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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Article
1 May 2018

Corporate Action and the Failings of the Jesner Decision

Author: 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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Article
30 April 2018

A Long and Winding Road to Corporate Accountability: the Wider Ramifications of Jesner v Arab Bank

Author: 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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Article
30 April 2018

Blurring the Line between Criminal and Civil Liability of Corporations in Jesner v Arab Bank

Author: 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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Article
30 April 2018

Complicity issues and redress for victims in the aftermath of Jesner v Arab Bank

Author: 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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Article
30 April 2018

Landmark Supreme Court Opinion Shuts Door to ATS Suits Against Foreign Corporations

Author: 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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Article
26 April 2018

U.S. Supreme Court Closes Door to Human Rights Lawsuits against Foreign Corporations under the Alien Tort Statute

Author: 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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Article
25 April 2018

Unnecessary, Wrong, and Misguided – the US Supreme Court’s Blanket Ban on All ATS Suits against Foreign Corporations in Jesner v Arab Bank

Author: 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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Article
24 April 2018

Opinion analysis: Court bars lawsuits against foreign corporations under Alien Tort Statute

Author: Amy Howe, SCOTUSBlog (USA)

Nearly seven years ago, the Supreme Court agreed to decide whether corporations can be sued under the Alien Tort Statute...The justices ultimately did not resolve the corporate liability question in that case...[T]oday they did settle the issue, holding...that foreign corporations may not be sued under the ATS.  The decision will almost certainly put a halt to efforts...by foreign plaintiffs to hold foreign corporations responsible in U.S. courts for human rights violations abroad...Jesner v. Arab Bank, was filed in the United States by victims of terrorist attacks that occurred between 1995 and 2005 in Israel...The court emphasized that when Congress enacted the ATS, its primary goal was to avoid foreign-relations problems by making sure that federal courts were available to review lawsuits by foreign nationals alleging violations of international law “where the failure to provide one might cause another nation to hold the United States responsible for an injury to a foreign citizen.”  But in this case and others, the court continued, allowing a lawsuit to go forward in U.S. courts was having precisely the opposite effect, creating “significant diplomatic tensions with Jordan...” Moreover...the court should generally refrain from creating or extending new grounds for lawsuits...Justice Sonia Sotomayor...castigated her colleagues for absolving “corporations from responsibility under the ATS for conscience-shocking behavior.”...

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Item
24 April 2018

Decision: US Supreme Court in Jesner vs. Arab Bank

Author: Supreme Court of the United States

Attached is the 90-page judgment by the US Supreme Court in the case of Jesner vs. Arab Bank.

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Article
24 April 2018

Supreme Court Rejects Liability for Foreign Corporations in International Human Rights Cases

Author: Charity Ryerson, Corporate Accountability Lab (USA)

...[T]he Supreme Court ruled...that foreign corporations cannot be sued for egregious human rights violations under the Alien Tort Statute (ATS). Here is our...take on the opinion. In short: the majority’s opinion appears to have more to do with market fundamentalism than the administration of justice, and sets a problematic precedent for victims’ access to remedy...[I]t lays the framework to eliminate liability even for domestic companies...While there is a reasonable argument that this case doesn’t have enough connection to the US for US courts to have jurisdiction, the Court made a sweeping ruling based on these limited facts that will harm other plaintiffs bringing cases with much more connection to the US going forward...[T]hey decide...not only do these human rights cases need to “touch and concern” the US, the defendant cannot be a foreign corporation...Kennedy relies primarily on the argument that there is no corporate liability under international law...The next time the ATS comes before the Supreme Court...the defendant will argue powerfully that this opinion forecloses corporate liability altogether, not just for foreign companies.  Kennedy also relies on the separation of powers, arguing that it should be Congress’ role to determine whether corporations are subjects of the ATS...He writes “[A]llowing plaintiffs to sue foreign corporations under the ATS could establish a precedent that discourages American corporations from investing abroad, including in developing economies where the host government might have a history of alleged human rights violations..."

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