Suing Companies for Atrocities Has Never Been Harder. Thanks, Supreme Court!
If you’re a U.S. corporate CEO fearful that your company’s actions abroad — say, setting up a mine and killing some villagers in the process — might have you running afoul of international law, take heart: The human rights law that once might have been used against you has been practically stripped of its power, ...
If you’re a U.S. corporate CEO fearful that your company’s actions abroad — say, setting up a mine and killing some villagers in the process — might have you running afoul of international law, take heart: The human rights law that once might have been used against you has been practically stripped of its power, thanks to a vague provision in a 2013 Supreme Court ruling now making itself felt in the American judicial system.
On Nov. 12, the 9th U.S. Circuit Court of Appeals in California ruled 2 to 1 in Mujica v. AirScan that the families of the victims of a Dec. 13, 1998, cluster bomb attack on the town of Santo Domingo, Colombia, could not make claims against two American companies — the Houston-based Occidental Petroleum and AirScan, Inc., a private military contractor in Florida — allegedly complicit in the attack.
In its ruling, the court cited the 225-year-old Alien Tort Statute (ATS), which scholars generally agree was created to hold American companies accountable for breaches of international law. In his majority opinion, Judge Jay S. Bybee wrote that the plaintiffs had no viable claim under the ATS because they failed to show "that actions or decisions furthering the purported conspiracy … took place in the United States." In short, even though the plaintiffs allege that Occidental helped fund and plan the Colombian military raid that killed more than a dozen people, the company won’t be punished in U.S. courts because the conspiracy didn’t take place in the United States.
As Joshua Keating wrote for Foreign Policy last year, the ATS was rarely used until the 1980s. In the decades since, it has come to be used as a remedy against human rights abuses committed by U.S. corporations in foreign countries. The statute was expanded in 1995, when the 2nd U.S. Circuit Court of Appeals in New York ruled that the ATS could be used to hold individuals outside of government accountable for human rights abuses. That case involved the infamous Bosnian Serb leader Radovan Karadzic — currently facing trial at The Hague on war crimes charges — and resulted in a $745 million ruling for those who had suffered genocide and rape orchestrated by Karadzic in the 1990s.
The ruling also paved the way for a successful 1996 ATS suit against the now-defunct petroleum company Unocal Corp., which was based in California, for complicity in abuses carried out by the government of Myanmar. According to a database maintained by Jonathan Drimmer, a professor of law at Georgetown University, 154 cases were filed against corporations under the statute between 1995 and September 2012.
But in a series of rulings in the past two years, the ATS has been denuded by U.S. courts, most recently by the decision to give oil giant Occidental Petroleum a pass for its alleged crimes in Colombia. Despite the California court’s ruling against Mujica, the ATS would certainly seem applicable: Much of the Santo Domingo attack, which wounded 25 and killed 17 people, including six children, was allegedly made possible by U.S. companies. The Colombian helicopters that bombed Santo Domingo did so to protect the Caño-Limón pipeline, owned by Occidental, according to the plaintiffs. Occidental allegedly provided financial support to the Colombian military, going so far as to give it office space to plan the Santo Domingo raid, the plaintiffs said. Colombian forces had also been working with Occidental and AirScan to provide security for the pipeline.
But because these acts were carried out "exclusively" in Colombia, the 9th Circuit dismissed the case against Occidental.
What changed for the ATS is the Supreme Court’s unanimous April 2013 ruling against the plaintiff in Kiobel vs. Royal Dutch Petroleum Co. In that case, Nigerian plaintiff Esther Kiobel accused a group of oil exploration companies, including a subsidiary of Royal Dutch Petroleum, of working with the Nigerian government to violently repress Ogoni villagers resisting the expansion of oil interests. Kiobel’s husband, a well-known activist who fought Shell in a long-running peaceful campaign against oil-related pollution in the Niger Delta, was executed in 1995 by the military regime of Nigeria’s then-leader Gen. Sani Abacha.
Why did Kiobel bring the case before U.S. courts? The Shell Petroleum Development Company of Nigeria was a wholly owned subsidiary of parent company Royal Dutch Petroleum Co., which in turn controlled Royal Dutch’s U.S. subsidiary, the Shell Oil Co. "So they went up the chain to the parent, and back down the chain to the U.S." courts, seeing an opportunity to use the ATS to sue Shell, as one attorney with expertise in the ATS explained to me on background. Still, in the run-up to the decision, legal experts were locked in heated debate over whether the plaintiffs even had standing in U.S. courts under the ATS.
But in his majority opinion, Chief Justice John Roberts decided that "the relevant conduct" — i.e., the repression of the Nigerians — occurred not in the United States but in Nigeria. "And even where the claims touch and concern the territory of the United States," Roberts wrote, "they must do so with sufficient force to displace the presumption against extraterritorial application." Because corporations in the modern age are virtually everywhere, "it would reach too far to say that mere corporate presence suffices" for the ATS to apply, Roberts reasoned. The decision sharply curtailed the power of the ATS to deal with human rights abuses committed by corporations.
The business community was predictably thrilled by the decision. "The U.S. Supreme Court’s decision today ensures that trial lawyers cannot continue to use the American judicial system to expose global businesses to frivolous and costly lawsuits," said Thomas J. Donohue, president of the U.S. Chamber of Commerce.
Human rights campaigners were of course dismayed. "Human rights abusers may be rejoicing today, but this is a major setback for their victims," Elisa Massimino, president of Human Rights First, said at the time of the ruling.
Now, that "touch and concern" standard has returned in Mujica. Echoing Roberts in Kiobel, Bybee wrote that the ATS didn’t apply because the plaintiff’s claims against Occidental and AirScan failed to "touch and concern" the United States with sufficient force.
But how that standard actually functions as a legal mechanism remains unclear, as former State Department counsel John Bellinger III wrote for Lawfare in September. On the one hand, there’s a Sept. 5 opinion in the U.S. District Court for the Northern District of California in Pasadena, where the court dismissed an ATS suit against the California-based Cisco Systems for allegedly selling security software to China to set up a surveillance network called the Golden Shield to track and, ultimately, brutally repress members of the Falun Gong.
The "plaintiffs have not shown that the alleged human rights abuses committed against them in China … were planned, directed, or committed in the United States," the court found. Cisco’s "domestic conduct," they said, did not violate the norms of international law.
By contrast, on Sept. 23, Judge Royce Lamberth of the U.S. District Court for the District of Columbia allowed plaintiffs in Doe vs. Exxon Mobil to amend their initial complaint to allow them to meet the slippery touch and concern standard. In that case, plaintiffs allege that Indonesian government security forces guarding an Exxon Mobil gas facility allegedly beat and tortured 15 villagers in Aceh in 2000 and 2001. But according to Bellinger, Lamberth didn’t lay out exactly what sort of burden of proof plaintiffs would need to meet the touch and concern standard.
In his dissent from the majority in Mujica, Judge Thomas Zilly argued that Kiobel didn’t mean that the conduct in question had to actually occur in the United States for an ATS claim to hold. The majority opinion, he wrote, introduced "novel standards" that would prevent the Mujica plaintiffs and other aliens looking to prosecute a U.S. corporation for atrocities committed abroad. "Having enjoyed the benefits of incorporation within the United States," Zilly wrote, "defendants … should also be required to answer in a court of the United States for any role they might have played in the 1998 bombing of Santo Domingo."
Relying on a standard as ill-defined as touch and concern, it seems, creates language sufficiently vague for corporations to hide behind.