Stewart Mini-Symposium: The Ambitious Past of Corporate Regulation

by Samuel Moyn

[Samuel Moyn is professor of law and history at Harvard University. He is on Twitter at @peiresc.]

During the absorbing litigation that led to the death of Alien Tort Statute litigation a couple of years ago, one of the most fascinating moments occurred late, and it has not been mentioned since.

In the Second Circuit phase of Kiobel v. Royal Dutch Petroleum, Judge José Cabranes had contended that the International Military Tribunal at Nuremberg proved there was no norm in customary international law of corporate civil liability. If so, he had asked, how could he find for the plaintiffs? In response, a bevy of renowned historians filed an amicus brief on appeal to the United States Supreme Court, contending that the reason Judge Cabranes had failed to find civil liability was because the Allies had been willing to destroy the corporations that participated in Nazi evil. The greater included the lesser: if they could go that far, would they really have rejected civil liability for corporate atrocities? Then another group of historians, including Jonathan Bush, filed an amicus brief not so ardently focused on serving the human rights movement (though not opposing it either). No longer indentured to the instrumental if understandable project of reading the past for present ends, these historians revealed that our ancestors were more ambitious than we are.

In their treatment of corporations, Bush and his colleagues said, the Allies hadn’t really been interested in atrocities anyway, or merely aimed at the low bar of sanctioning them. Rather, Nuremberg lawyers had been New Dealers; they had thought a lot about corporations, especially in the antitrust context; and it was this thinking that motivated them to break up (not destroy) I.G. Farben and take the other steps they did. More generally, an attitude of politically organizing business properly to avoid aggressive war mostly prevailed, not atrocity consciousness for the sake of victims seeking compensation. It was one of those things that seemed self-evident as soon as the historians said it, even if the insight got lost in the shuffle of the litigation, with its necessarily opportunistic attitude toward the past. Yet the prospect that opened in the midst of the litigation wasn’t merely self-evident, it was exciting. In the old days, corporations were regulated in the name of a theory of the healthy role they could and must play in a democracy. They were not simply unbound — as they have been since the conservative legal movement set the terms of corporate law nationally and internationally — and then at most taxed after the fact when they went awry.

Granted, the corpse of ATS may twitch for a long time and – who knows? – may one day find itself resurrected under different political circumstances. It is to his great credit, however, that James G. Stewart has turned away from searching frantically for signs of life in the fallen statute, in order to explore other fruitful approaches. Anyway, how much good did the ATS do, even before it was cut down? (Full disclosure: I have been flamed on this blog simply for raising this question, as if the burden weren’t on advocates of the ATS strategy to prove how much difference it has made, and to consider it in relation to other possible political and legal strategies.)

I won’t comment much on Stewart’s alternative, corporate criminal liability, in part because his other respondents know a lot more about the details. His reading of the tea leaves of the Argor-Heraeus case seems speculative but impressive, and his assessment of the doctrinal possibilities of criminal liability relative to the ATS strategy is interesting. As Stewart points out, a civil liability strategy merely taxing corporations (especially when the tax is simply passed on to their consumers) looks insufficient if it doesn’t provide the social condemnation law secures through criminal opprobrium. Stewart might even be right that if we have to choose, the criminal strategy is normatively superior. Of course, in an ideal world, it would be better to have both, since a now potentially lost civil liability in theory should exist: victims may need and deserve the monetary compensation too.

But for no particular reason — it isn’t strictly necessary to his plausible invitation to watch with him where a turn to criminal liability goes from here — Stewart reaches out to engage my worries in various places that ATS and other features of the age of rights have been too minimalist. As I said above, before atrocity consciousness and the massive surge of interest in the legal community in targeting the problem, a broader approach prevailed. The greater did indeed include the lesser in this case: to the extent society regulates corporate activity so that it serves socially useful ends (as the New Dealers believed), and in particular so that corporations are not complicit with outrageous aggression, atrocity will not occur. If you are willing to impute an abstract philosophy to our ancestors, you might put it this way: when it came to corporations and more generally, New Dealers wanted to intervene as early as possible in the causal chain that might expectably lead to atrocity, not merely after the fact to pick up the pieces, whether criminally or civilly. If your theory is that depression leads to dictators, dictators to war, and war to atrocity, the ambitious thing is to start by regulating the economy (or even building in social protections for citizens), then to give criminalization of aggression pride of place, and finally to get around to atrocity if you can. These were the general priorities after World War II, and they explain Nuremberg’s priorities in particular. By contrast, after the human rights revolution, we broke drastically with Nuremberg, starting (and normally sticking) at the end of the chain.

