Kiobel v Shell: US Supreme Court on corporate accountability for foreign human rights abuses

18 April 2013 by Wessen Jazrawi

US Supreme Court : Kiobel et al v. Royal Dutch Petroleum Co et al – Read Judgment 

In a long-awaited judgment, the United States Supreme Court has decided unanimously that there was no jurisdiction for a US federal court to hear a claim by a group of Nigerians alleging that the respondents assisted the Nigerian government to kill, rape, beat and arrest individuals who protested against Shell’s environmental practices. 

The judgment has already attracted a lot of commentary, from those claiming it is undermines US leadership on human rights to those who argue it is sensible or a mixed bag.  The claimants, who resided in the United States, filed suit against the respondents (Dutch, British and Nigerian corporations) in federal court under the Alien Tort Statute (the “ATS”).

Opinion of the Court

The opinion of the Court (or majority judgment) was delivered by Chief Justice Roberts and joined by Scalia, Kennedy, Thomas and Alito.  The opinion focused on the fact that the presumption against extraterritoriality – namely that when a statute gives no clear indication of an extraterritorial application, it has none – applies to claims under the ATS and that there was nothing in the ATS to suggest that this presumption should be rebutted.  Substantial case law was quoted to support this presumption, which served to protect against unintended clashes between the laws of the US and those of other nations which could result in international discord.

Much importance was attached to the fact that when Congress enacted the ATS, only three principal offenses against the law of nations had been identified: violation of safe conduct, infringement of the rights of ambassadors and piracy.

With respect to the first two, it was noted that they have no obvious extraterritorial application.  With respect to the third, Chief Justice Roberts took  great pains to distinguish it, stating that piracy took place on the high seas, beyond the territorial jurisdiction of the United States or of any other jurisdiction, and that it did not therefore raise the same issues or concerns. Pirates were “fair game” wherever found, by any nation.  It referred to Doe v Exxon Mobile Corp. 654 F. 3d 11 and to the objections listed therein to extraterritorial applications of the ATS by a number of countries, including the UK.

He also expressed concern that allowing this application would imply that other countries could haul American citizens into their courts for violations of the laws of nations.  The opinion concluded by noting that all the relevant conduct took place outside the US, and that even where the claims touched and concerned the territory of the US, they must do so with “sufficient force to displace the presumption against extraterritorial application”.  Corporations were often present in many countries and it would be overreaching to suggest that mere corporate presence sufficed. 

Justice Kennedy provided a concurring opinion, as did Justices Alito and Thomas.

Partly dissenting opinion 

Justice Breyer provided the other opinion, to which Ginsburg, Sotomayor and Kagan joined, in which he concurred with the judgment of the Court but dissented with its reasoning.  In particular, he took issue with the presumption against extraterritoriality that formed the cornerstone of the majority opinion.  He stated that he would find jurisdiction under ATS where:

1. the alleged tort occurred on American soil,
2. the defendant was an American national, or
3. the defendant’s conduct substantially and adversely affected an important American national interest, which included a distinct interest in preventing the US from becoming a safe harbour for a torturer or other common enemy of mankind.

He returned to the Supreme Court’s judgment in Sosa v. Alvarez-Machain 542 U.S. 2004 where the Court had held that ATS provided today’s federal courts with the power to fashion a cause of action for a modest number of claims, essentially those that rested on a “norm of international character accepted by the civilized world and defined with a specificity comparable to the features of those three ’18th-century paradigms'” listed above.   He asked, Who are today’s pirates?, and went on to answer his own question that they were torturers and perpetrators of genocide.

He also critiqued the reasoning of the majority judgment, noting in particular that the ATS had been created with “foreign matters in mind” and that the attempt to dismiss piracy was fundamentally flawed.  He pointed out that piracy did not occur on the water but on ships, which would fall within the jurisdiction of the nation whose flag they flew.  Permitting the US courts to take jurisdiction over such matters would therefore raise the same direct foreign policy consequences.  Crucially, he stated that Congress must have intended the statute’s jurisdictional reach to match its underlying substantive grasp.

However, he ultimately did not find jurisdiction.  He noted that the defendants were two foreign corporations with very limited links to the US: they were traded on the NYSE and had an office in New York.  The plaintiffs were not American nationals, and the alleged conduct took place abroad.  He also considered it relevant that the plaintiffs were not alleging that the defendants had directly engaged in torture or genocide, but that they had helped others to do so.

Comment

Whilst this is discouraging for those with an interest in corporate accountability in the United States, United Kingdom or elsewhere – all of whom have been eagerly awaiting this judgment – much like in the Pandora legend, there is a ray of hope.  The opinion of Justices Breyer, Ginsburg, Sotomayor and Kagan suggests that the door may not be completely closed and that there may yet be scope to use the ATS to protect victims of human rights abuses.

This tug-of-war between corporations and victims of human rights violations abroad is one which is also playing out here in the UK  – for example,  Chandler v Cape plc [2012] EWCA Civ 525 (25 April 2012) involved a claim for asbestiosis contracted as a consequence of poor working conditions in South Africa and where the Court permitted a case to be brought against the parent company in the UK.  Similarly, with respect to the claims against Anglo American for silicosis suffered by miners in South Africa, which claimants are also attempting to bring in the UK: Vava & Ors v Anglo American South Africa Ltd [2012] EWHC 1969 (QB) (16 July 2012).  It remains to be seen whether the Court will find jurisdiction in this case, and other cases involving similar causes of actions are awaiting the outcome, including that of Sindla Sigadla and Ors v. Anglo American South Africa Ltd and Ors.

In addition, whilst it does not relate to corporate accountability, it should be noted that the European Court of Human Rights did find in Al-Skeini that there may be instances when the European Convention on Human Rights may apply outside the its member states.  This is part and parcel of what human rights lawyers are hoping – despite Kiobel – is a trend, that courts are starting to recognise that, in an increasingly global world, rejecting any extraterritorial application of such laws means that defendants are effectively being given a free pass.  If nothing else, it is to be hoped that Kiobel will prompt movement on the long-touted multi-jurisdictional treaty governing the actions of multinational corporations.

In summary, whilst Kiobel has been a setback for those seeking stronger accountability of multinationals operating abroad, the decision does not mean that corporations are immune from liability, and ways will continue to be sought to that end.

Wessen Jazrawi is an Associate in the Human Rights and Environmental Practice at Hausfeld & Co LLP

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