Poor Shell… Human Rights Abuses Aren’t Free

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Last week, Shell filed its latest brief in the Kiobel case, taking a position that would immunize corporations that commit human rights violations abroad from liability in the United States. While Brad and Jonathan have already posted their initial reactions to the brief, I was struck most by this passage on pages 51 and 52:

[A]pplication of the ATS and federal common law to foreign conduct risks adverse impacts upon the Nation’s commercial interests. Contrary to Petitioners’ assertion that there have been relatively few corporate ATS cases since Filartiga, there have in fact been more than 115 such cases. And ATS suits involving foreign conduct frequently entail invasive discovery that could coerce settlements that have no relation to the prospect of success on the ultimate merits. Settlement pressure is further exacerbated by the high-profile nature of ATS suits, which provides a platform for plaintiffs or their proxies to engage in aggressive public-relations campaigns that inflict significant reputational harm on corporate defendants. Indeed, the mere filing of an ATS suit can have an adverse effect on a company’s stock price and debt rating. (internal citations and quotations omitted).

My initial reaction to most of this reasoning was simply: so what? While Shell’s brief is noticeably lacking in evidence supporting these statements, the more important point is that they have no bearing on whether or not the ATS applies to human rights violations committed abroad.

Sure, major corporations may find it inconvenient to defend against allegations that they were complicit in crimes against humanity. But that is not a reason to find that they are immune. Major corporations, and the United States itself, are frequently the subject of lawsuits that may have adverse commercial implications—and we don’t deny plaintiffs the opportunity for redress because of the potential or actual costs. If we don’t deny victims a forum for even ordinary claims, why would we do so when the crimes at issue are the very worst kinds imaginable?

Furthermore, 115 corporate ATS cases since Filartiga (which was decided in 1980) is relatively few. To give a little perspective, there were 282,895 civil filings in U.S. District Courts in 2010.  Even if all 115 had been filed in one year rather than spread out over 32 years, corporate ATS cases still would have accounted for about 0.04% of cases in federal district court. And even if it weren’t relatively few, what Congress decides is an actionable tort is not determined by the number of defendants who might be liable for it.

Additionally, the high cost of modern discovery is not an issue unique to ATS litigation, and therefore is not a basis for an ATS-specific rule. And the irony is that ATS litigation is more expensive because big corporate defendants want it that way; they file endless motions because they always have more resources than the plaintiffs and because delay is in their interests.

Finally, the notion that corporations should not be held accountable for their human rights abuses abroad because of the potential for reputational harm is, quite frankly, ludicrous and insulting.* If plaintiffs were unable to pursue justice in every instance where the defendant’s reputation might suffer, the number of lawsuits would quickly approach zero and plaintiffs entitled to redress would remain uncompensated. The American judicial system is meant to seek truth and ensure justice for all, not to blindly protect the good name of the wealthy and powerful.

Of course, this blog post holds a magnifying glass up to a single paragraph in Shell’s brief, but I think the absurdity of this particular passage is illustrative of how highly Shell values its bottom line and its reputation at the expense of fundamental human rights. In a 2011 case called Flomo v. Firestone Nat. Rubber Co., Judge Posner said an argument that “corporations shouldn’t be liable under the Alien Tort Statute because that would be bad for business” is irrelevant — and the same is true of Shell’s arguments about extraterritoriality.

*See ERI’s response to the U.S. Chamber of Commerce’s “Think Globally, Sue Locally” report for a discussion of the relationship between transnational litigation and public awareness campaigns.

This guest post was contributed by Maia Levenson, a rising third year law student at Harvard Law School, currently interning in D.C. with ERI's legal team.

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