Posts Tagged ATS
For background to this week’s SCOTUS ruling in Jesner v Arab Bank see my earlier posting. Bastian Brunk has early reflection here, with good summary of the Court’s majority (as well as dissenting) opinion.
Human rights litigation under ATS is not dead. Yet it is clear it is not going to be routine, either. I find the judgment not surprising. While one could certainly from a political point of view bemoan that ATS is not providing the avenue to hold corporate excess to account, SCOTUS have a point when
- they emphasise the foreign policy intentions of the ATS when it was originally drafted. Hence the need not to ignore the same foreign policy implications 2 centuries on. Hence also my stance on JASTA.
- they highlight the continuing de lega lata situation on corporate culpability under international law: the default position remains that corporations are not subjects of public international law. Yes there are hard-core exceptions – and these may be further developing. And yes, plenty over the past 20 years have tried to change that status quo. Finally the Court could have flagged more of those attempts that raise serious doubt over the position. However it is hardly the role of the US Supreme Court single-handedly to force the hand of the league of nations.
- separation of powers in the US, too, demands Congress intervene should it want the Statute’s causes of action to be broadened.
All in all a ruling very much in Montesquieu’s spirit. Students of public international law in particular should read the judgment with care: there is plenty in there to chew over.
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.
Alien Tort Statute, ATS, Corporate culpability, Corporate social responsibility, CSR, https://www.supremecourt.gov/opinions/17pdf/16-499_1a7d.pdf, https://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/16-499.htm, ICSID, Jesner v. Arab Bank, Kiobel, SCOTUS, Urbaser, USSC
Jesner v Arab Bank. Corporate culpability, the substantive question ignored in Kiobel, makes certiorari.
Update 13 October 2017: Oral hearing took place this week. See here for reporting in particular on Gorsuch J’s unexpected line of questioning.
Thank you, Ludo Veuchelen, for alerting me to Adam Liptak’s reporting on Jesner v Arab Bank, in which certiorari was granted by the United States Supreme Court early April. The case may finally have us hear SCOTUS’ view on the question which led to certiorari in Kiobel but was subsequently ignored by the Court: whether corporations can be culpable for violation of public international law. ‘May’ is probably the keyword in the previous sentence.
Update 18 January 2018 One thing to look out for is whether SCOTUS will refer to developments in ICSID /World Bank arbitration, particularly Urbaser v Argentina where the Panel noted at 1195
‘it can no longer be admitted that companies operating internationally are immune from
becoming subjects of international law. On the other hand, even though several initiatives undertaken at the international scene are seriously targeting corporations human rights conduct, they are not, on their own, sufficient to oblige corporations to put their policies in line with human rights law. The focus must be, therefore, on contextualizing a corporation’s specific activities as they relate to the human right at issue in order to determine whether any international law obligations attach to the non-State individual.’
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.
Alien Tort Statute, ATS, Corporate culpability, Corporate social responsibility, CSR, https://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/16-499.htm, ICSID, Jesner v. Arab Bank, Kiobel, SCOTUS, Urbaser, USSC
Institute of Cetacean Research v. Sea Shepherd Conservation Society: A great illustration of (failure of) injunctive relief under ATS.
Institute of Cetacean Research v. Sea Shepherd Conservation Society has recently come to my attention thanks to Juliett Hatchett over at Baker: her analysis is spot on and I am happy to refer to it. She summarises the case as the district court confirming that perpetrating and funding piracy and unsafe navigation are within the scope of ATS jurisdiction, but holding that there is no enforceable international norm against whaling or financing terrorism.
The case is not easy to find however Sea Shepherd tend to link to court documents in their updates on the litigation.
I flag the case mainly to bring it to readers’ attention that CSR litigation can be done proactively: one need not wait for alleged violations of relevant legal standards to seek to seize a court. Exactly a point I assessed in the context of vulture fund litigation, end of May. (And in forthcoming paper).
Alien Tort Statute, ATS, CSR, injunction, Institute of Cetacean Research v. Sea Shepherd Conservation Society, Japanese whaling, No. 11-cv-2043, proactive litigation, Sea Shepherd, vulture funds, Whaling
Regular or indeed occasional readers of the blog will have been following developments in US case-law since SCOTUS issued its ruling in Kiobel. In Al Shimari v. Caci, the fourth circuit Court of Appeal held in early July that plaintiffs’ claims “touch and concern” the territory of the United States with sufficient force to displace the presumption against extraterritorial application of the Alien Tort Statute: that is the test which SCOTUS set in Kiobel.
Due to a shortage of trained military interrogators, the US hired civilian contractors to interrogate detainees at Abu Ghraib, Iraq – context will be known to readers. During the time period relevant to the civil action, those private interrogators were provided exclusively by CACI Premier Technology, Inc. (CACI), a corporation domiciled in the US. Plaintiffs in the case are foreign nationals who allege that they were tortured and otherwise mistreated by American civilian and military personnel while detained at Abu Ghraib. Plaintiffs allege that CACI employees “instigated, directed, participated in, encouraged, and aided and abetted conduct towards detainees that clearly violated the Geneva Conventions, the Army Field Manual, and the laws of the United States.”
