By LINCOLN CAPLAN, Published: March 3, 2012 , NYTIMES
Should foreigners be allowed to use American courts to sue foreign corporations for human rights atrocities committed abroad?
The Supreme Court heard arguments last week on this question in a case brought by Nigerian citizens against the Royal Dutch Petroleum Company and other firms, charging gross violations of human rights in Nigeria. Four conservative justices expressed skepticism about the federal courts having the reach to deal with such disputes.
But an arcane 1789 law, called the Alien Tort Statute, permits just such lawsuits to be heard in federal courts if brought against individual defendants. The same should hold true for corporations accused of such offenses abroad, provided they have contact with this country, say, by selling products here.
In a world where multinational corporations are primary actors, the need for a way to hold them accountable for extreme abuses is more urgent than ever. When corporations do business in America, they have to operate under American law. Providing a forum for victims seeking justice against corporate bad actors is appropriate to America’s history and role in the international community.
The aim of the statute — which allows suits for “any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States” — was to help enhance this role. The law was passed as part of the new nation’s efforts to show the world respect for the law of nations by opening its courts to foreign claimants. The statute lay dormant for 170 years, but the principle is just as important today.
It was not until 1980 that the law was unearthed and employed in a watershed case that led to a $10.4 million judgment against a former official of Paraguay (who was visiting the United States) for the torture and murder of a young man in Paraguay. Since then, federal courts have heard over a hundred cases brought by foreign nationals against foreign individuals, and since 1997, against corporations as well.
Human rights lawyers realized that suing only individuals was often inadequate because multinational firms were among those violating international law. Offenses growing out of companies’ operations (for example, the brutal use of forced labor) contributed to their profits, so it made sense to seek damages from them for ill-gotten gains.
It was not until 2004 that the Supreme Court took up a case applying this law. In a 6-to-3 ruling, it confirmed that the law allows foreigners to sue for violations of a limited category of universally accepted rights. It also held that those rights and violations should reflect the law when a case is brought.
In 1789, the violations concerned piracy, mistreatment of ambassadors and violations of safe passage. Today, federal courts have found that such violations include torture, genocide, slavery and other crimes against humanity.
The statute does not explicitly say who can be sued. But even in 1789, corporations could be sued for damages for their actions and those of their employees. Under American law, corporations are granted rights like the ability to shield their investors from liability, and in exchange, they are legally accountable for wrongdoing.
Four federal appeals courts have ruled since 2005 that corporations can be held liable under the Alien Tort Statute. Only the Second Circuit Court of Appeals, in Kiobel v. Royal Dutch Petroleum, the case now before the Supreme Court, has rejected that concept on grounds that international tribunals have not held corporations liable for human rights violations.
The Nigerian plaintiffs are seeking monetary damages for a brutal campaign in the mid-1990s by three oil companies and the military dictatorship in Nigeria to silence protesters against environmental damage caused by oil operations. Scores were allegedly killed. Many others, including the plaintiffs, said they were captured and beaten. The conduct alleged includes torture, crimes against humanity and executions.
Royal Dutch Petroleum argues that the Supreme Court must look to the law of nations on the question of corporate liability and that no such provision exists in international law. It also contends that finding liability could create international tension.
That stance is wrong on law and policy. International law defines the violations, but enforcement is up to each nation’s domestic law, and under American law, corporations have been subject to suits for centuries. Worries about international repercussions are also overblown. As the Supreme Court decided in 2004, the statute applies only to the most abhorrent conduct, and federal courts have carefully rejected suits for infringing on American foreign policy-making as well as for evidentiary reasons.
There is no good justification for a categorical rule against corporate liability. As the economist Joseph Stiglitz said in an amicus brief, these lawsuits can be an efficient way to enforce human rights in countries where court systems and other means of policing violations are ineffective. Potential civil liability gives corporations an incentive to improve their conduct. If a multinational company commits an offense like torture, the fact that it is a corporation and not an individual is immaterial in the pursuit of justic