Why Shouldn't Corporations Be Liable under the ATS?

By Hufbauer, Gary Clyde | Georgetown Journal of International Law, Summer 2012 | Go to article overview

Why Shouldn't Corporations Be Liable under the ATS?


Hufbauer, Gary Clyde, Georgetown Journal of International Law


My question has a one-word answer: Congress. The explanation, however, takes a few pages. As nearly every reader of this Journal knows, the Alien Tort Statute (ATS) is a one-sentence law enacted by Congress in 1789 that reads: "[t] he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." (1)

Enacted as part of the Judiciary Act of 1789, which was passed soon "alter ratification of the U.S. Constitution, the ATS was intended to show European powers that the new nation would not tolerate violations of its treaties or the "law of nations," especially when foreign ambassadors or foreign ship owners were assaulted by U.S. citizens. The purpose was to avert unnecessary tensions between the United States and Europe: America would not harbor scofflaws. The immediate concerns were attacks against foreign ambassadors; piracy on the high seas and safe conduct for foreign diplomats were thrown in for good measure.

Following this Congressional declaration of good behavior, the ATS remained largely unnoticed and unused for almost 200 years, until 1980, when the Second Circuit Court decided Filartiga v. Pena-Irala. (2) Since then, mass tort lawyers and human rights advocates have explored many avenues in their attempt to resurrect the ATS and extend its scope far beyond whatever was imagined in 1789. More than 120 suits have been filed alleging wrongful acts in sixty foreign countries. (3)

The suits share common features:

* They imaginatively claim that the law of nations embraces offenses that were certainly not recognized under that label in 1789. The alleged wrongful acts go well beyond the eighteenth-century short list of ambassadorial rights, safe conduct, and piracy, and even beyond latter day additions, namely slavery, forced labor, war crimes, genocide, official torture, and extra-judicial killings.

* Such suits commonly target corporations for "aiding and abetting" a foreign government in abusing its own citizens, where the alleged assistance entails mere knowledge of the government's wrongful acts.

* The alleged abuses invariably take place on foreign soil, yet the ATS suits claim that the foreign judicial system cannot adequately dispense justice, either because the judges are under the thumb of the local government or because local courts are incompetent. This device leads ATS suits deep into extraterritorial application.

* Sometimes, as in Kiobel v. Royal Dutch Petroleum Co., (4) the real defendant is a foreign corporation, with minimum contacts to the United States.

* Many ATS suits are class actions that entail years of litigation, extensive discovery of corporate records, and damage to the corporation's reputation. Such suits are mostly an effort by the plaintiffs to force a corporate settlement regardless of the underlying merits.

Only in the United States would attorneys seek to stretch the powers of U.S. federal courts to these imperial dimensions by layering nuances upon a short and ancient statute. The construction of legal superstructure on top of a small foundation stone might be understandable if the ATS was a clause in the U.S. Constitution. But the ATS is a mere statute, not a command carrying the authority and wisdom of the Founding Fathers. This fact, coupled with the ATS's brevity and its long hibernation, should persuade the courts to be cautious in expanding the scope of ATS cases without further Congressional action.

The ATS was enacted in a world where multinational corporations were in their infancy, at a time when international trade and investment were a small part of economic life, and when the law of nations was a handful of precepts. It is preposterous to extend the scope of the ATS by drawing an analogy between Blackbeard plundering on the high seas, and Royal Dutch Petroleum Co. …

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