Oral Argument in Jesner v. Arab Bank: Gimme Two Steps?

Ed. note. This article is the latest in our series on the U.S. Supreme Court case Jesner. v. Arab Bank, a case that is slated to resolve the question of whether corporations can be sued under international law for human rights violations and terrorism.

As Bill Dodge’s fine post on the oral argument in Jesner v. Arab Bank PLC indicated, several members of the Supreme Court – Justices Alito, Kagan, and Kennedy, at least—referenced a two-step approach to Alien Tort Statute (ATS) cases.  Paul Clement, arguing for Arab Bank, half-joked during Wednesday’s opening argument’s that he did not want to sound “sort of Chevronesque here.”  That may be because analyzing the ATS’s “legal Lohengrin” through anything Chevron-like is like trying to decipher the Voynich manuscript with Ikea instructions. 

Par for a Chevron course, there is room for disagreement about what exactly the two steps are, and whether there any hidden known only to the cognoscenti.  Professor Dodge suggests that the Justices seemed to be considering these: “(1) whether customary international law permits corporate liability; and (2) assuming it does, whether the ATS cause of action should be interpreted to permit corporate liability.”  He may well be right, but that is not what I think precedent would recommend, nor what a sound approach would counsel.  Explaining my different understanding might help unpack the questions the Court has to resolve in Jesner.  

To begin with, the Justices and counsel seemed to be alluding to a more general two-step approach that might be applied to corporate liability.  What generic steps might that involve?  Justice Kennedy, helpfully, referred to a “Sosa step 1, where we ask if there is a specific universal norm.”  A “specific universal norm” sounds like an oxymoron, but it alludes to the limitation in the Supreme Court’s 2004 decision in Sosa v. Alvarez Machain that placed a limit on the kinds of international-law norms that could be employed by federal courts under the ATS.  What, then, remains for a “Sosa step 2”?   In Kiobel v. Royal Dutch Petroleum, the Court suggested that identifying an international law norm “is only the beginning of defining a cause of action,” which would involve questions like those actually addressed in the Torture Victim Protection Act of 1991: further “detailed definitions” of the claims, “specifying who may be liable, creating a rule of exhaustion, and establishing a statute of limitations,” each aspect carrying “with it significant foreign policy implications.”  Sosa itself suggested that these were all entangled in its principal inquiry, since “the determination whether a norm is sufficiently definite to support a cause of action should (and, indeed, inevitably must) involve an element of judgment about the practical consequences of making that cause available to litigants in the federal courts,” after which it reeled off “related considerations” in its footnote 20—including a reference to corporate liability.  At the argument, Justice Alito experimented with a kind of meiosis for this inquiry, saying that “what I’ll call step 2 of Sosa” is “the question of whether we should recognize a federal common law claim under particular circumstances,” including any international repercussions.  For purposes of this discussion, I will take that as gospel.

Let’s assume, at least, that any Step One is to be put in terms of international law norms, some violation of which is critical to establishing jurisdiction under the ATS.  What is the precise inquiry for use in Jesner?  It certainly should not be whether there is generally some “norm of corporate liability under customary international law,” as the Second Circuit majority did in its 2010 decision in Kiobel v. Royal Dutch Petroleum Co., as that would require customary international law to be “universal” in a completely implausible way.  Such a question also seems out of sync with Sosa’s footnote 20, which (as Professor Dodge and other International Law Scholars recalled in their amicus brief) asked “whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued.” 

On the other hand, I am not sure the Court would agree with Professor Dodge that the proper question instead is “whether customary international law permits corporate liability” (my emphasis).  This is not, I suppose, intended to be answered affirmatively so long as international law fails to prohibit corporate liability—though that would parallel the way the petition asks “Whether the [ATS] categorically forecloses corporate liability”.  But it is amenable to the government’s conclusion in its brief that (as Dodge summarizes in his post) the international norms in question “do not distinguish between natural persons and corporations.”  Is it really so easy to trundle off toward Step Two?

