Kiobel v. Royal Dutch Petroleum, No. 10-1491, is among the most important business cases on the Supreme Court’s docket. At issue is whether a non-US company’s activities in Nigeria, which allegedly harmed Nigerians, may be the subject of a tort suit in US federal court, because the company’s actions allegedly violated international law. The suit arises under the so-called Alien Tort Statute, 28 USC. § 1350 (“ATS”), which allows aliens to bring claims in US federal court for torts committed in violation of the “law of nations.” A lower federal court dismissed the case, holding that only natural persons, and not corporations, could be subject to ATS claims under international law.

The Supreme Court first heard oral argument in Kiobel on February 28, 2012. The first questions from Justices Kennedy, Ginsburg and Alito, however, focused not on the status of corporations under international law, but on whether US courts could address claims that lacked any connection to the United States. On March 5, 2012, the Court took the unusual step of scheduling the case for reargument on an additional question: “Whether and under what circumstances the Alien Tort Statute, 28 USC. § 1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

Reargument is set for October 1, 2012, the Supreme Court’s first day in session for its new term. Media coverage of this development generally anticipates that the Court will curb the reach of the ATS both as to scope and who can be sued. This may not be the case, however, as a ruling on the extraterritorial reach of the ATS could be used by the Court to leave some ATS claims against companies untouched.

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