SULLIVAN: …The crucial question that is at the threshold is which law determines whether corporations are liable.JUSTICE BREYER: I think you are right on that point….
- From the Kiobel v. Royal Dutch Shell, Oral Argument Transcript, February 28, 2012 at 32.
This exchange between Kathleen Sullivan, the attorney for respondents Royal Dutch Shell in Kiobel, and Justice Breyer highlights the importance of the “choice of law” question to this case. The “choice of law” question is whether international law or domestic law governs the question of corporate liability.
The importance of the “choice of law” question might seem surprising. After all one might expect that a leading international human rights lawyer like Kiobel’s attorney, Paul Hoffman, and a leading scholar of international human rights law like Professor David Weissbrodt, would invoke international law to justify holding corporations accountable for humanitarian atrocities. Yet both (along with the Obama Justice Department) are insisting the question of corporate liability is a matter for domestic and not international law.
The reasons for this insistence, as I argued in my prior post, is that the international law precedents for holding corporations liable for violations of customary international law are embarrassingly thin. They are so thin that the Petitioners barely mentioned them, and that the Obama Justice Department didn’t even invoke them. They are so thin that Professor Weissbrodt, who spearheaded the important U.N. effort to develop norms governing the behavior of transnational corporations, does not make this argument either.
Justice Breyer’s comment therefore suggests that if international law governs the question of corporate liability, the plaintiffs will lose. And 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.
On this “crucial” point, I still find the Petitioner’s argument lacking.
[Chimène Keitner is an Associate Professor of Law at the University of California, Hastings College of the Law.]
The oral arguments in Kiobel and Mohamed will doubtless generate a new round of commentary on these cases. A “quick response” panel is planned for Thursday, followed by a Georgetown Law symposium on March 27 and an ASIL annual meeting panel on March 31.
Since I have written on the choice of law question under the ATS, I predictably agree with Kathleen Sullivan’s statement that “The crucial question that is at the threshold is which law determines whether corporations are liable.” (Tr. at 32.) However, I disagree with her argument that “corporate liability” is a “substantive norm,” and that the question of whether a natural person’s conduct can be attributed to a corporation for the purpose of imposing civil liability is necessarily governed by the same source of law as the standard for aiding and abetting, or the state action requirement addressed in footnote 20 of the Sosa opinion. Sullivan argued that all three of these questions (corporate liability, aiding and abetting, and state action) are “substantive questions answered by international law.” (Tr. at 37.) Elsewhere in the argument, she suggested that the proper source of law for theories of attribution, at least in a common law action, would be “the place of misconduct or the place where the corporation is headquartered.” (Tr. at 39.) Punitive damages, by contrast, she would categorize as a remedial matter properly governed by U.S. domestic law. (Tr. at 39.) Paul Hoffman argued on behalf of Petitioners that domestic law applies to the corporate liability question because “international law, from the time of the Founders to today, uses domestic tribunals, domestic courts and domestic legislation, as the primary engines to enforce international law” (Tr. at 6), and that in any event the substantive international legal norms at issue in this case do apply to corporations, as argued more fully by Opinio Juris contributor Oona Hathaway in an amicus brief.
In general, the Justices appeared to endorse a dichotomy between “substantive” rules and rules relating to “enforcement”—a dichotomy advocated by Ed Kneedler in his argument on behalf of the U.S. Government. Justice Kagan articulated this as the dichotomy between the law governing “who has an obligation” vs. “who can be sued.” (Tr. at 37-38.) As I suggested in my 2008 article, following Bill Casto, and in a shorter 2011 symposium piece, it seems to me that the most coherent approach to the choice of law question distinguishes between “conduct-regulating” and “non-conduct-regulating” rules. Under the ATS, conduct-regulating norms are supplied by international law. Since entities inevitably act through natural persons, these norms govern the conduct of natural persons, but that does not mean that other organizations or entities cannot also bear the legal consequences of natural persons’ conduct in a variety of circumstances. (The reverse is also true—for example, foreign officials generally do not bear the legal consequences of commercial transactions that they enter into on behalf of the foreign state.) Paul Hoffman indicated some sympathy for this view in his final response to Justice Scalia’s question about what source of law he would apply to the standard for aiding and abetting liability (an issue not presented for review in this case), when he responded that “I think that—that aiding and abetting could be viewed as a conduct regulating norm, that it actually applies to the things that can be done to violate the norm. And therefore, international law would apply to that.” (Tr. at 56.) However, the same answer does not necessarily hold true for the corporate liability question presented in Kiobel, because rules of attribution are not conduct-regulating.
