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Wednesday, February 29, 2012

Corporate Legal Personhood in the Kiobel Case

In Kiobel v. Royal Dutch Petroleum, the U.S. Supreme Court waded into the murky waters of corporate legal personhood, at least potentially, in hearing oral arguments in late February 2012. The issue in the case is whether corporations can be held liable to the extent that they are complicit in a foreign government’s human rights abuses. Legal personhood would say that they could be. This would represent an obligation that goes with legal personhood. The question is whether the justices who conferred in the Citizens United decision the right of corporations, based on their legal personhood, to make unlimited political donations would also be willing to view obligations as “part and parcel” with such personhood. If not, then legal persons, unlike human persons, would have the benefits of personhood without any of the obligations—an oxymoron to corporations to be sure. In other words, such an asymmetry would render the legal personhood doctrine itself as akin to a one-sided coin—which cannot exist, let alone stand.

As in any legal analysis, it is best to include a bit on the particular case itself. “In Kiobel, about a dozen Nigerians contend that Shell Oil's parent company aided and abetted their government in its torture and extrajudicial killing of environmental and human rights protesters resisting Shell's operations in Nigeria in the 1990s. . . . The plaintiffs brought their suit under a law, commonly called the Alien Tort Statute, passed by the first Congress in 1789 to allow foreign nationals to bring civil suits in federal courts ‘for a tort only, committed in violation of the law of nations or a treaty of the United States.’” The law is silent on whether corporations can be sued under the law. Because of this silence, the U.S. Supreme Court can decide the case on the basis of whether corporations are legal persons, and, if so, whether obligations go with such personhood.

For its part, the U.S. Government submitted a brief stating in part, “Corporations have been subject to suit for centuries, and the concept of corporate liability is a well-settled part of our 'legal culture.'" In other words, corporate personhood entails obligations, one of which is to refrain from contributing to human rights abuses abroad. On the other side, corporations and their allies have been submitting briefs arguing that they should not be subject to the law. It is only natural to want benefits without obligations. Corporate power could indeed enable “legal persons” to shamelessly enjoy the benefits without being subject to any of the obligations—even as such “persons” extoll their “corporate citizenship” for public relations purposes. That is to say, the U.S. Supreme Court could maintain the legal person doctrine for corporate contributions and essentially ignore it in refusing to include corporations as the “persons” subject to the Alien Torts Statute.

Indeed, in oral arguments, the high court seemed split five to four, with the conservative majority looking to exempt corporations even as it had cited their personhood in granting them the right of “wealth as free speech” in political contributions. Justice Kennedy, for example, said that “the case turns in large part” on the point that “international law does not recognize corporate liability.” However, U.S. law is not limited to what is recognized in international law. In fact, the U.S. does not even recognize the International Criminal Court. Chief Justice Roberts and Justices Alito and Scalia expressed hostility toward the Alien Tort Statute itself. Alito noted that the lawsuit had been brought by foreign plaintiffs against a foreign defendant for acts that took place in a foreign country. “What business does a case like that have in the courts of the United States?” Justice Ginsburg noted that the U.S. Supreme Court had already allowed such cases to be brought under the Alien Tort Statute. She reminded the Court that the question was whether only individual defendants or also corporate defendants are liable—not whether the law itself is constitutional. Alito’s ploy at subterfuge—subtly attempted by pivoting on “the issue”—had been rendered transparent by the veteran justice. Unfortunately, however, the doctrine of legal personhood itself was not given center stage in the oral arguments.

In my view, rather than focus on the relationship between U.S. and international law, the justices should have used the oral arguments in Kiobel to decide in a definitive way whether “personhood” extends to corporations. Given the Court’s Citizen’s United decision, which allows corporate “persons” to give unlimited amounts to political action committees, a decision on Kiobel could have “laid down the law” not only on “abstract” legal personhood, but also more specifically on whether both benefits and obligations go along with personhood in a legal system based on laws. If corporations are able to cherry-pick legal opinions through inconsistent conservative justices in the majority—the Court itself reflecting a more general partisanship rather than the coherency that law itself must have—then we are no longer a people based on law rather than the power of the most powerful of our institutions. In other words, corporations may indeed be able to get away with all of the benefits of personhood without any of the obligations, with the cost being “passed on” in terms of the viability of the United States themselves.

Mike Sacks, “Corporate Personhood Case Forces Supreme Court to Hack New Path,” Huffington Post, February 27, 2012. http://www.huffingtonpost.com/2012/02/27/corporate-personhood-supreme-court-alien-tort-statute_n_1305226.html

Mike Sacks, “Corporate Immunity Looks Likely: Supreme Court Seems Ready to Side with Shell in Human Rights Suit,” The Huffington Post, February 28, 2012.