Companies Shielded as U.S. Court Cuts Human-Rights Suits

Date of publication: 
17 April 2013

The U.S. Supreme Court insulated multinational corporations from some lawsuits over atrocities abroad, scaling back a favorite legal tool of human rights activists.

The justices threw out a suit accusing two foreign-based units of Royal Dutch Shell Plc (RDSA) of facilitating torture and execution in Nigeria. The majority said the 1789 Alien Tort Statute generally doesn’t apply to conduct beyond U.S. borders.

In the Shell case, “all of the relevant conduct took place outside the United States,” Chief Justice John Roberts wrote for the court. The justices were unanimous on the outcome in the Shell case, while dividing in their reasoning.

The ruling may help a number of companies defeat similar lawsuits. Exxon Mobil Corp. (XOM), Cisco Systems Inc. (CSCO), Chiquita Brands International Inc. (CQB), Siemens AG, Daimler AG and Rio Tinto Group (RIO) are all fighting Alien Tort Statute claims.

Roberts pointed to the “presumption against extraterritoriality,” saying that legal principle limits the reach of the Alien Tort Statute. The court’s four Democratic appointees — Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan — wrote separately to say they would have reached the same result using different reasoning.

Human-rights advocates said before the Supreme Court decision that a ruling favoring Shell would undermine the ability of atrocity victims to hold their perpetrators accountable. Alleged victims have invoked the law more than 150 times in the past 20 years.

The court could “cripple these cases,” attorney Steve Berman said before the decision was issued. Berman represents Papua New Guinea landowners who sued Rio Tinto in 2000, accusing the mining company of complicity in genocide.

The case is Kiobel v. Shell Petroleum, 10-1491. The US Supreme Court judgment is at –