The case, Corrie et al. v. Caterpillar, was filed in Seattle in 2005, but a district court dismissed it. After this hearing, the appeals court will rule whether the suit should be dismissed or sent back to the lower court.
Cindy and Craig Corrie, the woman's parents, allege Caterpillar violated human rights and committed war crimes by knowingly selling its equipment to the Israeli army, which used the bulldozers to raze Palestinian homes and endanger people. Rachel Corrie was run over by a bulldozer driven by an Israeli soldier as she tried to block a home from demolition.
"We are essentially arguing that you cannot knowingly provide substantial assistance — the means to commit war crimes, which is essentially what Caterpillar has done here," said Maria LaHood, with the Center for Constitutional Rights, on the Corries' legal team.
Israel said the death was an accident, according to The Associated Press. Caterpillar has said in the past that it can't be held responsible for how its bulldozers are used.
On Friday, a Caterpillar spokeswoman declined to comment on the development.
The Corries seek monetary damages in the civil suit, and they want to stop Caterpillar from selling its products to groups they say violate human rights. Four Palestinian families whose homes were bulldozed are also plaintiffs.
"We hope that this decision would mean eventually that Caterpillar shouldn't sell D9 bulldozers to Israel while they are using them to commit human-rights violations," LaHood said.
The death of The Evergreen State College student polarized political camps about the Israeli-Palestinian conflict. This is not the first time corporations have been tried or held liable for their involvement in alleged human-rights violations or war crimes, LaHood said.
Three judges will hear arguments, and a ruling could take a few months, LaHood said.