Are corporations people?
Following the Supreme Court’s 2010 decision in Citizens United, this question has sparked endless debate among daytime pundits and has provided cannon fodder for late-night comedians. Take, for example, Stephen Colbert’s recent political “attack ad” that portrays presidential hopeful Mitt Romney as “Mitt the Ripper”; a satirical reference to his former career “carving up corporations” as CEO of Bain Capital and his recent statement that “corporation are people.” (I've embedded the video below).
While the American public may be divided over this question as it relates to campaign finance, the circuit courts are similarly divided over the issue as it relates to the Alien Tort Statute (ATS), which is sometimes referred to as the Alien Tort Claims Act or 28 U.S.C. § 1350. The ATS provides that “district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."
Earlier this week on Valentine’s Day, the U.S. District Court for the District of New Jersey identified a split among the circuits over the question of whether corporations, like their human counterparts, may be subject to liability under the ATS. See Karunamunige Chamila Krishanthi v. Rajaratnam, Civil Action No. 09-CV-5395 (DMC) (MF), 2012 U.S. Dist. LEXIS 19137 (D.N.J. Feb. 14, 2012) (unpublished). “The Eleventh Circuit,” the court noted, “grants jurisdiction from complaints of torture against corporate Defendants.” Id. (citing Romero v. Drummond Co. Inc., 552 F.3d 1303, 1315 (11th Cir. 2008)).
Back in July 2011, the Seventh Circuit offered a more comprehensive look at each circuit’s stance on this divisive issue:
The issue of corporate liability under the Alien Tort Statute seems to have been left open in an enigmatic footnote in Sosa, 542 U.S. at 732 n. 20, 124 S.Ct. 2739 (but since it's a Supreme Court footnote, the parties haggle over its meaning, albeit to no avail). All but one of the cases at our level hold or assume (mainly the latter) that corporations can be liable. Romero v. Drummond Co., 552 F.3d 1303, 1315 (11th Cir. 2008); Herero People's Reparations Corp. v. Deutsche Bank, A.G., 370 F.3d 1192, 1193, 1195 (D.C. Cir.2004); Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 91-92 (2d Cir. 2000); Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 163 (5th Cir. 1999); see also Abdullahi v. Pfizer, Inc., 562 F.3d 163, 174 (2d Cir. 2009); Sarei v. Rio Tinto, PLC, 550 F.3d 822, 831 (9th Cir. 2008) (en banc). (Our court hasn't addressed the issue.) The outlier is the split decision in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010), which indeed held that because corporations have never been prosecuted, whether criminally or civilly, for violating customary international law, there can't be said to be a principle of customary international law that binds a corporation.
The Third Circuit, as the district judge in Rajaratnam pointed out earlier this week, is noticeably absent from this list: “In the absence of Third Circuit precedent and considering the Circuit split on the issue at the crux of TRO-USA's appeal from this Court's Opinion, it is prudent to await the Supreme Court's provision of binding precedent on this point of law.” Karunamunige Chamila Krishanthi v. Rajaratnam, Civil Action No. 09-CV-5395 (DMC) (MF).
In the spirit of Valentine's Day, Rajaratnam sounds like a love note to the Supreme Court, doesn’t it? For interesting takes on the topic, check out the video below as well as the following article: John C. Coffee, Jr., "No Soul to Damn: No Body to Kick": An Unscandalized Inquiry into the Problem of Corporate Punishment, 79 Mich. L. Rev. 386 (1981) (available here).