The Court of Appeal noted among many things that SCOTUS in Kiobel broadly stated that the “claims,” rather than the alleged tortious conduct, must touch and concern United States territory with sufficient force, suggesting in the view of the CA that courts must consider all the facts that give rise to ATS claims, including the parties’ identities and their relationship to the causes of action. It found that the claims do concern US territory, pointing to the fact that:
‘the plaintiffs’ claims allege acts of torture committed by United States citizens who were employed by an American corporation, CACI, which has corporate headquarters located in Fairfax County, Virginia. The alleged torture occurred at a military facility operated by United States government personnel.
In addition, the employees who allegedly participated in the acts of torture were hired by CACI in the United States to fulfill the terms of a contract that CACI executed with the United States Department of the Interior. The contract between CACI and the Department of the Interior was issued by a government office in Arizona, and CACI was authorized to collect payments by mailing invoices to government accounting offices in Colorado. Under the terms of the contract, CACI interrogators were required to obtain security clearances from the UnitedStates Department of Defense. Finally, the allegations are not confined to the assertion that CACI’s employees participated directly in acts of torture committed at the Abu Ghraib prison. The plaintiffs also allege that CACI’s managers located in the United States were aware of reports of misconduct abroad, attempted to “cover up” the misconduct, and “implicitly, if not expressly, encouraged” it.‘
(The case nb is not home and dry: whether the claims present non-justiciable political questions still needs to be determined by the district court).
Many out there must be writing PhDs on related issues: a moving target indeed!
Abu Ghraib, Al Shimari v. CACI, Alien Tort Statute, Apartheid, ATS, Comity, Corporate social responsibility, CSR, extraterritorial, Extraterritoriality, Fourth Circuit, Human rights, Iraq, Jurisdiction, Kiobel, SC, SCOTUS, United States Court of Appeals for the Fourth Circuit, United States Supreme Court, USSC
That did not take long! DaimlerChrysler v Bauman may clarify Kiobel – Corporate Social Responsibility remains in the Supreme Court spotlight
When I said here that ATS cases might end up at the USSC again, I did not think less than a week later: on Monday, the USSC granted certiorari in DaimlerChrysler AG v Bauman. The issue as summarised over at the SCOTUS blog (which has superb further analysis), is: Whether it violates due process for a court to exercise general personal jurisdiction over a foreign corporation based solely on the fact that an indirect corporate subsidiary performs services on behalf of the defendant in the forum state.
Chief Justice Roberts’s and concurring opinions in Kiobel leave room for further distinguishing – which is what might happen in DaimlerChrysler. The Court had presumably seen sitting on the DaimlerChrysler case until it had decided Kiobel. DaimlerChrysler however will probably have a wider impact than the ATS jurisdictional issues. Accepting jurisdiction against corporations on the basis of the actions of a subsidiary present in the forum State but unrelated to the subsidiary which allegedly violated the law elsewhere, can also apply in an internal US setting.
DaimlerChrysler Ag is a German company, and it was sued in federal court in California for alleged human rights violations in Argentina for actions by a subsidiary in that country. The basis for suing the company in the U.S. was that it has another subsidiary that sells the company’s autos in California.
Of note is also that the Supreme Court vacated Rio Tinto and sent it back to the Ninth Circuit to be decided on the basis of the Kiobel finding.
Alien Tort Statute, ATS, Corporate social responsibility, CSR, DaimlerChrysler, DaimlerChrysler v Bauman, Extraterritoriality, Human rights, Jurisdiction, Kiobel, Piercing the corporate veil, Rio Tinto, Sarei v Rio Tinto, SC, United States Supreme Court, USSC
Update 18 January 2017. Ms Kiobel is now apparently using Dutch courts to try and sue Shell over the case. (Evidently unrelated to the pursuit of Shell in The Netherlands on environmental grounds). See here for background to the case.
The central question in Kiobel turned out to be this: whether and under what circumstances US courts may recognize a cause of action under the Alien Torts Statute, for violations of the law of nations, occurring within the territory of a sovereign other than the United States. In focusing on this question (and replying in the negative), the SC did not entertain the question which actually led to certiorari, namely whether the law of nations recognises corporate liability.
I have a paper with Charlotte Luks over on ssrn, which discusses the ATS (and related developments in the EU). The Alien Tort Statute, a product of the United States’ first congress, creates a domestic forum for violations of international law. The relevant text 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.”
