US Supreme Court rules that foreign corporations cannot be sued for human rights abuses under the Alien Tort Statute

On 24 April 2018, the US Supreme Court ruled in Jesner v. Arab Bank that foreign corporations cannot be sued in the US for complicity in human rights abuses abroad. The ruling, decided by a 5-to-4 vote upheld the decision of a lower court, which ruled that corporations may not be sued under the Alien Tort Statute. According to the ruling, explicit congressional authorisation is required in cases involving international human rights cases against foreign defendants.

 

Arab Bank HQ Credit_jean pierre x_wikicommons

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الكاتب: Francisco Javier Zamora Cabot, Maria Chiara Marullo, Red Tiempo de los Derechos - Papeles El tiempo de los derechos

"Never Send To Know ..., Comentario Crítico a la Sentencia Jesner v. Arab Bank, del Tribunal Supremo de los Estados Unidos", 22 Oct 2018

En estas páginas,..., proponemos nuestras reflexiones críticas, desde la perspectiva del Derecho internacional privado, en torno a la sentencia del Tribunal Supremo de los Estados Unidos en el caso Jesner v. Arab Bank, que ha sentado un precedente importante en el proceso de restricción del acceso a los tribunales de los Estados Unidos en litigios sobre violaciones de los Derechos Humanos, haciéndolos imposibles respecto de las empresas extranjeras y, probablemente, preparando el terreno para que suceda lo propio con las domésticas.  Gracias a una lectura historicista del Alien Tort Claims Act (ATS o ATCA), el Alto Tribunal afirma que ni el tenor literal del texto ni los precedentes apoyan una excepción a los principios generales, deduciendo que debe ser el Poder Legislativo el que considere si el interés público podría servirse en caso de imponer nuevas responsabilidades sustantivas y, entre ellas, una norma que impusiese responsabilidad sobre entidades artificiales como las empresas.  De todo lo cual deduce que “.…sería inapropiado que los tribunales extendiesen la responsabilidad bajo el ATS a las empresas extranjeras, a salvo de una acción en tal sentido a cargo del Congreso”.

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الكاتب: Francisco Javier Zamora Cabot, Maria Chiara Marullo, Red Tiempo de los Derechos - Papeles El tiempo de los derechos

"Never Send To Know ..., Critical commentary on the US Supreme Court decision Jesner v. Arab Bank", 22 Oct 2018

...[W]e propose our critical insights, from the International private law perspective, of the ruling of the Supreme Court of the United States in the case Jesner v. Arab Bank.  This judgment has set an important precedent in relation with the process of access restriction to courts in the United States as far as international disputes involving serious infringements on Human Rights are concerned, making them impossible with regard to foreign corporations...Due to a historical reading of the Alien Tort Claims act (ATS or ATCA), the High Court states that neither the literal wording of the text nor the precedents support an exception to the general principles, reaching the conclusion that it falls within the scope of the Legislative Power to consider whether the public interest could be a resource in the event that new substantive responsibilities were imposed and, among them, a rule requiring liability over artificial entities as it happens with companies....

 
[Full text available only in Spanish]

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الكاتب: William S. Dodge, Business & Human Rights Journal

...[T]he US Supreme Court tried to answer whether corporations are subject to suits for human rights violations under the Alien Tort Statute (ATS).

In [two] decisions, the Court failed to answer that question, instead imposing other limitations on the ATS cause of action...

In 2013, the Supreme Court applied the presumption against extraterritoriality in Kiobel v. Royal Dutch Petroleum, limiting the ATS cause of action to claims that 'touch and concern the territory of the United States.'

In 2018, the Court held in Jesner v. Arab Bank that 'foreign corporations may not be defendants in suits brought under the ATS', leaving open the possibility of suits against US corporations...

