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Kiobel v. Royal Dutch Petroleum

Will SCOTUS review Alien Tort Statute after D.C. Circuit ruling?

7/11/2011

Friday’s 151-page ruling by the U.S. Court of Appeals for the District of Columbia Circuit, reviving an Alien Tort Statute case accusing Exxon of abetting murder and torture in Indonesia, stands in direct contrast to a ruling last September by the Second Circuit, which determined that corporations cannot be held liable under the Alien Tort law. The issue of corporate liability under the ATS is now squarely before the U.S. Supreme Court, since the Nigerian plaintiffs in the Second Circuit case, Kiobel v. Royal Dutch Petroleum, filed a June 13 certiorari petition asking for review of the appellate court’s holding. So with a clear split in the circuit courts, it’s a sure bet that the Supreme Court will take the case when the justices return from their summer break, right?

Not necessarily. The issue of whether corporations-as opposed to individual corporate employees-are liable in U.S. federal courts for atrocities committed against foreign nationals has been hotly debated since the Supreme Court’s 2004 ruling in Sosa v. Alvarez-Machian raised the question in a footnote. The D.C. and Second Circuits aren’t the only appellate courts considering the questions. Lawyers for the Kiobel plaintiffs noted in their cert petition that the Eleventh Circuit has permitted ATS claims to proceed against corporations in three cases. The Seventh Circuit has already heard oral arguments testing Firestone’s liability for alleged child labor law violations in Liberia, after the case was dismissed on Kiobel grounds. And last September the Ninth Circuit heard its second en banc appeal of a case involving allegations that the mining company Rio Tinto was engaged in atrocities in Papua New Guinea.

The Kiobel lawyers, led by Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison, argue that the Second Circuit’s outlier ruling in their case, coupled with the urgency of the issue of corporate ATS liability as demonstrated by the number of courts grappling with it, demands Supreme Court action. “Today corporations may be sued under the ATS for their complicity in egregious human rights violations in Miami or Atlanta, but not in New York or Hartford,” they wrote in the cert petition. “Review by this Court is necessary to eliminate the uncertainty created by this conflict for both corporations and victims of human rights violations.”

That seems like compelling logic, particularly because the Kiobel plaintiffs say the Second Circuit’s reasoning transforms “virtually every major ATS issue into a matter of subject matter jurisdiction,” representing a “radical overhaul” of precedent. But with so many other cases addressing corporate ATS liability already briefed and argued before appellate courts, the Supreme Court could just as well decide to wait and see how other circuit courts analyze the issue. It may turn out that the justices think the Exxon case or the Firestone case, for instance, is a better vehicle to review the question. (The Rio Tinto case has progressed the farthest, but because it involves a foreign corporation as well as foreign plaintiffs, it poses some additional complications.)

Consensus on corporate ATS liability has been as rare as aNational League win in the All-Star game. The D.C. Circuit panel’s Exxon ruling was 2-to-1. The Second Circuit split down the middle, 5-to-5, when it voted on whether to rehear Kiobel en banc. (Because there was a tie, rehearing was denied.) Eloquent opinions have been written on all sides of the issue, with courts finding yet more nuances in the one-sentence 1799 law and its subsequent interpretations. Royal Dutch Shell may argue that the Supreme Court should wait for the judicial reasoning to crystallize before taking on the issue.

Royal Dutch Shell, which is represented by Rowan Wilson of Cravath, Swaine & Moore, has until August 13 to submit its opposition to the plaintiffs’ cert petition.

(Reporting by Alison Frankel)

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