As a general matter, I abstain from making predictions in cases. However, in a slight break from my own tradition, I will hazard a guess that there will be at least one opinion supporting corporate liability (on the principle that corporations are routinely held liable for the torts of their agents), one opinion opposing corporate liability and also challenging the ATS’s grant of jurisdiction over extraterritorial conduct and over suits between aliens, and one opinion (perhaps a concurrence) opining on how ATS suits fit (or not) into the evolving global landscape of domestic adjudication of international law violations (whether these are denominated violations of international law, common law, or domestic statutes that codify international law norms).
… from this morning’s hearing: Kiobel and Mohamad. I would be curious as to readers’ prognostications of how the Justices will rule based on the oral arguments today. (Thanks for comments, interested in more. For example, where did this extraterritoriality question suddenly materialize from and does it portend something different from what was originally thought? You can also see John Bellinger’s take on the argument at Lawfare.)
Update: Reading the transcripts more carefully, as well as Chimene Keitner’s thoughtful post above, I recall that in some blog post somewhere a few year ago – my old blog, OJ, Volokh, I don’t even remember – I said that the problem of corporate liability and that ATS was that in order to get the international law predicate going, “you needed not just a what but a who.” I assumed that this would be an issue in the oral argument; like lots of other folks, I didn’t anticipate that extraterritoriality would figure in any significant way.
[Juan E. Méndez is the United Nations Special Rapporteur on Torture and Other Cruel, Inhuman and Degrading Treatment or Punishment, and a Professor at American University Washington College of Law.]
Torture is illegal and immoral, and like slavery, we should have abolished it by now. And yet its use continues to haunt our societies. In fact, the issue of torture — and whether corporations are immune from liability for committing torture — will come before the U.S. Supreme Court on Feb. 28.
In Kiobel v. Royal Dutch Petroleum and Mohamad v. Palestinian Authority and Palestine Liberation Organization, the Supreme Court will decide whether or not torture victims can sue corporations and other non-governmental entities, for their injuries. The two federal statutes at issue—the Torture Victim Protection Act (TVPA) and the Alien Tort Statute (ATS)—have been used for more than a decade to hold corporations liable for torture, genocide, crimes against humanity, and war crimes, even when those violations occurred outside of the United States.
While Kiobel and Mohamad do not represent the first time that torture victims have sued corporations or other non-state actors for committing the most atrocious of abuses, this is the first time that the push back from corporations has reached the Supreme Court. On the one hand, corporations declare, in cases like Citizens United v. FEC, that they have rights. On the other hand, corporations refuse to take responsibility for committing or aiding in torture or genocide. If “corporations are persons too,” we ought to be able to hold them accountable for the most serious crimes.
Kiobel is a modern-day David and Goliath story. The Kiobel plaintiffs, Nigerian political activists who opposed Shell’s oil exploration in the Niger Delta in the mid-1990s, allege that they were subjected to torture, extrajudicial killings and crimes against humanity by the corporate-funded Nigerian military forces. On the other side of the table is one of the largest oil companies in the world, Royal Dutch Petroleum, which reaped a reported $30 billion in profits in 2011. The Supreme Court granted certiorari, after a New York federal court of appeals held that corporations cannot be sued for international law violations. Similarly, the Mohamad court held that corporations and non-physical entities are immune from suit under the TVPA, where a man was allegedly tortured to death by agents of the Palestinian Authority in the West Bank.
