Last week, the Supreme Court heard oral argument in Kiobel v Royal Dutch Petroleum, the case asking whether corporations can be liable in federal court for violations of international human rights law. In the decision under review, the Second Circuit – unlike every other circuit court to consider the question – had held that they could never be liable. So one might think that a logical way for the petitioners to begin their oral argument would be to give an example or two where international law had recognized corporate liability. And, in fact, Justice “Swing Vote” Kennedy hit the attorney for the petitioners with that very question before he had completed his opening statement.
It wasn’t a good sign when the attorney didn’t come up with any examples. (He might have pointed out that after World War II, the Allies broke up IG Farben because of its contributions to Nazi crimes – as Richard Posner noted in his opinion for the Seventh Circuit.) As a result, a general feeling after the oral argument was that the Supreme Court would probably affirm the Second Circuit by a 5-4 margin, with Kennedy in the majority.
But on Monday, the Court threw a spanner in the works, upset the apple cart, and stuck a spoke in the wheels of those expectations. More specifically, it scheduled the case for rehearing next term, asking the parties to address “Whether and under what circumstances the Alien Tort Statute, 28 U.S.C. § 1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”
So the focus of the case now shifts from whether corporations can ever be liable for human rights violations, to whether any defendant can ever be liable for violations that occur in the territory of other countries. Expect to hear a lot about the Court’s jurisprudence on the presumption against extraterritoriality, which – to put it politely – it has not always applied consistently or predictably.
As a result, the stakes in Kiobel have become even higher for human rights advocates. The Court’s decision now has the potential to narrow the scope of possible federal claims even more than a decision affirming the Second Circuit would have done. Plaintiffs could try to work around a “can’t sue corporations” rule by suing individual corporate officials. But there may not be many human rights claims of any kind – against corporations, individuals, or governments – that will survive if the rule is “can’t sue for anything that happens in another country.” The time may be approaching when human rights attorneys and activists will have to look for other avenues to find relief for abuses of human rights. State courts, anyone?