Arcane Law Brings Conflicts From Overseas to U.S. Courts (WSJ)
By NATHAN KOPPEL
Victims of human-rights abuses around the world increasingly are seeking justice American style -- by filing lawsuits against deep-pocketed defendants.
The Alien Tort Statute, a one-sentence law enacted in 1789 authorizing foreign nationals to file U.S. civil actions against those who violate "the law of nations," has been used often in recent years to sue major companies for alleged complicity in crimes overseas, including torture and murder. Defendants need only to have regular business contacts with the U.S. to be vulnerable to lawsuits.
The litigation has proven controversial. Some legal experts claim that opportunistic plaintiffs' lawyers have seized on the long-dormant law to enrich themselves. Knotty geopolitical issues, they say, are better left to Congress and the White House, not unelected federal judges. But human-rights lawyers counter that victims of abuses often can't obtain justice in foreign courts, making alien tort suits their only recourse. Both sides agree on one thing: Courts increasingly are willing to consider alien-tort suits and to force companies to answer for their behavior overseas.
"Think of a troubled spot in the world, and it likely has given rise to alien tort litigation," says Curtis Bradley, a Duke University School of Law professor.
In one of the most prominent recent cases, Royal Dutch Shell PLC paid $15.5 million in June to settle a lawsuit claiming it was complicit in the Nigerian government's execution of activists who had protested Shell's oil production in the country. Shell has denied wrongdoing.
The Alien Tort Statute was virtually a dead letter until 1980, when the Second U.S. Circuit Court of Appeals ruled that Paraguayan citizens who resided in the U.S. could sue a Paraguayan police official who allegedly had kidnapped and tortured a family member of the plaintiffs in their home country. A trial judge later awarded the plaintiffs $10 million in damages.
The Second Circuit ruling sparked a surge in alien tort suits, but it wasn't until the 1990s, lawyers say, that plaintiffs started targeting corporations, often under the theory that they aided foreign officials or third parties who committed abuses. In assessing liability, a key question can be whether companies assisted a foreign government that was known to violate human rights, says Joe Cyr, a New York lawyer who defends companies against alien tort claims. But the law is unclear, he adds, about what constitutes knowledge. "Is it enough to just read a newspaper or a blog that a particular sovereign is engaged in human-rights violations?" Mr. Cyr says. "Multinationals incur risks anytime they do business with anyone who has been accused of human-rights violations."
Most federal districts now allow suits against corporations for the same types of human-rights violations that can be brought against individuals -- torture, extrajudicial killings, slavery-like practices, war crimes, says Paul Hoffman, a Los Angeles attorney who specializes in filing alien tort suits.
Last month, a Los Angeles federal judge ruled that alien tort claims could be brought alleging that London-based Rio Tinto PLC engaged in mining operations on the island of Bougainville in Papua New Guinea that incited a 10-year civil war, during which thousands of civilians died. Rio Tinto denies the allegations.
And earlier this year, a New York federal judge allowed claims to move forward alleging that several major multinational companies, including General Motors Corp. and Ford Motor Co., aided and abetted human-rights violations by providing goods and services to South Africa's apartheid regime. Ford declined to comment. In a statement, GM said the company "opposed apartheid and became a proactive corporate leader in expressing this stand."
Thomas Niles, a former U.S. ambassador to Canada and Greece who is now the vice chairman of the United States Council for International Business, a pro-business group, says corporations are being used unfairly as a surrogate for foreign governments in these cases. "You can't sue the government of Nigeria or South Africa because of sovereign immunity, so who are you going to sue? Companies, and they are sued essentially for being" in countries where human-rights violations occur.
Some legal experts raise a broader concern that alien tort litigation can interfere with American foreign policy. "I regularly heard from legal advisers and ambassadors that they were outraged that our federal courts were judging conduct in their country," says John Bellinger III, the chief legal adviser to the U.S. Department of State from 2005 to early 2009.
But Congress has the authority to rein in alien-tort litigation and hasn't done so, casting doubt that the litigation impinges on diplomatic interests, human-rights lawyers counter. If anything, alien tort suits improve America's standing abroad, says Katherine Gallagher, an attorney with the Center for Constitutional Rights, a New York-based nonprofit that files alien tort suits.
The suits, she says, "give people in foreign countries comfort that U.S. corporations and officials will abide by international standards and not go to different corners of the globe and exploit the local populations."
Write to Nathan Koppel at email@example.com
Printed in The Wall Street Journal, page A11