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So Sue Me: Kiobel v. Royal Dutch Shell and the Implications of Reparations

In Ben Kurland on March 2, 2012 at 4:36 pm

There is a long standing debate in human rights law as to the effectiveness of enforcement mechanisms. As many point out, international regimes often have very few means at their disposal to back up the law and actually get the bad guys. Effectiveness itself can be considered a loaded term academically because it can contain several notions of what it means to be effective. It depends on whether your goal is punishing offenders, truth and reconsolidation, or the restructuring of a broken system.

There is a significant avenue of effectiveness that is undergoing serious development: reparations. This means the ability for human rights victims to actually receive compensation of damages for their loses. For example, within the International Criminal Court’s (ICC) founding document, the Rome Statute, article 75 states, “The Court shall establish principles relating to reparations to, or in respect of, victims, including restitution, compensation and rehabilitation.” This manifested itself in the Trust Fund for Victims which aims to bring reparations and general assistance to victims of crimes under the ICC’s jurisdiction.

While Human Rights law is often seen as belonging to the realm of international institutions, like the ICC, there is an interesting parallel under development in domestic courts and specifically the United States. Last Tuesday, the United States Supreme Court heard the case Kiobel v. Royal Dutch Shell. Kiobel is Esther Kiobel, the wife of one of the “Ogoni Nine” who were executed by hanging in 1995 along with Nigerian environmental and indigenous rights activist Ken Saro-Wiwa. She is suing Royal Dutch Shell, on behalf of a group of similar Nigerian nationals, alleging that the company aided and abetted the Nigerian government in the torture and extrajudicial killing of their relatives. This case has intense implications for U.S. domestic human rights law and involves serious questions about the development of human rights law in general.

The legal question of significance in this case is whether corporations are liable for torts committed in the violation of international law. This is a packed question so I will break it down.

At the crux of the argument is the Alien Tort Statue (ATS) (28 U.S.C. § 1350). Adopted in 1789, it has perplexed legal scholars and judges since for the mere fact that its sweeping impactions are only matched by its ambiguity. It is one line long and reads, “The district courts shall have original jurisdiction of 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.”  There are several interesting pieces to this minute statute. Under its auspicious, aliens (non-U.S. citizens not extra-terrestrials) are allowed to file civil suits in the U.S. for violations of the “law of nations”. The statute neither defines who can be sued nor does it elaborate on what counts as a “violation of the law of nations”.

Under this statute in 1980, the Court of Appeals for the 2nd Circuit decided in Filártiga v. Peña-Irala that a national of Paraguay could sue another national of Paraguay for an act of torture committed in Paraguay in U.S. civil court. Filártiga was the family of seventeen-year-old Joelito Filártiga who sued Américo Norberto Peña-Irala, the then Inspector General of Police in Asunción, for Joelito’s kidnap, torture, and murder in 1976. The court found that it had subject matter jurisdiction (i.e. the right to hear the case) because, “deliberate torture perpetrated under color of official authority violates universally accepted norms of the international law of human rights, regardless of the nationality of the parties.” [Filártiga v. Peña-Irala, 630 F.2d 876 (2d Cir. 1980)]

This was a case between individuals, however. No international or domestic court has found that a corporation can be held accountable for human rights violations. Individuals within corporations can be found liable, but not the corporations themselves. As even the Nuremburg judgment states, “Crimes against international law are committed by men, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced.” The majority opinion of the Court of Appeals for the 2nd Circuit which originally dismissed Kiobel’s suit even cited this line as a reason why they could find that, “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.”

Where is the catch? As many will remember from the public outcry, the Supreme Court recently found in the Citizens United v. Federal Election Commission (No. 08-205) that corporations are individuals enough to receive the protection of the First Amendment when it comes to campaign financing. Now the question at hand seems to be: if corporations are individual enough to have the protection of free speech, are they individual enough to be sued for human rights violations? If so, they will then be liable, under the ATS, for civil litigation by aliens for crimes committed abroad.

The reason this is so important for international law as a whole is because U.S. Courts are effective and do have the means to enforce their decisions where international courts fall short. For example, the Court of Appeals for the 9th Circuit found that the estate of ex-Filipino dictator Ferdinand Marcos was liable for acts of torture, summary execution, and disappearances that were committed by his order or with his knowledge in Hilao v. Estate of Marcos (No. 95-16779). Why is this case especially important? The victims in the case actually got checks in the mail. So, if the Supreme Court finds in favor of Kiobel it would significantly expose large corporations to civil litigation and most of all the recovery of damages.

