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US judges dismiss Nigerian violence case vs Shell

Fri Sept 17, 2010 2:08pm EDT

* Corporations not liable for rights violations -court

* Dissenting opinion calls it blow to international law

* Case involves Nigerians executed over 1990s protests (Adds Alien Tort expert says strong dissent suggests further appeal likely)

By Grant McCool

NEW YORK, Sept 17 (Reuters) – A U.S. Appeals Court on Friday dismissed a case against Royal Dutch Shell Plc (RDSa.L) in which the oil company was accused of helping Nigerian authorities violently suppress protests against oil exploration in the 1990s.

Judges in the U.S. Court of Appeals for the 2nd Circuit in New York ruled that until the Supreme Court deemed otherwise, corporations could not be held liable in U.S. courts for violations of international human rights law.

One judge on the three-member appeals court panel wrote a strong dissent of the majority opinion, calling it “a substantial blow to international law.”

The case was brought under a 1789 U.S. statute, the Alien Tort Statute (ATS) by families of seven Nigerians who were executed by a former military government for protesting Shell’s exploration and development.

Shell has denied allegations of involvement in human rights abuses.

Jonathan Drimmer, a partner of Steptoe & Johnson LLP in Washington and an authority on the statute, said the strong dissent suggests that there will be a further appeal.

Drimmer said the ruling’s impact would be confined to those against corporations in the same court.

“Will it result in the conclusion of those lawsuits? It’s going to depend on each individual case,” Drimmer said.

One of those is a complaint seeking to hold corporations such as Ford Motor Co (F.N), General Motors Co [GM.UL] and International Business Machines Corp (IBM.N) liable for aiding and abetting authorities in South Africa under apartheid — the decades-long system of racial segregation and suppression of the black majority by the white minority rulers until the early 1990s.

The accusations against Shell included violations connected with the 1995 hangings of prominent activist Ken Saro-Wiwa and eight other protesters by Nigeria’s then-military government.

The families had sought to make the company the first foreign corporation found liable in a U.S. court for aiding human rights violations abroad under the ATS.

Chief Judge Dennis Jacobs and Judge Jose Cabranes said in a written ruling that the trial judge, who declined to dismiss some claims against Shell, should have thrown out all claims.

The opinion noted that no corporation has ever been subject to any form of civil or criminal liability under the international law of human rights.

“We hold that corporate liability is not a discernible — 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 138-page ruling said in part.

In a dissenting opinion, Judge Pierre Leval wrote:

“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.”

The cases are Wiwa et al v. Royal Dutch Petroleum Co et al, U.S. District Court for the Southern District of New York, No. 96-08386 and Nos. 06-4800 and 06-4876 in the U.S. Court of Appeals for the 2nd Circuit.

(Reporting by Grant McCool; Editing by Matthew Lewis and Richard Chang)


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