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The Alien Tort Statute and Corporate Liability: Looking Ahead to the Supreme Court Decision in Kiobel

By: Maria Flo­ren­cia Lib­rizzi[*]

The Supreme Court will soon decide the fate of lit­i­ga­tion seek­ing to hold U.S. cor­po­ra­tions account­able under the Alien Tort Statute (ATS) for aid­ing and abet­ting human rights abus­es over­seas. In Sep­tem­ber 2010, the Sec­ond Cir­cuit held in Kio­bel v. Roy­al Dutch Petro­le­um that the statute did not apply to cor­po­ra­tions.[1]  Since then, sev­er­al oth­er cir­cuits have ruled oth­er­wise, lead­ing the Supreme Court to grant cer­tio­rari in Kio­bel in Octo­ber 2011. Oral argu­ment is sched­uled for Tues­day, Feb­ru­ary 28.[2]

The out­come of this case will be pro­found­ly impor­tant. If the Court affirms the Sec­ond Circuit’s major­i­ty opin­ion, alien vic­tims will no longer be able to sue cor­po­ra­tions under the ATS. In many cas­es cor­po­ra­tions will be free to prof­it from over­seas human rights vio­la­tions, while safe­guard­ing their assets against com­pen­sa­tion claims.[3]

Look­ing ahead to the Court’s deci­sion, I sum­ma­rize below the evolv­ing jurispru­dence of the ATS, includ­ing the cir­cuit split over the statute’s applic­a­bil­i­ty to cor­po­ra­tions and the mens rea stan­dard for aid­ing and abet­ting lia­bil­i­ty. If the Court lim­its itself to the Ques­tions Pre­sent­ed in the cer­tio­rari peti­tion, it will decide only whether the ATS applies to cor­po­ra­tions. How­ev­er, the Court may also resolve oth­er points of con­tention among the cir­cuits, includ­ing the mens rea stan­dard for aid­ing and abet­ting lia­bil­i­ty. After review­ing the case law, I con­clude with sev­er­al arguments—instrumental, descrip­tive, and policy—in favor of rec­og­niz­ing cor­po­rate lia­bil­i­ty under the ATS.

The ATS gives fed­er­al dis­trict courts juris­dic­tion over civ­il actions filed by aliens for torts com­mit­ted in vio­la­tion of inter­na­tion­al law.[4] Large­ly unused for almost two cen­turies after its enact­ment in 1789, over the last 30 years the ATS has spurred a pro­lif­er­a­tion of law­suits against U.S. cor­po­ra­tions for alleged­ly aid­ing or abet­ting for­eign gov­ern­ments in the com­mis­sion of human rights violations.

In these suits, U.S. courts have cir­cum­scribed the nature of inter­na­tion­al norms that fall with­in the juris­dic­tion­al grant of the ATS. Accord­ing to Filar­ti­ga v. Peña-Irala, the ATS is to be inter­pret­ed as open­ing “the fed­er­al courts for adju­di­ca­tion of the rights … rec­og­nized by … well-estab­lished, uni­ver­sal­ly rec­og­nized norms of inter­na­tion­al law.”[5]  The Supreme Court first decid­ed an ATS case in 2004, hold­ing that “courts should require any claim based on the present-day law of nations to rest on a norm of inter­na­tion­al char­ac­ter accept­ed by the civ­i­lized world and defined with a speci­fici­ty com­pa­ra­ble to the fea­tures of the 18th-cen­tu­ry par­a­digms we have rec­og­nized.”[6] The Supreme Court’s deci­sion in Sosa made clear that fed­er­al courts have author­i­ty to rec­og­nize claims based on cur­rent inter­pre­ta­tion of cus­tom­ary inter­na­tion­al law, but not claims based on less def­i­nite inter­na­tion­al norms.

The applic­a­bil­i­ty of the ATS to cor­po­ra­tions has been one of the major top­ics of debate with­in the courts. While ana­lyz­ing in Sosa whether an inter­na­tion­al norm was suf­fi­cient­ly def­i­nite to sup­port a cause of action, the Supreme Court not­ed that “a relat­ed con­sid­er­a­tion is whether inter­na­tion­al law extends the scope of lia­bil­i­ty for a vio­la­tion of a giv­en norm to … a pri­vate actor such as a cor­po­ra­tion or indi­vid­ual.”[7] The Supreme Court ulti­mate­ly left open the ques­tion of cor­po­rate lia­bil­i­ty, which allowed a cir­cuit split to develop.

