Saturday, April 02, 2011

Joel Slawotsky on Corporate Liability in Alien Tort Litigation

Joel Slawotsky, lecturer at the Radzyner School of Law, Interdisciplinary Center, Herzliya, Israel; and the Law and Business Schools of the College of Management, Rishon LeZion, Israel has written an excellent essay: Corporate Liability in Alien Tort Litigation, Virginia Journal of International Law Online 1:27-42 (2011).

The essay is well worth reading.  The object of the essay is a critical analysis of Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010). Slawotsky argues
Given prior precedent, Kiobel ‘s holding is startling. But even more troublesome is that, taken to its logical conclusion, Kiobel arguably holds that corporations can conduct business any way they deem proper without concern of liability under the statute. In light of this, there are several compelling reasons for finding that corporations should be liable under the statute.
First, there is nothing to indicate that corporations were excluded by the statute. All available evidence indicates that, to the contrary, corporations were always envisioned as part of the class of potential ATS defendants. Second, the zealous reliance by Kiobel on the Sosa footnote is misplaced. The footnote does not stand for the proposition that federal courts should examine international law to find whether a class of defendants, such as corporations, can be sued under the statute. Rather, the Supreme Court simply articulated that international law should be examined to determine whether the type of misconduct at issue can be allocable to various actors, such as public or private entities.
Third, international law does not mandate the manner of its enforcement; such mechanisms are reserved for the individual states to implement.
Fourth, the Kiobel court‘s reliance on international criminal rulings to prove corporations are not liable under international law is misplaced, as criminal law is fundamentally different from civil tort law.
Fifth, international law unquestionably protects corporate rights and, therefore, corporations should be subject to obligations.
Sixth, the view that international law is applicable only to "states" is not an accurate reflection of our globalized world. As states increasingly outsource their functions to businesses, corporations are beginning to fulfill traditional "state" roles. This change has led to a blurring of the once sharp public/private distinction.
Slawotsky, supra, at 30. Slawotsky ends his essay with a suggestion about the the anachronistic approaches of the U.S. courts.
In today‘s world, both states and corporations have similar or even identical interests. This coalition of interests underscores the blurring of the distinction between states and corporations. Given the reality of corporations being wealthier than states and the blurring distinction between states and corporations, the failure to impose obligations upon corporations because corporations are distinct from states is no longer valid.
Slawotsky, supra, at 41.  This is absolutely correct.

Slawotsky's trenchant analysis also provides a means of thinking about the limits of law in general, and the reach of international law domesticated within national legal orders specifically, in cases of transnational activity of non-state actors.  At the time the ATS was adopted, the idea of the state as the organization of a political community at the top of a hierarchy of coercive power was still in its infancy.   The radical element of ATS, in a sense, was its acknowledgement of this role of the state, and thus, of the obligations of states to abide by the rules of the community of actors with which it shared a relationship of equals.  ATS, then, in a sense, could be understood to buttress the idea of the state, by acknowledging that all advanced states wielded supreme power, but all also adhered to the same normative framework of rules that legitimated the superior power of the state.   To extend this power to other actors might  well undo the foundations that gave the ATS its normative legitimacy.  But the realities of globalization has begun to undermine the normative foundation on which ATS legitimacy is founded.  That is one of the more important insights of Slawotsky's essay.  But the consequences are unclear.  On the one hand, globalization, by undermining the framework within which the ATS could be legitimated, might produce an alternative framework on which to ground ATS.  In so doing, the ATS' purpose, and its jurisdiction would be expanded to include all transnational actors and all transnational governance.  That is essentially where many who look to the state for remedies for international wrongs would have the national courts of the United States go.  On the other hand,  globalization may make clear the limits of the authority of  a domestic legal order in the application of its domestic law and legal process to adjudicate activities that do not involve other state actors.  In such cases, ATS might not be legitimately contorted to reach the parties.  Those wrongs may be beyond the remedial power of the community of states exercised through their courts and laws, but may not be outside the reach of governance.  The case reminds us that either international law must adapt to changes in its fundamental organization, or that reliance on the remedial apparatus of corporate governance mechanisms will have to suffice.   For the moment, that leaves few people satisfied. 

1 comment:

Anonymous said...

Fine refreshing paper by Slawotsky. Excellent contribution to the literature on the subject. I agree wholeheartedly with Larry.