Kiobel decision leads US away from global trends on accountability

Jochai Ben-Avie contributed to this post.

Update — In response to the recent Kiobel ruling, Turkish telco Turkcell has dropped the lawsuit it filed against South African telco MTN in U.S. federal district court. Turkcell’s lawsuit had alleged MTN violated the law of nations in securing an operating license in Iran. Turkcell’s suit was delayed pending the Kiobel decision, whose outcome makes it more difficult for plaintiffs like Turkcell to file Alien Tort Statute cases based on violations committed abroad.

Last week, the U.S. Supreme Court ruled that Esther Kiobel cannot pursue her case against Royal Dutch Shell for the company’s alleged role in the torture and execution of her husband in the city of Port Hacourt Nigeria, in 1995. The decision in Kiobel v. Royal Dutch Petroleum is the most extreme of the recent rulings constraining the jurisdiction of US courts to hear claims regarding human rights abuses abroad. The decision will limit the options for victims of human rights violations, reduce the pressure on companies to preserve evidence of abuses, and lead US courts in the wrong direction.

The Kiobel litigation has centered around the applicability of the Alien Tort Statute (ATS), a US law passed in 1789 originally designed to prosecute piracy on the high seas and crimes against diplomats on US soil, but which has been increasingly used in the last few decades to sue companies complicit in human rights abuses. It has been a popular tool for achieving justice for victims of abuses in jurisdictions with weak rule of law where suits often cannot effectively be brought in domestic courts, and has often produced settlements–and some victories.

The case stems from the oil company’s exploration in Nigeria in the 1990s. Dr. Barinem Kiobel, a member of the local Ogoni community, led protests objecting to the company’s operations in the Ogoni area of the Niger Delta. He, along with eight other community leaders, were detained illegally, tortured, sentenced under military tribunal, and summarily executed. According to the complaint, the oil company allegedly aided and abetted the regime and their troops, in violation of international law. In 2002, a group of plaintiffs including Ms. Kiobel filed suit against Royal Dutch Shell in the Southern District of New York, alleging complicity in violations of human rights law.

The Alien Tort Statute and digital rights

What does a ruling saying an oil company can’t be sued have to do with the internet and digital rights? At the moment, US federal courts are considering a $4.2 billion lawsuit between two major telcos, Turkcell and MTN, over a contract to provide a mobile 3G network to Iran. That suit, filed by Turkey’s Turkcell, claims that South Africa-headquartered MTN violated “the law of nations through bribery of sitting Iranian and South African officials and trading in influence,” including to help Iran spy on its subscribers, in return for the contract. Iran’s regime has been shown to arbitrarily arrest and torture users for their communications. Indeed, one of those victims, Iranian journalist Issa Saharkhiz, filed another ATS case against Nokia Siemens Networks for aiding in his arrest and torture, although the case was later withdrawn.

After the recent ruling, MTN’s CEO declared it “definitely a positive” decision for the company’s case with Turkcell. This is because the Kiobel decision, while not totally closing the door to all cases, significantly limits the ATS to only those cases that “touch and concern the territory of the United States… with sufficient force.” That is, a “presumption against extraterritoriality” applies, in contrast to decades of case law.

How the ATS could be used going forward

It remains to be seen whether the MTN-Turkcell case will meet the high bar set by the Supreme Court, but as in Kiobel, the plaintiff, the defendant, and the alleged harm all were located outside the US, suggesting that the case may very well be considered beyond the scope of the ATS. The ATS, however, could still probably be used in cases where a US national or company is involved, because those entities would more sufficiently “touch and concern” the US.

For example, US companies NetApp and Hewlett-Packard have been implicated in an effort to build sophisticated surveillance systems for an authoritarian government, Syria. Under a contracting and servicing agreement led by Italian company AreaSpA, the systems would have provided the Syrian government with the capability to not only read every email sent through the national network, but also to track citizens’ location in near real time, presenting clear and present dangers to human rights.

Despite significant press attention and campaigns from human rights groups (including Access), the $5 billion-a-year digital surveillance industry remains largely free from accountability and oversight. The ambiguity of the Kiobel decision, which lacks clarity on the meaning of “touch and concern” and “sufficient force,” suggests that the courts will be determining the limits of the ATS for some time.

As this body of jurisprudence is established, we believe it remains worth attempting to use the ATS as a tool to go after any US companies who facilitate human rights abuse by selling surveillance equipment to authoritarian regimes.

Reducing pressure on companies to gather evidence

Binding legal decisions can be held up to corporations as evidence of the importance of behaving in certain ways. One former executive writes, “remedies like the ATS offer invaluable assistance in risk management and enhancing compliance by corporate employees who might otherwise, through ignorance as well as malevolence, directly or indirectly violate human rights.”

Legal actions are among the most powerful means of forcing corporations to preserve and disclose evidence of abuses. Litigation in the US has forced companies to have systems in place to preserve documents even before a complaint is filed if the company reasonably believes a lawsuit could arise, and to call files up when needed.

Even if a suit doesn’t result in the award of financial compensation, the evidence of wrongdoing turned over in the discovery phase of an ATS suit can prove invaluable to human rights activists seeking information about abuses and who was involved. For example, plaintiff Turkcell is using the discovery phase to find documents on “the scale and scope of MTN’s business operations with United States banks, securities brokers, and financial institutions, and whether any [are] related to the Iranian transactions.” Without statutes like the ATS, there’s one less way to force corporations to maintain and expose evidence of wrongdoing.

Beyond the private sector, similar evidence could also be used to explain pressures placed on corporations by governments. State security forces, for example, frequently request user data from companies without upholding due process guarantees. Corporate “transparency reports” have helped provide insight into governments’ practice of collecting data in violation of privacy norms and rights. Preserving evidence of those requests for later “discovery” in court could help corporations make their case that governments apply undue pressure on them to infringe rights.

Muddying the waters for lower courts, and plaintiffs

International norms don’t simply come from treaties. They are effectively created from the ground up, through countless domestic legal decisions, laws, and regulations, and even private sector policies, all of which interact with each other in “conversation.” The ATS has been one powerful way that US courts have participated in that conversation.

Following the Kiobel decision, some predict that more U.S. state courts will begin hearing tort cases–such as “wrongful death”–that had previously been heard by federal courts. This decision muddies the water, leaving each US state court system to interpret international torts differently, and forces plaintiffs to struggle for the best venue.

More importantly, it leads the US courts away from the global trend toward greater corporate accountability. From the U.N. Guiding Principles on Business and Human Rights, unanimously endorsed by the UN Human Rights Council, to various examples of industry-led commitments on rights such as privacy and freedom of expression, businesses from every sector are realizing their responsibilities to respect human rights and remedy abuses.

The Supreme Court missed an opportunity to lead the entire U.S. judicial system, and influence corporate executives, with a coherent and clear statement that the “law of nations” is still alive and kicking in the United States. Interestingly, just this week the Court expressed interest in two pending ATS cases, giving itself opportunities to restore the law or further clarify the ambiguities in the Kiobel decision.

For its part, Congress should heed the Court’s call to clarify the purpose and reach of the ATS. Quoting from Justice Breyer’s concurring opinion, Congress could legislate that ‘the ATS applies to conduct that “substantially and adversely” affects national interests.’ Breyer offers the example of giving safe harbor to “a torturer or other common enemy of mankind” as the type of activity the ATS could guard against, but we believe such a framing could equally apply to the makers of surveillance technologies and services used to facilitate human rights abuse. In doing so, the US could contribute to human rights norms that more governments and businesses must strive to uphold.