Rick Herz's blog

I’m sitting here having a drink with Paul Hoffman, who argued Kiobel in the Supreme Court today, and the usual cast of ATS supporters.  We are reflecting on today’s argument. While you can never predict the outcome of a case from the oral argument, the mood here is much more New Year’s Eve than Irish wake.  

A little context: in February, the court heard oral argument, ostensibly on the question of whether corporations can be sued for complicity in human rights abuses under the Alien Tort Statute. But much of the argument focused on an assertion made by supporters of Shell—that the ATS does not apply to claims arising abroad.  

Since the plaintiffs had no opportunity to address that claim, the court ordered rebriefing and reargument. That argument was today, and we felt that it went well.  The court did not seem to be buying Shell’s position that corporations or “people” that commit human rights abuses in other countries are somehow immune from liability in US Courts.  No one on the court seemed willing to overturn the precedent set in Sosa to find that the ATS does not apply abroad.  Justice Kagan actually read from the Sosa opinion today, reminding us that yesterday’s pirate is the modern day torturer, and our courts should keep the doors open to victims of these kinds of universally condemned human rights abuses.   

Esther Kiobel and the Ogoni plaintiffs reaffirmed the importance of this statute in vindicating human rights and achieving justice.  If, as we believe, this is the highest calling of our nation’s court, the ATS will live to see another day. We’ll find out by June.

Esther Kiobel outside the US Supreme Court

Last Tuesday, Prof. John Ruggie, who served from 2005 to 2011 as the UN Secretary-General’s Special Representative for Business and Human Rights, released an “issues brief” on “Kiobel and Corporate Responsibility.” In it, he rebukes Shell for attempting to eviscerate the ATS based on disingenuous claims. And Ruggie should know. As he explains, “I would not be involved in [Kiobel] at all were it not for the fact that Shell’s initial Supreme Court brief and its lead attorney’s oral argument misconstrued a central finding of a United Nations report I had authored.” Shell had incorrectly suggested to the Court that Ruggie’s work supported the argument that corporations cannot be held liable under international law. Ruggie in fact had “noted evidence of ‘an expanding web of potential corporate liability for international crimes.’”

To correct Shell’s misstatements, Ruggie filed an amicus brief in the second round of Kiobel briefing. But, as Ruggie points out, Shell’s most recent brief, this time arguing that the ATS should not apply to acts abroad, contains similar mischaracterizations. For example, Shell cites the fact that South Africa complained in 2003 about an ATS case brought against American and European corporations that operated there during Apartheid. But it fails to note that after the case was substantially narrowed to only include companies alleged to have made specific contributions to Apartheid, South Africa changed its mind, and supported the litigation.

United Nations officials do not often submit briefs to national courts. But in Kiobel, in addition to Prof. Ruggie’s, the current U.N High Commissioner for Human Rights and current U.N. Special Rapporteur on Torture both submitted briefs in support of the Petitioners, demonstrating, contrary to Shell’s claim, that ATS cases are not in any way forbidden by international law. Their involvement only highlights the importance of Kiobel, and the poverty of the argument that enforcing the most fundamental prohibitions on egregious rights violations somehow violates international standards.

The SEC adopted rules yesterday that require oil, gas and mining companies to disclose the payments they make to foreign governments. These rules implement Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which mandates such disclosures.

For too long, oil companies have made payments to foreign governments in secret. This has made it easy for foreign officials to misuse or outright steal their people’s money, and exceedingly difficult for NGOs, journalists and civil society to track government revenues and root out fraud, waste and corruption. In short, secrecy is a major contributor to the resource curse, which is the paradox that many resource-rich countries that should be well-off actually experience lower growth and far greater poverty than resource-poor countries. Section 1504 is designed to combat the resource curse, as well as to protect investors by ensuring that they have sufficient information to assess political risk.

Industry lobbyists had asked the SEC to create a series of exemptions and other loop holes that were at odds with Congress’ intent to create a real reporting requirement. Those efforts are described in Maia’s post from last week. While we are still in the process of reviewing the full 232 pages of rule text released late yesterday afternoon, based on the description of the rules offered by SEC staffers at yesterday's hearing and a preliminary reading, the SEC at least appears to have rejected most of the extractive industry's attempts to gut the statute. If so, that would be a big victory for those who have long labored to end secret payments and the resource curse, and for millions of people in resource rich nations.

We also note that the fact that the SEC adopted any rules at all is itself a victory for ERI and our client Oxfam America in its suit against the SEC. Yesterday’s rules were adopted 16 months after the statutory deadline imposed by Section 1504. Because the rules were so late, we sued the SEC seeking a court order that the SEC issue the rules that Congress required. We are gratified that the SEC has finally acted.

