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1 A SHORT HISTORY OF CORPORATE ACCOUNTABILITY : A COMMENTARY ON INTERNATIONAL LEGAL PERSONALITY AND AN ANALYSIS OF HUMAN RIGHTS LITIGATION IN UNITED STATES COURTS UNDER THE ALIEN TORT STATUTE By JASON F. TAYLOR A THESIS PRE SENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS UNIVERSITY OF FLORIDA 2011
2 2011 Jason F. Taylor
3 To those who believe that to accomplish great things, we m ust not only act, but also dream; not only plan, but also believe
4 ACKNOWLEDGMENTS First and foremost I would like to thank my mother for her unconditional love support and encouragement I would additionally like to thank my sister, Shannon, and I a dmire her for fearlessly pursing our shared dreams of a better world through economic and social development I would like to thank my advisors and thesis committee members Berta Esperanza Hernndez Truyol, Jon L. Mills, and Winston P. Nagan for their ass istance and critical analysis I would also like to thank my committee chair Richmond F. Brown for his continued support of my academic endeavors; although he arrived to the University of Florida following the tragedy of Hurricane Katrina, his misfortune w as our benefit. I would especially like to thank Dean Mills for his support of the U niversity of F lorida Philip C. Jessup Moot Court Team, his encouragement of my academic pursuits, and the privilege of having worked with him. Lastly, I would like to recog nize the University of Florida, Levin College of Law and the Center for Latin American Studies for their combined support of their joint degree program which provided an educational opportunity well suited to my academic and professional goals.
5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ ............... 4 ABSTRACT ................................ ................................ ................................ ................................ ..... 8 CHAPTER 1 INTRODUCTION ................................ ................................ ................................ .................. 10 2 EXEMPTING CORPORATIONS FROM THE LAW OF NATIONS ................................ .. 16 Limited Liability for Corporate Wrongdoing ................................ ................................ ......... 16 Kiobel v. Royal Dutch Petroleum (2010) ................................ ................................ ........ 18 Facts of the case ................................ ................................ ................................ ....... 18 Procedural posture ................................ ................................ ................................ .... 19 Concluding no corporate liability ................................ ................................ ............. 20 The Majority Opinion ................................ ................................ ................................ ...... 20 Step Analysis ................................ ................................ ................. 22 Step one: determining potential subjects of liability ................................ ............... 23 Step two: determining corporate liability ................................ ................................ 23 The Concurring Opinion ................................ ................................ ................................ .. 26 ................................ ........................ 27 Domest ic Practice of Legal Liability under the ATS ................................ ...................... 28 Nature and Historical Development of International Law ................................ .............. 30 Neglecting the Theoret ical Question ................................ ................................ ............... 34 Contemporary Outcomes of the Social Process ................................ ................................ ...... 34 The Central Issue ................................ ................................ ................................ ............. 35 The Present Challenge ................................ ................................ ................................ ..... 35 3 THEORETICAL FRAMEWORK OF INTERNATIONAL LEGAL PERSONALITY ........ 37 International Person ality in Theory ................................ ................................ ........................ 37 Theoretical Conceptions of International Legal Personality ................................ ........... 37 States only ................................ ................................ ................................ ................ 39 Recognition ................................ ................................ ................................ .............. 41 Individualistic ................................ ................................ ................................ ........... 41 Formal ................................ ................................ ................................ ...................... 42 Actor ................................ ................................ ................................ ......................... 42 An Appraisal of the Five Theoretical Conceptions ................................ ......................... 43 Research Design and Framing the Social Process ................................ ................................ .. 44 Designing the System of Inquiry ................................ ................................ ..................... 46 The Community Process ................................ ................................ ................................ .. 47 Effective Power Process ................................ ................................ ................................ .. 48 Outcomes of the Power Process ................................ ................................ ...................... 49
6 4 MULTINATIONAL CITIZENSHIP INCORPORATED ................................ ...................... 51 Conceptualizing International Legal Personality in Practice ................................ .................. 51 Globalization and the Juridical Person ................................ ................................ ................... 51 Corporate Rights and Duties ................................ ................................ ........................... 53 Profit Over People ................................ ................................ ................................ ........... 53 Voluntary Codes of Corporate Responsibility ................................ ................................ 55 Recognition of the Corporate Form ................................ ................................ ........................ 55 Domestic Corporate Personality ................................ ................................ ...................... 55 The corporate person in United States history ................................ ......................... 55 Recognition of domestic corporate personality ................................ ........................ 57 International Corporate Personality ................................ ................................ ................. 58 Subjects of International Law ................................ ................................ ................................ 58 New Rules, Old Actor ................................ ................................ ................................ ..... 58 ime Against Humanity ................................ ................................ ................. 59 ................................ ................................ ........................... 60 Modern Subjects of International Law ................................ ................................ ................... 62 5 CORPORATE ENTERPRISES IN AND UNDER A MODERN LAW OF NATIONS ....... 68 Corporations In and Under International Law ................................ ................................ ........ 68 Sources of International Law ................................ ................................ ................................ .. 69 Treaties or Conventions ................................ ................................ ................................ ... 70 Customary International Law ................................ ................................ .......................... 72 Objective element: state practice ................................ ................................ .............. 73 Subjective element: opinion juris ................................ ................................ ............. 73 General Princi ples of Law ................................ ................................ ............................... 75 Subsidiary Means to Determine International Law ................................ ................................ 75 Judicial Decisions ................................ ................................ ................................ ............ 75 Teachings of Learned Scholars ................................ ................................ ....................... 76 Contemporary Sources of International Law ................................ ................................ .......... 76 International Organization s ................................ ................................ ............................. 77 Soft Law ................................ ................................ ................................ .......................... 78 Sources of Corporate Accountability in International Relations ................................ ............ 81 Nuremburg Precedent ................................ ................................ ................................ ...... 82 Looking Beyond Nuremburg ................................ ................................ ........................... 84 Dual identity of corporate nationals ................................ ................................ ......... 85 Regulating corporations ................................ ................................ ........................... 88 Diplomatic protection of corporate persons ................................ ............................. 89 Jurisdict ion in International Law ................................ ................................ ............................ 92 Jurisdiction Over Multinationals ................................ ................................ ..................... 93 Universal Jurisdiction ................................ ................................ ................................ ...... 96 6 A SHORT HISTORY OF HUMAN RIGHTS LITIGATION IN UNITED STATES COURTS UNDER THE ALIEN TORT STATUTE ................................ .............................. 98 A Long Story in Brief: Kiobel v. Royal Dutch Petroleum Co. ................................ .............. 9 8