The appellate decisions under review, fly in the face of the United States’ commitment to a zero-tolerance approach to torture. As a party to the Convention Against Torture and other treaties, the United States prohibits torture by all U.S. actors and is obliged to afford remedies against all victims. Torture cannot be excused when used against foreigners in secret locations outside the United States. And it cannot be excused when committed or abetted by a corporation anywhere in the world. If torture occurs, the United States is obliged to investigate, prosecute and punish every instance and to offer remedies, reparation and rehabilitation to victims.
What is at stake in Kiobel is the effective eradication of torture. To exempt corporations from liability is akin to providing amnesty for acts that are unquestionably illegal. It tells torturers and their enablers: if you want legal immunity, privatize your operations. It sends the message to corporations around the world: torture your employees and members of the communities in which you operate, because you won’t be held accountable and your bottom line could actually grow.
As the United Nations Special Rapporteur on Torture, I apply a victim-centered approach to my mandate, derived from international standards but also from personal experience. As a young lawyer in Argentina, I represented political prisoners during the “Dirty War” inflicted on my country by the military dictatorship. Because of my work, I was arrested, tortured, and held in administrative detention for more than a year.
I have seen first-hand how torture and other forms of inhuman treatment can thrive in an environment where accountability is lacking. I know that the physical and psychological injury that victims suffer lasts long after the torture ends. And I believe that victims’ reintegration with their families and into their daily lives is not complete until their perpetrators are brought to justice.
As a witness and as a survivor, I feel an acute sense of responsibility to ensure that the perpetrators of torture are punished and that their punishment is held up as a warning to others. I remain convinced that the ATS, enacted in 1789, and its companion statute, the 1992 TVPA, hold great potential for holding perpetrators accountable. I hope that the Supreme Court will uphold the promise of these laws, and fulfill the United States’ commitment to protect human rights, and not allow corporations to get away—literally—with torture.
I am participating this week in a discussion on Kiobel v. Royal Dutch Petroleum, the case on corporate liability under the Alien Tort Statute that will be argued tomorrow at the Supreme Court, at the Manhattan Institute’s Point of Law Blog. My interlocutor will be Professor David Weissbrodt of the University of Minnesota. Here is a snippet of my opening salvo:
I will use two recent op-eds on the upcoming case to launch our discussion. Each op-ed reflects how the disputants in Kiobel would like to frame their argument to the Supreme Court and to the public.
In the NYT, Peter Weiss, formerly of the Center for Constitutional Rights, focuses on the importance of the ATS in holding human rights offenders accountable and the general unfairness of excluding corporations from ATS lawsuits.
In the Washington Post, former Bush Administration State Department Legal Advisor John Bellinger, argues that ATS lawsuits are being used to harass corporations into settlements, to interfere with other nation’s domestic affairs, and to embroil the United States in disputes with important foreign allies like the United Kingdom, the Netherlands, and Germany.
I think Bellinger has a very strong argument (I have joined an amicus brief in this case making very similar arguments) and I haven’t seen the petitioners in this case or their amici make a very persuasive response to it. If the Supreme Court rules against the Kiobel plaintiffs, I am betting some version of this argument will be in the majority opinion.
But it is also noteworthy that Bellinger does not respond to Weiss’ claim about the unfairness of excluding corporations. He doesn’t do so because the “corporations are not liable under the ATS,” is the kind of rigidly formalistic argument that rarely succeeds at the Supreme Court and has almost no appeal to the general public. The NYT headline to Weiss’ op-ed, “Should Corporations Have More Leeway to Kill Than People Do?,” neatly captures the difficulty that the Shell defendants face in making this argument.
But just because the argument is unattractive, doesn’t mean it is wrong.
Please check out Point of Law for the rest of my post, and later on this week for Prof. Weissbrodt’s thoughts on the Kiobel question.