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Obama Administration supports corporate liability under the Alien Tort Statute

Solicitor General Donald B. Verrilli

Solicitor General Donald B. Verrilli

Several previous posts ( for example, here, here, and here) have noted recent developments on the question of corporate liability under the Alien Tort Statute. With an HT to Daniel Buk, I am happy to report that the Obama Administration recently filed an amicus brief supporting corporate liability under the ATS. Over at Lawfare, former State Department Legal Adviser John Bellinger explains:

The Obama Administration filed an amicus curiae brief today [December 21, 2011]  with the Supreme Court in support of the Nigerian petitioners in the Kiobel case (which was brought against Shell Oil, relating to its activities in Nigeria), arguing that corporations may be held liable for violations of international law under the Alien Tort Statute.  The brief –signed by State Department Legal Adviser Harold Koh and (somewhat surprisingly) by Commerce General Counsel Cameron Kerry in addition to Solicitor General Don Verrilli – argues that the question of corporate liability under the Alien Tort Statute is governed by federal common law, not by international law, although international law “informs” the issue.  And the brief goes on to argue that under federal common law, corporations may be held liable for violations of both domestic and international law: “[C]orporations have been subject to suit for centuries, and the concept of corporate liability is a well-settled part of our ‘legal culture.’”  The brief states that the United States is not aware of any international law “norm” that would prohibit corporations from being sued for violations of international law.  The brief acknowledges that there are a number of other issues “in the background” of the case (such as aiding-and-abetting liability and extraterritoriality) but urges the Court to address only the corporate liability issue.

This makes a great deal of sense to me. Recently, I participated in an online discussion of corporate liability under the Alien Tort Statute sponsored by the University of Pennsylvania Law Review. In that discussion I argued that corporate liability should obtain under the ATS. In response to an excellent opening statement by Harvard Law Professors Susan Farbstein and Tyler Giannini, I said:

On Monday, October 17, 2011, the United States Supreme Court granted certiorari in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010). This is not surprising. As Professors Farbstein and Giannini explain in their excellent Opening Statement, since the Second Circuit ruled in Kiobel that corporate liability did not obtain under the Alien Tort Statute (ATS), 28 U.S.C. § 1350, both the D.C. and Seventh Circuits have taken a contrary view. See Doe v. Exxon Mobil Corp., 654 F.3d 11, 40-41 (D.C. Cir. 2011); Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013, 1017 (7th Cir. 2011).

While it is always difficult to predict how the Supreme Court will resolve the split in the circuits, I am inclined to think that the Court will reject Kiobel for several reasons—many of which have already been described by Farbstein and Giannini. But let me highlight two in particular.

First, I believe that the Second Circuit’s decision in Kiobel fundamentally misinterprets the Supreme Court ruling in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004). In Sosa, the Supreme Court set forth the standard to determine whether a violation of a putative norm of customary international law rose to the level of a “‘tort… in violation of the law of nations’” for purposes of the ATS. Sosa, 542 U.S. at 698-99 (quoting 28 U.S.C. § 1350). In the course of a discussion on “the determination whether a norm is sufficiently definite to support a cause of action,” id. at 732, the Supreme Court notes in a footnote that a “related consideration is whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual.” Id. at 732 n.20. For some reason, the Second Circuit latched onto this note to indicate that international law provides some form of standard about liability for different types of juridical persons. Referring to the footnote, the Second Circuit claims: “That language requires that we look to international law to determine our jurisdiction over ATS claims against a particular class of defendant, such as corporations.” Kiobel, 621 F.3d at 127 (emphasis omitted). But if one continues to read the Sosa footnote, it becomes clear that the Court was not suggesting that there was an international law standard regarding the differentiation of individuals from corporations, but rather a standard about whether private actors versus state actors could be held liable. (The footnote continues on to compare Judge Edwards’s concurrence in Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 791-95 (D.C. Cir. 1984), which detailed an insufficient consensus on whether torture by private actors violates international law, with Kadic v. Karadzic, 70 F.3d 232, 239-41 (2d Cir. 1995), which found a sufficient consensus that genocide by private actors violates international law. Sosa, 542 U.S. at 732 n.20.) As the amicus brief of International Law Scholars in support of granting certiorari in Kiobel explains, the “text [of the footnote] shows that the Court was referring to a single class of non-state actors (natural and juristic individuals), not two separate classes as assumed by the Kiobel panel majority….” Brief of Amici Curiae International Law Scholars in Support of the Petition for Writ of Certiorari at 6-7, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Jul. 13, 2011), 2011 WL 2743197, at *6-7. Indeed, as the International Law Scholars point out, the Supreme Court has previously noted that the “‘Alien Tort Statute by its terms does not distinguish among classes of defendants….’” Id. at 6 (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 438 (1989)).

