The Supreme Court yesterday granted certiorari in two cases to resolve circuit splits involving corporate liability under the Alien Tort Statute (ATS) and Torture Victims Protection Act (TVPA). The outcome of these cases should decide whether corporations will face liability under the ATS and TVPA. These statutes have become an increasingly popular basis for claims by human rights organizations against corporations with foreign operations. The Second Circuit held that corporations cannot be sued under the ATS; the Seventh, Eleventh and D.C. Circuits have held that they can. Similarly, the Second and Fourth Circuits held that corporations cannot be sued under the TVPA; the Eleventh Circuit held that they can be sued.
The ATS, 28 U.S.C. §1350, grants U.S. courts jurisdiction over violations of international law or U.S. treaty. In Kiobel v. Royal Dutch Petroleum (No. 10-1491), twelve Nigerian nationals brought suit for injuries they suffered when the Nigerian government, allegedly in conjunction with three oil companies, forcibly suppressed resistance to oil exploration in its territory. Plaintiffs sued the oil companies in federal court in New York, arguing that the corporations' actions violated customary international law, giving rise to jurisdiction under the ATS. The Second Circuit rejected this claim, holding that customary international law did not allow for corporate liability, and therefore that the ATS did not provide U.S. courts with subject matter jurisdiction over the case. Kiobel v. Royal Dutch Petroleum, 621 F. 3d 111 (2d Cir. 2010). The Supreme Court granted certiorari on two issues: first, whether corporations and other non-natural persons can be subject to liability under the ATS, and second, whether corporate liability under the ATS is a matter of subject matter jurisdiction or, instead, a question for the merits.
The Court also granted certiorari in a separate case to consider whether liability under the TVPA is limited to “natural persons” or whether it extends to corporations. The TVPA was enacted to create "a civil action for recovery of damages from an individual who engages in torture or extrajudicial killing." Pub. L. No. 102-256, 106 Stat. 73 (1992) (codified at 28 U.S. C. §1350, note). To be subject to liability under the TVPA, an individual must have been acting “under actual or apparent authority, or color of law, of any foreign nation . . .” In Mohamad v. Rajoub, relatives of a Palestinian allegedly tortured and killed by the Palestinian Authority and the Palestine Liberation Organization sued those organizations, alleging violations of the TVPA. 634 F.3d. 604 (D.C. Cir. 2011). The District Court in the District of Columbia granted the defendants’ motion to dismiss, and the D.C. Circuit affirmed, holding that the TVPA provides a cause of action only against “individuals,” a term that encompasses only natural persons.
Argument is expected to be scheduled for February 2012 and a decision is likely by June 2012.