On February 4, the Second Circuit Court of Appeals denied plaintiffs' petition for a rehearing en banc in Kiobel v. Royal Dutch Petroleum, 621 F.3d 111 (2d Cir. 2010). Plaintiffs filed the petition after the Second Circuit held, in a controversial September 2010 decision, that corporations cannot be properly sued under the Alien Tort Statute (“ATS”) for violations of customary international law.

The Court was divided 5-5 on the decision of whether to grant en banc review. Several judges prepared separate opinions, and these opinions reflect a deeply divided court.

In support of the decision to deny a rehearing, Chief Judge Dennis Jacobs stated that "no international consensus has arisen (or is likely to arise) supporting corporate liability" for violations of customary international law. He warned that allowing ATS cases to go forward against corporations could provoke "invasive discovery" that might "coerce settlements that have no relation to the prospect of success on the ultimate merits."

Chief Judge Jacobs also observed that the Second Circuit's decision in Presbyterian Church of Sudan v. Talisman, 582 F.3d 244 (2d Cir. 2009), had limited aiding and abetting liability under the ATS to those cases in which "conduct is done with the positive intention of bringing about a violation of the Law of Nations." He found, therefore, that the "incremental number of cases actually foreclosed by the majority opinion in Kiobel approaches the vanishing point." He warned, however, that unless Kiobel was upheld, "plaintiffs would be able to plead around Talisman in a way that would delay dismissal of ATS suits against corporations[.]" He concluded that "this case has no great practical effect except for the considerable benefit of avoiding abuse of the courts to extort settlements."

Judge Leval dissented from the denial of a rehearing, in an opinion that echoed his vigorous dissent from the original September 2010 decision. He noted the Chief Judge's argument that Kiobel "can have no more than trivial detrimental effect because, under our holding on Talisman, liability may be imposed for aiding and abetting only in the most serious cases -- those in which the defendant acted with a purpose to violate the law of nations." Judge Leval then argued that "[t]o justify a rule that exempts certain defendants from liability on the ground that the rule protects only the very worse offenders is strange logic."

Judge Leval noted many of Chief Judge Jacobs' concerns and found that "[t]o the extent Judge Jacobs airs reasonable grievances, these can be ameliorated by less drastic measures, which do not leave juridical entities free to conduct businesses based on the abuse of human rights without exposure to civil liability."

In a short dissenting statement attached to the order denying the request for rehearing, Judge Lynch, joined by Judge Pooler, Judge Katzmann, and Judge Chin, observed that "this case presents a significant issue and generates a circuit split," citing to the Eleventh Circuit's decision in Romero v. Drummond, 552 F.3d 1303 (11th Cir. 2008), which upheld corporate liability under the ATS. This observation of the circuit split may foreshadow the ultimate resolution of the question of corporate liability under the ATS as the split provides a basis for a petition to the U.S. Supreme Court.