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Pirates of the Corporation
The Supreme Court considers whether corporations 
can be sued for violations of international law.
Garrett Epps
The American Prospect
February 29, 2012
http://prospect.org/article/pirates-corporation

Let's play make-believe (sorry, lawyers call it
"counterfactual") with Justice Stephen J. Breyer.
Imagine that Edward Teach, known as Blackbeard, had
incorporated his buccaneering business as Pirates, Inc.
Now Blackbeard is captured.

And sued. "Do you think in the 18th century if they'd
brought Pirates, Incorporated [to court], and we get all
their gold, and Blackbeard gets up and he says, oh, it
isn't me; it's the corporation-do you think that they
would have then said: Oh, I see, it's a corporation.
Good-bye. Go home[?]"

Kathleen Sullivan, the lawyer for the Royal Dutch
Petroleum Company, did not flinch: "Justice Breyer, yes,
the corporation would not be liable." She helpfully
added that under maritime law, Blackbeard's victims
could sue his ship and get its value. But as for the
corporation, no.

A few minutes later, Breyer was back. "What about
slavery? ... That seems like contrary to international
law norms, basic law norms, it could be committed by an
individual. And why, if it could be committed by an
individual, could it not also be committed by a
corporation in violation of an international norm?"

Sullivan replied that corporate liability would have to
be established by a specific rule of international law.
"There is no international norm applicable to
corporations for violations of the human rights
offenses" in the case before the Court, she said.

Nothing daunted, Breyer returned with a question about
the very worst offenses under international law: "Could
you not say, where an action is forbidden by the
international law, and it is punishable ... by all laws
of God and man, in such a circumstance there being no
reason to deny corporate liability here, [should] we
interpret the Federal common law to permit that remedy?"

No, Sullivan said. "The law of nations is uniform. It
rejects corporate liability. It rejects corporate
liability."

You begin to see how argument went Tuesday in the case
of Kiobel v. Royal Dutch Petroleum, in which a Shell
subsidiary stood accused of helping the Nigerian
government execute and torture members of the country's
Ogni minority. Having won a sweeping victory in the
court below, Royal Dutch Petroleum didn't want to give
any of it back. "We do not urge a rule of corporate
impunity here," Sullivan said. Then she laid out a rule
of corporate impunity: "Corporate officers are liable
for human-rights violations and for those they direct
among their employees." But corporations can't be sued
in federal courts for violations of human rights.

Kiobel is a closely watched case about international
human-rights law in American courts; the oral argument
drew so many top human-rights lawyers (including the
president of the European Court of Human Rights) that an
onlooker thought he was at a Secret Policeman's Ball. At
issue was whether the Alien Tort Statute (ATS), passed
in 1789, gives U.S. courts jurisdiction to hear the case
against Royal Dutch Petroleum.

The ATS, as it is called, is cryptic: "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."  As Paul Hoffman, the lawyer for the
Nigerian plaintiffs, noted in his argument, the statute
sets out who the plaintiff must be (an alien) and what
the claim must be (a tort in violation of international
law). It doesn't say who the defendant has to be-or
can't be.

In Kiobel, the Second Circuit Court of Appeals dismissed
the plaintiffs' case for the broadest possible reason.
International law, it said, never allowed a federal
lawsuit against a corporation for international-law
violations (as opposed to violations of domestic law).
That issue appeared more or less out of the sun; the
District Court had made a preliminary decision that some
of the plaintiffs' claims were permitted under the ATS
and others were not. The parties then took a special
expedited appeal to the Second Circuit on the issue of
the sufficiency of the claims. But without warning-or
asking for briefs-the Second Circuit panel held that it
had no jurisdiction over the case because no ATS case
against a corporation could ever be heard. That's the
issue in front of the Supreme Court now. Judge Pierre N.
Leval concurred in the result-he said the plaintiffs had
not pleaded their claims in enough detail. But he
bridled at the majority's new rule:

    The majority opinion deals a substantial blow to
    international law and its undertaking to protect
    fundamental human rights. According to the rule my
    colleagues have created, one who earns profits by
    commercial exploitation of abuse of fundamental
    human rights can successfully shield those profits
    from victims' claims for compensation simply by
    taking the precaution of conducting the heinous
    operation in the corporate form.

Other Courts of Appeals have rejected blanket corporate
immunity, and the U.S. government joined with Kiobel and
the other plaintiffs in asking the Court to reject the
Second Circuit ruling.