7 The Alien Tort Statute ................................ ................................ ................................ ............ 99 Origin and Development ................................ ................................ ............................... 100 The Statutory Elements ................................ ................................ ................................ 102 Conceptual Problems ................................ ................................ ................................ ..... 103 Constitutionality and the Federal Common Law ................................ ................... 103 International law as United States law ................................ ................................ ... 104 Application of the ATS in Human Rights Litigation ................................ ............................ 105 Filartig a v. Pea Irala (1980) ................................ ................................ ........................ 106 Doe v. Unocal (2003) ................................ ................................ ................................ .... 108 Sosa v. Alvarez Machain (2004) ................................ ................................ ................... 109 Suing Corporations Under the ATS ................................ ................................ ...................... 113 A Nightmare Scenario ................................ ................................ ................................ ... 113 ................................ ................................ ........................ 115 Multinational Corporate Liability Under the ATS ................................ ............................... 118 Determining Who to Sue ................................ ................................ ............................... 119 Personal Jurisdiction ................................ ................................ ................................ ...... 119 Forum Non Conveniens ................................ ................................ ................................ 120 The Aftermath of Kiobel v. Royal Dutch Shell Co. and Beyond ................................ ......... 122 The Immediate Impact ................................ ................................ ................................ ... 122 Appropriateness of Defendants ................................ ................................ ..................... 124 Scope of Liabili ty: An Open Question ................................ ................................ ......... 125 7 CONCLUSION ................................ ................................ ................................ ..................... 127 Principal Conclusions ................................ ................................ ................................ ........... 127 Rehearing Denied ................................ ................................ ................................ ................. 130 Final Thoughts Regarding Corporate Liability ................................ ................................ ..... 131 LIST OF REFERENCES ................................ ................................ ................................ ............. 133 BIOGRAPHICAL SKETCH ................................ ................................ ................................ ....... 147
8 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts A SHORT HISTORY OF CORPORATE ACCOUNTABILITY : A COMMENTARY ON INTERNATIONAL LEGAL PERSONALITY AND AN ANALYSIS OF HUMAN RIGHTS LITIGATION IN UNITED STATES COUR TS UNDER THE ALIEN TORT STATUTE By Jason F. Taylor May 2011 Chair: Richmond F. Brown Major: Latin American Studies With increasing frequency t he modern corporation conducts business in all corners of the world. The power of the corporation is unparalleled in the international sphere, even when compared with the nation state. Unlike the g rowth of the corporation, the rule of law lags behind; misguided interpretation and failure to recognize the evolving nature of non state actors in international law limits its application to the changing paradigm of international relations. The Alien Tort Statute ( 28 U.S.C. § 1350 ) provides a unique opportunity to examine corporate legal accountability in and under international law Enacted in 1789, t he Alien Tort Statute ( ATS ) permits enforcement of international law through United States tort law and pe rmits aliens to su e for human rights violations in United States courts. Although the history and purpose of the ATS appears quite narrow, ATS jurisprudence broadened over time to hold all international actors accountable for violations of international la w H owever, a recent ruling by the United States Second Circuit in Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111 (2d Cir. 2010), essentially exempts corporations from liability for transgressions of the law of nations. But surely this does not mean th at corporations operate in a legal vacuum entirel y beyond the reach of justice.
9 This thesis reflects the increasing presence of multinational corporate enterprises in the international sphere and increasing jurisdictional uncertainty in international law a nd under the ATS. It explores the complicated relationship between sovereign states and private enterprises and the increasing difficulty of subject law. Although the question of whether corporations are subjects r ather than mere objects of international law arises in the context of human rights litigation in United States courts under the ATS this issue concerns the global community at large.
10 CHAPTER 1 INTRODUCTION Corporations and their multinational enterpris es are often the engines of national economic growth and development. Unfortunately, there are numerous historical examples of corporate actors violating human rights. Even though these instances of human rights atrocities committed by multinational corpor ate enterprises are relatively few when compared with the number of multinational corporate enterprises operating throughout the world, this author is of the opinion that economic development and human rights ought to be considered together and not viewed as incompatible objectives. This thesis explores the relationship between corporate liability for human rights violations under the Alien Torts Statute (ATS) and the development of corporate legal personality in domestic and international law as well as an alyzes a recent ruling by the United States Second Circuit in Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111 (2d Cir. 2010), that essentially exempts corporations from liability for transgressions of the law of nations under the ATS. 1 At present, multin ational corporate entities operate in a theoretical and practical ungoverned space in the international sphere This gap in international law is often exploited by private actors because their country of citizenship is either unable or unwilling to regulat e its abroad and frequently the host country of multinational corporate activity is either unwilling or unable to govern their conduct within its borders Consequently multinational corporate activity by capitaliz ing upon economic p ower seemingly t ranscend ed the rule of law Although the vast majority of multinational corporations adhere to human rights norms, there are notable examples where corporate activity either directly or indirectly breached human rights 1 The ATS pro
11 norms in the pursu it of profit However, in the later part of the twentieth century a new phenomen a emerged in the struggle to enforce international human rights norms in United States courts: the Alien Torts Statute (28 U.S.C. § 1350) developed into a vehicle to provide a domestic remedy for torts committed by multinational corporations in violation of international law. In fact, for over a quarter of a century United States courts played an important role in the protection and enforcement of international hu man rights n orms. T hese human rights norms did not develop into being full panoply, instead, global particip ants actively pursued these values through institutions, like United States courts, and liability for violations of human rights norms developed in the context of this international decision making process. The decision making process, simply stated, is a response to an actual or perceived problem: corporate accountability. This author is also of the opinion that the rule of law provides the foundations for a d emocratic, free and just society and the ATS succeeds in filling a gap in international law. In fact, the evolution of ATS jurisprudence over the last three decades provides a unique opportunity to examine the legal standards governing private actor conduc t and the development of corporate liability in an under a modern law of nations. Through this lens, the rule of law is merely a form of decision making that emerged from societal demand s and the legal decisions holding private actors, such as corporatio ns accountable for internationally wrongful conduct may be understood as an institutional response to these demands Just like the ATS developed as a response to an actual and perceived problem s of society, so too did the recent decision to foreclose that ATS as a viable method to hold corporations accountable Some believe that the ATS is bad policy and that it is bad for business. In fact, t here is voluminous debate among legal commentators about the ATS. This thesis does not purport to resolve every vignette surrounding
