U.S. Chamber Defends Corporate Separateness and Opposes Expansion of Liability under ATS in CA2
In its brief, the US Chamber asked the Second Circuit to affirm the dismissal of Alien Tort Statute claims that seek to hold Ford and IBM directly liable for their South African subsidiaries’ activities—namely, selling computers and cars to the South African government—that plaintiffs allege aided and abetted the “apartheid” regime in committing innumerable violations of international law.
The Chamber’s brief explained that plaintiffs’ attempt to revive their claims after the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), by trying to tie the companies’ subsidiaries actions directly to the U.S. parent companies, nonetheless failed to overcome the extraterritoriality problem or justify ignoring the companies’ corporate form.
The Second Circuit affirmed the dismissal of Alien Tort Statute claims that sought to hold Ford and IBM directly liable for their South African subsidiaries’ activities—namely, selling computers and cars to the South African government—which plaintiffs alleged aided and abetted the “apartheid” regime in committing innumerable violations of international law. The Second Circuit held that the plaintiffs did not allege sufficient conduct within the United States to rebut the Alien Tort Statute’s presumption against extraterritoriality.
Picking up on a theme presented in the Chamber’s amicus brief, the Court reasoned that conduct by the companies’ South African subsidies was not relevant, because the subsidiaries were separate corporate entities and there was no basis in this case to pierce the corporate veil. The Court also affirmed a prior Second Circuit decision holding that the Alien Tort Statute does not impose liability on corporations, as opposed to individuals.