A Review of the Nigerian Energy Industry

US Supreme Court hears Shell rights case

03 October 2012, News Wires – US Supreme Court justices suggested they will shield companies from some suits alleging complicity in overseas atrocities, but the court debated how far to go in scaling back a favorite legal tool of human-rights advocates, a report said.

During arguments in Washington on accusations that two foreign-based units of Shell facilitated torture and execution in Nigeria, the justices this week questioned whether American courtrooms were the proper site for such claims, Bloomberg reported. The case centers on the two-century-old Alien Tort Statute.

“Why does this case belong in the courts of the United States when it has nothing to do with the United States other than the fact that a subsidiary of the defendant has a big operation here?” the news wire quoted Justice Samuel Alito as saying Monday, as the court heard the first case of its new nine-month term.

A ruling cutting back the Alien Tort Statute would be a coup for companies, including Exxon Mobil, Chevron and Coca-Cola, dozens of which have all been sued under either the Alien Tort Statute or a related law, known as the Torture Victim Protection Act.

By the end of the hour-long session, the focus of the debate was how far the court should go in trimming the Alien Tort Statute.

Some justices suggested they would continue to allow suits against alleged perpetrators who took refuge in the US, while the Obama administration urged the court to bar claims against foreign units — and throw out the Shell case — without deciding whether US companies could be sued.

Human-rights advocates say a victory at the high court for Shell, based in the Hague, Netherlands, would undermine the ability of atrocity victims to hold their perpetrators accountable.

“This law is incredibly important,” said Katie Redford, co-founder of EarthRights International, an environmental and human rights group that filed a court brief supporting a group of Nigerians who sued, in a statement.

“It makes corporations think twice before they cut corners and curb human rights standards to improve their bottom line.”

The justices were hearing arguments for the second time on the suit, being pressed by Nigerians who say two Shell units were complicit in torture and execution in the country’s Ogoni region from 1992 to 1995.

The high court in February considered contentions that the Alien Tort Statute doesn’t permit suits against corporations.

The justices then expanded their review, ordering re- argument on a potentially more sweeping question: whether the statute applies beyond the U.S. borders.

Paul L. Hoffman, the lawyer for the Nigerians who sued, told the court that “the trend in the world today is toward universal justice for people that — and corporations that — violate these kinds of norms.”

The court’s Republican-appointed justices suggested they weren’t comfortable with that approach. Kennedy said Hoffman’s position would give other countries license to adjudicate claims involving alleged wrongdoing against US corporations.

Under Hoffman’s approach, “if a US corporation commits an international law violation in the United States, that US corporation can be sued in any court in the world,” Kennedy said.

Shell’s lawyer, Kathleen Sullivan, urged the court to issue a sweeping decision that would categorically bar suits for conduct that occurs beyond the US borders. The US should not  impose “our law onto foreign countries,” she said.

US Solicitor General Donald Verrilli, representing the Obama administration, urged the court to rule in Shell’s favor without reaching some of the broader questions. He said the court should leave intact a 1980 decision that allowed suits against perpetrators who had moved to the US.

Several justices, including Anthony Kennedy, today suggested they weren’t interested in undercutting the 1980 decision. That would limit the scope of any ruling in the Shell case, perhaps barring suits against foreign-based corporate units while allowing other types of claims.

Justice Elena Kagan asked Sullivan whether the court should permit such suits in at least some contexts, such as a hypothetical assault by an American on a French ambassador in London, or whether plaintiffs should first have to try to sue in countries with a closer connection to the alleged wrongdoing.

The case is Kiobel v. Shell Petroleum, 10-1491.

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