Now I am not actually committed, as Stewart worries in his text (especially in his long notes 40-41), to a general theory of displacement when it comes to the rise of our atrocity obsession. Were human rights and all the strategies it promotes simply not there, I do not believe the world would automatically be a better place, as if they were simply an obstruction to clear to make way for superior justice. I think Stewart is right to suspect that most tools are supplementary, so that a narrow atrocity strategy and a broader regulatory strategy are no more “mutually exclusive” options (in Stewart’s words) at the international level than beneficent social policy and criminal or civil liability are in domestic circumstances. I thus agree with Stewart that it would be dubious, not to mention counterfactual, to suppose that a focus on atrocity (whether through criminal law or civil liability) somehow rules out bigger regulatory ambition. But still, there are two provisos.

The first proviso is that there is a colorable argument that the particular strategy of ATS litigation became so all-important (in part because it harmonized with the institutional pressures of law school clinics) as to disable the imagination and marginalize other approaches. Normally, the more tools you have, the better, just as in the face of the hungry you give them food — and the more the better. But couldn’t there be rare circumstances in which something is in the way? “When a man has filled his mouth so full of food that for this reason he cannot eat and it must end with his dying of hunger,” Søren Kierkegaard asked, “does giving food to him consist in stuffing his mouth even more or, instead, in taking a little away so that he can eat?” It might be a good analogy for ATS, even if a blanket claim about the “obstruction” that human rights strategies pose to broader approaches would not hold.

The second proviso is that we still have to ruminate on why it is that the rise of the atrocity focus, together with the narrow search for remedies so late in the causal chain, have coexisted in time with the fall of broader approaches — and what to do in response. Few are working on this set of problems. It is certainly not one for litigators, who defensibly serve their clients, or clinicians, who need to look for suits. But it ought to be somebody’s job, and it is excellent that Stewart closes his article, not by protesting when a couple of marginal scholars ask where our ambitions have gone, but by hoping for ambition himself: “This new understanding may also assist in identifying the added value of other regulatory models,” Stewart writes, or even of “broader structural rearrangements that would better respond to underlying causes of these crimes.”

But to be honest, I doubt that the otherwise promising criminal turn Stewart advertises in his useful article would assist much in this regard. Why would switching from a set of civil remedies after the fact to a set of criminal remedies after the fact escalate into ambitious interventions before the fact? If I happen to be right in this suspicion, of course, it would only redouble the need to seek other regulatory models or even broader structural rearrangements, just as Stewart hopes.

And perhaps one day we will even retrieve the forgotten radicalism of our ancestors at Nuremberg and elsewhere — updated to face the daunting multinationalization of corporations, which makes the prospect of submitting them to political controls a far more difficult task than the one the New Dealers originally, and heroically, took on.

http://opiniojuris.org/2014/11/24/stewart-mini-symposium-ambitious-past-corporate-regulation/

2 Responses

  1. The judge could have turned on his computer (or his clerk) and easily discovered that there had already been TWENTY U.S. Supreme Court cases that have recognized that corporations and companies can have duties and rights under treaty-based and customary international law! See http://ssrn.com/abstract=1701992 And with respect to ahistorical statements in manifest error in the S.Ct’s Kiobel opinions, see, e.g., http://ssrn.com/abstract=2486875
    It is shocking that judges and Justices and their clerks either fail to turn on their comupters or, having discovered what stands against their errors, ignore relevant trends in decision, etc.

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