True or false: corporations should behave as citizens are expected to do.
The current Supreme Court, blithely provoking a growing national call for corporate accountability, is settling in to tackle this question as one of the central and defining issues of its term. The Court's decision in Citizens United, opening the floodgates for corporate representation in politics, was only its opening maneuver. Now the Court has agreed to review the question of whether corporations deserve impunity when they aid and abet human rights violations. We should fear the power that will be unleashed if the Court grants this impunity.
In Citizens United, the Supreme Court held that corporations are to be treated the same as natural persons under the first amendment. This ruling has already been interpreted by a lower court in Virginia to mean that corporations can make direct contributions to political candidates.
But the Citizens United decision to give corporations rights does not cut both ways -- when it comes to corporate responsibilities for violating other 'natural persons'' rights, the question of corporate personhood remains open. By reaching its holding on the narrow ground that corporations are treated the same as natural persons under the first amendment, the Supreme Court left open the possibility that corporations might be treated as different from natural persons under other areas of the law -- including those areas of law that seek to hold corporations accountable for violating human rights.
The Supreme Court has agreed to hear the case of Kiobel v. Royal Dutch Petroleum, No. 10-1491. The Second Circuit heard this case, which alleged that one of the world's largest oil companies had aided and abetted the Nigerian government in the torture and executions of Ogoni people who were protesting oil development in their communities. The case was brought under an old federal law known as the Alien Tort Statute (ATS), which allows non-U.S. citizens to bring suit in U.S. federal courts for violations of international human rights law. The Second Circuit dismissed the Kiobel case last September, holding that only natural persons can be held liable for violations of international human rights -- and that corporations are not natural persons.
But how can this be? Since the late 1700s' corporations have had capacity to both sue and be sued under domestic law. With the rise of the modern corporation, and of corporate rights (to contract, to sell land) arose parallel corporate duties -- liability in tort and on contracts. This makes sense: the whole point of a corporation -- limited liability for the shareholders -- requires liability for the corporation. They are two sides of the same coin. And until the Second Circuit's decision, courts never even questioned the ability of plaintiffs to bring suits against corporations under the ATS, with the ATS being used in a number of cases to sue both natural persons and corporations complicit in the most egregious violations of human rights.
Kiobel plaintiffs present a strong argument that the Second Circuit, which ducked the question as by accepting that corporations did not have personhood under international law, actually got the law wrong. Plaintiffs argued that fundamentally international law leaves the question to individual nations. International law provides the "norm" or prohibition (i.e. one should not engage in piracy, one should not torture, one should not commit crimes against humanity), but it is then left to each state to hold perpetrators liable under domestic law. The common law in the United States has always done just that -- and corporations should not be permitted to circumvent this truth to carve out an exception for their immunity, particularly in those instances when they are complicit in the most egregious violations of human rights.
Already, the 7th Circuit, and the D.C. Circuit have issued opinions agreeing with Kiobel plaintiffs and rejecting the flawed reasoning of the Second Circuit. But now the case is in the Supreme Court's hands, and their decision will set the rule for the whole country. This is the same Court that gave us the Citizens United opinion. What will the Supreme Court do? Will it with one hand treat corporations as persons to give them first amendment protection, and with the other hand treat them as non-persons when it comes to liability for human rights violations?
Those who are filling the streets in opposition should take note. We need our justice system to establish the principle of accountability as a vital means of deterring such violations in the first place. Citizens United all but gave corporations the vote. The question in Kiobel is whether the Supreme Court will now give them immunity. The prospect of a polity where a company can be represented in government, but does not have to abide by the law, is one that should send us all to the streets.