New Civil Liability for Corporations: The Seventh Circuit Takes a Stand on the Alien Tort Statute

Many Americans may be surprised to learn that because of the Alien Tort Statute (ATS), federal courts are open to foreign plaintiffs who may bring claims against non-immune public officials for violations of international law. Recent litigation in the field has hit a speed bump, however, and the multi-million dollar question is whether the ATS covers corporations. The circuit courts of appeals are split on the issue. The Seventh Circuit ruled in Flomo v. Firestone National Rubber Co. that the ATS does apply to corporations that commit violations of international law. In reaching this conclusion, the Seventh Circuit rejected the district court’s reliance on a recent Second Circuit case, Kiobel v. Royal Dutch Petroleum Corp. In Kiobel, a decision now before the Supreme Court, the Second Circuit expressly held that the ATS does not apply to corporations. This article contends that the Seventh Circuit was correct in rejecting Kiobel for two reasons: first, the fundamental theories of international law provide that domestic nations may determine what remedies they will provide for plaintiffs aggrieved by violations of international norms; second, provisions in newer international treaties show an erosion of resistance to criminal corporate liability and a gradual acceptance of civil corporate liability, even if those attitudes did not exist in the recent past. With Kiobel representing the odd-man out, the Supreme Court now has the opportunity to create uniformity among the circuits by overturning Kiobel and adopting the Seventh Circuit\u27s rationale in Flomo