DC Circuit ATS Ruling Sharpens Circuit Split Over Corporate Liability

It’s likely old news to most OJ readers, but we should still note in passing that the DC Circuit, in a divided panel, handed down an important ATS case, John Doe VIII v Exxon Mobil Corp.  It is noteworthy, among other things, for straight-out rejecting the Second Circuit’s Kiobel ruling, which held that there is no such thing as corporate liability in the ATS.  The DC Circuit panel held otherwise.  The circuit split is thus sharpened on an issue that was only glancingly mentioned, and not answered, in the Supreme Court’s Sosa holding:

We further conclude under our precedent that this court should address Exxon’s contention on appeal of corporate immunity and, contrary to its view and that of the Second Circuit, we join the Eleventh Circuit in holding that neither the text, history, nor purpose of the ATS supports corporate immunity for torts based on heinous conduct allegedly committed by its agents in violation of the law of nations.

I have occasionally described the controversy over corporate liability as the “hinge” in the ATS.  Meaning that the ATS creates an “international law” part, and a domestic law part, and the circuit split reflects disagreement as to where the corporate liability part has to be found, if at all: must it be found as an element of international law (and might not be held to exist there), or does it suffice if it is found as part of domestic law of tort.  The ATS roots the violation in international law, and the remedy in domestic tort law, and it will matter crucially where one holds that corporate liability would have to exist, if it exists at all.  That’s the sense of a hinge; something has to “swing” from international law into domestic tort law.  My own view is that corporate liability has to be part of the international law predicate, but that it does not exist there, and so you can’t get an action going.  This is roughly the Second Circuit view, which the DC Circuit opinion rejects.

Shifting to a much broader take on the ATS, I’ve also talked sometimes about the ATS as an example not of international law, but rather the “law of the hegemon.”  It refers to international law, but then frames itself within US domestic law and practice writ for the whole world.  We in the US have a law of tort; we have a law that envisions corporate liability: ergo, international law should and does as well because, as Judge Weinstein put it in a case I was involved in, an American judge could scarcely imagine it otherwise.  This leaves me in something of a conflicted position.  On the one hand, I think the ATS needs to be sharply reined in – I agree more or less with Judge Kavanaugh’s dissent in the DC Circuit panel, that the ATS properly applied is limited to conduct within the territorial United States.  In that sense, I welcome judicial moves to cut back the ATS.

On the other hand, in those moves to curtail the scope and sweep of the ATS, I think I discern an element of the decline of the hegemon – do US courts really want to be hauling Chinese corporations over the coals of US tort liability for what they do in Africa? Will US administrations, including the Obama administration, be happy to see that happen?  I regard US hegemony as being a broadly beneficial thing, providing lots of public goods to the world; decline is dangerous and destabilizing, particularly in Asia.  And much of what the international law community regards as universal human rights, I regard as universalism sheltering under American hegemony, and if hegemony declines, the universalist human rights movement declines with it, even if the movement is the last to understand that.  Insofar as the decline of the ATS – its long, slow death, as Roger referred to it a while back – is evidence of a broader hegemonic decline, I regard it with dismay.  Your results may differ, it hardly needs saying.

I’m not a sufficiently expert SCOTUS-watcher to know whether this realistically pushes the Court to take up the ATS where Sosa left off.  Reading the Kiobel majority, which I liked, and the Exxon Mobil majority, which I didn’t, however, I am struck in each case by how much outcomes seem to me driven by ideology, in the sense of a fundamentally political take on the world.  It is not as if there is some new body of legal materials that is going to provide new light on the question; at bottom, higher authority has to decide what it will be.  Sosa partakes of this outcome, of course, by using vague phrases that would permit any outcome by appeal to exactly the same locutions.  But the corporate liability issue is so fundamental to contemporary ATS litigation – preceding, in a logical sense, the standards found in Sosa – and the split among circuits now so stark, that I hope I’m not being naive by thinking that the Court cannot simply avoid resolving it.

Update: John Bellinger comments on this new ruling over at Lawfare, noting in passing that with the 2nd Circuit on one side and the 11th and now DC Circuits on the other, the 9th and 7th Circuits have cases under consideration on this issue of corporate liability as well.  And Georgetown’s David Stewart has kindly sent me a comment by email, running to my larger (and certainly more controversial) political point about hegemony:

I would personally quibble only over the notion that a decline of “US legal hegemony” necessarily means/implies/leads to a commensurate decline in the “universalist human rights movement” – human rights has now grown deep roots in many domestic legal systems, and one only has to look at the European human rights system, and the recent decisions of the European court in al-Jedda and al-Skeini to know that there are many flag bearers.  It’s long been an unfortunate pretension of US human rights promoters that we alone, or we mainly, or we indispensably, must be the world’s human rights police, and that without judgments of US courts, foreigners and foreign governments won’t pay attention to human rights.  In some circumstances that has done far more harm than good.  Anyway, even if SCOTUS decides in favor of the 2nd Cir. (and I agree they have the better view), litigants will probably just sue individual officers and directors, vice the corporation itself, and the result will be higher insurance fees.