The debate goes both ways. Those arguing that corporations should be liable emphasize that it is important that these companies be held responsible for their actions. As Professor Oona A. Hathaway of Yale University points out, “there is usually no recourse available in the country where the abuses took place, often because the government participated.” As Susan Farbstein and Tyler Giannini of Harvard Law School claim, “In the defendant’s view, even a corporation that decided to establish a torture center to assist a dictatorship, or began trading slaves for profit, could not be held liable.” For proponents, human rights abuses are not isolated to individuals but often corporations either cooperate or commit violations themselves. It is important than in the interest of stopping such violations and recovering damages that there is an effective court mechanism to litigate such abuses.

On the other hand some, in the words of the Cato Institute’s Ilya Shapiro, argue, “Congress never gave U.S. courts the power to entertain lawsuits alleging corporate malfeasance involving foreign actors abroad.” The Constitution gives Congress the power to determine the extent of the Court’s jurisdiction. Allowing the Court to expand its own jurisdiction, according to Shapiro, would amount to a “democracy gap” which would be particularly problematic in such cases because, “foreign affairs…are appropriately the province of the political branches.” In the classical sense, international law is the realm of states with each state deciding by contract (treaty) which rules it would submit to in the international system. This according to Shapiro is the proper understanding of “the law of nations” as it would have been defined at the adoption of the ATS in 1789. International Human Rights law which represented an extension of international law to the protection of the individual rather than the state did not develop until the aftermath of World War II. Simply put, “the law of nations” did not apply to corporations in Congressional thought circa 1789. There is also the argument that allowing such lawsuits would lead to a huge influx of cases essentially cramming the U.S. judicial system. Just look at the backlog of the European Court of Human Rights.

Now, I do not really have the legal background to call this case strictly on its merits. I also do not want to engage in guessing at the individual tenor of each justice and which way they may vote. Although, after observing the justices during oral arguments Tuesday, Lyle Denniston of the seemed to draw a particularly pessimistic outlook if you are in favor of corporate liability saying, “a majority of the Justices looked notably unconvinced.” As but a lowly Masters student in International Relations I can merely comment on the implications this case has on international relations and leave the law aside.

First of all, if the court were to side with Kiobel, it would significantly increase corporate liability globally. Corporations are the big jackpot when it comes to civil suits because often times they are the ones with the coffers to pay up. If an avenue of litigation were to be made available in a court with the means to effectively award damages, like the United States, it would be a huge victory for those seeking reparations for human rights violations. Companies would in fact have to be more vigilant of their practices abroad especially in weak states or states that participate in human rights violations where they would formerly have been effectively immune. The argument that allowing such cases would cause huge backlogs is also fairly weak. These sort of large class action law suits are not easily put together. It requires a lot of time, money, and effort which frankly not many can coordinate. Also take into account that most cases get solved out of court in settlements and rarely see an actual trial. The incentives to settle will still remain the same.

A decision for Kiobel would present several challenges to the foreign policy of the United States. While the Federal government did submit an amicus brief on behalf of Kiobel, there can be little doubt that such law suits would severely limit the federal government’s ability to operate in such situations. This could either be good or bad considering your view of the role of politics in law. The fact remains is that allowing foreign nationals to bring such suits in domestic courts can be seen as a violation of another country’s sovereignty. The practice of comity dictates that states are supposed to respect each other’s laws, judicial decisions, and institutions. Allowing such law suits without a mechanism like the ICC’s “unwilling or unable” restriction would certainly be a violation of comity (according to article 17 of the Rome Statute the Court cannot accept a case unless “the State is unwilling or unable genuinely to carry out the investigation or prosecution”). As Justice Stephen G. Breyer pointed out during oral arguments, “there is no United States Supreme Court of the World.”

So, where does that leave us in the end of the analysis? Like most cases, the Supreme Court will most likely try to decide somewhere in the middle on this case; neither granting full immunity to companies nor placing itself as the Supreme Court of the world. What form these restrictions will take I do not know. I am not a lawyer and even if I was I cannot read minds let alone nine of them. In the end I can only suggest that the court establish corporate liability but create legal stipulations as to the types of crimes that can be brought and the level of material connection to the United States needed to justify jurisdiction. If such provisions are met, the world may have a new effective way to recover damages for human rights victims.

-Ben Kurland


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