US Supreme Court lowers curtain on an activist stage

April 19, 2013
The international oil and gas industry escaped a legal hazard on Apr. 17 when the US Supreme Court narrowed the geographic scope of an antique law on civil infractions involving noncitizens.

The international oil and gas industry escaped a legal hazard on Apr. 17 when the US Supreme Court narrowed the geographic scope of an antique law on civil infractions involving noncitizens.

In Kiobel v. Royal Dutch Petroleum, the high court held that the Alien Tort Statute doesn’t apply to acts committed outside the US.

Enacted in 1798, the statute provides foreigners a judicial remedy in the US for violations of “the law of nations.” Congress acted it after foreign ambassadors fell victim to mistreatment in the US—in one case verbal abuse by a countryman and in another the wrongful arrest of a domestic servant—and had no legal recourse. It also gave legal footing to actions related to piracy.

For nearly 200 years, little happened under the law. That changed in 1980. Then, according to an Oct. 5, 2009, article in Oil & Gas Journal, Paraguayan citizens living in New York filed suit in New York against a Paraguayan police official they said tortured and murdered a relative in their homeland.

“When the courts allowed the lawsuit to proceed,” wrote Jonathan Drimmer of Steptoe & Johnson LLP and Jennifer Millerwise Dyck of APCO Worldwide, “dozens of others quickly followed.”

Suddenly, the Alien Tort Statute became an avenue into US courts—and news media—for cases alleging international misbehavior.

Targets at first tended to be officials of oppressive regimes. Damage awards, according to Drimmer and Dyck, often exceeded $10 million and sometimes $100 million.

In the mid-1990s, litigation targets became transnational companies. At the time of the OGJ article, at least 128 Alien Tort Statute cases had been brought against corporations. Many were oil and gas companies.

The US judicial system had become a stage for antioil theatrics in cases activists didn’t need to win. Even when defendants disproved the allegations—as, like Shell, they usually did—lawsuits alleging abuses of people and nature smirched their reputations.

There will be fewer of them now. Justice has prevailed.

(Online Apr. 19, 2013; author’s e-mail: [email protected])