Sev­er­al cir­cuits have found that cor­po­ra­tions can be liable under the ATS.[8] In Flo­mo v. Fire­stone, for instance, a group of Liber­ian chil­dren alleged that the defen­dant-cor­po­ra­tion and its offi­cers had uti­lized “haz­ardous child labor” in vio­la­tion of cus­tom­ary inter­na­tion­al law. The Sev­enth Cir­cuit held in that case that cor­po­rate lia­bil­i­ty was pos­si­ble under the ATS.[9] Sim­i­lar­ly, the Eleventh Cir­cuit stat­ed in Romero that “[t]he text of the Alien Tort Statute pro­vides no express excep­tion for cor­po­ra­tions,… and the law of this Cir­cuit is that this statute grants juris­dic­tion from com­plaints of tor­ture against cor­po­rate defen­dants.”[10] In Doe, the D.C. Cir­cuit sim­i­lar­ly held that cor­po­ra­tions are not immune from lia­bil­i­ty under ATS, not­ing that “cor­po­rate immu­ni­ty also would be incon­sis­tent with the ATS because by 1789 cor­po­rate lia­bil­i­ty was an accept­ed prin­ci­ple of tort law in the Unit­ed States.”[11]

In con­trast, the Sec­ond Cir­cuit held in Kio­bel that cor­po­rate defen­dants can­not be sued under the ATS, as they are not sub­ject to lia­bil­i­ty under cus­tom­ary inter­na­tion­al law.[12] In that case, Niger­ian res­i­dents claimed that the defendants—Dutch, British, and Niger­ian cor­po­ra­tions engaged in petro­le­um explo­ration and production—had aid­ed and abet­ted the Niger­ian gov­ern­ment in com­mit­ting atroc­i­ties in vio­la­tion of inter­na­tion­al human rights law. Specif­i­cal­ly, the plain­tiffs alleged the aid­ing and abet­ting of (1) extra­ju­di­cial killing; (2) crimes against human­i­ty; (3) tor­ture or cru­el, inhu­man, and degrad­ing treat­ment; (4) arbi­trary arrest and deten­tion; (5) vio­la­tions of the rights to life, lib­er­ty, secu­ri­ty and asso­ci­a­tion; (6) forced exile; and (7) prop­er­ty destruc­tion.[13] The major­i­ty opin­ion rea­soned that “the poten­tial for civ­il dam­ages under the ATS aris­es only if cus­tom­ary inter­na­tion­al law rec­og­nizes that a par­tic­u­lar class of defen­dant is a sub­ject of inter­na­tion­al law,”[14] and con­clud­ed that “cor­po­rate lia­bil­i­ty … is sim­ply not accept­ed by the civ­i­lized world and defined with a speci­fici­ty com­pa­ra­ble to the fea­tures of the 18th cen­tu­ry par­a­digms.”[15]

The cir­cuit courts have also applied dif­fer­ent stan­dards regard­ing aid­ing and abet­ting lia­bil­i­ty under the ATS. In par­tic­u­lar, there has been dis­agree­ment with respect to the mens rea required for aid­ing and abet­ting lia­bil­i­ty. In Khu­lumani, three groups of plain­tiffs sued under the ATS and the Tor­ture Vic­tims Pro­tec­tion Act (TVPA) on behalf of indi­vid­u­als alleg­ing injury aris­ing from cor­po­rate par­tic­i­pa­tion in South Africa’s Apartheid poli­cies. The Sec­ond Cir­cuit held in that case that “a defen­dant may be held liable under inter­na­tion­al law for aid­ing and abet­ting the vio­la­tion of that law by anoth­er when the defen­dant (1) pro­vides prac­ti­cal assis­tance to the prin­ci­pal which has a sub­stan­tial effect on the per­pe­tra­tion of the crime, and (2) does so with the pur­pose of facil­i­tat­ing the com­mis­sion of that crime.”[16] The Court also looked to the last six­ty years of prac­tice in inter­na­tion­al law to find that “aid­ing and abet­ting lia­bil­i­ty, so defined, is suf­fi­cient­ly ‘well-estab­lished[] [and] uni­ver­sal­ly rec­og­nized’ to be con­sid­ered cus­tom­ary inter­na­tion­al law” for the pur­pose of the ATS.[17]