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الكاتب: Tara Van Ho, Rights as Usual

One needn’t get very far into the Jesner decision before it is apparent exactly how the US Supreme Court was going to rule...The problem with Kennedy’s approach is that often the corporation is not a tool for doing evil but is the reason for doing evil...[D]ecades of studies...indicate that...the leaders can make bad decisions specifically because they are serving the corporate interest...[T]he conditions within the corporate structure can motivate either positive or negative ethical behaviour...[I]t is important that judges and policy makers recognize that at times the corporate structure is not simply a tool but can be a cause of criminal conduct.  When a company has a repeated history of ignoring the negative impacts it has on the societies in which it operates...then...that it is the corporation and not the individuals within the corporation that is responsible for the misdeed...Kennedy’s opinion shows not just a fundamental misunderstanding of international law, but also of how corporations and corporate environments work...[H]e missed or misrepresented the fundamental question of corporate claims: how do we hold the institution accountable for its institutional failures?...The International Law Commission and states are currently debating the...International Convention on the Prevention and Punishment of Crimes against Humanity.  The current draft proposal states that: “...each State shall take measures...to establish the liability of legal persons for the offences referred to in this draft article...[S]uch liability of legal persons may be criminal, civil or administrative.”  This approach recognizes that it is not simply the individuals who commit the wrong, but that at times a corporation commits its own breaches...

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الكاتب: Marisa McVey, Rights as Usual

...[T]here have been increasing calls for greater corporate accountability for human rights, yet binding accountability still seems to be a rarity.  Transnational tort litigation has been used to fill this void, but the recent US Supreme Court decision Jesner v Arab Bank more than complicates matters...[T]he judgement effectively applies a blanket ban on the ability to hold corporations accountable via foreign direct liability under the Alien Tort Statute (ATS)...It’s u nlikely that transnational tort cases for human rights will disappear...[T]here now exists a plethora of non-statutory corporate accountability mechanisms eager to come to the fore.  Some, like the Alliance for Bangladesh Workers Safety, are galvanised by (and specific to) a particular industry or human rights issue.  Others, like the UN Guiding Principles on Business and Human Rights aim to be preventative, encouraging human rights reporting practices to become central to providing corporate accountability.  The OECD Guidelines, with their National Contact Points and specific instance procedure, to an extent provide a stronger form of corporate accountability. However, interpretation of these Guidelines differs from country to country, leaving a highly fragmented body of cases...Jesner will provide an excellent incentive to ramp up the campaign for a binding international treaty on business and human rights...

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الكاتب: Alessandra De Tommaso, Rights as Usual

On 24 April 2018, the U.S. Supreme Court delivered its opinion in the case Jesner v Arab Bank, closing the door to future litigation against foreign corporations under the Alien Tort Statute (ATS).  For those who believe in corporate accountability for human rights violations, this decision is a setback.  But irrespective of one’s views, the decision is also incorrect...In reaching the conclusion that there is no international norm of corporate liability, the majority applies the same reasoning adopted by the Court of Appeals for the Second Circuit in its 2010 decision in Kiobel.  Since none of the existing international criminal tribunals included corporations in their jurisdiction, the liability of business entities for human rights violations must be excluded under international law...Here the Court confuses the lack of a mean of enforcement at the international level with the absence of an international norm...The Court does not take into consideration that the international tribunals mentioned in the judgement have the authority to impose criminal liability only.  Civil liability is not addressed in the statutes of any of these tribunals...[T]he Court fails to distinguish between criminal liability under international criminal law, on one side, and civil liability under national law, on the other...

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الكاتب: Ciara Hackett, Ciaran O’Kelly, Clare Patton, Luke Moffett, Rights as usual

Last week the US Supreme Court issued their decision on Jesner v Arab Bank...On complicity, the Court seemed particularly misguided, recognising only ‘active’ complicity – and suggesting that this was an issue for Congress to decide.  ‘Active’ complicity is also known as ‘aiding and abetting’... In Jesner, the majority seemed to say that plaintiffs allege ‘aiding and abetting’ to use corporations as surrogate defendants.  Justice Sotomayor (dissenting) recognises that this is misaligned and suggests that there are other forms of ‘aiding and abetting’.  However,...neither she, nor the rest of the Court seem to recognise the idea of ‘passive’ complicity.  This is where corporations may be complicit in human rights violations even when they are not the direct result of their own action...Passive complicity, in an era of due diligence and increasingly complex supply chains, is a key area for business and human rights moving forwards...[T]his would have aligned the Court’s decision with Principle 2 of the UN Global Compact which recognises direct, beneficial and silent complicity...The judgment is silent on where victims of human rights violations involving corporations might seek redress...Where alternative routes to recovery are mentioned, they all focus on an active abuse of human rights as opposed to complicity in the face of human rights abuses...This ignores the literature on collective responsibility and group agency dominating the area at present...If the Court has such a narrow view of what complicity is, they are failing to recognise the categories of victims that may exist where a corporation has been passively or silently complicit...

