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Supreme Court hears corporate human rights case

Security guards walk the steps of the Supreme Court before Justice Elena Kagan's investiture ceremony in Washington
Security guards walk the steps of the Supreme Court before Justice Elena Kagan's investiture ceremony in Washington

By James Vicini

WASHINGTON (Reuters) - A number of Supreme Court justices expressed skepticism on Tuesday that corporations can be sued in the United States for alleged complicity in human rights abuses abroad, a case with important financial, legal and international implications.

The high court during arguments considered limiting the reach of a 1789 U.S. law that was largely dormant for nearly two centuries, but used in the past 20 years by foreign victims to sue multinational corporations for abuses committed overseas.

The court's conservatives voiced concern that allowing such lawsuits violated international law, that it created tensions with foreign nations and that the U.S. law only applied to acts by individuals, not to corporations.

The case before the court involved a lawsuit by 12 Nigerians who alleged that Royal Dutch Shell Plc helped the Nigerian government crack down on oil exploration protests between 1992 and 1995 through torture, executions and crimes against humanity.

"What business does a case like that have in the United States?" Justice Samuel Alito asked Paul Hoffman, the California attorney who argued for the plaintiffs.

"There's no connection to the United States whatsoever," Alito said. "This kind of lawsuit only creates international tension."

Justice Anthony Kennedy, who often casts the decisive vote on the court divided with five conservatives and four liberals, questioned whether international law recognized corporate responsibility for the alleged offenses in the lawsuit.

The case has been closely watched by corporations concerned about long and costly litigation in the United States and by human rights advocates who say businesses can be held accountable in U.S. courts for their alleged role in torture, executions or other abuses committed abroad.

Justice Antonin Scalia said Congress could always amend the law to make clear that it covered corporations.

The Alien Tort Statute from 1789 states that U.S. courts shall have jurisdiction over any civil lawsuit "by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."

DEFENDING LAW'S REACH

The Obama administration supported Hoffman. Deputy Solicitor General Edwin Kneedler argued that a U.S. appeals court in New York erred in ruling that a corporation never can be liable under the U.S. law.

But Kennedy questioned Kneedler about the government's argument.

"Suppose an American corporation commits human trafficking with U.S. citizens in the United States. Under your view, the U.S. corporation could be sued in any country in the world," Kennedy said.

Representing Shell at the arguments, Kathleen Sullivan, a former dean of the Stanford Law School in California, said the post-World War Two Nuremberg tribunals established that only individuals can be held liable for human rights violatons.

She said corporate officers can be held responsible for human rights abuses, but that nations around the world have long treated corporations and individuals differently.

Some of the court's liberals questioned Sullivan's argument that only persons can be held accountable for human rights abuses. "Where do you find that in international law?" Justice Elena Kagan asked.

Justice Stephen Breyer asked whether a corporation could be held liable in certain circumstances, such as conduct involving piracy or slavery.

"What about slavery? That seems like contrary to international law norms, basic law norms, it could be committed by an individual. And why, if it could be committed by an individual, could it not also be committed by a corporation in violation of an international norm?" Breyer asked Sullivan.

The British, Dutch and German governments supported Shell, as did various multinational corporations and the U.S. Chamber of Commerce business lobby.

In the past two decades, more than 120 lawsuits have been filed in U.S. courts against 59 corporations for alleged wrongful acts in 60 foreign countries, lawyers in the case said.

Many of the lawsuits have been unsuccessful, though there have been a handful of settlements, the lawyers said. Many of the cases, having dragged on for years, are still pending.

Among the cases: Indonesia villagers accused Exxon Mobil Corp's security forces of murder, torture and other abuses in 1999-2001; Firestone tire company was accused of using child labor in Liberia; and Ford Motor Co and other firms were accused of aiding South Africa's apartheid system.

The Supreme Court is expected to rule in the case by the end of June.

The Supreme Court case is Esther Kiobel v. Royal Dutch Petroleum Co, No. 10-1491.

(Reporting By James Vicini; Editing by Eric Beech)

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