Take, by way of contrast, the question of the form of corporate liability (e.g., whether joint and several liability was available).  Regarding this as a remedial question to be addressed at Step Two, as Professor Dodge (and Justice Kagan, at least) would seem to favor, has considerable appeal: most think international law simply doesn’t address this kind of thing, while the common-law of tort does, so there’s no point to pretending otherwise.  We would, at this Step Two, apply common-law methods in elaborating the tort, while considering—as seemed particularly important to Chief Justice Roberts and Justice Alito—any foreign policy complications for the United States, at least if they could not be dealt with via other doctrines.  

Unfortunately, if one assumes that international law could, more plausibly, address the prior question of whether corporations or other types of perpetrator are liable at all, Sosa’s cautious approach suggests a muddier analysis at Step One, without such a clear distinction between international and domestic inquiries.  Even at Step One, the Court has seemed only partly interested in what a law-finding court would say about whether an international law norm exists or does not.  Sosa and Kiobel asked whether the international law norm was “specific, universal, and obligatory” (quoting the Ninth Circuit’s 1994 decision in In re Estate of Marcos, Human Rights Litigation).  This seemingly demanding standard was thought to afford an extra degree of confidence that federal courts would be constrained in affording tort remedies; the “obligatory” bit also served the function of relating this role to U.S. responsibility.  If this filtered view of international law is a constant of Step One, asking what international law “permits” seems to start in the wrong place. 

We are left, then, with difficult questions, perhaps even at the Step One that seemed to be stepping out in Jesner.  Do the international law norms in question, in establishing a standard of conduct and addressing the parties to be bound, make it sufficiently clear for ATS purposes—insofar as they fail to exclude corporations from the scope of liability—that they are included?  Does the failure to exclude corporations constitute their inclusion to the degree of certainty required by the “specific, universal, and obligatory” burden, or does that not apply?  And does this all occur at Step One?

One might, at this juncture, restate our Step One and Step Two—as applied to questions involving corporate liability—to be something like the following:

  1. Does international law establish a “specific, universal, and obligatory” norm that is alleged to have been violated—and include corporations within the scope of liability for its violation?

       2. Should a court recognize a federal common law claim under the particular circumstances?

This is, I think, consistent with the general drift of Professor Dodge’s post.  However, asking whether international law “includes” corporations is not actually as easy as asking whether it “permits” liability for corporations or “excludes” such liability—nor does this clarify whether that is governed by the same demanding standard of inquiry into what international law has established.  Alternatively, and equally consistent with a pre-disaggregated Sosa and its footnote 20, we would consider “whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued” to be a “related question”—but not subject to the same standard of inquiry.  This might yield something like the following:

  1. Does international law establish a “specific, universal, and obligatory” norm that is alleged to have been violated—and in relation to that particular norm, would it be consistent with international law to include corporations within the scope of liability?

       2. Even assuming international law would permit corporate liability, should a court recognize a federal common law claim               under the particular circumstances?

The continuing problem, which seemed to be evidenced during the Jesner argument, is that this still mixes an international-law inquiry (into the existence of a norm) with a standard (“specific, universal, and obligatory”) that is as much a creature of skepticism about international law and about the role of federal courts—thus compounding the difficulty the Justices have in distinguishing between a threshold Step One and various bases for judicial restraint.  A more radical approach, then, would be something like the following:

  1. Does international law establish a norm that is alleged to have been violated—and in relation to that particular norm, would it be consistent with international law to include corporations within the scope of liability?

       2. If so, is the international-law prohibition sufficiently “specific, universal, and obligatory” to satisfy the ATS, and should a             court recognize a federal common law claim under the particular circumstances?

Jesner may not be the ideal case to consider the broader approach, given the secondary nature of the corporate liability question.  But this argument, like the arguments in Kiobel before it, have been haunted by an uncertainty about the nature of the questions the Court is examining, and it would be better to clarify before taking another step.

 

About the Author(s)

Edward Swaine

Professor at the George Washington University Law School, Visiting Fellow at the Graduate Institute of International and Development Studies in Geneva, Switzerland