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Torture Ruling Bars ‘Alien Tort’ Claims on Companies

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Sept. 17 (Bloomberg) -- Companies including Royal Dutch Shell Plc’s Nigerian unit aren’t subject to U.S. lawsuits by foreigners seeking damages for human rights violations, a federal appeals court in New York ruled.

A panel of the court ruled 2-1 today that the Alien Tort Statute gives U.S. courts jurisdiction over alleged violations of international law by individuals only, not by corporations.

The decision dismisses claims by a group of Nigerians that Shell aided in the torture and murder of dissidents in Nigeria in the 1990s, including the playwright Ken Saro-Wiwa.

“The principle of individual liability for violations of international law has been limited to natural persons -- not ‘juridical’ persons such as corporations -- because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an ‘international crime’ has rested solely with the individual men and women who have perpetrated it,” Judge Jose Cabranes wrote on behalf of the two-judge majority.

Cabranes said that the Alien Tort Statute, enacted in 1789, allows U.S. courts to hear death and injury claims by non-U.S. citizens connected to violations of international law, including war crimes and crimes against humanity.

“This is going to alter the landscape of existing and contemplated cases,” said Jonathan C. Drimmer, a partner at Steptoe and Johnson LLP, who lectures on the subject at Georgetown University Law Center in Washington. “Assuming this ruling stands, and even while it remains in effect, there are going to be motions to dismiss Alien Tort Statute claims cases by corporations.”

Full-Court Review

Drimmer said the case may be reconsidered by the entire appeals court, which reviews decisions from federal courts in New York, Vermont and Connecticut.

Circuit Judge Pierre N. Leval wrote a separate opinion in which he agreed that the case should be dismissed but disagreed that the Alien Tort Statute applies only to individuals.

“The majority opinion deals a substantial blow to international law and its undertaking to protect fundamental human rights,” he wrote. “According to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victims’ claims for compensation simply by taking the precaution of conducting the heinous operation in the corporate form.”

He agreed that the case should be dismissed, saying the plaintiffs didn’t properly claim Shell intended to cause the Nigerian government to violate human rights.

Lawsuit Claims

The case, filed in 2002, claimed that Royal Dutch Petroleum Co. and Shell Transport and Trading Co. aided the Nigerian government, through a Shell subsidiary in that country, in committing human rights abuses beginning in 1993.

The suit was filed by people in Nigeria’s Ogoni region. No individual was sued.

The suit claimed that Shell helped the Nigerian government in putting down Ogoni protests against oil production in the region through the use of extrajudicial killings, torture, arbitrary arrests, forced exile and destruction of property.

Paul L. Hoffman, a lawyer for the Nigerian plaintiffs, didn’t immediately reply to a voice-mail message seeking comment on the ruling.

“We agree with the decision of the court,” Shell spokesman Bill Tanner said.

The case is Kiobel v. Royal Dutch Petroleum Co., 0096-4800, 2nd U.S. Circuit Court of Appeals (Manhattan.)

To contact the reporters on this story: Bob Van Voris in U.S. District Court in New York at rvanvoris@bloomberg.net; Patricia Hurtado in.S. District Court in New York at rvanvoris@bloomberg.net.

To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net.

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