Corporate Human Rights Case Expanded by U.S. Supreme Court

The U.S. Supreme Court ordered a second round of arguments in a case that might shield multinational companies, including Royal Dutch Shell Plc (RDSA), from suits accusing them of complicity in human-rights abuses.

The justices today expanded their review of a lawsuit that claims Shell units played a role in torture and execution in Nigeria in the 1990s. The court said in a one-paragraph order that it will consider whether the two-century-old Alien Tort Statute can be invoked for alleged wrongdoing that occurs beyond the U.S. borders.

Multinational companies have faced dozens of suits accusing them of involvement in human rights violations, environmental misconduct and labor abuses. Exxon Mobil Corp. (XOM), Coca-Cola Co. (KO), Pfizer Inc. (PFE), Unocal Corp (UCL)., Chevron Corp. (CVX) and Ford Motor Co. (F) have all been sued under either the Alien Tort Statute or a related law, known as the Torture Victim Protection Act.

When the justices heard arguments in the Shell case last week, they focused on whether the Alien Tort Statute allowed suits against corporations. Several justices, including Samuel Alito, suggested during the argument that they were more interested in considering contentions that the law can’t be applied overseas.

A ruling on the so-called extraterritoriality issue would potentially impose more sweeping limits on lawsuits, shielding corporate officers as well as the companies themselves.

The court’s briefing schedule means the new argument will take place during the nine-month term that starts in October.

The justices also are considering whether companies and organizations can be sued under the Torture Victim Protection Act. That case, which isn’t affected by today’s order, involves a suit against the Palestinian Authority and the Palestinian Liberation Organization filed by the sons and widow of a U.S. citizen allegedly tortured and murdered in the West Bank.

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

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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