Sunday, October 15, 2017

A Free Pass for Corporations in Human Rights Suits?

      Seven years after giving corporations a First Amendment right to unlimited spending in election campaigns, the Roberts Court appears ready to give corporations a free pass for serious human rights violations committed abroad. That result was the consensus prediction following arguments last week [Oct. 11] in a case seeking to force the Jordan-based Arab Bank to pay millions of dollars in damages to victims of violent attacks in Israel and the West Bank for helping to finance the militant Palestinian group Hamas.
      The plaintiffs in Jesner v. Arab Bank, PLC are relying on a 225-year-old federal law granting federal courts the power to hear damage suits for violations of international law. Congress included what is now called the Alien Tort Statute as a single sentence in the Judiciary Act of 1789, the foundational statute for the federal judiciary. The provision lay mostly dormant until the 1980s, however, when human rights lawyers in the United States began using it to haul accused international human rights violators into U.S. courts to be held accountable for their conduct.
      The Supreme Court has been less than receptive to claims under the law despite its seemingly clear "plain text." Federal courts, the law states, have "original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations [emphasis added]." In a pair of recent decisions, however, the Court has moved to limit the scope of the law — its substantive content and its geographical reach — and questioned use of the law to sue corporations, not just individual defendants.
      In the present case, the New York-based Second U.S. Circuit Court of Appeals accepted arguments by Arab Bank and supporting U.S. business groups that the law does not authorize suits against corporations. Judging from the three-sided arguments at the Supreme Court, the four most conservative justices along with Anthony M. Kennedy are ready to agree despite the four liberal justices' evident doubts about the basis for any broad exemption for corporations.
      Representing the plaintiffs, Jeffrey Fisher, a Stanford law professor and director of the school's Supreme Court litigation clinic, opened by stressing what he called the "traditional presumption that corporations can be held liable in torts." He acknowledged that the court's most recent decision, Kiobel v. Royal Dutch Petroleum Co. (2013), required that the alleged misconduct have some sufficient connection to the United States for a suit to proceed in federal court.
      The suit in Kiobel that the Supreme Court rejected stemmed from environmental depredation by the Dutch company from oil drilling in the Niger River delta in Nigeria. Fisher contended that the Arab Bank's financing of Hamas met the jurisdictional test  because the bank has a U.S. branch and its transactions clear through a New York financing facility.
      Representing the bank, Paul Clement, the former U.S. solicitor general and now the go-to Supreme Court advocate for conservative causes, discounted the claimed basis for federal jurisdiction over the suit. But he argued more broadly and most strongly that there was no "norm for holding corporations liable for violations of international law" in circumstances like those alleged in the suit.
      In a split-the-difference stance, the government agreed with Clement that the Arab Bank's use of a New York clearinghouse was insufficient to establish federal jurisdiction over the case. But Brian Fletcher, an assistant U.S. solicitor general, argued that Clement's argument for a "categorical rule" exempting corporations from suits under the law was "wrong."
      Chief Justice John G. Roberts Jr. led the conservatives in questioning the suit, just as he had done earlier in the Kiobel argument. He repeatedly voiced concern about the likely "foreign entanglements" if federal courts entertained suits arising from events abroad. Fisher and Fletcher both argued for dealing with those concerns case-by-case without any categorical exemption for corporations.
      All four liberal justices echoed those doubts in questions from the bench. Justice Stephen G. Breyer aptly asked who could be held liable for financing terrorism if not a bank: only a billionaire, he suggested. Justice Elena Kagan asked the same question about use of slave labor. And Justice Sonia Sotomayor answered the conservatives' doubts by noting that "many countries" hold corporations civilly liable in tort suits.
      From the conservative side, Justice Neil Gorsuch, he of the plain-text statutory construction school, questioned whether Congress in 1789 really had corporations in mind when it passed the law. The law originated from an assault on the French ambassador, an alleged violation of the international law of diplomatic immunity. Kagan batted away Gorsuch's doubts by asking "what difference" it would have made if the ambassador's assailant had been hired by a corporation.
      The U.S. Chamber and other business groups now count this as a major issue because of the proliferation of suits against U.S.-based multinational companies — for example, against Ford and IBM for supplying cars or computers to South Africa's apartheid regime or against Wal-Mart for buying from suppliers abroad with inhumane working conditions. With the conservative justices evidently sharing that concern, Fisher noted that the number of suits has dropped since the court's decision in Kiobel.
      The Roberts Court's conservative majority has been solicitous of business interests in a variety of areas — most controversially in the 5-4 decision in Citizens United v. Federal Election Commission (2010) giving corporations a First Amendment right to engage in political spending. Against that background, a decision to give corporations a free pass for violating international law seems a flat contradiction.

No comments:

Post a Comment