Second Circuit Denies Rehearing En Banc in Kiobel v. Royal Dutch Petroleum Co.

In our posting last September when the decision was announced (here), we discussed the Second Circuit’s decision in Kiobel, et al. v. Royal Dutch Petroleum Co., et al., 06-4800-cv, 06-4876-cv (2d Cir. 17 Sept. 2010), which held that the Alien Tort Statute, 28 U.S.C. § 1350, does not subject a corporation (as opposed to natural persons) to liability.  Now, in two separate filings (here and here) leading to an 5-5 split, the Second Circuit denied the request for the full Court to reahear the case en banc.   (For a general discussion of the role of comity in international disputes, see our Topic discussion in our e-book, International Practice:  Topics and Trends.)

The Circuit’s Chief Judge (Jacobs), who was in the majority in the panel’s decision, took the occasion of the denial of the rehearing en banc to state that he “acknowledge[d] that Judge Leval’s [dissenting] opinion is worked out with a certain scholarly force, and has an academic constituency”.  Nonetheless, Judge Jacobs, by his concurring opinion in the denial of rehearing en banc, wished to “subject Judge Leval’s conclusion to some tests of reality”.

In his opinion that followed, Judge Jacobs addressed the law and possible practical ramifications sketched out in Judge Leval’s earlier dissent.  Judge Jacobs writes that it is “fanciful” to suppose that slavers and pirates will now rush to incorporate themselves as corporations to take advantage of the Second Circuit’s ruling and that ”policy considerations [including of comity] explain why no international consensus has arisen (or is likely to arise) supporting corporate liability” and asks rhetorically:  “Is it plausible that customary international law supports proceedings that would harm other civilized nations and be opposed by them–or be tantamount to ‘judicial imperialism’”? Concluding, Judge Jacobs writes:

“The majority opinion [in the ealier panel ruling] demonstrates why ATS suits against corporations are foreclosed. It is a matter of great importance to say so, in order to promote international comity, to administer efficient handling of cases, and to avoid the use of our courts to extort settlements”.

In a concluding personal note, Judge Jacobs states:

“Judge Leval, passim, reads my words as giving absolution to moral monsters. For the record: even moral monsters are humans, and I would happily see them hanged.”

Again dissenting, this time from the evenly split Court’s denial of rehearing en banc, Judge Leval believed he perceived that Judge Jacobs, and the opinion of the earlier majority, “reveals an intense, multi-faceted policy agenda that underlies the majority’s undertaking to exempt corporations from the law of nations”.

See also the Bankruptcy Court’s decision following Kiobel and disallowing apartheid claims to be asserted in bankruptcy against General Motors.  In re Motors Liquidation Co., et al., f/k/a General Motors Corp., et al., Case No. 09-50026 (S.D.N.Y Bank. Ct. Jan. 2011)

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