12 the ATS; rather, it examines corporate accountability in and under international law and argues that corporations may be held liable for internationally wrongful conduct under international law and the ATS. In essence, this thesis p rovides a framework for understanding the legal status of corporate actors in and under international law and whether the jurisdictional grant under the ATS is sufficient to hold corporate entities accountable for violations of prevailing international nor ms governing private actor conduct. Recent judicial decisions in United States courts make this inquiry into corporate liability under international law particularly timely. On September 17, 2010, the United States Second Circuit Court of Appeals decided Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111 120 (2d Cir. 2010) and the majority ruled that corporations are exempt from suit under the ATS because international law does not extend liability to corporate entities. Despite years of ATS jurisprudenc e holding private actor accountable for human rights violations, the United States Second Circuit Court of Appeals groundbreaking decision basically closed United States courts to alien plaintiffs seeking to hold corporations accountable for alleged human rights abuses outside of the United States. Although United States courts allowed lawsuits against corporate defendants under the Alien Tort Statute (ATS) for nearly two decades, the Second Circuit Court of Appeals has now exempted corporations from the l aw of nations and provided corporations with a new benefit of incorporation : limited liability The thesis is divided into seven chapters. Chapter One consists of this introduction. Chapter Two serves five preliminary purposes. First, the chapter provid es an overview of the United States Second Circuit Court of Appeals decision in Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111 (2d Cir. 2010). This first section of Chapter Two will highlight the facts of the
13 case, the procedural posture, and the court s conclusion. Second, Chapter Two examines the majority opinion in Kiobel and the two step analysis the court employed to reach its decision that corporations are not liable for violations of the law of nations. Third, Chapter Two introduces the concurri ng opinion of Judge Leval. Although the entire court found that th is case ought to be dismissed, Judge Leval strongly disagreed with the reasoning and vehemently opposes the rule, arguably, manufactured by the majority Fourth, Chapter Two brie fly analyzes the to the ruling. In Kiobel the c ourt international law in theory and in practice lead to the court to incorrectly determine that corporations are not subjects of international law and as a result corporate entities are not liable under the ATS. Lastly, t his section will introduce the reader to the initial arguments of this thesis which seeks to determine whether corporations are subjects of internation al law. Chapter Three has two primary purposes. First, it examines international legal personality in theory vis vis five theoretical conceptions of international legal personality. Throughout the history of international legal practice, these five main theoretical conceptions of legal personality inform the debate surrounding the issue of whether a corporation may be held liable for violations of international law. Second, Chapter Three lays out the system of inquiry employed throughout this thesis. This thesis borrows its theoretical approach from decision making theory which at its most basic level posits that problems of law, such as determining corporate personality for the purposes of liability under the ATS, are problems derived from the social proc ess. The theoretical model introduced in Chapter Three and adopted by this thesis frames the inquiry of corporate liability within the context of the social process. This theoretical model
14 recognizes that all actors have rights and duties determined by th e international decision making process and posits that all actors, including corporations, are effective actors within the international decision making process. In this context, the particularized aspects of any given obligati ons and responsibilities are derived from its participation within this decision making process. Mo reover, an entities rights and duties depend upon it s effective power within the legal system. Following this configurative analysis approach to examining co rporate liability, this thesis will also examine the outcomes of the power process. Importantly, t h is theoretical model is employed because it accounts for the social reality of law and under this model all international actors are accounted for in and und er the rule of law. Chapter Four and Chapter Five examine corporations in and under international law. Chapter Four examines the historical development of legal personality. Chapter Five provide s the reader an orientation to the sources and application of international law. These chapters explore the nature of international law as an evolving body of law within the context of the social process and trace the historical development of the corporation in and under the rule of law Taken together, Chapter Fou r and Chapter Five provide a roadmap for determining whether corporations are accounted for in and under international law Chapter Six examines human rights litigation in United States courts and describes the development of corporate liability under the ATS First, Chapter Six revisits the United States Second Circuit Court of Appeals decision in Kiobel v. Royal Dutch Petroleum Co Second, Chapter Six reviews the complicated historical development of the ATS and reflects briefly on the waves of litigation under the ATS leading to corporate actor liability For a more detailed and general description of the development in ATS jurisprudence there exists a plethora of literature ; however, the focus of this study is whether corporations are subjects of interna tional law and
15 whether corporate liability under the ATS is consistent with international law Third, Chapter Six analyzes three specific cases that provide the framework to examine the legal standards of corporate liability under the ATS: Filartiga v. Pe a Irala 630 F.2d 876 (2d Cir. 1980), Doe v. Unocal Corp. 110 F. Supp. 2d 1294 (C.D. Cal. 2000); 395 F.3d 932 (9th Cir. 2002); 395 F.3d 978 (9th Cir. 2003) and Sosa v. Alvarez Machain, 542 U.S. 692 (2004) These cases provide the framework to examine the evolution of United States law governing tort liability for violations of international law. Central to the discourse pertaining to the viability of the ATS to hold private actors accountable is whether international law pr ovides for corporate liability a nd whether domestic principles of corporate law provide the basis for corporate legal personality in international law. Here, these three cases provide illustrative examples of the development of law governing domestic remedies for torts committed in viola tions of th e law of nations Prior to concluding, this chapter weighs the outcome of the decision in Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111 (2d Cir. 2010) and its influence on the future enforcement of human rights in United States courts and be yond. Chapter Seven concludes this thesis and serves three purposes. First, it provides s uggestions for further research. Second, I offer a few concluding words concerning the majority opinion in Kiobel v. Royal Dutch Petroleum Co. Third, Chapter Seven add resses the policy of the ATS. Lastly, Chapter Seven provides the reader with a conclusion of the inquiry into corporate liability under the ATS is that the jurisdictional grant is consistent with international law and the must be reviewed by the United Sta tes Supreme Court.
16 CHAPTER 2 EXEMPTING CORPORATIONS FROM THE LAW OF NATIONS Limited Liability for Corporate Wrongdoing to business foremost among them the limitation of liability to the assets of the business without 2 Yet, in Kiobel v. Royal Dutch Petroleum Co. the United States Second Circuit arguably announced a new set of corporate rights. 3 In a split decision, the court ruled that t he Alien Tort Statute (ATS) 4 does not provide subject matter jurisdiction over claims alleging violations of international law against corporations. 5 Judge Leval, agreeing only in the ju dgment to dismiss 6 long as they i n corporate businesses will now be free to trade in or exploit slaves, employ mercenary a r mies to do dirty work for despots, pe rform genocides or operate torture prisons for a 7 In response to the aforementioned concerns, majority opinion author Judge Cabranes wrote, [ w ]e do not take light ly the passion with which Judge Leval disagrees with our illogical 2 Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 150 (2d Cir. 2010) (Leval, J., concurring) [herein Kiobel ]. 3 Id. at 114. 4 The Alien Tort Statute, 28 U.S.C.S. § 1350, provides jurisdiction over (1) tort actions, (2) brought by aliens only, (3) for violations of the law of nations. Kiobel v. Royal Dutch Petroleum C o. 621 F.3d 111 (2d Cir. 2010); see also Filartiga v. Pena Irala 630 F.2d 876, 890 (2d Cir. 1980); see also Sosa v. Alvarez Machain 542 U.S. 692, 724 25, 732, 124 S. Ct. 2739, 159 L. Ed. 2d 718 (2004) (Souter, J.) (quoting Filartiga with a p proval and i dentifying it as the 5 Kiobel at 114 115. 6 Kiobel at 150 (Leval, J., concurring). 7 Id.
