Justices Divided on Corporate Liability for Human Rights Violations

Feb 28, 2012 5:10pm

Supreme Court Justices seemed divided today in a case regarding whether corporations can be held liable in U.S. courts for human rights violations committed abroad.

At issue is a case brought by 12 Nigerian plaintiffs against a subsidiary of Shell Oil. The Nigerians claim that Shell aided and abetted human rights violations in Nigeria between 1992 and 1995. They are seeking to sue the corporation under a federal law that allows foreigners to bring lawsuits in U.S. federal court for violations of international human rights law.

Kathleen M. Sullivan, a lawyer for Shell, argued that her client could not be sued under the federal law in question — the Alien Tort Statute — because it applies to individuals, not corporations. She interpreted a footnote in a prior Supreme Court case to say that courts must look to international law for guidance and that international law does not recognize corporate responsibility for the alleged offenses.

“International law holds corporations liable for some international law violations,” Sullivan said, and she pointed to conventions on the financing of terrorism and the bribery of public officials. “But the human rights offenses here do not arise from conventions like those which allow corporate liability. To the contrary. The human rights offenses here arise from conventions that speak to individual liability. The liability of individuals.”

Justice Elena Kagan pressed Sullivan on whether corporations are “meaningfully different from individuals.”

And she said: “You said the international community draws this line. And as far as I can see, the international sources are simply silent as to this question.”

Paul Hoffman, a lawyer representing the Nigerian plaintiffs, argued that international law is used to assess the nature of the human rights violation, not to determine whether corporations should be held accountable.

“International human rights norms that are at the basis of this case for the plaintiffs — crimes against humanity, torture, prolonged arbitrary detention … all of those human rights norms are defined by actions,” Hoffman said. “They’re not defined by whether the perpetrator is a human being or a corporation.”

The conservative justices had some tough questions for Hoffman.

Justice Anthony Kennedy said that in his view the case turns on whether international law recognizes corporate responsibility for the alleged offenses.

Justice Samuel Alito suggested the case shouldn’t even be in front of the court.

“Well, there’s no particular connection between the events here and the United States,” he said. “So, I think the question is whether there’s any other country in the world where these plaintiffs could have brought these claims against the respondents.”

And Chief Justice John Roberts added, ” If there is no other country where this suit could have been brought, regardless of what American domestic law provides, isn’t it a legitimate concern that allowing the suit itself contravenes international law? ”

The U.S. Court of Appeals for the Second circuit sided with Shell in the case, but other courts have split on the issue.

Ralph G. Steinhardt, a law professor at George Washington University Law schools who filed a brief representing international law scholars on behalf of the Nigerian plaintiffs, said after arguments that in such extreme cases, said international law is on their side.

“I think that international law requires accountability for the most egregious abuses, and international treaties involved do not distinguish between individual human beings and corporations,” said Steinhardt,.

Lawyers for the Obama administration said that the lower court had gone too far.

“The court of appeals erred in its categorical ruling that a corporation may never be held liable under the Alien Tort Statute regardless of the nature of the norm, the locus of the wrong, or the involvement of the state,” Deputy Solicitor General Edwin S. Kneedler argued.

The case is expected to be decided by early summer.

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