In its July 2011 ruling in Flomo v. Firestone Natural Rubber Company,i the United States Court of Appeals for the Seventh Circuit cites a law review article by Notre Dame Law Professor Doug Cassel, Director of the Center for Civil and Human Rights, arguing that corporations involved in human rights violations overseas can be sued for money damages under the Alien Tort Claims Act (“ATCA”).ii
The Seventh Circuit decision is the latest salvo in an ongoing judicial debate, one which may soon reach the U.S. Supreme Court. The Seventh Circuit panel reaches an opposite conclusion from last year’s holding by a Second Circuit panel,iii in which Cassel’s article was cited by a concurring judge.iv On the other hand, the Seventh Circuit view is consistent with an earlier federal district court ruling, which also relied in part on Cassel’s article.v
The article is Corporate Aiding and Abetting of Human Rights Violations: Confusion in the Courts, 6 NORTHWESTERN UNIVERSITY JOURNAL OF INTERNATIONAL HUMAN RIGHTS 304 (2008). Among other contentions, Cassel argues that, merely because corporations cannot generally be criminally prosecuted under international law, this does not mean that they cannot be sued civilly for money damages.
The Seventh Circuit opinion was authored by Judge Richard Posner and joined by Judges William Bauer and Daniel Manion. It finds jurisdiction under ATCA to sue corporations for human rights violations, at least where “the violations are directed, encouraged, or condoned at the corporate defendant’s decisionmaking level.”
The opinion cites Cassel’s argument that distinguishes criminal from civil liability under international law. Cassel argues that “current international criminal law does not generally impose international criminal responsibility on corporations. But the principal reason, …, is not a peculiar reluctance to hold corporations criminally accountable for violating international norms. Rather the main reason is that the domestic legal systems of many States do not provide for criminal responsibility of [corporations] for violating any law.”
Cassel continues: “There is no comparable problem, however, in holding corporations civilly accountable to pay money damages for violations of norms. I am not aware of any legal system in which corporations cannot be sued for damages when they commit legal wrongs that would be actionable if committed by an individual.” vi
Despite its general holding on corporate liability, the Seventh Circuit declined to find Firestone liable for alleged child labor on its rubber plantation in Liberia. The company does not directly employ children, but imposes stringent production quotas on its adult employees. According to the plaintiffs, the quotas lead the adults to recruit their young children to help them in the fields. On these particular facts, the Court ruled that Firestone does not violate customary international law against child labor.
The earlier, contrary Second Circuit ruling involved allegations that Royal Dutch Petroleum is liable under ATCA for aiding and abetting Nigerian soldiers to commit murder, rape, and other acts of violence against a civilian population. By a 2-1 decision, the Court ruled that, because international law norms applied under ATCA derive from international criminal law, and international criminal law does not generally expose corporations to prosecution, there can be no civil liability for corporations under ATCA.vii Judge Leval, concurring in the judgment only, dissented on this point, citing Cassel’s article for the argument quoted above. viii
The first case to rely on Cassel’s article was the 2009 District Court decision in which various corporations are alleged to have been accomplices to South African apartheid.ix
Whether corporations may be sued under the Act could be decided by the Supreme Court as early as next term. On June 6, 2011, plaintiffs in the Nigerian case petitioned for a writ of certiorari. Facing a split between the Second and Seventh Circuits (among others), the Supreme Court will have grounds which could lead it to take the case.
In an era when courts are ever more reluctant to rely on academic writing, Notre Dame’s Center for Civil and Human Rights continues to combine scholarship with cutting edge issues of human rights practice.
i 2011 U.S. App. LEXIS 14179, at 15 (July 11, 2011). ii 28 U.S.C. section 1350. The Act provides in full: “"The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."
iii Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010), rehearing en banc denied, 2010 U.S. App. LEXIS 27003, rehearing denied, 2011 U.S. App. LEXIS 2200, cert. filed, June 6, 2011.
iv Id., 621 F. 3d at 149, 160, 176 n. 22 (Judge Leval, concurring only in the judgment).
v In re South African Apartheid Litigation, 617 F. Supp. 2d 228, 260 (S.D.N.Y. 2009).
vi 6 NW. U. J.INT’L HUM.RTS. 304, 322.
vii Kiobel, note ii supra, at 120.
viii 621 F. 3d at 149, 160, 176 n. 22
ix In re South African Apartheid Litigation, 617 F. Supp. 2d 228, 260 (S.D.N.Y. 2009).