10-3675 Flomo v. Firestone Natural Rubber Co., LLC

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Torts
Alien Tort Statute; corporate liability

A corporation can be liable under the Alien Tort Statute.

“[I]n the United States the liability of a corporation for torts committed by its employees in the course of their employment is strict, on the theory that strict liability for employees’ torts gives corporations (and other employers) incentives to police their employees that are needed because the employees themselves will usually be judgment proof and hence not responsive to tort sanctions. The theory attenuates when the employees include local residents of Third World countries, such as the Liberian rubber farmers employed on Firestone’s plantation. American corporations that have branches in backward or disordered countries may be incapable of preventing abuses of workers in those countries.”

“But the concern we’ve just expressed is an objection not to corporate liability for violations of customary international law but to the scope of that liability; and the plaintiffs concede that corporate liability for such violations is limited to cases in which the violations are directed, encouraged, or condoned at the corporate defendant’s decisionmaking level. That is analogous to the liability of municipalities under the Monell doctrine, where as we noted recently ‘a person who wants to impose liability on a municipality for a constitutional tort must show that the tort was committed (that is, authorized or directed) at the policymaking level of government—by the city council, for example, rather than by the police officer who made an illegal arrest.’ Vodak v. City of Chicago, 639 F.3d 738, 747 (7th Cir. 2011). We needn’t decide how far corporate vicarious liability for violations of customary international law extends; it’s enough that we see no objection to corporate civil liability as circumscribed as the plaintiffs concede.”
Affirmed.

10-3675 Flomo v. Firestone Natural Rubber Co., LLC

Appeal from the United States District Court for the Southern District of Indiana, Magnus-Stinson, J., Posner, J.

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