In Pres­by­ter­ian Church of Sudan v. Tal­is­man Ener­gy, Inc., a group of Sudanese plain­tiffs sued a Cana­di­an cor­po­ra­tion under the ATS, alleg­ing that the cor­po­ra­tion had aid­ed and abet­ted or con­spired with the Gov­ern­ment of Sudan to com­mit human rights abus­es in con­nec­tion with the devel­op­ment of oil con­ces­sions by the corporation’s affil­i­ates.[18] The Court recalled that “Sosa and our prece­dents send us to inter­na­tion­al law to find the stan­dard for acces­so­r­i­al lia­bil­i­ty.” Apply­ing inter­na­tion­al law, the Court held that “the mens rea stan­dard for aid­ing and abet­ting lia­bil­i­ty in ATS actions is pur­pose rather than knowl­edge alone.”[19] In addi­tion, the Court stat­ed that even when there is suf­fi­cient inter­na­tion­al con­sen­sus about lia­bil­i­ty for pur­pose­ful­ly aid­ing and abet­ting a vio­la­tion of inter­na­tion­al law, that con­sen­sus does not nec­es­sar­i­ly extend to lia­bil­i­ty for know­ing­ly aid­ing and abet­ting the vio­la­tion.[20] In the instant case, there was evi­dence that the defen­dant had par­tial­ly financed road-build­ing and oth­er infra­struc­ture with knowl­edge of the government’s human rights abus­es, but there was no evi­dence that those projects were done with unlaw­ful pur­pose. The Court ulti­mate­ly held that with­out proof that the cor­po­ra­tion pro­vid­ed sub­stan­tial assis­tance to the Gov­ern­ment of Sudan with the pur­pose of aid­ing the government’s unlaw­ful con­duct, the cor­po­rate defen­dant could not be held sec­on­dar­i­ly liable under the ATS.[21]

The D.C. Cir­cuit, how­ev­er, decid­ed in Doe that aid­ing and abet­ting lia­bil­i­ty was avail­able under the ATS as it “involves a norm estab­lished by cus­tom­ary inter­na­tion­al law and that the mens rea and actus reus require­ments are those estab­lished by the ICTY, the ICTR, and the Nurem­berg tri­bunals, whose opin­ions con­sti­tute expres­sions of cus­tom­ary inter­na­tion­al law.”[22] In that case, the Court found that the applic­a­ble mens rea stan­dard was actu­al “knowl­edge.”[23]

In Flo­mo, the Sev­enth Cir­cuit stat­ed that its con­cern was not with cor­po­rate lia­bil­i­ty per se, but rather with “the scope of that lia­bil­i­ty.”[24] The Court estab­lished that cor­po­rate lia­bil­i­ty in these cas­es has to be lim­it­ed to vio­la­tions that are “direct­ed, encour­aged, or con­doned” at the cor­po­rate defendant’s deci­sion-mak­ing lev­el.[25]

The Fourth Cir­cuit, in a recent case informed by the analy­sis in Tal­is­man, adopt­ed the spe­cif­ic intent mens rea stan­dard for acces­so­r­i­al lia­bil­i­ty.[26] The Court reject­ed the knowl­edge stan­dard applied in Doe, not­ing that the D.C. Cir­cuit had ground­ed its deci­sion on ICTY and ICTR prac­tice, rather than on the Rome Statute. Thus, the Court fol­lowed Tal­is­man’s stan­dard, recall­ing Sosa’s com­mand that courts must lim­it ATS lia­bil­i­ty to vio­la­tions of inter­na­tion­al law with def­i­nite con­tent and accep­tance among civ­i­lized nations.[27]

There are many nor­ma­tive rea­sons for rec­og­niz­ing cor­po­rate lia­bil­i­ty under the ATS. For instance, accord­ing to the major­i­ty in Kio­bel, in order to estab­lish lia­bil­i­ty under the ATS, the court must find not only a sub­stan­tive vio­la­tion of inter­na­tion­al law, but also a norm under cus­tom­ary inter­na­tion­al law that per­mits lia­bil­i­ty for the rel­e­vant type of actor.[28] To deter­mine whether civ­il lia­bil­i­ty extends to cor­po­ra­tions under inter­na­tion­al law, the major­i­ty looked to the Inter­na­tion­al Mil­i­tary Tri­bunal (IMT) at Nurem­berg, which held only indi­vid­u­als liable (in crim­i­nal pro­ceed­ings).[29] It has been not­ed, how­ev­er, that “if the majority’s major premise were true, indi­vid­ual lia­bil­i­ty at Nurem­berg would have been con­trary to inter­na­tion­al law because there was no opin­ion juris for hold­ing indi­vid­u­als liable for vio­la­tions of the law of nations at the time of the tri­bunal.”[30] As it stands, the out­come at Nurem­berg demon­strates that there is no need for an actor-type norm to hold the defen­dant liable.[31] More­over, as Judge Lev­al point­ed out in his con­cur­rence in the judg­ment, this issue is high­ly relat­ed to the con­fu­sion between crim­i­nal and civ­il lia­bil­i­ty. The IMT sought to try indi­vid­u­als pre­cise­ly because crim­i­nal lia­bil­i­ty did not attach to cor­po­ra­tions, where­as civ­il lia­bil­i­ty did.[32]

