Friday, September 17, 2010

Goodbye Alien Torts? Second Circuit Blows Hole in 1789 Law

LAW.COM  - Nathan Koppel

Companies in recent years have faced a rising threat from alien-tort suits, which often allege that a company has aided a foreign government in committing human-rights abuses overseas.

But Corporate America can breath a whole lot easier today, following a potentially landmark Second Circuit ruling that US courts have jurisdiction only over alien-tort suits against individuals, not companies.

Click here for a Bloomberg report on the ruling, which involved a suit against Royal Dutch Petroleum and Shell Transport alleging that they aided the Nigerian government in torturing and murdering Nigerian dissidents in the 1990s.

A 2-1 panel of the court dismissed the suit, brought by a group of Nigerians.

“The principle of individual liability for violations of international law has been limited to natural persons — not ‘juridical’ persons such as corporations — because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an ‘international crime’ has rested solely with the individual men and women who have perpetrated it,” Judge Jose Cabranes wrote on behalf of the majority.

Judge Pierre Leval concurred in the dismissal of the case, but expressed concern about the scope of the ruling. “The majority opinion deals a substantial blow to international law and its undertaking to protect fundamental human rights,” he 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 case is Kiobel v. Royal Dutch Petroleum, Docket Nos. 06-4800-cv, 06-4876-cv (2d. Cir. Sept. 17, 2010)

[NOTE: The 9th Circuit ruling in Bowoto (below) held that corps cannot be liable under the TVPA]