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الكاتب: Freshfields Bruckhaus Deringer

...[T]he Supreme Court issued a 5-4 opinion in Jesner v. Arab Bank Plc., foreclosing foreign plaintiffs’ ability to bring human rights claims against foreign corporations under the ATS.  The opinion promises to reshape the landscape of human rights litigation in the United States and could have a substantial impact on lawsuits brought by terror victims...[T]he Supreme Court’s opinion appears to leave open the question of whether claims can be brought under the ATS against U.S. corporate entities, although the Court’s reasoning...suggest that such claims are unlikely to succeed in the absence of congressional action...[I]ts ultimate impact is difficult to predict...[T]he Justices...drew a path for human rights activists by suggesting that they target the “human agents” of corporate conduct...[T]he Jesner decision may not so much end human rights litigation under the ATS as redirect it against corporate directors and officers...[I]t is unlikely that Jesner will be the last word on corporate liability in the human rights space, or on the role of U.S. courts in adjudicating such claims...Jesner changes, but does not eliminate, the risk of human rights litigation for corporate defendants.  The dual prospect of foreign proceedings asserting human rights claims..., whether brought against the corporation itself or its officers, directors or employees, strongly suggests the need for corporate entities to monitor carefully their compliance with evolving human rights standards and obligations.

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الكاتب: Steve Nickelsburg, Clifford Chance (USA)

On April 24, 2018, the Supreme Court held in Jesner v. Arab Bank, PLC that foreign corporations may not be sued in U.S. courts for human rights violations under the Alien Tort Statute ("ATS")...The Supreme Court's decision in Jesner effectively puts an end to ATS litigation in U.S. courts against foreign corporations for alleged human rights violations...[H]owever, the volume of ATS litigation had already been reduced dramatically by the Supreme Court's decision in Kiobel that the ATS does not apply extraterritorially.  Thus, plaintiffs already have been pursuing other avenues such as civil lawsuits under the Anti-Terrorism Act, and under common law doctrines...Jesner potentially leaves open the possibility of ATS litigation against foreign corporate officers and employees and U.S. corporations, so some attempts to file new ATS lawsuits may continue...[P]laintiffs are likely to continue to look elsewhere for favorable venues; human rights-related litigation in other jurisdictions is on the increase...There is a clear international focus on promoting transnational accountability for corporate activity with human rights impacts...[H]uman rights-related obligations on corporations have been increasing through other means, including diligence and disclosure obligations under foreign and U.S. federal and state laws...

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الكاتب: Nadia Bernaz, Rights as Usual

...[O]n  24 April 2018...the Court issued a blanket ban on all ATS [Alien Tort Statute] suits against foreign corporations...[T]his is the end of business and human rights ATS litigation against non-US companies, and a setback for those who seek to strengthen corporate accountability...The decision is also wrong, as it conflates the existence of a norm of international law and the possibility of its enforcement at the international level...[T]he decision is misguided.  The Court expresses concerns about the treatment of US corporations abroad if ATS suits against foreign corporations were allowed to continue...It is as if the Court aimed to appease those who believe US corporate giants cannot possibly do wrong...The case could have been dismissed on forum non conveniens grounds or on the basis of nonjusticiability concerns...Instead..., the Court went for an absolute ban...The Court discusses...the existence of a norm on corporate liability for gross human rights violations under international law.  It concludes that such liability is not recognised in international criminal tribunal’s statutes and that it therefore does not exist...To use this argument to prevent corporate liability at the domestic level is wrong...To think that the mere possibility of an ATS lawsuit against foreign corporations could “ discourage” US corporations from investing abroad is misguided...This argument is also ridiculous in light of the protections international investment law affords...The final point about how US corporations contribute to the realisation of human rights is also misguided...

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