Anoth­er argu­ment that has been raised for cor­po­rate lia­bil­i­ty is that cur­rent Amer­i­can law, as well as the law in many oth­er coun­tries, rec­og­nizes the per­son­hood of cor­po­ra­tions.[33] In oth­er words, cor­po­ra­tions have many of the same rights and oblig­a­tions that a nat­ur­al per­son has. It seems plau­si­ble, there­fore, that cor­po­ra­tions should be amenable to suit under the ATS. This con­clu­sion is con­sis­tent with Cit­i­zens Unit­ed v. Fed­er­al Elec­tion Com­mis­sion, in which the Supreme Court decid­ed that the “gov­ern­ment may not, under the First Amend­ment sup­press polit­i­cal speech on the basis of the speaker’s cor­po­rate iden­ti­ty.”[34] By anal­o­gy, it is rea­son­able to con­clude that cor­po­ra­tions should be held liable when aid­ing and abet­ting torts. In this con­text, a rul­ing dimin­ish­ing cor­po­rate respon­si­bil­i­ty for human rights vio­la­tions would be in ten­sion with the recent rul­ing pro­tect­ing cor­po­rate rights in the frame­work of personhood.

Rec­og­niz­ing cor­po­rate lia­bil­i­ty also com­ports with the Unit­ed Nations’ Pro­tect, Respect, and Rem­e­dy Frame­work for Busi­ness and Human Rights. In his report to the U.N. Human Rights Coun­cil, Spe­cial Rep­re­sen­ta­tive John Rug­gie laid out the fol­low­ing core prin­ci­ples of the Frame­work: (1) the state’s duty to pro­tect against human rights abus­es; (2) the cor­po­rate respon­si­bil­i­ty to respect human rights; and (3) the need for effec­tive access to reme­dies.[35] Ruggie’s report rec­og­nized that the inter­na­tion­al com­mu­ni­ty was still in the very ear­ly stages of pro­vid­ing more effec­tive pro­tec­tion to indi­vid­u­als and com­mu­ni­ties against human rights abus­es com­mit­ted by cor­po­ra­tions.  To sup­port this effort, the report intro­duced a prin­ci­ples-based con­cep­tu­al and pol­i­cy frame­work.  It acknowl­edged that busi­ness­es were a major source of invest­ment and job cre­ation, and that they were capa­ble of gen­er­at­ing eco­nom­ic growth and con­tribut­ing to the real­iza­tion of a wide range of human rights. At the same time, the report also not­ed that his­to­ry has shown “that mar­kets pose the great­est risks—to soci­ety and busi­ness itself—when their scope and pow­er far exceed the reach of the insti­tu­tion­al under­pin­nings that allow them to func­tion smooth­ly and ensure their polit­i­cal sus­tain­abil­i­ty.”[36] In that sense, the report frames insuf­fi­cient cor­po­rate respon­si­bil­i­ty for human rights abus­es as a gov­er­nance gap cre­at­ed by globalization—in oth­er words, a gap between the pow­er of eco­nom­ic forces and the capac­i­ty of soci­eties to deal with their neg­a­tive con­se­quences. “These gov­er­nance gaps pro­vide the per­mis­sive envi­ron­ment for wrong­ful acts by com­pa­nies of all kinds with­out ade­quate sanc­tion­ing or repa­ra­tion.”[37] Apply­ing the ATS to cor­po­ra­tions could serve to nar­row that gap by pro­vid­ing repa­ra­tions to the vic­tims of human rights vio­la­tions aid­ed and abet­ted by corporations.

Aside from the nor­ma­tive rea­sons dis­cussed above for allow­ing cor­po­rate lia­bil­i­ty under the ATS, there are instru­men­tal or descrip­tive rea­sons for such a propo­si­tion. From a free mar­ket per­spec­tive, for instance, there should be an effort to pro­tect cor­po­ra­tions that respect human rights, as they may be at an eco­nom­ic dis­ad­van­tage when they com­pete with oth­er com­pa­nies that prof­it from human rights vio­la­tions. There are already some ini­tia­tives in this respect, like the Cal­i­for­nia Trans­paren­cy in Sup­ply Chains Act of 2010, which requires cor­po­ra­tions to inform con­sumers whether the goods they pur­chase were made using slav­ery or human traf­fick­ing. As a mat­ter of eco­nom­ic analy­sis, the pos­si­bil­i­ty of being held liable under the ATS would require cor­po­ra­tions to inter­nal­ize the social cost of using forced or child labor, which would in some cas­es deter them from such heinous prac­tices. Addi­tion­al­ly, cor­po­ra­tions that respect human rights would have one more incen­tive to keep doing so.