17 strange or that he repeatedly critici internally inconsistent individually or in combination, are a fair reading of our opinion. In so doing we are confident that if our effort is mi sguided, higher judicial authority is available to tell us so 8 This tension between judges evidences that United States courts are clearly struggling to determine standards of corporate legal personality in international matters. Moreover, I accept the i nvitation to decide whether Judge Lev a eighty eight page separate opinion page opinion in Kiobel that concluded that corporations are not subject to liability under the ATS. Indeed, this thesis will show that Judge in theory and practice is an accurate critique of the majority opinion The majority opinion is incorrect in theory First, the majority relies on outdated and outmoded legal theory which purports to confer legal personality exclusively to state actors; second, the majority exhibits an insufficient understanding of the international legal process and ignores the essence of international legal practice; third, th e result is that the majority lacks any bases under a modern law of nations to support its holding and based its decision upon its incorrect theoretical approach that led the majority to manufacture rules to support its holding; fourth, the majority missta tes the historical development of international norms ; and fifth, the majority ignores well settled relationships between the rights and duties of international actors. Additionally, t he majority opinion is incorrect in practice First, the majority inco rrectly approaches the modern law of nations The majority based its assessment of international law upon an incomplete appraisal of its sources. Second the majority departs from well settled principles of law, both international and domestic Third, the majority lacks legal precedent for 8 Id. at 123 (emphasis added).
18 its holding The majority misconstrues existing ATS jurisprudence misunderstands the Supreme Court s decision in Sosa and frustrates the object and purpose of the jurisdictional grant of the ATS. Kiobel v. Royal Dutch P etroleum (2010) In Kiobel v. Royal Dutch Petroleum Co. the Second Circuit found that corporate defendants have never been held liable, either criminally or civilly, for violations of international law, and held that in the absence of an international rule against corporate entities must be dismissed for lack of subject matter jurisdiction. 9 The United States Supreme Court has never addressed the issue of corporate liability under the ATS. Although the Second Circu Kiobel represents a significant departure from ATS precedent, the decision was issued at a point in ATS jurisprudence where many parties were looking for a judicial split among appellate courts to prompt a ruling from a higher judicial aut hority. The Supreme Court has decided only one case under the ATS and provided little guidance to lower courts. 10 Kiobel is ripe for review. Facts of the c ase In Kiobel Nigerian citizens, residents of the Ogoni Region of Nigeria, alleged that corporate def endants Royal Dutch Petroleum Company and Shell Transport and Trading Company PLC, through a subsidiary, Shell Petroleum Development Company of Nigeria, Ltd., aided and abetted the Nigerian government in committing human rights abuses. 11 In Kiobel all 9 Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 114 115 (2d Cir. 2010) (In Kiobel the majority reasoned that 10 Sosa v. Alvarez Machain 542 U.S. 692 (2004). 11 Notably, for the purpose of determining personal jurisdiction, the corporate defendants are holding companies, Royal Dutch Petroleum Company, incorporated in the Netherlands, and Shell Transport and Trading Company PLC and incorporated in the United Kingdom respectively; Shell Petroleum Development Company of Nigeria, Ltd. is incorporated in Nigeria. Id. at 123.
19 defe ndants were corp o rations; each of the entities sued under the ATS for aiding and abetting the 12 Nigerian military forces, throughout 1993 and 1994, were accused of with the assistance of defendants. 13 The Nigerians alleged that Shell (1) provided transportation to Nigerian forces, (2) allowed their property to be utilized as a staging ground for attacks, (3) provided food for soldiers involved in the attacks, and (4) provided compensation to those soldiers. 14 abetting (1) extrajudicial killing; (2) crimes against humanity; (3) torture or cruel, inhuman, and degrading treatment; (4) arbitrary arrest and d e tention; (5) violation of the rights to life, liberty, security, and association; (6) forced exile; and (7) property 15 Procedural p osture In September 2002, the Nigerian plaintiffs in Kiobel filed their class action under the ATS alleging the aforementioned violations of the law of nations. Shortly after filing the case, the Supreme Court decided Sosa v. A lvarez Machain and the corporate defendants moved for dismissal relying on the Sosa decision. 16 In 2006, the District Court for Southern New York forced exil e; extrajudicial killing; and violations of the rights to life, liberty, security, and 12 Id. 13 Id. 14 Id. 15 Id. at 123. 16 Id. at 124; see als o, Sosa v. Alvarez Machain 542 U.S. 692, 12 4 S. Ct. 2739, 159 L. Ed. 2d 718 (2004).
20 association reasoning that customary international law did not define those violations with the particularity required by Sosa. 17 Concluding n o c orporate l iability In Ki obel the Second Circuit Court found that corporations are not subjects of international law and as a result are not subject to liability under the ATS. 18 Judge Cabranes, joined by Judge Jacobs, in a fifty bring claims under the ATS against corporations, plaintiffs fail to allege violations of the law of nations, and 19 Notably, in a separate eighty eight page opinion, Judge Leval agreed with the judgment but vehe mently analysis, reasoning, and conclusions. 20 Importantly, Judge Leval noted protect fundamental hu 21 The Majority Opinion 22 The Kiobel majority held as follows: (1) Since Filartiga which in 1980 marked the advent of the modern era of litigation for violations of human rights under the Alien Tort Statute, all of our precedents -and the Supreme Court's decision in Sosa require us to look to international law to determine whe ther a particular class of defendant, such as 17 Kiobel v. Royal Dutch Petroleum Co ., 456 F. Supp. 2d 457, 464 65, 467 (S.D.N.Y. 2006). 18 Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 114 115 (2d Cir. 2010). 19 Id. 20 Id. at 149 50 (Leval, concurring). 21 Id. at 149 (Leval, concurring). 22 Id at 114 115.
21 corpor a tions, can be liable under the Alien Tort Statute for alleged violations of the law of nations. (2) The concept of corporate liability for violations of customary international law has not achieved unive rsal re c ognition or acceptance as a norm in the relations of States with each other. Inasmuch as plaintiffs assert claims against corporations only, their complaint must be dismissed for lack of subject matter jurisdi c tion. 23 24 But upon a closer inspection, the issue of whether corporations have international legal personality is much more complex. A determination of whether corporate liability is permissible under the ATS is d ependent upon how one approaches international law In Kiobel t he majority approached international law somewhat straightforward yet employ ed an antiquated approach and ignored general principles of law that essentially serve as gap fillers in international law 25 As a result, the majority misconstrued international law and arrived at a conclusion to exempt corporations from liability that is incompatible with the development legal norms addressing the of human rights obligations Furthermore the majority in Kiobel undermine the purpose of the ATS. First, the plain language of the text clearly indicates that the purpose of the ATS is to provide aliens a civil remedy in federal courts for violations of international law. Additionally, the his tory of the ATS further supports the notion that the ATS provides federal courts jurisdiction brought by an alien alleging injuries arising from a violation of international law Second, the ATS does not designate the appropriate defendant s and to not allow ATS actions against 23 Id. at 125 (internal citations omitted). 24 See generally J ONATHAN S WIFT A M ODEST P ROPOSAL FOR P REVENTING THE C HILDREN OF P OOR P EOPLE IN I RELAND F ROM B EING A B URDEN TO T HEIR P ARENTS OR C OUNTRY AND FOR M AKING T HEM B ENEFICIAL TO THE P UBLIC (1729) (suggesting that the impoverished Irish might ease their financial situation by selling children to the wealthy for consumption). 25 Kiobel at 141 n.43.
