One More Almost Forgotten Argument Against Corporate Liability

by Julian Ku

Anton Metlitsky, an attorney that is defending Rio Tinto from a similar ATS lawsuit as Kiobel’s, drops me this useful reminder about another hurdle facing the Kiobel plaintiffs.

In a recent post, you say that “the only way plaintiffs will prevail is if they convince a majority of the Court (meaning Justice Kennedy), that the question of corporate liability is really a question of remedies, and that is a matter left to the domestic common law of the U.S.”  I think there is a strong argument that plaintiffs should lose even if the question of corporate liability is controlled by domestic law (i.e., federal common law).  As we argued at length in an amicus brief we filed in support of the respondents, corporate liability is not automatic under federal common law.  For example, the Supreme Court has held that there is no corporate liability for implied federal common law actions under Bivens, which are similar in kind to the implied federal common law actions that the ATS empowers federal courts to imply under Sosa.  And there are several good reasons, we argue, for the Court to hold that federal common law should not allow private actions against corporations.  Most important, it appears likely from the Mohamad argument that the Court will hold (as most lower courts have held) that the TVPA does not allow for corporate liability.  That is highly significant to the corporate ATS liability question, because enactment of the TVPA was the one time Congress actually considered what an express cause of action under the ATS should look like, and it chose to preclude suits against corporations.  Supreme Court precedent concerning other areas of federal common law, such as maritime law, make clear that the Court should heed the policy limits Congress sets forth in statutes when crafting analogous common law causes of action.  Thus, the TVPA’s limitation of liability to natural persons should lead the Court to conclude that federal common law claims under the ATS alleging violation of similar human rights norms should be similarly limited.

To be sure, the TVPA is limited to torture and extrajudicial killing, while courts have recognized causes of action under the ATS for other human rights norms.  But when the TVPA was enacted, the two major ATS human rights cases were Filartiga and Tel-Oren, which dealt only with the norms covered by the TVPA.  Indeed, the TVPA was expressly intended to provide an express cause of action to support the type of action recognized by the Second Circuit in Filartiga and by Judge Edwards in Tel-Oren, in case the Second Circuit and Judge Edwards turned out to be wrong, and Judge Bork’s view that the ATS was only a jurisdictional statute requiring further action by Congress turned out to be right.  There is no reason to think Congress would have treated other related human rights norms any differently.  The Kiobel petitioners also argued in their reply brief that the TVPA does not have much to say about the scope of the ATS action because the TVPA was only meant to “supplement” the ATS.  But that argument only works if (as Filartiga and Judge Edwards appear to have believed) the ATS itself created a cause of action.  Sosa rejected that position, holding that the ATS was jurisdictional only, but that it empowered courts to imply a narrow set of actions under federal common law.  And when it comes to federal common law, the courts should follow Congress’s lead, not the other way around.  Whether corporate liability should be allowed for some human rights violations and not for others is a question that Congress, not the courts, should decide, particularly in an area where the risk of interference with the political branches’ foreign policy prerogatives is so high, and where Sosa itself declares that courts must exercise “great caution” in fashioning new actions under the ATS.

Their amicus brief is here. I think this is also a good argument, and might very well be another way for the Court to avoid the unattractive “corporations are not liable for torture” argument, although it ultimately will look and sound the same. Still, worth thinking about.  I like especially the point that there is no corporate liability in a Bivens action (a tort claim for violation of one’s constitutional rights).

3 Responses

  1. This is an interesting line of argument, but aren’t Bivens actions distinguishable because constitutional rights violations necessarily necessarily contemplate that it will be state – as opposed to private – actors committing the violations.  I understand that corporations can act under the color of law and I get that it could be argued that international law generally, and international human rights law specifically, also contemplate state violators.  But the ATS is commonly thought to include offenses (“torts”) of the kind that more directly contemplate private actors as the violators.  Is there Bivens jurisprudence that suggests that individual private actors can be held liable in circumstances where corporate entities cannot?

  2. This came up in the oral argument in Mohamad (pages 41-43):

    “Sotomayer:  So what’s the good reason … for the U.S. to have limited liability to natural persons in the TVPA, but not in the ATS context?

    Gannon [for the United States]:  Well, I think that there are several reasons that Congress could have had in mind [in drafting the TVPA], although I think that if you read the legislative record … most members of the Congress weren’t thinking precisely about this question….  I think the difference is that the ATS has not even attempted to speak to this question, whereas the TVPA does.  As this Court has noted in Amerada Hess, the ATS does not define a class of defendants here….  [T]here are several reasons why they ended up with this result, the chief of which is that all of the cases that they were thinking about at that time had involved natural persons.”

  3. have a great dog named Jack, and I like pin~a coladas. (And gettin’ caught in the rain.)

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