Second, as Farbstein and Giannini note, there is ample evidence to support the proposition that international law clearly recognizes that juridical persons, such as corporations, can violate international law. Dating at least as far back as Nuremberg, international law has acknowledged that actors other than natural persons can commit violations of international law. Indeed, the International Law Scholars brief points to a long litany of recent claims to this effect:

A diverse array of treaties reveals the accepted understanding within the international community that corporations have international obligations and can be held liable for violations of international law. See, e.g., Council of Europe Convention on the Prevention of Terrorism, May 16, 2005, art. 10(1), C.E.T.S. No. 196 (2005) (“Each Party shall adopt such measures as may be necessary, in accordance with its legal principles, to establish the liability of legal entities for participation in the offences set forth in Articles 5 to 7 and 9 of this Convention.”); Convention against Transnational Organized Crime, Nov. 15, 2000, art. 10(1), 2225 U.N.T.S. 209 (“Each State Party shall adopt such measures as may be necessary, consistent with its legal principles, to establish the liability of legal persons for participation in serious crimes involving an organized criminal group and for the offences established in accordance with articles 5, 6, 8 and 23 of this Convention.”); Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Dec. 17, 1997, art. 2, S. Treaty Doc. No. 105-43 (“Each Party shall take such measures as may be necessary, in accordance with its legal principles, to establish the liability of legal persons for the bribery of a foreign public official.”); Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, Mar. 22, 1989, 1673 U.N.T.S. 57; International Convention on the Suppression and Punishment of the Crime of Apartheid, Nov. 3, 1973 art. I(2), 1015 U.N.T.S. 243 (“The States Parties to the present Convention declare criminal those organizations, institutions and individuals committing the crime of apartheid.”); International Convention on Civil Liability for Oil Pollution Damage, Nov. 29, 1969, 973 U.N.T.S. 3; Convention on Third Party Liability in the Field of Nuclear Energy, July 29, 1960, 956 U.N.T.S. 251 (emphasis added in all cases). There is certainly no rule in international law that corporations, regardless of their relationship with a government, enjoy immunity for their state-like or state-related activities, as when they interrogate detainees, provide public security, work weapons systems in armed conflict, or run prisons. As noted by the Special Representative to the U.N. Secretary-General in his summary of international legal principles, the corporate responsibility to respect human rights includes avoiding complicity, which has been most clearly elucidated “in the area of aiding and abetting international crimes, i.e. knowingly providing practical assistance or encouragement that has a substantial effect on the commission of a crime….” Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, ¶¶ 73-74, U.N. Doc. A/HRC/8/5 (Apr. 7, 2008).

Brief of Amici Curiae International Law Scholars, supra, at 11-13.

But at the end of the day, whether corporate violations of international law can be punished in domestic courts through the remedy provided by a civil suit is a question that international law leaves to individual states. It does not matter whether there is an international law “standard” for civil liability for such violations—a point emphasized by both the D.C. and Seventh Circuits and highlighted by Farbstein and Giannini in their Opening Statement.

In short, in support of Farbstein and Giannini’s arguments, I believe that the Supreme Court will, in fact, reject the majority’s conclusion in the divided panel in Kiobel and hold that there is civil liability under the ATS for corporations that commit torts in violation of the law of nations.

But I would be remiss if I did not point to one interesting legal thread raised in the D.C. Circuit and in the International Legal Scholars brief—the issue of “general principles of law.” As will be recalled, the Second Circuit based its decision exclusively upon what it deemed to be rules of customary international law, concluding that there is no rule of customary international law establishing corporate liability for purposes of the ATS. Kiobel, 621 F.3d at 145. The D.C. Circuit and the amicus brief for the International Law Scholars make an argument that, irrespective of whether there is a rule of customary international law, there is a general principle of law providing for corporate liability for violations of international law. See Exxon, 654 F.3d at 53; Brief of Amici Curiae International Law Scholars, supra, at 14.

Article 38 of the Statute of the International Court of Justice, as is well known, lists three main sources of international law: conventions, custom, and “general principles of law recognized by civilized nations.” Statute of the International Court of Justice, art. 38, para. 1(c). This last source is the most controversial and unclear in its meaning. See Anthony Clark Arend, Legal Rules and International Society 49-53 (1999). One of the most widely accepted meanings of general principles is that the term refers to “general principles of law that are common to the domestic legal systems of states.” Id. at 49. And it is this meaning that the D.C. Circuit applies in Doe v. Exxon. The court notes that “the Kiobel majority overlooked general principles of international law as a proper source for the content of international law,” Exxon, 654 F.3d at 53, and concludes that “[g]eneral principles of international law… offer further support that corporate responsibility for the conduct of its agents under a principle of respondeat superior is recognized in the law of nations,” id. at 54.

So here is the question: will the Supreme Court venture into a discussion of general principles of law? If so, it would make a significant contribution to international legal jurisprudence on this source of international law. As far as I can tell, with the possible exception of a passing reference in a footnote in United States v. Maine, 475 U.S. 89, 103 n.18 (1986), the Supreme Court has never addressed the nature of general principles of law.

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Anthony Clark Arend is Professor of Government and Foreign Service at Georgetown University and the Director of the Master of Science in Foreign Service in the Walsh School of Foreign Service.

Commentary and analysis at the intersection of international law and politics.