22 corporate defendants is contrary to historical and jurisprudential evidence that suggests otherwise. Lastly, the majority in Kiobel misconstrue s Sosa and reaches a conclusion that threa tens to undermine United States business interests. In fact, to deny corporate liability under international law is tantamount to denying the rights of our corporate nationals doing business abroad Importantly, United States corporate nationals are increa singly subjected to exterritorial governance and in the absence of universal compliance with human rights norms, United States economic interests are placed at a significant disadvantage when compared with a corporate national of a state that does not enfo rce human rights law. Still, the majority overlook this policy argument which would ensure the competitiveness of United States economic interests abroad. In short, the majority opinion reache d the conclusion that corporations are not subject to liability under the ATS based upon his understanding of Step Analysis To reach the conclusion tha t corporations are not subject to liability, the majority employed a two step analysis. 26 First, the court considered whether international law or domestic law determines whether the jurisdictional grant under the ATS extends to civil a c tions against corpor ations. 27 sources of international law reveal with respect to whether corporations can be subject to liability for violations of customary international law. 28 26 Id. at 125 27 Id. 28 Id. at 125
23 Step one: determi ning potential subjects of liability The first issue before the court, according to the majority, was to determine whether international law or domestic law determines ATS liability of a particular actor, corporate or individual. 29 The majority read the Su preme decision in Sosa to i n ternational law to determine [its] jurisdiction over ATS claims against a particular class of defendant, such as corpor a 30 The majority reinforced its interpretation of Sosa by noting t type of perpetrator ( e.g ., a 31 Next, to de termine whether international or domestic law governs whether an actor is a subject of international legal obligations (i.e. international legal personality) the court looked to jurisprudence of international and domestic courts, scholarly works of intern ational commentators and briefly turned to its own ATS jurisprudence to find that international law rather than domestic law determines the subjects of international law. 32 Step two: determining corporate liability controls our inquiry, we next consider what the sources of international law reveal with respect to the existence of a norm of corporate liability 33 The court approaches the issue of whether corporate 29 Id. 30 Id. 31 Id. at 128 (citatio n omitted) (emphasis included in text). 32 Id. 33 Id. at 131.
24 liability, in the c ontext of the Sosa 34 The court constrained its inquiry to the jurisdictional grants of International Tribunals, including but not limited to Nuremburg, the ICTY, the ICTR, and the Rome Statute of the ICC. Alth ough this limited scope inquiry correctly weighs in favor of the majority finding no customary rule of corporate civil liability for violations of international criminal law, the survey was an incomplete assessment of international law based upon a limited inquiry into criminal liability norms that established for the specific purpose of imposing liability on those who violate the law of nations, the history and cond 35 particularly significant, therefore, that no international tribunal of which we are aware has ever held a corporation liable for a violation of the law of n a 36 In contrast, Judge L eval aptly points out that, international law generally looks to domestic law for notions of civil liability, but he also neglects to inquire about developments in corporate personality in international law outside of the criminal context. 37 Following its reliance on International Criminal Tribunals to find notions of civil liability, the majority briefly considered a few particularized treaties. 38 From its review of the treaties upon which the district court relied, the majority stated the following: 34 Id. at 131 (quoting Sosa 542 U.S. at 732). 35 Id. at 132. 36 Id. at 132 (emphasis in original). 37 Id. at 149 50 (Leval, concurring). 38 Id. treaties: (1) Convention Concerning the Application of the Pri n ciples of the Right to Organize and to Bargain Collectively, adopted July 1, 1949, 96 U.N.T.S. 257 (not ratified by the United States); (2) Convention on Third Party Liability in the Field of Nuclear [**75] Energy, done July 29, 1960, amended Jan. 28, 1964, 956 U.N.T.S. 263 (not ratified by the United States, China, the Soviet Union, or Germany); (3) International Convention on Civil Liability for Oil Pollution Damage, done Nov. 29, 1969, 973 U.N.T.S. 3 (not ratified by the United States, China, or the Soviet Union)); (4) Vienna Convention on Civil Liability
25 [T]her e is no historical evidence of an existing or even nascent norm of customary intern a tional law imposing liability on corporations for violations of human rights. It cannot be said, therefore, that those tre a ties on specialized questions codify an existing, general rule of customary international law. Nor can those recent tre a ties, in light of their limited number and specialized subject matter, be viewed as crystallizing an emerging norm of customary international law. 39 Here, the court incorrectly character izes the evolution and development of customary international law because, in fact, the practice of a small number of states in a particular region creates regional customary international law. 40 Again, incorrectly the majority states that corporate liability in a handful of specialized treaties cannot be said to have a a mentally norm 41 Additionally, the practice of particularly affected states ( e.g. space law), can create custom that binds other states and the ICJ has signaled such a possibility may exist. 42 limited number and specialized subject matter, be viewed as crystallizing an emerging norm of 43 The majority al statute was rooted in the ancient concept of comity among nations and was intended to provide a remedy for violations of custo m in for Nuclear Damage, done May 21, 1963, 1063 U.N.T.S. 265 (not ratified by the United States, China, France, Germany, or the United Kingdom ); (5) Convention Relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material, done Dec. 17, 1971, 974 U.N.T.S. 255 (not ratified by the United States, China, the Soviet Union, or the United Kingdom); and (6) Convention on Civil Liabi lity for Oil Pollution Da m age Resulting from Exploration for and Exploitation of Seabed Mineral Resources, done Dec. 17, 1976, r e printed at 16 I.L.M. 1450 Id 138 n 40 (citing Presbyterian Church 244 F. Supp. 2d at 317). 39 Kiobel at 138. 40 Id 41 Id at 139. 42 The ICJ, in the Asylum case, accepted that there could be a Latin American customary rule regarding the right of a state to issues a unilateral and definitive grant of political asylum. See generally Asyl um (Colom. V. Peru), 1950 I.C.J. 266 (Nov. 20.). 43 Id at 139.
