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US Supreme Court Throws Out Lawsuit Against Shell

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WASHINGTON -

The Supreme Court Wednesday said a centuries-old statute making international law enforceable in U.S. federal court can't be applied to actions that take place overseas, blunting a tool human-rights groups had used against torturers and other abusers for violations in their home countries.

In an opinion by Chief Justice John Roberts, the court held that the Alien Tort Claims Act, adopted in 1789 shortly after Congress met for the first time, applies only to actions that take place in the U.S. While all justices voted to dismiss the suit against Royal Dutch Shell PLC, Justice Stephen Breyer, joined by three other liberals, disputed the bright line majority conservatives drew.

Justice Breyer wrote that some lawsuits based on overseas acts should be permitted, if the defendant is an American national or the challenged conduct allegedly harms American interests.

In past decades, victims of former officials of foreign governments have won judgments in federal courts against their abusers. Those rarely have been paid, however, and more recently human-rights advocates have pursued defendants with deeper pockets, such as corporations doing business in countries with questionable regimes, under a theory that they are complicit in the misconduct.

The Supreme Court's ruling Wednesday will close off many such suits.

Still, the majority opinion left open at least the theoretical possibility that some acts abroad could so significantly "touch and concern the territory of the United States" to "displace the presumption" against the statute's use. In a concurring opinion, Justice Anthony Kennedy emphasized that future cases could provide "further elaboration and explanation" of that exception.

The alien tort law remained dormant for most of its history until human-rights advocates rediscovered it in the 1970s and began applying it to violations of modern international law.

In 1980, the U.S. Court of Appeals for the Second Circuit, in New York, ruled that a Paraguayan immigrant could invoke the law against a former Paraguayan police official for the torture and killing of her brother in Paraguay.

Wednesday's ruling involved a case brought by Nigerian refugees against Royal Dutch Shell. The plaintiffs alleged that the Anglo-Dutch oil giant aided and abetted the Nigerian government in a repressive campaign in the country's Ogoni region. Shell denies the allegations.

Initially, the Supreme Court agreed to consider whether the alien-tort law applied to corporations as well as individuals, but after a first round of arguments in February 2012, the justices ordered additional arguments over the far-broader question of whether the law applies at all to events overseas.

At arguments last October, several justices voiced concern that affirming such liability would make American courts a magnet for aggrieved foreign plaintiffs bringing claims for acts completely unrelated to the U.S.--and could invite foreign courts to encourage judging U.S. corporations for actions outside their own borders.

The case is Kiobel v. Royal Dutch Petroleum Co.

Copyright (c) 2012 Dow Jones & Company, Inc.

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