Posted on 03/01/2012 11:48:15 AM PST by Martin_Schmidt
This Tuesday the Supreme Court will hear arguments in two cases that should interest every U.S. company doing business overseas, and especially those operating in the developing world. Kiobel v. Royal Dutch Petroleum Co. and Mohamed v. Palestinian Authority raise the issue of whether corporations can be sued for violations of international law under U.S. statutes, including the Alien Tort Statute.
The ATS was adopted in 1789 by the first U.S. Congress. The statute permits suits by aliens in federal courts for certain alleged international-law violations, but it was moribund for nearly 200 years and its purpose remains opaque. The best guess is that Congress wanted to provide a means by which the U.S. could fulfill its international obligations to vindicate a very discrete set of damage claims by diplomats and other foreign nationals injured or abused by Americans.
Beginning in the 1980s and 1990s, however, activists and plaintiffs' lawyers began using the law as a means of suing foreign nationals, and then U.S. nationals and companies, in federal court for alleged human rights abuses overseas. They included abuses perpetrated not by the defendant corporations but by the foreign governments with which the companies have done business. This type of "aiding and abetting" liability reached its high-water mark in Khulumani v. Barclay National Bank Ltd. (2002), a case brought in Manhattan's federal district court against dozens of U.S. companies that had done business with the South African government during that country's apartheid years.
The trial judge properly dismissed the case, but the U.S. Court of Appeals for the Second Circuit partially reversed that decision, permitting the ATS claims to go forward. The Supreme Court initially agreed to review the case but then changed its mind because too many Justices would have had to recuse themselves, being shareholders in one or more of the defendant companies. The Second Circuit decision that corporations could be sued under the ATS merely for doing business with the wrong government stands.
Alien law is by definition alien to the Constitution. No ifs ands nor buts.
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