WASHINGTON: The Supreme Court’s conservative justices sounded skeptical Tuesday about allowing multinational corporations to be sued in American courts over claims that they were complicit in human rights abuses in foreign countries.
The court heard arguments over whether a 223-year-old law gives foreign victims of abuses the right to use U.S. courts to try to prove that companies played a role in atrocities and should pay damages.
Justice Anthony Kennedy, whose vote often decides closely contested cases, appeared ready to join his four fellow Republican appointees in ruling out lawsuits against corporations under the Alien Tort Statute. The issue is at the heart of a lawsuit by 12 Nigerians who want to hold oil giant Royal Dutch Shell liable for aiding the Nigerian government’s deadly crackdown on protests in the Niger Delta in the 1990s.
In the second case argued Tuesday, the justices indicated they would rule that a 20-year-old law that allows victims of torture to pursue civil lawsuits against those responsible can only be invoked against individuals, not organizations or corporations.
The dispute over the reach of the Alien Tort Statute has drawn intense interest from businesses, human rights groups and even U.S. allies that oppose a broad interpretation of the law. The Obama administration is siding with the Nigerian plaintiffs.
The Alien Tort Statute went unused for most of American history until rights lawyers dusted it off in the late 1970s. Lawsuits have been brought against individuals who allegedly took part in abuses and, more recently, against companies that do business in places where abuses occur and in the U.S.
Arguments over who may be sued under the law turn in part on how other countries and international courts treat human rights violations. Business interests say that corporations can’t be sued in most of the rest of the world.
“But, counsel, for me, the case turns in large part on this,” Kennedy said, referring to Shell’s legal brief. “It says, ‘International law does not recognize corporate responsibility for the alleged offenses here.’ ”
He also worried that a broad ruling in favor of allowing the lawsuits could open up American companies to lawsuits in foreign countries.
Kennedy spoke of an American company accused of human trafficking in the U.S. “In your view, the company can be sued in every country in the world,” he said to Deputy Solicitor General Edwin Kneedler, representing the U.S.
Kennedy’s point underscored another lurking issue that has the potential to wipe out almost all lawsuits under the 1789 law. It is a minor part of Shell’s case, but other companies supporting Shell said the law never was intended to apply to conduct by a foreign government against its own citizens within its own borders.
A couple of briefs supporting the Nigerians mentioned Kennedy’s majority in the Supreme Court’s 5-4 ruling in the Citizens United case in 2010 that said corporations have the same constitutional rights as people to speak and spend freely to influence elections.
The same five justices could rule in favor of corporations in the Shell case — essentially that they are different from individuals under this law. Unlike Citizens United, this case turns on the meaning of a statute, not the Constitution, and Congress could always change the law specifically to bring corporations under it.