Nestle & Cargill v John Doe at the US Supreme Court. A further restriction of jurisdiction under ATS, with encouragement on corporate culpability as a pudding.

Update 8 September 2021 note the French Supreme Court’s less restrictive approach to ‘aiding and abetting’ in the (criminal law) judgment re Lafarge yesterday. It held complicity in a crimes against humanity case does not require hands-on assistance. As Philip Grant reports, in the view of the French SC it is necessary and sufficient to have had knowledge of the preparation or commission of such acts and that aid or assistance facilitated them; it is not necessary to belong to the criminal organization nor to subscribe to the conception or execution of the criminal plan.

A most late flag on Nestlé & Cargill v John Doe at the US Supreme Court, back in June. I reported on the case here and if you follow Lucas’ thread on the case, there is further interesting and impromptu analysis. Readers of the blog may know I have published on the issue before – search tag ‘ATS’ should give you all cases referred to below.

This case reconfirms the mood viz the Alien Tort Statute,  a popular (if not the only!) vehicle for corporate social responsibility litigation: since Kiobel, the USSC has seriously reigned in the scope of application of the ATS. In Nestlé, it would seem to impose a further squeeze on the ATS jurisdictional gateway. In Apartheid and Jesner Bank, ‘aiding and abetting’ by the US corporate headquarters of culpable conduct by their subsidiaries abroad, seemed to be a burden of proof claimants had to meet in order for the action to be admissible under the ATS. In Nestlé the Court in its current composition (sub III of the majority Opinion) suggests that aiding and abetting in that interpretation risks becoming a court-introduced (hence in its view noli sequi) action in tort.

Sub II, the Court is not at all clear what the jurisdictional hurdle might be, except that it is a very high one: ‘Nearly all the conduct that [claimants] say aided and abetted forced labor—providing training, fertilizer, tools, and cash to overseas farms—occurred in Ivory Coast… allegations of general corporate activity—like decisionmaking—cannot alone establish domestic application of the ATS.’ (Interesting contrast here with the UKSC in ia Vedanta).

Not only could one debate whether this decision represents the intention of the ATS (which, even if one applies it in limited fashion, did historically mean to catch at least in part activities outside of the US). One also immediately sees the most unattractive consequence of this judgment: as long as the dirty work is left for foreign affiliates to carry out overseas, one escapes the reach of ATS. As Lucas points out, it is not clear what kind of headquarter engagement could still trigger a suit under the ATS.

There is little solace in the indication that the Court (both in majority opinion and minority concurrence) accepts that corporations are not as such immune from suit under the ATS (which links to the issues currently discussed in Nevsun Resources). Update 8 September 2021 more on that issue by Doug Cassel here.

There will be more attempts to further refine the ATS scope. At the same time one imagines claimants will study in even greater detail than before, the possibility to bring the suit under more recent US federal laws with clear extraterritorial intent, such as in the field of corruption of export controls. As past (but now gone) ATS litigation shows, human rights and /or environmental suit need not necessarily label themselves as such.

Nomen non est omen. It is the end goal of human rights or environmental protection or, say, environmental justice which determines a suit’s character, no matter what prima facie subject matter the suit addresses. If one can advance these causes by suing under the by-laws of the World Philately Federation, say, one should have a good go at it.

Geert.

EU Private International Law, 3rd ed. 2021, Chapter 7.

Jesner v Arab Bank. Scotus does not play ball on corporate culpability under international law.

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.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.

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.’

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.