* Shell had been shielded from liability in U.S. courts
* Split in federal courts could go to U.S. Supreme Court
* Plaintiffs sought to use 1789 law in human rights case
By Jonathan Stempel
NEW YORK, Feb 4 A U.S. appeals court refused to
reconsider a lawsuit that accused Royal Dutch Shell Plc
(RDSa.L) of helping Nigerian authorities violently suppress
protests against oil exploration in the 1990s.
In a divided vote that prompted a bitter debate among some
of its judges, the court left intact what some legal experts
call a landmark ruling in September that companies cannot be
liable in U.S. courts for violations of international human
The plaintiffs, families of seven Nigerians who were
executed by a former military government for protesting Shell's
exploration and development, had sought to recover from the oil
giant under a 1789 U.S. law known as the Alien Tort Statute.
That law recently has gained favor among plaintiffs as a
way to sue companies in U.S. courts for acts committed abroad.
The full 2nd U.S. Circuit Court of Appeals in New York
declined to hear the case by a 5-5 vote. The tie leaves intact
the original 2-1 panel ruling from September. Separately, the
judges in that panel voted 2-1 not to rehear the case.
But this may not be the end of the lawsuit.
"The 2nd Circuit is alone among federal circuit courts in
concluding that corporations cannot be responsible under U.S.
law for human rights violations," said Ralph Steinhardt, an
international law professor at George Washington University.
"This clears the way for the plaintiffs to seek review at
the Supreme Court," he added.
Paul Hoffman, a lawyer who has represented the families,
and Shell, did not immediately return requests for comment.
The 2nd Circuit ruling applies in New York, Connecticut and
The Alien Tort Statute has underpinned other human rights
cases. In one, mining company Rio Tinto Plc (RIO.L) was accused
of forcing workers in Papua New Guinea to live in "slave like"
conditions, and pushing the government to exact retribution
after a mine was sabotaged.
In another, plaintiffs sought to hold Ford Motor Co (F.N),
General Motors Co (GM.N) and International Business Machines
Corp (IBM.N) liable for helping South African authorities when
apartheid was in force more than two decades ago.
SLAVERS, PIRATES AND MORAL MONSTERS
In the Shell case, the company was accused of violations
related to the 1995 hangings of the activist Ken Saro-Wiwa and
eight other protesters by Nigeria's then-military government.
Shell denies allegations it is involved in human rights
Friday's split ruling showed major differences in the
Chief Judge Dennis Jacobs, part of the September panel that
ruled for Shell, wrote that the original ruling "has no great
practical effect except for the considerable benefit of
avoiding abuse of the courts to extort settlements."
He chided what he called fears by dissenting Judge Pierre
Leval that "slavers and pirates will now rush into corporate
transactions," resulting in "absolution to moral monsters. For
the record: even moral monsters are humans, and I would happily
see them hanged."
Leval countered that Jacobs' opinion evinces an "intense,
multi-faceted policy agenda" underlying an effort "to exempt
corporations from the law of nations."
Other judges who favored a rehearing by the entire court
said the case presented "a significant issue," and that
September's ruling conflicted with a 2008 ruling from the 11th
Circuit appeals court, which sits in Atlanta.
The case is Kiobel et al v. Royal Dutch Petroleum Co et al,
2nd U.S. Circuit Court of Appeals, Nos. 06-4800 and 06-4876.
(Reporting by Jonathan Stempel in New York; Editing by Tim