Justice Elena Kagan seemed skeptical of Sullivan's
argument. Sullivan kept insisting that no convention, no
adjudicated case, no doctrine supported corporate
liability. Kagan called her back to a point made by
Hoffman-that the international human-rights norms forbid
acts such as torture or slavery; they don't necessarily
spell out all possible defendants. "It's as if somebody
came and said ... this norm of international law does
not apply to Norwegians. And ... there's no case about
Norwegians. And it doesn't specifically say
`Norwegians.' But, of course, it applies to Norwegians
because it prevents everybody from committing a certain
kind of act." Sullivan responded that since
international law forbids corporate liability, there
wouldn't be the same ambiguity as with the Norse.

Judging from the justices' questions, the outlook seems
to be for a 5-4 decision, and probably good news for
Royal Dutch Petroleum. (Justice Anthony Kennedy's
questions quoted verbatim from the company's brief.) The
Court seems unlikely to go as far as Sullivan wanted it
to, but there are many other grounds on which the Court
could uphold the result without embracing blanket
corporate immunity.

Now, again at the behest of Justice Breyer, let's play
(not making this up) cricket. Mohamad v. Palestinian
Authority raised a similar question about a different
statute. In 1991, Congress became concerned that the
courts were going to read the ATS to prevent all human-
rights suits. It passed (over executive opposition), the
Torture Victim Protection Act (TVPA), which says that
"an individual who, under actual or apparent authority,
or color of law, of any foreign nation ... subjects an
individual to torture ... or  subjects an individual to
extrajudicial killing" can be sued in federal court by
"that individual ... the individual's legal
representative, or . any person who may be a claimant in
an action for wrongful death."

Azzam Rahim, a naturalized American citizen born in
Palestine, visited his home in the West Bank in 1995,
not long after the beginning of self-rule there by the
Palestinian authority (PA). He was immediately kidnapped
by PA security agents. When his body was returned, it
bore marks of torture. A U.S. government report
concluded that he had been held in a PA prison and
tortured to death there. His widow and sons have sued
the Palestinian Authority under the TVPA. The question
before the Court Wednesday was whether the PA, which is
not a sovereign government but is also not a "natural
person," is "an individual" of the type that can be sued
under the TVPA.

Early in the argument, Justice Breyer had a warning for
Jeffrey Fisher, co-director of the Stanford Law School
Supreme Court Litigation Clinic: "I have to say that you
are on a weak wicket." Fisher spent the rest of his time
dodging googlies; he cut manfully at the ball, but was
unable to drive. He argued that the word "individual"
has a special meaning in international law-"anyone but
the state." (The PA, thus, not being a state, would be
covered by the TVPA.) Fast-bowling was Justice Kagan,
who said, "It's obvious that "individual" doesn't
usually mean what you want it to mean." Another spinner
was hurled by Justice Scalia: "If Congress wanted
"individual" to mean what you say it doesn't mean, what
word would they have used instead? I mean, if individual
is a code word for person, what's the code word for
individual?" Chief Justice Roberts, who throws right at
the wicket when words are involved, protested that "your
reading gives a different meaning to `individual' in two
sentences that are right ... actually it's in the same
sentence."

Laura G. Ferguson, arguing for the PA, had a
considerably easier innings: The point of TVPA, she
said, was to cover cases like Filartiga v. Peña-Iralta,
in which a Paraguayan family living in Washington, D.C.,
discovered that the former secret policeman who had
tortured and killed their son in Paraguay had moved to
Brooklyn. So "individual," she reasoned, meant, well,
"individual" as in an individual like the secret
policeman. Curtis Gannon, arguing for the government in
support of the PA, seconded that argument: "The paradigm
they were thinking about was the torturer who is found
in the United States who is-who is walking on the
streets. There is an individual moral accountability
that-that everybody understood needed to happen there."

Torture, it seems, is an individual matter. Justice
Sotomayor gave the ball a cynical spin when she asked
Ferguson, "So it's OK to keep out individuals who
subject others to torture, but corporations, we want
their money so they should invest here, because we're
going to protect them from liability for people that
they torture?"

The underlying disputes these cases present are
agonizing. But the cases turn on issues that non-lawyers
hate: questions of jurisdiction and statutory
interpretation. The Court's moral sense, such as it is,
is probably not enough to overcome the words of the
statute. The betting in Mohamad was a unanimous verdict
for, of all parties, the Palestinian Authority.

___________________________________________

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