Kiobel Unlikely to Turn on Corporate Personhood posted an article this past Monday with the provocative headline: In Shell Case, Will Supreme Court’s View of Corporate Personhood Mean Liability for Crimes Abroad?  The article went on to describe the case as follows:

The Supreme Court opens its 2012-2013 term today with a landmark case to decide whether survivors of human rights violations in foreign countries can bring lawsuits against corporations in U.S. courts. The case centers on a lawsuit that accuses the oil giant Shell’s parent company, Royal Dutch Petroleum, of complicity in the murder and torture of Nigerian activists. Some legal analysts are comparing this case, Kiobel v. Royal Dutch Petroleum, to the landmark campaign finance ruling in Citizens United. In 2010, the Supreme Court ruled corporations have broad rights under the First Amendment and can directly fund political campaigns. The court is now being asked to decide if corporations have the same responsibilities as individuals for violations of international law.

However, there are good reasons to believe the Court will never reach the issue of corporate theory or personhood.  To begin with, the Court ordered re-argument to address the question whether the Court should be hearing the case at all—independent of any questions of corporate status.  As the Wall Street Journal reported (here):

Initially, the Supreme Court agreed to consider whether the alien tort law applied to corporations as well as individuals, but after a first round of arguments in February, the justices ordered additional arguments over the far broader question of whether the law applies at all to events overseas.

"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?" said Justice Samuel Alito, who both Monday and in February seemed most inclined to restrict the law's scope.

Furthermore, as I note in the latest SSRN draft of my paper, The Silent Role of Corporate Theory in the Supreme Court’s Campaign Finance Cases, 15 U. PA. J. CONST. L. __ (forthcoming), even the corporate-status issue is unlikely to involve corporate personhood/theory:

Looking ahead, in Kiobel v. Royal Dutch Petroleum Co., the Court will soon be addressing the question whether federal courts in the United States may exercise jurisdiction over corporations pursuant to the Alien Tort Statute, which gives federal courts “original jurisdiction of 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 Second Circuit, in ruling on the case below, identified the relevant issue as “the treatment of corporations as a matter of customary international law.”    This may at first blush suggest corporate theory is irrelevant because the question is not why corporations are treated a particular way under international law, but rather simply how they are in fact treated.  

I did go on to note, however, that:

Nevertheless, it may again be difficult to separate a conclusion about the scope of the statute from preconceived notions about what corporations are.  For example, the Brief Amicus Curiae for the Brennan Center for Justice at NYU School of Law in Support of Petitioners  notes the following:

"In his opinion denying rehearing, a distinguished member of the panel majority below asserted that requiring multinational corporations to defend against customary international law claims in United States courts would subject them to 'extort[ed]' settlements, and unjustifiably 'beggar' them. Such a canard is deeply troubling, not only because it is so clearly legislative in nature, but because it is premised on an indefensible assumption that corporations are freestanding entities less prone to great evil than the fallible human beings who constitute them."

Thus, it is unlikely that the case will turn on corporate personhood or corporate theory, but I won’t be surprised if the attitudes of the justices toward corporations make their way into the opinion nonetheless.


Stefan Padfield