On May 26, 2020, the Trump administration filed a brief amicus curiae in the Cargill Inc. v John Doe case, urging the Supreme Court to hold that domestic corporations cannot be liable for human rights violations under the Alien Tort Statute (ATS).
In this case, former child slaves who were forced to work on cocoa farms in the Ivory Coast claim that Nestle US and Cargill aided and abetted slave labour by providing financial support and technical farming aid to famers, subjecting defendants to suit under the ATS.
Exactly three months after the Canadian Supreme Court ruled that Canadian corporations may be held liable for breaches of human rights occurring abroad, the Trump administration is arguing that the US Supreme Court should rule the other way.
Corporate liability under Alien Tort Statute
The Alien Tort Statute provides federal courts 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.”
The question whether corporations are liable under ATS has never been fully addressed by the US Supreme Court.
In Kiobel v. Royal Dutch Petroleum Co, the Court of Appeals held that the ATS does not extend to suits against corporations to the extent that the law of nations does not recognise corporate liability. The Supreme Court granted certiorari to consider that question, but instead ruled that the presumption against extraterritoriality applies to the ATS, and that “even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application. Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices.”
Hence, the Supreme Court left the question unsolved, considering that given the circumstances of the case (“all relevant conduct took place outside the United States”), the suit could not be maintained under the ATS.
Then, in Jesner v. Arab Bank, the Supreme Court addressed the question whether foreign corporations are subject to liability under the ATS. After considering whether there was an international law norm requiring liability on corporations for acts of their employees that violate fundamental human rights, and whether the Judiciary should extend ATS liability to foreign corporations without further action from Congress, the Supreme Court concluded that foreign corporations cannot be sued under the ATS.
Aiding and abetting by US corporations
Back to the Cargill Inc. v John Doe case, in 2018, the Court of Appeals for the Ninth Circuit allowed plaintiffs to amend their complaint to specify whether aiding and abetting conduct that took place in the United States is attributable to the domestic corporations under the ATS. The court of appeal held that, the focus of the ATS not being limited to principal offenses (here child labour and slavery), applying the ATS cause of action to aiding and abetting would be domestic because such acts (notably spending money, taking decisions) allegedly occurred in the United States.
While defendants are urging the court to end the suit, the Supreme Court in January 2020 signaled interest in the case by asking the US Solicitor General to advise whether the court should hear the defendants’ appeal.
In the brief filed, the Trump administration first considered that the court of appeal “erred in holding that domestic corporations are subject to liability under the ATS”, and second “erred in recognising aiding-and-abetting liability under the ATS”. According to the administration, both questions are questions for Congress. Third, even in case the court of appeal was right on the first two points, it “erred in finding that respondents have overcome the bar on extraterritoriality”.
The administration argued that the reasoning in Jesner in respect to foreign corporations forecloses liability for domestic corporations as well. As there is no international law requiring corporate liability and the question of corporate liability is a question for Congress, domestic corporations should not be liable under the ATS. The administration added that domestic corporate liability would “facially discriminate against US corporations”.
Then, the administration considered that the court should add the question of whether the ATS imposes aiding and abetting liability. For the administration, “just as Jesner declined to extend liability beyond individual perpetrators to foreign corporations, so too this Court should decline to extend liability beyond primary violators to aiders and abettors”.
Finally, the administration found that even assuming aiding and abetting litigation against domestic corporations was recognised under the ATS, the element of the case would fail to meet the territorial criteria set in Kiobel. According to the administration, because the principal offense occurred abroad, claims are extraterritorial, and so the suit cannot be maintained under the ATS.
What will the Supreme Court decide?
William S. Dodge, Professor of Law and former Counsellor on international law to the Legal Adviser at the US Department of State argues that Trump administration is urging the Supreme Court to “draw further incoherent distinctions between corporations and natural persons and between liability as an aider and abettor and liability as a principal”.
Would the Supreme Court hear the case, it should take example from its Canadian counterpart to acknowledge that corporate irresponsibility for human rights violations abroad must cease.
To be continued!