Supreme Court Review of ATS Corporate Liability

by Roger Alford

Kathleen Sullivan has filed a petition for certiorari (2009 WL 2173302) in Abdullahi v. Pfizer arguing that there is a circuit split on the question of corporate liability under international law:

There is no general international common law of torts. Thus, to establish subject matter jurisdiction under the ATS for a violation of international law by a private corporation or individual, plaintiffs in most cases must allege that the private actor acted under color of law or in concert with a foreign government.

The Second Circuit’s decision, however, conflicts with decisions of other circuits as to the degree of state action required to transform a private party into a state actor for ATS purposes. The Fifth, Ninth, and Eleventh Circuits all have rejected ATS complaints that were based on purported state action but that failed to allege that the foreign government knew of or participated in the specific conduct alleged to violate international law. The Second Circuit, by contrast, held below that respondents had sufficiently alleged state action merely by referring to the Nigerian government’s general assistance to Pfizer without any allegation that the government knew of or participated in Pfizer’s alleged failure to obtain adequate consent to the clinical trial of Trovan. This holding conflicts with the decisions of other circuits that have found state action adequately invoked only by allegations that the state was specifically involved in the allegedly wrongful conduct, either as a matter of official state policy or under color of law.

The Second Circuit’s decision allows respondents to proceed with their ATS claims despite their failure to allege that the Nigerian government knew of or participated in the specific conduct by Pfizer that is claimed to violate international law – namely, the administration of a clinical trial without adequate consent. … No other circuit has so permissively interpreted the degree of state action required to make out violations of international law cognizable under the ATS.

Earlier this month, Professor Arthur Miller filed a brief in opposition (2009 WL 2473875) arguing that there was no circuit split and that state action is not even required under international law:

The Second Circuit noted, in addition to those allegations highlighted by the District Court, allegations that (1) the “Nigerian government and government officials” assisted in the unlawful conduct, (2) the Kano experiment was “jointly administered” by American and Nigerian members of Pfizer’s team, and (3) the Nigerian government, “according to a Nigerian physician involved in the Trovan experimentation, appeared to ‘back[]’ the testing.”

The Second Circuit’s decision in no way expands the concept of state actor under the ATS. Even if this Court were to accept Petitioner’s proposed “knowl-edge or participation” test for determining whether a private actor functions as a state actor, Respondents’ allegations as described above satisfy that test. More-over, even if the allegations in the Complaints were somehow deemed inadequate on this point, on re-pleading such inadequacy could be cured quickly and easily by reference to, inter alia, Pfizer’s own public statements.

Even if there were a conflict regarding what is necessary to show state action, or if Respondents were unable to show state action in this case, certiorari should be denied because state action is not required to sustain a claim under the ATS. Indeed, this Court in Sosa clearly contemplated international norms reaching private actors, as in this case.

Finally, earlier this month Professor Jack Goldsmith filed an amicus brief (2009 WL 2473873) on behalf of the American Chamber of Commerce. The summary of his argument is as follows:

Corporations are not subject to international law except in a few well-defined instances (like war crimes and genocide). The lower courts have permitted plaintiffs to skirt this limitation by alleging links between corporate behavior and state behavior that, the lower courts conclude, bring corporations within the international law-based causes of action available under the ATS. Courts have done this not only in cases, like the one below, where corporations are the primary alleged wrongdoer and states allegedly facilitate the wrongdoing, but also in cases where states are the primary alleged wrongdoers and corporations allegedly facilitate the wrongdoing, as well as in cases where corporations are linked to states via intermediary private parties. The central legal disagreement concerning the appropriate state/private actor link in all three types of case is whether the actor facilitating the wrongdoing (be it a state or a private party) must have actual knowledge of the specific wrongdoing by the primary wrongdoer (be it a state or a private party). This case is an excellent vehicle to resolve this issue, because the majority and dissenting opinions below clearly addressed it and sharply disagreed about it.

Regardless of one’s views about corporate liability in the ATS context, there is little doubt that the federal circuits are in disarray and that Supreme Court guidance would greatly assist in the development of the law.

The Pfizer case is a particularly good vehicle to develop the law because it so clearly departs from the direction of other circuits regarding the state action requirement. The facts also are particularly unusual, with the alleged corporate misconduct almost completely divorced from any government conduct, or even knowledge of the misconduct. Contrast that with the South African apartheid case of Khulamani v. Barclays where the principal bad actor was the South African government and the corporate misconduct appeared to be peripheral.

Eventually the Court must consider corporate liability in the ATS context. With a circuit split, great counsel on both sides, and highly unusual facts that almost beg for clarification on the proper standard, Pfizer may be the ideal case.

http://opiniojuris.org/2009/08/24/supreme-court-review-of-ats-corporate-liability/

5 Responses

  1. Let us hope so.  ATS cases cry out for clarification, and hopefully the court will address the issue at hand, rather than deciding the case on very narrow grounds as with several of their more recent cases.

    Of course, at this point, they can still avoid the issue entirely if they so choose.  That would be unfortunate.

  2. there are several district court opinions with apt reasoning re: the existence of private company and corporate liability.  Such was recognized by the U.S. A.G. in 1907.  Wheaton 6th ed. in 1855 recognizes private indiv. “or public and private corporations” can have duties, etc., etc.
    see Paust, Van Dyke, Malone, International Law and Litigation in the U.S. 18-19 (3 ed. 2009).

  3. Great case; interesting blog.  Please follow the below link to see some of the potential policy ramifications of the case.

    http://blogs.cgdev.org/globalhealth/2009/08/potential-us-supreme-court-case-on-nigerian-drug-trial-presents-mixed-picture-for-global-health.php

Trackbacks and Pingbacks

  1. […] at Opinio Juris, the international law professor blog, my colleague Roger Alford (Pepperdine) has a great new post up on amicus briefs being filed by various prominent law professors on the question of corporate […]

  2. […] state actor and which violations of international law are actionable. The Pfizer case presents the perfect opportunity for the Supreme Court to resolve those […]