Since the path-breaking Doe v. Unocal litigation in 1997, more than 50 cases have been brought in the United States against companies under the Alien Tort Statute alleging corporate involvement in human rights abuse abroad. However In Kiobel v Royal Dutch Petroleum, the United States Court of Appeals for the Second Circuit held that corporations cannot be sued under the Alien Tort State for violations of customary international law because “the concept of corporate liability […] has not achieved universal recognition or acceptance of a norm in the relations of States with each other.” In denying re-hearing, Chief Judge Jacobs argued in February 2011 that
All the cases of the class affected by this case involve transnational corporations, many of them foreign. Such foreign companies are creatures of other states. They are subject to corporate governance and government regulation at home. They are often engines of their national economies, sustaining employees, pensioners and creditors–and paying taxes. I cannot think that there is some consensus among nations that American courts and lawyers have the power to bring to court transnational corporations of other countries, to inquire into their operations in third countries, to regulate them–and to beggar them by rendering their assets into compensatory damages, punitive damages, and (American) legal fees. Such proceedings have the natural tendency to provoke international rivalry, divisive interests, competition, and grievance–the very opposite of the universal consensus that sustains customary international law.
Certiorari at the Supreme Court was keenly awaited by the corporate social responsibility (CSR) community, for ATS litigation by default had become the flag bearer for pursuing alleged violations of international law (whether in human rights or environment) by multinational corporations.
Extraterritorial application of US law was most recently the issue in Morrison v National Australia Bank, in the area of securities. In Kiobel, the SC relies on its extensive review of exterritoriality in Morrison. It did so even if in Morrison (and other cases before it), the question of exterritoriality was one of merits (aka jurisdiction to prescribe): i.e. whether an Act of Congress regulating conduct, applies abroad. By contrast, in Kiobel, the question concerns jurisdiction pur sang (aka jurisdiction to adjudicate). For the SC, this did not dent precedent value of Morrison: ‘we think the principles underlying the canon of interpretation similarly constrain courts considering causes of action that may be brought under the ATS’.
In Morrison, the SC held that when a statute gives no clear indication of an extraterritorial application, it has none. In Kiobel, the Court did not find convincing argument in either text, history, or purpose of the ATS, which could rebut the presumption against extraterritoriality. The closest such rebuttal arguably lay in the historic (and more current) examples of employing ATS against piracy: as the SC notes, ‘piracy normally occurs on the high seas, beyond the territorial jurisdiction of the United States or any other country, [however] applying U. S. law to pirates does not typically impose the sovereign will of the United States onto conduct occurring within the territorial jurisdiction of another sovereign, and therefore carries less direct foreign policy consequences.‘
The latter of course is where the core of the argument lies, and where public, and private international law principles of comity come into play: the degree to which in upholding jurisdiction, the courts in ordinary might be obstructing US foreign policy. As an aside and not having completed my thinking on this: Judge Jacobs’ frank assessment of the respective roles of public and private international law, referred to above, is particularly interesting when one considers the communis utilatis roots of modern conflict of laws The conviction in Dutch conflict of laws in the 17th century (later exported via Scotland to the US), that foreign laws needed to be applied if and when they so wanted, on the basis of reciprocity, and in line with communis utilitatis has now been turned on its head: comity is now being used as a presumption against such application of foreign laws or, here, public international law.
The SC concludes as follows:
The Court therefore answers Kiobel-type cases (a foreign plaintiff suing a foreign defendant for acts or omissions occurring wholly outside of the United States that allegedly violate the law of nations), however it does leave open many questions which fall outside the factual Kiobel box. Does the reference to ‘claim’ and ‘territory’ of the US refer to the tortious action (thus requiring that to take place in the US) or would a US defendant suffice (in all likelihood: no)? What ‘link’ would be enough for the action to take place in the US: in particular, lack of corporate oversight over foreign subsidiaries? In all likelihood, further distinguishing will take place by lower courts (and might eventually end up at the SC again), however it is clear that the scope for ATS litigation has been severely diminished. This means that attention may now be re-ignited in what has been brewing in the EU for some time: using national courts to apply national law for conduct abroad: in other words, classic private international law /conflict of laws coming to the limelight once again.
Alien Tort Statute, ATS, Certiorari, Corporate social responsibility, CSR, Extraterritoriality, Foreign Legal Assistance (FLA), Human rights, Jurisdiction, Kiobel, Morrison v National Australia Bank, Royal dutch Petroleum, Shell, USSC
- Cunico v Daskalakis. Lugano Convention, employment and choice of court. 22/01/2019
- Liberato: violation of lis alibi pendens rules does not justify refusal of enforcement on grounds of ordre public. 21/01/2019
- DES v Clarins. The law applicable to ending commercial agency: Granarolo (and Rome I’s /Rome Convention’s overriding mandatory law rules) applied by Paris Court of Appeal. 18/01/2019
- Forget what you have read. Szpunar AG does not restrict EU ‘Right to be forgotten’ /data protection laws to European territory. 15/01/2019
- SAS Institute v World Programming. Ordre Public, res judicata, fraus and (European) statute conspire against enforcement. 14/01/2019
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