Source: http://www.csrandthelaw.com/2010/09/19/second-circuit-holds-that-corporations-are-not-proper-defendants-under-the-alien-tort-statute/
Timestamp: 2019-04-26 15:40:58+00:00

Document:
On September 17, in a controversial opinion, the Second Circuit Court of Appeals held in Kiobel v. Royal Dutch Petroleum that corporations cannot be properly sued under the Alien Tort Statute (“ATS”) for violations of customary international law. The case is one of a series of cases arising from claims that Royal Dutch Petroleum was complicit in human rights abuses against the Ogoni people in Nigeria. Three related cases (the Wiwa cases) settled on the eve of trial in June 2009 for a disclosed settlement of $15.5 million.
Because customary international law consists of only those norms that are specific, universal, and obligatory in the relations of States inter se, and because no corporation has ever been subject to any form of liability (whether civil or criminal) under the customary international law of human rights, we hold that corporate liability is not a discernable—much less universally recognized—norm of customary international law that we may apply pursuant to the ATS. Accordingly, plaintiffs’ ATS claims must be dismissed for lack of subject matter jurisdiction.
The Kiobel opinion has some legal scholars wondering whether this may be the beginning of the end for ATS litigation against corporations. The decision will certainly be appealed, and this may be the case that results in Supreme Court clarification on the applicability of the ATS to corporate actors. The question of whether corporations are properly liable under the ATS was left unsettled by the Supreme Court in Sosa v. Alvarez-Machain, and the Supreme Court declined to take up the issue when it recently denied Pfizer’s writ of certiorari in Pfizer v. Abdullahi.
Before Kiobel, several post-Sosa appellate court decisions have upheld jurisdiction over corporate defendants. Notably, many of these decisions have not involved much analysis of whether corporations were proper defendants. In Presbyterian Church v. Talisman, decided in 2009, the Second Circuit assumed “without deciding, that corporations…may be held liable for the violations of customary international law[.]” In Khulumani v. Barclays Nat. Bank Ltd., decided in 2007, defendants did not raise the question of corporate liability on appeal, but the Second Circuit observed that “[w]e have repeatedly treated the issue of whether corporations may be held liable…as indistinguishable from the question of whether private individuals may be.” Other appellate courts, including the Eleventh Circuit in Romero v. Drummond Co., decided in 2008, and Aldana v. Del Monte Fresh Produce, decided in 2005, have similarly upheld corporate liability under the ATS.
according to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victims’ claims for compensation simply by taking the precaution of conducting the heinous operation in the corporate form.
It is certain that the Kiobel decision represents one of the most significant ATS decisions in years, although it is far too early to state that this is the end of ATS litigation for companies. Both the majority and concurring opinions in Kiobel will find many advocates and detractors and all parties will continue to look to the Supreme Court for final resolution.

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