Two US appellate courts have addressed whether corporations may
be named as defendants under the Alien Tort Statute and the Torture
Victims Protection Act. Each court determined that corporations
cannot be held liable under the statutes, a significant narrowing
of the scope of claims that plaintiffs can assert both directly and
on vicarious liability theories.
The Alien Tort Statute provides alien plaintiffs subject matter
jurisdiction in federal courts to sue defendants for violations of
the "law of nations" – essentially, egregious
human rights abuses – or violations of a treaty of the
United States. The Torture Victims Protection Act provides a cause
of action for any plaintiff for torture and extrajudicial killing,
but does not grant subject matter or personal jurisdiction.
Kiobel v. Royal Dutch Petroleum Co. (2nd Cir. Sept. 17, 2010)
In this case, the Second Circuit limited jurisdiction to
suits against individuals, not corporations, under the Alien Tort
Statute, 28 U.S.C. § 1350 (ATS). Nigerian residents
living in that country's Ogoni region sued Royal Dutch
Petroleum Company, alleging that the company had aided and abetted
human rights abuses against them in 1993 and 1994. According to
plaintiffs, Royal Dutch enlisted the Nigerian military forces to
suppress Ogoni resistance to Royal Dutch's activities in the
region. The military suppression is alleged to have included
extrajudicial killings, beatings, rapes and arrests of
residents.
The Second Circuit held that "insofar as plaintiffs in this
action seek to hold only corporations liable for their conduct in
Nigeria (as opposed to individuals within those corporations), and
only under the ATS, their claims must be dismissed for lack of
subject matter jurisdiction." However, recourse may be sought
against the individual persons who allegedly perpetrated abuses in
violation of the law of nations, including corporate employees,
managers, officers and directors, each of whom clearly is within
the jurisdiction of the ATS.
Bowoto v. Chevron Corp. (9th Cir. Sept. 10, 2010)
In this case, the Ninth Circuit has held that
individuals, but not corporations, can be held liable under
the Torture Victims Protection Act, 28 U.S.C. § 1350
(TVPA). The case arose from violence inflicted by the Nigerian
Government Security Forces (GSF) after a group of Nigerians took
over the Parabe oil platform to protest Chevron Nigeria
Limited's alleged destruction of the environment and its
refusal to employ the local population. On the fourth day of the
protest, Chevron asked the GSF to end the protest. During those
efforts, the GSF fired into the group of protestors, killing
two.
Nigerian citizens then sued Chevron in California District Court,
alleging violations of the TVPA, Nigerian law and California law.
Regarding the TVPA claim, the court held that Chevron could not be
held liable under the TVPA because it is a corporation. The court
affirmed the district court's holding and stated "[e]ven
assuming the TVPA permits some form of vicarious liability, the
text limits such liability to individuals, meaning in this statute,
natural persons. The language of the statute thus does not permit
corporate liability under any theory." This decision does not
impair a plaintiff's established right to allege a TVPA claim
against natural persons, as opposed to juridical entities,
including corporate employees, managers, officers and
directors.
Contrast among circuits foretells Supreme Court review
In contrast, case law in the Eleventh Circuit (the only other
circuit-level court to address the issue of corporate liability)
holds that corporations may be held liable under each of the ATS
and TVPA. Because the recent decisions conflict with Eleventh
Circuit law, the issue of corporate liability under either of the
ATS and TVPA is ripe for Supreme Court review.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.