26 44 Unless, of course, ensuring the payment of private debt owed by serious threat to United States interests. 45 The Concurring Opini on eight page separate opinion harshly criticizes the majority. 46 Even though Judge Leval agrees with the majority that the case against Royal Dutch Shell for aiding and abetting the Nigerian government must be dismissed, Judge Leval, federal precedent on the ATS, and deals a blo w to the efforts of international law to protect 47 this because it failed to state a proper legal claim upon which the defendants were entitled to relief under the ATS. 48 However, Judge Leval refused to join the majority opinion because he found juridical 49 Judge Leval objects to the majo for several reasons. First, Judge Leval finds the majority have no basis for its contention in 44 Id at 139 (quoting Sosa 45 See infra note 325. 46 Kiobel at 149 196 (Leval, concurring). 47 Id. at 196 (Leval, concurring). 48 Id. at 151 (Leval, concurring) (emphasis in original). 49 Id. at 196(Leval, concurring)
27 international law. 50 Second, 51 In particular, Judge Leval notes that conclusion that norms enforcement through the ATS apply only to natural persons and not to 52 corporations are subjects rather than merely objects of international law. An Introductor y Assessment of the First, let me say that j urisdictional uncertainty and the issue of corporate liability for an internationally wrongful act generate significant concern. This uncertainty and concern about subjecting private non state actors to liability for an internationally wrongful act is underscored by a misguided approach to international law which purports to confer legal personality, the ability to sue and be sued, exclusively to state actors. 53 However, the so a legal fiction and the creation of such legal persons has evolved, developed, and continues to coexist among the various subjects of international law. In reality, international law places all legal persons on the same conceptual plane, irrespecti ve of entity or enterprise. The sovereign state is the first legal personality of international law, and in this context, the corporate legal person should exist on the same conceptual plane as other subjects of international law. Yet, the historical reali ty of international law is that any exercise by the 50 Id. at 153 (Leval, concurring). 51 Id. at 152 (Leval, concurring). 52 Id. at 153 (Leval, concurring). 53 See generally R OLAND P ORTMANN L EGAL P ERSONALITY IN I NTERNATIONAL L AW (2010) (this monograph provides the only comprehensive analysis of legal personality in international law); see also Jan Klabbers, Legal Personality: The Concept of Legal Personality, 11 I US G ENTIUM 35, 37 (2005).
28 corporate legal person of the right to sue, just like that of an individual, must be filtered through the sovereign. In contrast, liability for wrongful acts freely flows to the individual or a non tradit ional legal person, such as a corporation or supranational entity. Such varied conceptual notions of international legal personality led to the current uncertainty regarding corporations in and under international law. Second direct responsibility of corp orate actors for human rights violations is even more problematic in United States courts. Recently, federal courts have begun to grapple with subjecting corporate actors to subject matter jurisdiction for extraterritorial human rights violations. These c ontemporary problems of corporate liability for human rights violations s courts with jurisdiction to adjudicate torts committed in violation of the law of nations. 54 Domestic Practice of Legal Liability under the ATS As modernity ushered in new societal demands and notions of responsibility, ATS case law evolved and broadened. 55 Early case law under the ATS subjected individuals to liability for 54 Enacte Tort Statute (28 U.S.C. §1350) has developed over time into a legal mechanism to hold private actors accountable for human rights violations beyo nd the conventional territorial reach of domestic courts. Judge Friendly first referred See IIT v. Vencap, Ltd ., 519 F.2d 1001, 1015 (2d Cir. 1975) (Friendly, J.), abrogated o n other grounds by Mo r rison v. Nat'l Austl. Bank Ltd ., 130 S. Ct. 2869 (2010); compare with B ETH S TEPHENS J UDITH C HOMSKY J ENNIFER G REEN P AUL H OFFMAN & M ICHAEL R ATNER I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS 3 (2008) ( noting that Judge Frie history) 55 See generally J EFFERY D AVIS J USTICE A CROSS B ORDERS : T HE S TRUGGLE FOR H UMAN R IGHTS IN U.S. C OURTS (2008) (studying the struggle to enforce international human rights law in United States courts); P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE (2009) ( addressing the legal interpretations and practical implications of the ATS ); M ICHAEL K OEBELE C ORPORATE R ESPONSIBILITY UNDER THE A LIEN T ORT S TATUTE : E NFORCEMENT OF I NTERNATIONAL L AW THROUGH US T ORTS L AW (2009) (studying the struggle to enforce international human rights law in United States courts) (examining and analyzing corporate liability under the ATS) [ herein K OEBELE ]; B ETH S TEPHENS et al I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS (2008) (providing an in depth guide to human rights litigation under the ATS)
29 torts committed in violation of the law of nations and shortly thereafter, courts began to assert subject matter jurisdiction over corporations accused of committing human rights violati ons. 56 An individual, possessing locus standi juridical is logically an appropriate defendant in lawsuits under the ATS; however, courts now hesitate about the ascription of responsibility to corporations extraterritorially. 57 In such cases, business enterp rises have dual identity. 58 These courts resurrected concerns about non state actors and notions of legal personality in international law. Courts have created new rules for the multinational enterprise and provide new 56 For nearly two decades, U.S. courts have allowed lawsuits against corporate defendants under the ATS. See, e.g., Doe v. Unocal Corp ., 395 F.3d 932 (9th Cir. 2002) (concluding that a private party, a corporation is subject to suit under the ATS without any showing of state action for aiding and abetting violations of customary international law), reh'g en b anc granted 395 F.3d 978 (9th Cir. 2003), appeal dismissed 403 F.3d 708 (9th Cir. 2005) (ultimately settled); Aguinda v. Texaco, Inc. 303 F.3d 470 (2d Cir. 2002) (dismis s ing ATS case against corporate defendant on forum non conveniens grounds, because courts of Ecuador pr o vided adequate alternative forum); Presbyterian Church of Sudan v. Talisman Energy, Inc ., 374 F. Supp. 2d 331, 335 (S.D.N.Y. 2005) (Cote, J.) (finding corporate defendants argument that corporate liability under international law is no t sufficiently accepted in international law to support an ATS claim is misguided); Talisman 244 F. Supp. 2d 289, 319 (S.D.N.Y. 2003) (Schwartz, J.) (ruling that a private corporation is a j u ridical person and has no per se immunity under domestic or inte rnational law and finding where plaintiffs allege jus cogens violations, corporate liability may follow); Mujica v. Occidental Petroleum Corp. 381 F. Supp. 2d 1134 (C.D. Cal. 2005); 564 F.3d 1190 (9 th Cir. 2009); Sinaltrainal v. Coca Cola Co., 572 F.3d 12 52 (11th Cir. 2009); Abdullahi v. Pfizer, Inc ., 562 F.3d 163 (2d Cir. 2009) (holding corporate defendant liable for engaging in non consensual medical experimentation on human subjects in violation of law of nations), cert. denied 78 U.S.L.W. 3049. Howeve r, recent decisions essentially closed U.S. courts to alien plaintiffs seeking to hold corporations accountable for alleged human rights abuses outside of the U.S. See, e.g. Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 114 115 (2d Cir. 2010) ; Flom o v. Firestone Natural Rubber Co. No. 1:06 cv 00627, 2010 U.S. Dist. LEXIS 108068, at 7 (S.D. Ind. Oct. 5, 2010) ( relying on holding to dismiss corporate ATS case); Viera v. Eli Lilly & Co ., No. 1:09 CV 0495, 2010 U.S. Dist. LEXIS 103761 (S.D. In d. Sep 30, 2010) ( relying on holding to dismiss corporate ATS case); Doe v. Nestle No. CV 05 5133, 2010 U.S. Dist. LEXIS 98991 (C.D. Cal. Sept. 8, 2010) (holding independently of Kiobel that the ATS does not provide subject matter jurisdiction ov er corporations). 57 States generally assert extraterritorial jurisdiction over legal and natural persons and conduct occurring outside t e.g. narcotics and human trafficking, antitrust laws, and e.g. espionage, visa fraud, terrorism); and (5) under the e.g. crimes against humanity, genocide, war crimes, piracy, slavery). See Kenneth C. Randall, Universal Jurisdiction Under International Law 66 TEX. L. REV. 785 (1988). 58 See, e.g., Barcelona Traction, Light and Power Company, Limited (Belg. v. Sp.), Second Phase, Judgment, 1970 I.C.J. Rep. 32 (1970); Elettronica Sicula S.p.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. Rep. 3 (1989).
