Goodbye to the Alien Tort Statute? Second Circuit Rejects Corporate Liability for Violations of Customary International Law

[I posted this about the same time that Ken posted his discussion of the same case below, which is definitely worth reading. Please forgive any repetitions. But we are both on the same page.]

In a blockbuster opinion that could spell the end of the vast bulk of Alien Tort Statute litigation, the U.S. Court of Appeals for the Second Circuit has held that corporations cannot be liable for violations of customary international law under the Alien Tort Statute.  The decision, Kiobel v. Royal Dutch Petroleum, dismisses an ATS lawsuit against Royal Dutch Shell for allegedly aiding and abetting the Nigerian government in the commission of serious human rights violations.  Writing for two members of the panel, Judge Jose Cabranes held that (in my very quick and dirty summary):

1) International Law governs the scope of liability for violations of international law, hence the question of whether a corporation is liable for violating international law is itself governed by international law.

2) Under Supreme Court precedent, the Alien Tort Statute requires courts to apply norms of international law, and not domestic law, to the scope of defendants’ liabilities. Such norms must be “specific, universal, and obligatory.”

3) Under international law, corporations are not liable for violations, and any such norm of corporate liability is far from “specific, universal, and obligatory.”

I should note that one judge on the panel, Pierre Leval, took sharp exception to this holding in his concurring opinion. It is worth noting that his criticism is not on the question of whether corporations are liable for violations of international law, but whether international law should even govern this question.

I have an article coming out later this fall in the Virginia Journal of International Law which takes the same position on this question as Judge Cabranes. So I am both pleased that someone agrees with me, and horrified that I may have to seriously revise and update that article. Judge Cabranes’ analysis is very strong on points two and three above.  Indeed, I don’t think Judge Leval or the plaintiffs in this case seriously challenged these points.  The only bone of contention is with point one, whether international law is indeed the governing law for the question of corporate liability. And I assume that will be the main issue if this case (as I fully expect), an appeal to the U.S. Supreme Court is made to this decision.

But taking a step back, what I find fascinating is that there appears to be no serious argument left that customary international law can impose duties on private corporations.  I think this is right, and foreign academics, most notably James Crawford, have strongly rejected corporate liability.  But I think the vast weight of U.S. legal academic opinion has gone the other way on this point.  I have personally participated on at least three conferences where I was the only one arguing against corporate liability.

In any event, I will have more thoughts about this case and this issue soon. There is a lot here to digest and think about.  The bottom line for litigants though:  The wave of ATS lawsuits against corporations is, at least for the moment, DEAD in the Second Circuit.  And I wouldn’t feel good about ATS suits in other circuits either.