Can Foreigners Sue International Corporations in US Courts?

March 4, 2012— -- 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.

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"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.