Ninth Circuit Affirms Corporate Liability for Human Rights Violations

The Ninth Circuit ruled on Wednesday that the Rio Tinto Group, a multinational mining corporation, can be sued for genocide and war crimes. Sarei v. Rio Tinto was brought on behalf of residents of the island of Bougainville in Papua New Guinea. Island residents complained of racial discrimination and environmental degradation related to Rio Tinto’s mining. In the late 1980′s, the islanders rose up against the mining company and faced a brutal crackdown from their government. Thousands died after the military attacked and the island was blockaded. Rio Tinto was sued under the obscure Alien Tort Statute (ATS) for its role in the bloodshed, allegedly “inducing” the government’s actions.

The Ninth Circuit’s decision differs from a Second Circuit ruling that corporations cannot be liable under the ATS. Other circuits have agreed with Sarei, and the Supreme Court is reviewing the Second Circuit case later in this term.

Although the Alien Tort Statute (ATS) was passed in 1789, it was largely dormant until recent decades. The ATS grants federal courts jurisdiction over “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.” The statute is only a grant of jurisdiction, but the Court has construed the ATS to allow courts to recognize a cause of action for a violation of international law, as long as the law is “specific, universal, and obligatory.”

The Ninth Circuit found nothing in international human rights law that forecloses corporate liability. When the Second Circuit considered the question, it relied on the lack of international prosecutions against corporations. The Sarei court simply asked whether the international prohibitions of genocide and war crimes apply beyond states and individuals. The court found that such international norms are universal and even apply to “amorphous groups.”

The Ninth Circuit’s analysis tracks the Court’s test for ATS liability, so the Court may overrule the contrary Second Circuit case. The Sarei court recognized some claims as viable under the Sosa framework but dismissed the claims based on racial discrimination and crimes against humanity. Though the idea of holding corporations liable for human rights abuses is titillating to progressives, the broader questions raised by Sarei may be more interesting.

The ATS, as construed by the Court, allows federal courts to incorporate international norms into federal law. Justice Scalia has suggested that ATS jurisprudence has resurrected the notion of federal common law, which was abandoned long ago. Scalia criticized the Court for “usurping th[e] lawmaking power by converting what they regard as norms of international law into American law.” Conservatives warn that international law is subverting American law, and some states are considering laws that prohibit courts from citing certain foreign bodies of law.

Sarei is unique, in that it involves two foreign parties and conduct occurring in a foreign nation. The dissent in Sarei warned that the majority’s reasoning would lead to courts meddling in the affairs of other nations. If the Court upholds the decision, expect warnings about a flood of similar litigation, namely lawsuits with no connection to the United States.  Some courts have imposed an exhaustion requirement on such claims while the Court has noted that Congress is free to clear up any confusion over the scope of the statute.