Tuesday, April 24, 2018

Rooting for the Home Team: Jesner shows how Foreign Corporations can benefit from American Ideology

by Jena Martin, guest contributor, Professor, West Virginia University College of Law

Today, Justice Kennedy writing the plurality opinion for a splintered court, held that foreign corporations who commit human rights violations cannot be sued under the Alien Tort Statute (the ATS).  In doing so, the court effectively ended a twenty-two year old strategy  used by human rights advocates – namely using U.S. civil litigation to bring redress for victims of business and human rights violations.

Writing for a fractured court (the majority opinion was limited to section I, Section II B-1 and Section II-C of Kennedy’s opinion), Justice Kennedy made an explicit distinction between natural persons and corporations as defendants for the purposes of ATS liability. In that regard, much of the majority opinion seems to be devoted to answering the question Justice Ginsburg asked during oral arguments in this matter, a question that remains relevant today: “why you would split individual and corporation [in ATS litigation]?”  Specifically, while Justice Kennedy acknowledged that “ ‘the singular achievement of international law since the Second World War has come in the area of human rights,’ where international law now imposes duties on individuals as well as nation-states,” he goes on to argue that this principle of individual liability does not extend to corporations to the level that he argues is necessary under the standard set out in the court’s Sosa opinion (namely that the principle be “specific, universal and obligatory”).  Instead, Justice Kennedy finds enough disagreement in the organizing statutes of enough tribunals to find a distinction between corporations and natural persons under current international law.

In a previous blog, I noted that during oral arguments three of the court’s more conservative members: Roberts, Alito, and Gorsuch, explicitly raised issues that would limit ATS’s reach: (1) the scope of extraterritoriality; (2) the prospect of foreign entanglement; and (3) the foreign nationality of corporations.  All of these find purchase here.  For instance, the Court notes that part of the reason for limiting the use of ATS against foreign corporations is to reduce the diplomatic challenges that he claims have arisen because of this litigation. However, as Justice Sotomayor points out in her dissenting opinion (in which Justices Ginsburg, Breyer and Kagan joined) “none of those objections was about the availability of corporate liability as a general matter. (Dissent at 21). 

But, in the end, it appears that the Court’s opinion comes down to thinly disguised American Exceptionalism.  Justice Kennedy makes this position clear.  Despite exhortations earlier in his opinion that the “principle and commitment [to human rights] support the conclusion that human-rights norms must bind the individual men and women responsible for committing humanity’s most terrible crimes” (Opinion at 14), Kennedy would subsume this commitment under a seemingly more pressing concern.  As he notes on p. 24 of his opinion “[i]f . . . the Court were to hold that foreign corporations may be held liable under ATS, that precedent setting principle ‘would imply that other nations, also applying the law of nations, could hale our [corporations] into their courts for alleged violations of the law of nations.”  U.S. Corporations 1. Everyone Else 0.


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