A Most Favored Class: Corporate Exemption from the Alien Tort Statute

Posted on Aug 13, 2019

Kyle Nelson

Introduction

The arguments surrounding the Alien Tort Statute (ATS), and the scope of its international jurisdictional grant of American authority, ask the courts to resolve fundamental questions about America’s role in international justice. An expansive reading of the ATS would ask America courts to adjudicate human rights abuses across the world, regardless of their connection to the Unites States. Conversely, the federal courts can, and have, narrowed the statute’s scope to only include a very narrow subset of cases. The debate between these two poles asks whether the United States legal system should focus only on domestic disputes, or if it should serve a role in furthering American human rights objectives abroad. While there are many positions along this spectrum, there is no reason to offer corporations a blanket jurisdictional exemption. The Supreme Court may do exactly that.

Historical Developments

The ATS is one of our oldest laws, the ATS was first enacted as part of the Judiciary Act of 1789, yet this is the third time the statute has been reviewed by the Supreme Court in the 21st century. [1]The ATS reads: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”[2] While there is little legislative history regarding the ATS, many scholars argue that it was passed to ensure that the United State would have jurisdiction to provide remedies for violations of the law of nations.[3]

Only two courts based jurisdiction on the ATS from 1789 until 1980, when the 2nd Circuit granted jurisdiction to hear a case involving torture committed in Paraguay by a Paraguayan defendant on the Paraguayan plaintiff’s brother.[4] The court reasoned that torture was against the law of nations and both the defendant and the plaintiff lived in America, so the ATS applied.[5] This opened a flood of litigation under the ATS.

The Supreme Court began to try and limit this litigation in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004). The Court held that the ATS did not create a cause of action, but only granted jurisdiction for the courts to hear cases regarding violations recognized by the civilized world and defined with specificity akin to common law claims of the 18th-century standards.[6] The Supreme Court further limited the ATS in 2013 when it decided Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013). The Court, limiting the American judiciary’s role as the enforcer of all international norms, held that there is a presumption against the ATS applying extraterritorially.[7] Justice Roberts argued that, “the presumption against extraterritorial application helps ensure that the Judiciary does not erroneously adopt an interpretation of U.S. law that carries foreign policy consequences not clearly intended by the political branches”.[8] The majority dismissed the case, stating that the claims did not sufficiently “touch and concern” the United States to support jurisdiction.[9]

Jesner

On October 11, 2017, the Supreme Court heard oral argument for latest case in this string, Jesner v. Arab Bank. The question before the Justices is whether corporations can be held liable under ATS. [10]

Victims of terrorist attacks that occurred in Israel between 1995 and 2005 have brought the case against Arab Bank. These victims have no immediate connection to the United States. They allege that Jordan’s Arab Bank maintained accounts for known terrorists, accepted donations that it knew would be used to fund terrorism, and distributed millions of dollars to families of suicide bombers”.[11] The plaintiffs argue that the terrorists completed at least some portion of their funding using US dollars. Because the clearing process for dollars must be run through the United States, the plaintiffs believe that their case “touches or concerns” the United States.[12]

This line of cases is particularly interesting because they fundamentally ask the Courts to answer what is America’s role in the international justice system. This is not the first time that the courts have used technical jurisdictional arguments to favor some constituencies over other. It is informative to try and discern the policies underlying these decisions because they illustrate judicial preferences.[13] I strongly believe that the Supreme Court will dismiss the case against Arab Bank and I also believe that they are correct to do so. I do not believe that the Court should completely inoculate corporations from litigation under the ATS.

I expect that most Justices on the Supreme Court will have no issue declaring terrorism as an activity that is against the law of nations, giving the plaintiffs a cause of action to sue under the ATS. I still do not believe that jurisdiction should be granted because the defendant’s actions do not sufficiently “touch and concern” the United States. If the Supreme Court were to allow this suit to proceed, every human rights violation that involved the US dollar in any way could be brought in the American court system.[14] As the courts are supposed to be an independent branch of government, any situation in which the Courts could dramatically impact America’s foreign policy would quickly become politically untenable.

Alternatively, I see no legal reason why the Supreme Court should categorically exempt corporations from liability arising from violating the law of nations. The ATS is clear when it states that aliens may sue for a tort committed in violation of the law of nations.[15] The statute makes no specifications regarding what type of defendants these suits can be brought against. There is no reason for the Court to exclude corporations from liability that can be honestly grounded in the statutory text. To hold otherwise would show blatant favoritism for a class of defendants.

In short, the Supreme Court should continue to limit the scope of the ATS to avoid becoming an international political actor. It should not, however, set precedent for creating a most favored class of defendants.

 

 

[1] 28 U.S.C. §1350

[2] Id.

[3] Hufbauer, Gary Clyde; Mitrokostas, Nicholas K. (2003). Awakening Monster: The Alien Tort Statute of 1789. Washington, D.C.: Institute for International Economics. ISBN 978-0-88132-366-5.

[4] Filártiga v. Peña-Irala, 630 F.2d 876 (1980).

[5] Id.

[6] Sosa

[7] Kiobel, 569 U.S. at 116

[8] Id.

[9] Id.

[10] Amy Howe, An introduction to the Alien Tort Statute and corporate liability: In Plain English, SCOTUSblog (Jul. 24, 2017, 10:57 AM), http://www.scotusblog.com/2017/07/introduction-alien-tort-statute-corporate-liability-plain-english/

[11] Id.

[12] Jesner v. Arab Bank, PLC, 2017 WL 2687507 (U.S.), 1 (U.S. 2017)

[13] See Lujan v. Defenders of Wildlife 112 U.S. 2130 (1992), limiting the ability of regulation’s beneficiaries to sue

[14] Every U.S. dollar touches the United States at some point or another

[15] 28 U.S.C. §1350