It remains to be seen whether any of these con­sid­er­a­tions will bear upon the Supreme Court’s analy­sis in Kio­bel. Regard­less, the Court’s deci­sion (expect­ed in June 2012) will like­ly deter­mine whether U.S. courts will remain open to vic­tims of over­seas human rights vio­la­tions aid­ed and abet­ted by Amer­i­can cor­po­ra­tions. At stake is a promis­ing avenue for glob­al human rights enforcement.


* New York Uni­ver­si­ty School of Law, L.L.M. Can­di­date, 2012

1 See 621 F.3d 111, 118–20 (2d Cir. 2010).

2 See Supreme Court Dock­et (Case 10–1491), http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/10–1491.htm.

3 See Matthew E. Dan­forth, Note, Cor­po­rate Civ­il Lia­bil­i­ty Under the Alien Tort Statute: Explor­ing Its Pos­si­bil­i­ty and Juris­dic­tion­al Lim­i­ta­tions, 44 Cor­nell Int’l L.J. 659, 661 (2011).

4 28 U.S.C. § 1350.

5 630 F.2d 876, 887–88 (2d Cir. 1980).

6 Sosa v. Alvarez-Machain, 542 U.S. 692, 725 (2004).

7 Id. at 732 n.20.

8 See Flo­mo v. Fire­stone Nat­ur­al Rub­ber Co., 643 F.3d 1013, 1017–21 (7th Cir. 2011); Doe VIII v. Exxon Mobil Corp., 654 F.3d 11, 39–57 (D.C. Cir. 2011); Sarei v. Rio Tin­to, 550 F.3d 822, 831 (9th Cir. 2008); Romero v. Drum­mond Co., 552 F.3d 1303, 1315 (11th Cir. 2008).

9 Flo­mo, 643 F.3d at 1017–21 (7th Cir. 2011).

10 Romero, 552 F. 3d at 1315 (11th Cir. 2008).

11 654 F.3d at 47.

12 621 F.3d at 118–20.

13 Id. at 123.

14 Id. at 148.

15 Id. at 149.

16 Khu­lumani v. Bar­clay Nat’l Bank Ltd., 504 F3d. 254, 277 (2d Cir. 2007) (empha­sis added).

17 Id.

18 582 F.3d 244 (2d Cir. 2009).

19 Id. at 259.

20 Id.

21 Id. at 260–68.

22 654 F.3d at 14–19.

23 Id.

24 See 643 F.3d at 1020.

25 Id. at 1020–21.

26 See Aziz v. Alco­lac, 658 F.3d 388 (4th Cir. 2011).

27 Id. at 400–01.

28 See Kio­bel, 621 F.3d at 130.

29 See id. at 132–35.

30 Dan­forth, supra note 3, at 671.

31 See id.

32 See Kio­bel, 621 F.3d at 168 (Lev­al, J., con­cur­ring in judgment).

33 See, e.g., José E. Alvarez, Are Cor­po­ra­tions “Sub­jects” of Inter­na­tion­al Law? (N.Y. Univ. Pub. Law & Legal The­o­ry Work­ing Papers, Paper No. 238, 2010), avail­able at http://lsr.nellco.org/nyu_plltwp/238.

34 130 S. Ct. 876, 880 (2010).

35 See U.N. Human Rights Coun­cil, Pro­tect, Respect, and Rem­e­dy: A Frame­work for Busi­ness and Human Rights: Report of the Spe­cial Rep­re­sen­ta­tive of the Sec­re­tary-Gen­er­al on the Issue of Human Rights and Transna­tion­al Cor­po­ra­tions and Oth­er Busi­ness Enter­pris­es, John Rug­gie, ¶¶ 17–26, U.N. Doc. A/HRC/8/5 (Apr. 7, 2008), avail­able at http://daccess-dds-ny.un.org/doc/UNDOC/GEN/G08/128/61/PDF/G0812861.pdf. See also Sarah Altschuller, Amy Lehr & Andrew Orsmond, Cor­po­rate Social Respon­si­bil­i­ty, Inter­na­tion­al Legal Devel­op­ment in Review: 2010, 45 Int’l Lawyer 179, 179 (2011).

36 See U.N. Doc. A/HRC/8/5 ¶ 2.

37 Id. ¶ 3.

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