30 benefits of incorporation by permittin g the corporate form to be used as a means of insulating corporations from liability for human rights violations committed beyond our borders. 59 Nature a nd Historical Development o f International Law In the United States, the ATS developed into a viable leg al mechanism to hold international actors, both natural and legal persons, accountable for violations of human rights norms outside of the United States. 60 Although the origins and purpose of the ATS are unclear, ATS jurisprudence has been used to hold indi viduals and corporations accountable for human rights violations. 61 Recent decisions, however, have questioned whether a corporation is subject to liability under the ATS. 62 This reflects the conventional description of the international legal system as a co mmunity of states. Thus, states and only sovereign states are vested with legal personality. 63 Through this lens, non state actors like corporations are mere objects of international law. This perspective prevailed prior to World War II (WW II), yet intern ational law practice dramatically changed since then 64 In fact, international law practice since 1945 expanded the 59 Kiobel at 114 115. 60 B ETH S TEPHENS J UDITH C HOMSKY J ENNIFER G REE N P AUL H OFFMAN & M ICHAEL R ATNER I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS (2008). 61 See, e.g. M ICHAEL K OEBELE C ORPORATE R ESPONSIBILITY UNDER THE A LIEN T ORT S TATUTE : E NFORCEMENT OF I NTERNATIONAL L AW THROUGH US T ORTS L AW (2009) [herein K OEBE LE ] 62 See, e.g. Kiobel ; Flomo v. Firestone Natural Rubber Co. No. 1:06 cv 00627, 2010 U.S. Dist. LEXIS 108068 (S.D. Ind. Oct. 5, 2010); Viera v. Eli Lilly & Co ., No. 1:09 CV 0495, 2010 U.S. Dist. LEXIS 103761 (S.D. Ind. Sep 30, 2010); Doe v. Nestle No CV 05 5133, 2010 U.S. Dist. LEXIS 98991 (C.D. Cal. Sept. 8, 2010). 63 J.L. B RIERLY T HE L AW O F N ATIONS (6th ed. 1963); I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW (6 th ed. 2003); P HILIP C. J ESSUP A M ODERN L AW OF N ATIONS (1956). 64 See generally Developments in the Law International Criminal Law: V. Corporate Liability for Violations of International Human Rights Law 114 H ARV L. R EV 2025 (May, 2001); Frank Christian Olah, MNC Liability for International Human Rights Violations under the Alie n Tort Claims Act: A Review & Analysis of the Fundamental Jurisprudence and a Look at Aiding & Abetting Liability under the Act 25 Q UINNIPIAC L. R EV 751 (2007).
31 scope and volume of international law. 65 In one famous International Court of Justice (ICJ) decision, the Reparations for Injuries case, the q uestion before the court was whether the United Nations had legal personality. 66 The ICJ held that the United Nations ( UN ) had legal personality appropriate to its structure and functions. 67 The Reparations for Injuries case provides the only articulation of capable of possessing international rights and duties, and has capacity to maintain its rights 68 The ICJ reasoned that such s tatus results either from an granted to the organization. 69 Reparations for Injuries case, both scholars and the ICJ i tself have developed several indicia for determining international legal personality, which include but are not limited to, the existence of an independent decision making and ministerial organ, financial independence, and notably, the capacity to enter in to international agreements. 70 65 See, e.g. Richard B. Bilder, An Overview of International Human Rights Law in Guide To In ternational Human Rights Practice 3, 4 6 (Hurst Hannum ed., 4 th ed. 2004); see also Jeffery M. Blum & Ralph G. Stienhardt, Federal Jurisdiction over International Human Rights Claims: The Alien Tort Claims Act after Filartiga v. Pena Irala, 22 H ARV I NT L L.J. 53, 64 75 (1981). 66 Reparations for Injuries Suffered in the Service of the United Nations 1949 I.C.J. 174, 179 (Adv. Op., Apr. 11). 67 Id 68 Id 69 Id at 182. 70 See, e.g. C.F. A MERASINGHE P RINCIPLES OF I NSTITUTIONAL L AW OF I NTERNATIONAL O RGANIZATIO NS 83 (2005); J AN K LABBERS I NTRODUCTION TO I NTERNATIONAL I NSTITUTIONAL L AW 45 (2002); see also Western Sahara 1975 I.C.J. 12 (Adv. Op., Oct. 16).
