For more than two decades, U.S. courts have held that private corporations have duties under customary international law and can be subject to lawsuits under the Alien Tort Claims Act (ATCA or ATS). A recent opinion from the U.S. Court of Appeals for the Second Circuit, however, has created a circuit split on the issue. In Kiobel v. Royal Dutch Petroleum Co., the Second Circuit held that international law, and therefore U.S. law, does not allow the imposition of civil liability on corporations under the ATS. 

The majority's holding in Kiobel is in direct conflict with a 2009 Eleventh Circuit decision specifically holding that corporations may be liable under the statute and runs against virtually all appellate and trial court decisions prior to Kiobel.

There are several compelling reasons for finding that corporations should be liable under the statute.

First, there is nothing to indicate that corporations were excluded by the statute. All available evidence indicates that, to the contrary, corporations were always envisioned as part of the class of potential ATS defendants.

Second, the zealous reliance by Kiobel on a footnote in the Supreme Court of the United States' opinion in Sosa v. Alvarez-Machain is misplaced. The footnote does not stand for the proposition that federal courts should examine international law to find whether a class of defendants, such as corporations, can be sued under the statute. Rather, the Supreme Court simply articulated that international law should be examined to determine whether the type of misconduct at issue can be allocable to various actors, such as public or private entities.

Third, international law does not mandate the manner of its enforcement; such mechanisms are reserved for the individual states to implement.

Fourth, the Kiobel court's reliance on international criminal rulings to prove corporations are not liable under international law is misplaced, as criminal law is fundamentally different from civil tort law.

Fifth, international law unquestionably protects corporate rights and, therefore, corporations should be subject to obligations.

Sixth, the view that international law is applicable only to "states" is not an accurate reflection of our globalized world. As states increasingly outsource their functions to businesses, corporations are beginning to fulfill traditional "state" roles. This change has led to a blurring of the once sharp public/private distinction.