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The unattractive argument against corporate liability under the Alien Tort Statute

February 27, 2012 10:48 AM

Julian Ku

Professor of Law at the Maurice A. Deane School of Law at Hofstra University. Professor Ku focuses his research on the intersection of international and domestic law. His forthcoming book, Taming Globalization: International Law, the U.S. Constitution, and the New World Order (with John Yoo), is being published by Oxford University Press.

Thanks to Point of Law for inviting me to share my thoughts on the Supreme Court's consideration of the Alien Tort Statute (ATS) in Kiobel v. Royal Dutch Petroleum.

I will use two recent op-eds on the upcoming case to launch our discussion. Each op-ed reflects how the disputants in Kiobel would like to frame their argument to the Supreme Court and to the public.

In the NYT, Peter Weiss, formerly of the Center for Constitutional Rights, focuses on the importance of the ATS in holding human rights offenders accountable and the general unfairness of excluding corporations from ATS lawsuits.

In the Washington Post, former Bush Administration State Department Legal Advisor John Bellinger, argues that ATS lawsuits are being used to harass corporations into settlements, to interfere with other nation's domestic affairs, and to embroil the United States in disputes with important foreign allies like the United Kingdom, the Netherlands, and Germany.

I think Bellinger has a very strong argument (I have joined an amicus brief in this case making very similar arguments) and I haven't seen the petitioners in this case or their amici make a very persuasive response to it. If the Supreme Court rules against the Kiobel plaintiffs, I am betting some version of this argument will be in the majority opinion.

But it is also noteworthy that Bellinger does not respond to Weiss' claim about the unfairness of excluding corporations. He doesn't do so because the "corporations are not liable under the ATS," is the kind of rigidly formalistic argument that rarely succeeds at the Supreme Court and has almost no appeal to the general public. The NYT headline to Weiss' op-ed, "Should Corporations Have More Leeway to Kill Than People Do?," neatly captures the difficulty that the Shell defendants face in making this argument.

But just because the argument is unattractive, doesn't mean it is wrong. As I argued at some length in the Virginia Journal of International Law, the question of corporate liability under the ATS is NOT about whether corporations should be held liable for aiding in humanitarian atrocities. Of course they should. But they should be held liable under the domestic law of the country where the alleged atrocities occurred, under the domestic law of the corporate defendant's place of business or registration, or under an international treaty specifying their duties and obligations.

Instead of worrying about corporate accountability generally, the question for the Supreme Court is whether Congress has granted the federal courts the broad lawmaking authority to extend international law norms to corporate entities for actions that have the most tenuous of connections to the United States. As I detail in my VJIL article and in my amicus brief, the precedents for extending international law to corporate entities ranges from few to embarrassingly few. The international precedents are so thin that the pro-ATS Obama Justice Department does not even try to make this argument in their amicus brief otherwise supporting the petitioners.

Instead, the petitioners (and the Obama Administration) have emphasized that the question of corporate liability under the ATS is a question of domestic federal common law rather than of international law. Federal courts should be allowed to impose such liability as part of their general common lawmaking powers.

I think this argument has problems, which I may discuss in subsequent posts, but it is definitely the petitioner's strongest argument. And this strongly suggests that, at least for now, international law doesn't impose duties directly on corporate entities after all. Which means that the most unattractive argument for the defendants is probably correct, even though it won't do them much good.




Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.