Editorial Note: This morning the U.S. Supreme Court heard oral arguments in Kiobel v. Royal Dutch-Shell, a case which we have blogged about extensively over the past 18 months. Several of our staff members were in attendence, and four of them wrote brief initial impressions. This is one of those four.

How did it go? Who knows? There is a reason why people say you shouldn't try to predict which side will win a Supreme Court case based on the oral arguments.  This one certainly was no exception. There seemed to be Justices on both sides, and others whose positions could at best only be guessed at.  Its strange to think that the continued existence of the ability to sue corporations-which was essentially unquestioned for over a decade-may now rest on the decision of a single Justice.

Yet here we are.

Ultimately, I am optimistic.

Not because I feel like I learned anything today that would help me predict who will win... but because I still find it difficult to believe that the Court will accept that a corporation can participate in genocide or crimes against humanity and yet be immune from suit; to find that although corporations can be sued everywhere in the world for even ordinary torts, they can't be sued here for the worst kinds of abuses.  I still have faith in the rule of law.

A couple of weeks ago, I blogged about an Ecuadorean appeals court upholding an $18 billion dollar judgment against Chevron for massive oil pollution in the Amazon rainforest. The Court rejected Chevron’s arguments that the judgment was procured by fraud. Today, a decision by a federal appeals court in New York makes it more likely that this judgment can be enforced. 

Last year, fearing that it was going to lose in Ecuador, Chevron sued the plaintiffs in New York seeking a court order that would prevent the plaintiffs from trying to enforce any Ecuadorean judgment outside of Ecuador. Since Chevron no longer does business there, the judgment could not be enforced inside Ecuador.

A New York trial judge accepted Chevron’s arguments that the Ecuadorean proceedings were likely tainted by fraud, and issued an order barring the plaintiffs’ lawyers from enforcing any judgment, at least until Chevron’s fraud allegations could be tried in New York. Then, back in September, the appeals court overturned that trial court order, but it did so without issuing an opinion explaining its reasons, so the parties did not know precisely what the court of appeals had decided. 

Today, the court issued its opinion. It held that the New York law under which Chevron sued only determines if a foreign judgment can be enforced in New York; a New York court lacks power to determine whether a foreign judgment is enforceable anywhere else. Therefore, the trial court was not authorized to order the plaintiffs not to enforce the Ecuadorean judgment outside New York.  

Chevron, of course, will still try everything else it can think of to prevent the judgment from being enforced. We’ll keep you posted.

Ecuadorean villagers harmed by Chevron's pollution of a formerly pristine corner of the Amazon rainforest have been seeking legal redress against the company for almost two decades. Yesterday, they moved a whole lot closer to finally achieving justice, as an Ecuadorean appeals court upheld a judgement of 18 billion US dollars against Chevron.

Chevron stands accused of pollution on a truly massive scale. The victims, indigenous peoples and farmers, originally tried to challenge that pollution in Chevron's home forum, the United States, but after years of litigation, a federal court in New York accepted Chevron's argument that the case should be heard in Ecuador. So the plaintiffs filed suit in Ecuador.

And they won. Last spring, an Ecuadorean trial judge found that Chevron is liable for 18 billion US dollars in damages. 

Chevron, of course, appealed. But even prior to that ruling, Chevron, sensing they were going to lose, began claiming that the plaintiffs' case was fraudulent, and actually sued the plaintiffs and their lawyers in New York, asking among other things that the New York court bar the plaintiffs and their counsel from trying to enforce any judgment. Surprisingly, the federal district court issued just such an injunction, but it was quickly overturned on appeal. 

Now, as of yesterday, an Ecuadorean appeals court has upheld the judgment. This is a huge victory for the plaintiffs, not only in their legal case, but also in the court of public opinion. Chevron's mantra has been that the public should ignore the trial court judgment because it was obtained by fraud. But they made that argument in the Ecuadorean appeal as well, and although I have not yet read the entire decision, it is hard to see how the appellate court could have upheld the verdict without at least implicitly rejecting Chevron's claims of fraud. 

The Supreme Court today agreed to hear two cases that are critical to our human rights litigation. Both cases, Kiobel v. Royal Dutch Shell, and Mohamad v. Rajoub, consider whether corporations can be sued for human rights abuses. In Kiobel, the question is whether the Alien Tort Statute permits corporations to be sued. A bitterly divided panel of the U.S. Court of Appeals for the Second Circuit held in that case that corporations cannot be sued, no matter how egregious their participation in violations of universally recognized human rights. Three other federal appeals courts have come to the opposite conclusion, finding that corporations can be sued—indeed, two of those decisions came after, and specifically rejected, the holding in Kiobel. ERI had submitted amicus briefs to the Second Circuit in that case.

