Justice

Supreme Court To Hear The Mother of All Corporate Immunity Cases

The Roberts Court is rightly mocked for its seemingly single-minded willingness to immunize corporations from the laws intended to protect ordinary Americans, but the question presented in a corporate immunity case the justices just agreed to hear is so stark that a decision granting such immunity would verge on self-parody. Or, at least, it would if the consequences of such a decision wouldn’t be so tragic and far-reaching.

Indeed, as Judge Pierre Leval explains, if the Supreme Court upholds a Second Circuit decision holding that corporations have total immunity from a law holding the most atrocious human rights violators accountable to international norms, it would enable corporations to profit freely from some of the greatest acts of evil imaginable:

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. Without any support in either the precedents or the scholarship of international law, the majority take the position that corporations, and other juridical entities, are not subject to international law, and for that reason such violators of fundamental human rights are free to retain any profits so earned without liability to their victims. […]

The new rule offers to unscrupulous businesses advantages of incorporation never before dreamed of. So long as they incorporate (or act in the form of a trust), businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy – all without civil liability to victims. By adopting the corporate form, such an enterprise could have hired itself out to operate Nazi extermination camps or the torture chambers of Argentina’s dirty war, immune from civil liability to its victims. By protecting profits earned through abuse of fundamental human rights protected by international law, the rule my colleagues have created operates in opposition to the objective of international law to protect those rights.

The centerpiece of this case, Kiobel v. Royal Dutch Petroleum, is a U.S. law known as the Alien Tort Statute which allows private parties to be sued for the very worst violations of international law. Nothing in this law distinguishes between violations by actual persons and violations by corporations — and indeed a footnote in a 2004 Supreme Court opinion strongly suggests that the opposite is true. Nor is there any international legal consensus granting lawsuit immunity to corporations. Rather, the Second Circuit’s majority seems to have invented a new corporate immunity doctrine out of whole cloth.

Moreover, lest there be any doubt, Judge Leval’s warning of the consequences of their decision is not hypothetical. Earlier this year, the DC Circuit parted ways with Leval’s colleagues — holding that corporations are not free to commit mass atrocities. Had the court gone the other way, it would have completed immunized Exxon from allegations that their agents committed shocking human rights violations while in Exxon’s employ:

In addition to extrajudicial killings of some of the plaintiffs-appellants’ husbands as part of a “systematic campaign of extermination of the people of Aceh by [d]efendants’ [Indonesian] security forces,” the plaintiffs-appellants were “beaten, burned, shocked with cattle prods, kicked and subjected to other forms of brutality and cruelty” amounting to torture, as well as forcibly removed and detained for lengthy periods of time.

Now that the Supreme Court has agreed to consider this issue, Exxon gets another bite at the apple. If the Roberts Court rules their way, Exxon may be the first corporation to celebrate the birth of Leval’s nightmare scenario.