There was welcome news for multinational companies last fall when the U.S. Court of Appeals for the Second Circuit held that corporations may not be sued under the Alien Tort Claims Act. For 15 years, activists have sued businesses with operations in bad global neighborhoods—for alleged complicity in sins ranging from genocide in Darfur to forced labor in Burma—based on the unexamined premise that corporations may be held liable under international law. Second Circuit judge José Cabranes, writing for the court’s majority, decided that they may not. His ruling in the seminal case, Kiobel v. Royal Dutch Shell , officially let Royal Dutch Shell plc off the hook for any human rights offenses it may have committed in Nigeria. Plaintiffs had accused Shell of supplying arms and transit for a brutal counterinsurgency in the Niger Delta. (Shell denies all allegations.) Plaintiffs have asked for an en banc appeal, as the big question, whether companies may be liable in alien tort litigation, bubbles up in federal circuit courts around the country. Many observers say the corporate alien tort is ultimately doomed—some because they think Cabranes’s reasoning is impeccable, and others because they think that the U.S. Supreme Court is so pro-business.
But lawyers who counsel corporations on social responsibility say that it would be foolish for companies to gloat. “It’s not as though people have suddenly decided human rights abuse isn’t so bad after all,” says Foley Hoag’s Gare Smith. “To think that by defanging the alien tort statute you can somehow make the human rights movement go away is a fundamental long-term error,” says SNR Denton’s Claude Fontheim. “Corporate alien tort is the plaintiffs’ choice,” says Steptoe & Johnson’s Jonathan Drimmer, “but a lot of people are looking at Plan B.”