The question in Mohamad is whether the Torture Victim Protection Act (TVPA) permits suits against organizations, in that case, the Palestinian Authority and the Palestine Liberation Organization, for summary execution and extrajudicial killing. In particular, the question is whether the statutory language, which allows “individuals” to be sued, includes entities or only natural persons. Here again, the Circuits are split on the issue. ERI serves as co-counsel for the Plaintiffs in Bowoto v. Chevron, which raises the question of whether corporations can be sued under the TVPA. We had also asked the Supreme Court to address the issue. Interestingly, however, the Court did not issue any ruling today on that request. We believe the most likely outcome will be that the Court will simply hold onto the case until it decides Mohamad, and then issue a short ruling in Bowoto based on the decision in Mohamad.

Kiobel and Mohamad will be argued together, probably in February or March. A decision is expected by the end of June.

On this first day of the Supreme Court's new term, we have our eye on three pending cert petitions - requests that the Court hear a case - that are critical to our human rights litigation. All three cases, Bowoto v. Chevron (in which ERI serves as co-counsel for the Plaintiffs), Kiobel v. Royal Dutch Shell, and Mohamad v. Rajoub, address the question of whether corporations can be sued for human rights abuses.

Bowoto and Mohamad raise the question of whether corporations can be sued under the Torture Victim Protection Act (TVPA), whereas Kiobel raises the question of whether suits against corporations are permitted under the Alien Tort Statute (ATS). The Courts of Appeals, the federal courts just below the Supreme Court, are divided on both questions, with most holding that the ATS does permit suits against corporations, and most holding that the TVPA does not.

Since all of these petitions were briefed over the summer, we expected that the Court would have decided whether to hear these cases by today. Instead, these cases will be considered by the Court at its next private conference, on October 7.

In one interesting development, however, the Supreme Court today denied Shell's request that, if the Court were to hear Kiobel, it also consider whether the TVPA displaces claims for torture and extrajudicial killing under the ATS. This is great news. If the Court does decide whether or not to hear these cases at its Friday conference, we should know by next Monday morning. So stay tuned!

California’s Unfair Competition Law (Cal. Business and Professions Code Section 17200) allows plaintiffs to challenge business practices that are unfair or fraudulent. ERI has previously filed claims under the law in our suit on behalf of Burmese villagers against Unocal for its knowing benefit from the human rights abuses of its business partner the Burmese military, and our suit on behalf of Amazon Watch, which was forced to expand significant resources to challenge pollution by Occidental Petroleum (Oxy) in the Peruvian Amazon. The law requires that the plaintiff “has suffered injury in fact and has lost money or property as a result of such unfair competition.” 

Corporations, including Oxy, have argued that in order to bring a claim, the plaintiff not only must have lost money, but also that the lost money must be in the defendant’s possession. A few lower courts had accepted that argument. Last Thursday, however, in the Kwikset case, the California Supreme Court rejected that very narrow limit on who may sue under Section 17200. By affirming that the court house door is open to all those who lost money as a result of an unfair business practice, the decision is an important win for consumers, human rights and labor organizations and others concerned with corporate accountability.  The decision is described more fully on the UCL Practitioner blog.

In our case, Oxy has already sent a letter to the court acknowledging that Kwikset eliminates one of its arguments against Amazon Watch.

Human rights advocates, including we at ERI, have long used the Alien Tort Statute to hold corporations liable for their complicity in violations of universally recognized human rights standards. The statute, enacted in 1789 as part of the First Judiciary Act, grants federal district courts jurisdiction over claims by an alien for torts committed in violation of the law of nations.  Corporations have tried any number of creative interpretations of the law to avoid liability for their actions. 

One of the more creative (or perhaps ridiculous) examples is Chevron's argument in Bowoto v. Chevron Corp., that it could not be held liable for the shooting of protestors at a Chevron oil platform offshore Nigeria because, it claimed, when Congress passed the ATS, the word alien only included foreign citizens living in the United States, not non-resident foreigners. 

The Court properly rejected Chevron's argument. Undeterred, one of Chevron's attorneys published an article in the Berkeley Journal of International Law making the same claim. 

So human rights attorney Lorraine Leete (a former ERI law student intern!) and I have published a response: "An Alien by Any Other Name: Debunking a New Attempt to Re-Write the Original Language of the Alien Tort Statute." We note that the Supreme Court has already expressly held that non-resident aliens may bring suit under the ATS; in Rasul v. Bush , 542 U.S. 466 (2004), the Court upheld the availability of an ATS cause of action to non-resident aliens confined in military detention at Guantanamo Bay.