The U.S. Supreme Court has decided to review a Second Circuit Court of Appeals decision involving whether the Alien Tort Statute (ATS) confers federal jurisdiction over tort claims against corporations. Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S., cert. granted, October 17, 2011). The plaintiffs allege that the corporate defendants aided and abetted the Nigerian government in committing violations of the law of nations.
The Second Circuit determined that because corporate tort liability is a matter of domestic law and the ATS is restricted to offenses defined by customary international law, a plaintiff bringing an ATS suit against a corporation has not alleged a violation of customary international law. According to the court, “customary international law has steadfastly rejected the notion of corporate liability for international crimes, and no international tribunal has ever held a corporation liable for a violation of the law of nations.” The case was dismissed sua sponte for lack of subject matter jurisdiction.
The plaintiffs framed their issues on appeal as (i) “Whether the issue of corporate civil tort liability under the Alien Tort Statute is a merits question, as it has been treated by all courts prior to the decision below, or an issue of subject matter jurisdiction, as the court of appeals held for the first time”; and (ii) “Whether corporations are immune from tort liability for violations of the law of nations such as torture, extrajudicial executions or genocide, as the court of appeals decision provides, or if corporations may be sued in the same manner as any other private party defendant under the ATS for such egregious violations, as the Eleventh Circuit has explicitly held.” The case will be argued with another case raising similar issues under the Torture Victim Protection Act.
Meanwhile, the Ninth Circuit Court of Appeals, joining the Seventh, Eleventh and D.C. Circuits, has determined that corporations may be held liable in U.S. courts for genocide and war crimes under the ATS. Sarei v. Rio Tinto, PLC, Nos. 02-56256, 02-56380 and 09-56381 (9th Cir., decided October 25, 2011). Residents of the island of Bougainville in Papua New Guinea alleged that a multinational mining company is responsible for the deaths of some 15,000 residents in the 1980s following an uprising against the company involving purported pollution and discrimination issues.