CORPORATE LIABILITY FOR HUMAN RIGHTS ABUSE: FOR CONGRESS, NOT COURTS

Abstract

JESNER v Arab Bank plc 584 U.S. __ (2018) is the second time that the US Supreme Court has been asked to rule on whether corporations can be sued for violations of international norms under the Alien Tort Statute, 28 USC §1350 (“ATS”). Enacted in 1789, the Statute gives US federal courts jurisdiction over “any civil action by an alien for a tort only, committed in violation of the law of nations”. In Sosa v Alvarez-Machain 542 U.S. 692 (2004), the Supreme Court held that federal courts may recognise a right of action for contemporary ATS claims where the international norm alleged to have been violated is “specific, universal, and obligatory” provided that courts also exercise “judicial caution” (Sosa, 725). In 2010, the Court of Appeal for the Second Circuit sparked an intense debate when it held that corporations cannot be sued under the ATS because international law does not recognise a specific, universal and obligatory norm of corporate liability (Kiobel v Royal Dutch Petroleum 621 F.3d 111 (2d Cir. 2010)). Other circuit courts disagreed, deciding instead that although the conduct-governing norm is drawn from international law, it is federal common law that determines whether there is any liability for breaches of that norm. On appeal, the Supreme Court affirmed the Second Circuit decision but not by resolving the question of corporate liability. Instead, the Court held that the presumption against extraterritoriality applied to claims under the ATS and, as “all the relevant conduct” in Kiobel took place outside the United States, the presumption was not displaced (Kiobel v Royal Dutch Petroleum 569 U.S. 108 (2013), 124; noted [2013] C.L.J. 487. It added that “even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption” (Ibid, 124–5).