Corporate Immunity Looks Likely: Supreme Court Seems Ready To Side With Shell In Human Rights Suit (Update)


WASHINGTON -- The Supreme Court on Tuesday morning appeared divided along party lines, with a conservative majority ready to hold that corporations cannot be held accountable in federal courts for international human rights violations.

The Court was hearing oral argument in Kiobel v. Royal Dutch Petroleum, which was brought under a founding-era law, commonly called the Alien Tort Statute, that allows foreign nationals to bring civil lawsuits in U.S. federal courts "for a tort only, committed in violation of the law of nations or a treaty of the United States." The 12 Nigerian plaintiffs contend that Shell Oil's parent company aided and abetted the Nigerian government in its torture and extrajudicial killing of environmental and human rights protesters resisting Shell's operations in Nigeria in the 1990s.

The Alien Tort Statute says nothing about what types of defendants -- corporate, individual, state -- may be sued. In the past year, the four appeals courts to take on the issue of corporate liability have divided 3-to-1 in favor of those bringing the lawsuits. But Tuesday's oral argument reinforced the relevancy of another aspect of all these decisions: their partisan nature. Save one defection from each side, every Democrat-appointed judge held for corporate liability, and every Republican appointee found for corporate immunity.

At the very start of the Supreme Court's argument, Justice Anthony Kennedy said that "the case turns in large part" on Royal Dutch Petroleum's argument in its brief that "international law does not recognize corporate liability." He then pulled a quote from Chevron's brief in support of its fellow multinational oil company, which said, "No other nation in the world permits its court to exercise universal civil jurisdiction over alleged extraterritorial human rights abuses to which the nation has no connection."

"I was trying to find the best authority you have to refute that proposition," Kennedy told the Nigerians' lawyer, Paul Hoffman.

Hoffman responded that the United Kingdom and the Netherlands have somewhat similar laws on their books. Problem is, those two countries submitted briefs opposing Hoffman's position in this case.

Chief Justice John Roberts and Justices Samuel Alito and Antonin Scalia also expressed hostility not only to the notion of corporate liability, but also to the Alien Tort Statute itself. This lawsuit, Alito noted, was brought by foreign plaintiffs against a foreign defendant for acts that took place in a foreign country. "What business does a case like that have in the courts of the United States?" he asked Hoffman.

Justice Ruth Bader Ginsburg tried to push back against Alito's line of questioning, noting that the Supreme Court has already allowed such cases to be brought under the Alien Tort Statute. "I thought what we were talking about today, the question was, is it only individual defendants or are corporate defendants also liable," said Ginsburg.

In questioning Deputy Solicitor General Edwin Kneedler, who was arguing in support of the Nigerians, Roberts said, "Your argument seems to be that all you need to do is find an event -- torture, piracy, whatever -- and then it's up to the domestic law whether or not particular entities can be sued." That analysis, which Roberts summed up in a disapproving tone, was the reasoning used by the majorities of three lower courts to find for corporate liability.

Justice Stephen Breyer at first expressed skepticism about creating a "United States Supreme Court of the World," but then pivoted toward a position in favor of finding corporate liability. Objecting to the categorical rule adopted by the U.S. Court of Appeals for the 2nd Circuit that corporations may never be sued, Breyer said, "I seem to think possibly of counterexamples."

"Pirates Inc.," Breyer offered for consideration, implicitly noting that the Alien Tort Statute was originally passed in 1789 in part to allow suits arising from acts of piracy.

Breyer drew out his hypothetical for attorney Kathleen Sullivan, representing Royal Dutch Petroleum. "Do you think in the 18th century if [victims of piracy] brought [suit against] Pirates Inc., and we get all their gold, and Blackbeard gets up and he says, 'Oh, it isn't me, it's the corporation' -- do you think that [courts] would have said then, ‘Oh, I see, it's a corporation. Goodbye, go home'?"

"Justice Breyer, yes, the corporation would not be liable," Sullivan answered.

Relying on the principle articulated by Justice Kennedy at the start of the argument -- the same one endorsed by the Republican appointees in the lower courts -- Sullivan said that the plaintiffs "failed to show anything in custom or practice" to prove corporate liability for human rights abuses is an accepted international legal norm.

That is because all the international conventions and treaties Sullivan cited "are written to prohibit certain acts, and they don't talk about the actors," said Justice Elena Kagan.

"It's as if somebody came and said, 'This norm of international law does not apply to Norwegians,'" Kagan hypothesized. "But of course it applies to Norwegians because it prevents everybody from committing a certain kind of act."

Sullivan responded by arguing that some international law treaties, such as those banning terrorist financing and bribery of public officials, explicitly refuse to limit defendants to real people, whereas the "human rights offenses here" -- torture, extrajudicial killing, crimes against humanity -- "arise from conventions that speak to individual liability."

That answer did not satisfy Kagan. "All United States law and mostly in other countries' law would hold the corporation liable for the individual's act," she said. "That’s a general principle of law."

The back-and-forth between Sullivan and Kagan, which highlighted the irreconcilable, results-oriented divide between the two sides' arguments, ended as a stalemate between two career contemporaries: Each served as dean of one of the country's best law schools -- Sullivan at Stanford, Kagan at Harvard.

In the end, however, Sullivan appeared to have the Court's five-justice majority of Republican appointees on her side, if the typically silent Justice Clarence Thomas sticks to his previously expressed narrow views on the Alien Tort Statute and general pro-business bent.

A decision in the case is expected by the end of June.

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