Ed. note. This post is the latest in our series on the upcoming U.S. Supreme Court case Jesner. v. Arab Bank, a case with implications for everything from human rights to terrorism financing cases that will resolve the question of whether corporations can be sued under international law.
Intense debated preceded the Supreme Court’s 2004 decision in Sosa v. Alvarez-Machain opened the door to creating a remedy for victims of human rights violations overseas by recognizing a role for U.S. federal courts in making common law under the 18th century legislation known as the Alien Tort Statute. But the court did not open the door very far. A plaintiff must prove the violation of “a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th century paradigms,” such as piracy under maritime law. Nine years later, in Kiobel v. Royal Dutch Petroleum Co., the Supreme Court narrowed the opening by denying any remedy under federal common law for human rights violations within the boundary of another nation.
In the pending case of Jesner v. Arab Bank PLC, the court might take the opportunity to narrow the opening further by categorically foreclosing any form of corporate liability for human rights violations. That issue was raised but not decided in Kiobel. An absolute limitation on corporate liability might be attributed to the limited number of special corporate charters granted in the late 18th century, leading to a limited number of claims against corporations for human rights violations. However, in an amicus brief in Jesner (filed also on behalf of Thomas J. Schoenbaum and Joel Samuels), I have argued that this limitation has no basis in maritime law. Enterprise liability was common in admiralty in the 18th and 19th centuries. And for the same reasons that it is common today: large institutions played a dominant role in maritime commerce.
In rem liability, a characteristic feature of the general maritime law, effectively imposed a form of enterprise liability on the owners of vessels, which extended to seizure for piracy—an offense against the law of nations specifically addressed in Sosa. So, too, private corporations, as vessel owners, have long been subject to liability in admiralty, extending even to quasi-public corporations like the Dutch East India Company and the English East India Company. To exempt corporations from liability per se would deny a remedy for the violation of rights recognized in maritime law and the law of nations.
In this light, the proposed exclusion of corporate liability in Jesner appears to be little more than an attempt to close the door, almost entirely, on the remedy recognized in Sosa. That course would be deeply inconsistent with recognizing human rights and correlative remedies as the product of principled lawmaking. Virtually all systematic human rights violations can be laid at the feet of some institution, whether a government instrumentality or a private corporation. Sovereigns have preserved a degree of immunity, but that has been largely eroded for commercial transactions and now has been limited for various human rights violations.
Private corporations have never received the same degree of immunity. The decision in Sosa was, of course, deeply controversial, but having taken that step as a matter of principle, the Court should not backtrack on it by recognizing an unprecedented form of corporate immunity. In this respect, the proposed exclusion of corporations from liability in Jesner would represent a long step backward from Kiobel. Whatever might be said of that decision, respect for territorial sovereignty has played an essential role throughout the history of international law. Exempting private corporations from liability, as if they were the equivalent of sovereign states, would be an unprecedented and dubious innovation.