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On October 11, the U.S. Supreme Court heard arguments in Jesner v. Arab Bank, a case that could settle whether the Alien Tort Statute (ATS), a 1789 law that allows non-Americans to sue in U.S. courts for harms that violate international law, applies to corporations. The justices appeared divided, with some observers suggesting that the presumed swing vote, Justice Anthony Kennedy, is leaning toward corporate immunity. As transnational corporations expand their footprints worldwide, meaningful access to justice for victims of corporate complicity in human rights abuses has proved elusive—and a decision for Arab Bank would put it even further out of reach.
The plaintiffs in Jesner are noncitizens who were injured or are survivors of those killed in attacks in the West Bank and Gaza between January 1995 and July 2005. They claim that the defendant, Arab Bank of Jordan, “knowingly used its New York branch to collect donations, transfer money, and serve as a ‘paymaster’ for international terrorists,” thereby violating international law. The bank was found liable for harm to U.S. citizens under the Anti-Terrorism Act, but that law does not cover foreign plaintiffs, whose only available remedy in U.S. courts is the ATS. The Second Circuit dismissed their claim, holding that the ATS does not apply to corporations, and the plaintiffs appealed.
The ATS was enacted to provide a federal civil remedy for violations of the “law of nations,” at that time applicable to cases involving ambassadors, safe passage, and piracy. It was largely dormant until 1980, when the family of a Paraguayan man who was tortured and killed in Paraguay years earlier filed a lawsuit in New York against a former Paraguayan official who was then living in Brooklyn. In Filartiga v. Peña-Irala, the Second Circuit set a landmark precedent by holding the defendant liable for damages. Since then, the ATS has been used by human rights advocates to seek justice against serious abuses by government officials and corporations who aid and abet human rights violations. The law reached the Supreme Court in 2004, when the court clarified in Sosa v. Alvarez-Machain that the ATS grants federal courts jurisdiction over claims based on universally accepted norms of international law, which is an evolving standard, but did not create a new cause of action. In effect, the court affirmed the use of the ATS for private parties to sue for egregious human rights abuses and outlined a modern framework for determining its applicability.
The ATS came before the high court again in 2013, in a suit brought by a Nigerian woman named Esther Kiobel and others who claimed that Royal Dutch Shell was complicit with the Nigerian government in the torture, killing, or exile of their loved ones. The Second Circuit dismissed the claim, holding that the ATS did not apply to corporations. It was the only appellate court to adopt that position. On appeal, the Supreme Court in Kiobel v. Royal Dutch Petroleumsidestepped the issue, instead addressing the question of the statute’s reach to harm occurring outside the United States and affirming the presumption against the statute’s extraterritorial application.
Claims can only be brought under the ATS, the court held, when they “touch and concern the territory of the United States” with “sufficient force.” Kiobel’s claims, they concluded, did not. Since Kiobel, the ATS has been substantially diminished, though not entirely eviscerated, as a tool to vindicate human rights. Jesner could further narrow its reach. Aside from questions on corporate accountability, probing from conservative justices focused on extraterritoriality, the defendant’s foreign nationality, and the risk of creating tensions with foreign nations, underscoring their discomfort with the broad use of the ATS.
As transnational corporations expand their footprints worldwide, meaningful access to justice for victims of corporate complicity in human rights abuses has proved elusive.
In seeking to evade liability categorically, though, corporations want it both ways: to possess the rights of natural persons without the attendant responsibilities. The Supreme Court has supported corporate claims of legal personhood, upholding free speech protections under Citizens United and religious freedom protections under Hobby Lobby. A categorical ruling against corporate liability would enshrine one-sided rights and further deprive victims of an effective remedy while it shields perpetrators from the consequences of their actions. As the Center for Constitutional Rights and the International Federation for Human Rights argued in an amicus brief for the case (filed in support of neither party), “As the recognition of fundamental human rights sharpened over the last half-century, so has the concept that international law requires that States provide accountability and redress for violations of universal principles and norms.” Accordingly, they argued, the “ATS should be affirmed as a tool to remedy violations of the law of nations as understood in the modern era: to aid in protecting the dignity and equality of all people, especially the most vulnerable victims of human rights atrocities, be they committed by state actors, individuals or corporate entities.”
To be sure, transnational human rights litigation is no panacea. Although the ATS provides some measure of justice for individual plaintiffs who have the resources and wherewithal to pursue an arduous and expensive process of U.S. federal court litigation, it is inaccessible to all but a few who can satisfy its circumscribed jurisdiction and brave the potential risks of seeking justice. Even for those who prevail, the suits do not dismantle the underlying structural inequalities that give rise to many human rights violations. But there is still value to such cases against corporate defendants: a 2015 study by Judith Schrempf-Stirling and Florian Wettstein shows that even when victims don’t prevail, the threat of lawsuits can still serve a private watchdog function that may advance corporate accountability. The study found that “corporations adjusted their human rights policies and adopted additional measures to cope with human rights issues during or shortly after the legal proceedings.” As a result, the researchers concluded, “Opening legal channels for human rights litigation may be one way for governments to incentivize ﬁrms to respect human rights.”
Even with its limitations, transnational rights litigation is one component of a multidimensional toolkit that should incorporate an expansive view on human rights and an inclusive strategy to advance them. Despite concerns about the transnational litigation causing foreign friction, affirming corporate liability can advance, rather than undermine, U.S. foreign policy interests, which include protecting human rights. A decision upholding corporate liability in Jesner does not guarantee that plaintiffs will prevail—the case could be disposed of through a finding that it does not “touch and concern” the United States. But given the realities of expanding corporate power and elusive justice in the globalized economic system, the court should categorically hold that corporations do not get a free pass to commit gross violations of human rights.