; arbitrary arrest and detention; violation of the rights to life, liberty, security, and association; forced exile; and property destruction.

The U.S. District Court for the Southern District of New York dismissed the claims against corporate defendants in part and certified the entire order for interlocutory appeal. The parties cross-appealed. The U.S. Court of Appeals for the Second Circuit dismisses the complaint for lack of subject matter jurisdiction.

The issue is whether the ATS provides jurisdiction against corporations under customary international law. Quoting its own Filartiga v. Pena-Irala, 630 F.2d 876, 890 (2d Cir. 1980), the Second Circuit notes that the statute provides jurisdiction over "(1) tort actions, (2) brought by aliens (only), (3) for violations of the law of nations (also called 'customary international law' [FN3]) including, as a general matter, war crimes and crimes against humanity--crimes in which the perpetrator can be called 'hostis humani generis, an enemy of all mankind.'" [149]. Although precedent has held that the ATS holds sway over natural persons and even over individual members of a corporation, it is a case of first impression whether the statute can subject a juridical person such as a corporation to its jurisdiction.

The Second Circuit takes a two-step approach in reaching its decision, considering, first, whether international or domestic law governs the case and, second, whether corporations are subject to liability for violations of customary international law. Based on international law, the Supreme Court in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), and its own precedents that international law does govern, the Court addresses the first issue:

"Looking to international law, we find a jurisprudence, first set forth in Nuremburg and repeated by every international tribunal of which we are aware, that offenses against the law of nations (i.e., customary international law) for violations of human rights can be charged against States and against individual men and women but not against juridical persons such as corporations. As a result, although customary international law has sometimes extended the scope of liability for a violation of a given norm to individuals, it has never extended the scope of liability to a corporation." [120]

Sosa required courts to look to international law to determine jurisdiction over ATS claims. The Second Circuit notes that this had been its own approach, as set forth in the Filartiga case. Further, in its own circuit, the Court had held that aiding and abetting was as much a violation of the relevant international norm as was the act aided and abetted: while under domestic law, there is no general presumption that the plaintiff may also sue aiders and abettors, under the law of nations, there is.

Analyzing the second issue, the Court then considers "what the sources of international law reveal with respect to the existence of a norm of corporate liability under customary international law," [131] finding "those sources lead inescapably to the conclusion that the customary international law of human rights has not to date recognized liability for corporations that violate its norms." [166] Neither at the Nuremburg Trials nor at international tribunals since have corporations been held liable. And although certain treaties "suggest a trend towards imposing corporate liability in some special contexts, no trend is detectable outside such narrow applications in specialized treaties." [141] Thus:

"[I]mposing liability on corporations for violations of customary international law has not attained a discernible, much less universal, acceptance among nations of the world in their relations inter se. Because corporate liability is not recognized as a 'specific, universal, and obligatory' norm, see Sosa, 542 U.S. at 732, 124 S.Ct. 2739 (internal quotation marks omitted), it is not a rule of customary international law that we may apply under the ATS." [145]

The Court cautions that this is not a case of sovereign immunity. A formulation that asks whether corporations are "immune" from suit under the ATS "improperly assumes that there is a norm imposing liability in the first place." [120]

CITATION: Kiobel v Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010).
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Publication:International Law Update
Geographic Code:1USA
Date:Apr 1, 2011
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