32 Additionally, the Allied powers created Tribunals to try Nazi war criminals in Germany and Japanese war criminals in Japan. 71 These Tribunals, in particular Nuremberg, sought direct application of international criminal law to subjects of states. 72 The core assumption of these Tribunals was that collective punishment of states was secondary to individual accountability and that behind the state were the active decision makers. 73 Tribunals applied this reasoning to pierce the veil of the sovereign state to hold individuals directly accountable. 74 What was not fully appreciated is that if individuals were to be held legally accountable they must be afforded legal safeguards under the rule of international law. 75 Thus, in addition to h olding individuals 71 n ish ment of war criminals following the WWII. See Agreement for the Prosecution and Punishment of the Major War 72 See generally Robert H. Jackson, Final Repor t to the President Concerning the Nurnberg War Crimes Trial (1946), reprinted in 20 T EMP L.Q. 338, 342 (1946); see also Brigadier General Telford Taylor, U.S.A., Chief of Counsel for War Crimes, Final Report to the Secretary of the Army on the Nuremberg W ar Crimes Trials Under Control Council Law No. 10 at 109 (1949). 73 See Albin Eser, Individual Criminal Responsibility, in The Rome Statute of the International Criminal Court 767, 774 75 (Antonio Cassese et al. eds., 2002) (emphasis added) (footnote omitt ed); and Michael P. Scharf, Seizing the 43 C ORNELL I NT L L. J. 439, 440 criminal responsibility known as Joint Enterprise liability). 74 in the area of human rights, where the subjects of customary international law i. e ., those with international rights, duties, and liabilities -Kiobel at 119; see also Robert H. Jackson, Final Report to the President Concerning the Nurnberg War Crimes Trial (1946), reprinted in 20 T E MP L.Q. 338, 342 (1946). Brigadier General Telford Taylor, U.S.A., Chief of Counsel for War Crimes, Final Report to the Secretary of the Army on the Nuremberg War Crimes Trials Under Control Council Law No. 10 at 109 (1949) ce of the [Nuremberg] judgments lies, in my opinion, in those portions of the judgments dealing with the are a of personal responsibility Cf. Beth Stephens, The Amorality of Profit: Transnational Corp orations and Human Rights, 20 B ERKELEY J. I NT L L. 45, 76 (2002); and Jonathan Bush, The Prehistory of Corporations and Conspiracy in International Law: What Nuremberg Really Said 109 C OLUM L. R EV 1094 1098 (2009) (noting that international commentato rs and legal authorities misunderstand the post WWII war crimes tribunals judgments). 75 The Nuremberg Charter and Rules of procedure explicitly provide for the right to cross examine hostile witnesses and to be represented by a defense counsel chosen from a predetermined list of defense attorneys. However, affidavits and depositions were employed extensively to prove guilt, thereby neutralizing any significant defense examine. h other punishment as See Agreement for the Prosecution and Punishment of the Major War Criminals of the European Axis, Aug. 8, 1945, art. 27, 82 U.N.T.S. 279, 3 00. Specifically, in the trial of the major war criminals, seven of the accused were sentenced to extended
33 liable for international criminal violations, the unappreciated consequence of Nuremburg and other international Tribunals is the extension of individual rights to defendants under international criminal law. 76 The cumulative effect of th ese developments clearly challenges the orthodox position that only states are under the domain over international law. 77 International law in the post war period had to reach beyond the jurisdiction of states and, if necessary, reach individual actors. Fol lowing World War II, the international system witnessed a profusion of international and regional organizations having legal personality and identities distinct from the sovereign state which coexist within the international legal order. 78 Similarly, at pre sent, corporations in and under the modern law of nations raise various concerns because private institutions and non state actors are subordinate to the sovereign state and their rights and obligations are limited prison terms, eleven were sentenced to death by hanging, and three were acquitted. See J OSEPH E. P ERSICO N UREMBERG : I NFAMY ON T RIAL 397 405 (1994). 76 International commentators and courts generally look to the rules and procedures of international criminal tribunals ( i.e. Nuremberg Tribunals, International Criminal Tribunal for the former Yugoslavia (ICTY), International Criminal Tribunal for Rwanda (ICTR), the International Criminal Court (ICC)) and domestic courts for the content of international due process norms. See e.g. Statute of the International Criminal Tribunal for the former Yugoslavia, contained in the Report of the Secr e tary General pur suant to Paragraph 2 of S.C. Res. 808, U.N. SCOR, 48th Sess., U.N. Doc. S/25704 (1993), reprinted in 32 I.L.M. 1159, 1170 (1993); U.N. Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court, Rome Statute on the I nternational Criminal Court, July 17, 1998, U.N. Doc. A/CONF/183/9, reprinted in 37 I.L.M. 999 (1998) [hereinafter Rome Statute]. 77 coe r cive powe Toward an Explanation of the Origin of the State, in Explanation Of Prehistoric Change 215, 217 (James N. Hill ed., 1977) (citing Robert L. Carneiro, A Theory of the Origin of the State, 169 S CI 733 (1970)). Oppenh sovereignty possessed by each State: dominum, or territorial sovereignty, which is supreme authority over all persons, items, and acts within that state's territory, and imperium, or perso nal sovereignty, which is supreme authority over all citizens of that State, be they at home or abroad. See Oppenheim's International Law § 123 (H. Lauterpacht ed., 8th ed. 1955) See also Restatement (Third) Of The Foreign Relations Law Of The United State s population, under the control of its own government, and that engages in, or has the capacity to engage in, formal relations with other suc 78 See e.g. Charter of the Organization of American States, April 30, 1948, 2 U.S.T. 2394, 119 U.N.T.S. 3, as amended by protocols of 1993 [hereinafter OAS Charter].
34 accordingly. It remains an open question whether the notion that corporations are not traditional subjects of international law precludes liability for internationally wrongful conduct. 79 Neglecting the Theoretical Question This is, in part, a theoretical question of who among the various partici pants of a global community is an appropriate subject of international law and who the law may hold accountable for transgressions of prevailing norms. This theoretical inquiry must consider contemporary developments of the international legal process and the extent to which international law and notions of universal jurisdiction are exercised in domestic courts. Contemporary Outcomes of the Social Process Conditions in the international system have changed since early formulation and conceptualization of w ho may be considered subject to and a subject of international law. 80 Today corporate activity lends support to recognizing the significance of the corporate actor among the various subjects of international law. 81 For instance, corporations are among the w which they operate. According to the World Bank, of the world's largest 150 economic entities, ninety five are corporations; thus, corporations make up the majori 79 See generally. Phillip I. Blumberg, Asserting Human Rights Under United S tates Law: Conceptual and Procedural Problems 50 A M J. C OMP L. 493 (2002). See also Harold Hongju Koh, Transnational Public Law Litigation 100 Y ALE L.J. 2347 (June, 1991); How Is International Human Rights Law Enforced 74 I ND L.J. 1397 ,1414 (1999); S eparating Myth from Reality About Corporate Responsibility Litigation 7 J. I NT L E CON L. 263 (2004). 80 See S USAN S TRANGE T HE R ETREAT OF THE S TATE -T HE D IFFUSION OF P OWER IN THE W ORLD E CONOMY 46 the balance of power away from states and toward see also W ILLIAM G REIDER O NE W ORLD R EADY OR N OT 11 26 (1997) (discussing the emphasis on competitive global capitalism); Winston P. Nagan & Craig Hammer, The Changing Nature of Sovereignty in International Law and International Relations 43 C OLUM J. T RANSNAT L L. 141, 161 (2004) 81 See e.g. Lucien J. Dhooge, Human Rights for Transnational Corporations 16 J. T RANSNAT L L. P OL Y 1 97 (2007).
35 economic enterprises. 82 From a business prospective, this indicates the success of the global trading system, yet from a legal perspective this observation lends itself to the recognition of the corporation as a dominant institu tion of modernity within the international community. The Central Issue The central problem in the international legal community regarding corporate and enterprise activity is that violations of modern customary norms may fall outside of the legal framewo rk. This gap in the rule of law occurs because courts continually frame questions of international law within eighteenth century paradigms. In this context, international law is inadequate to address the systemic demands confronting international decision makers. Such activity influences world order and generates uncertainty about which rules apply to corporate activity. In short, the states only conceptualization of international law is in sufficient to regulate the conduct of these entities across state bo rders. The Present Challenge Modern conflicts, such as the rise of terrorism, citizen insecurity, human trafficking, counternarcotics and globalization, and even the resurgence of old conflicts, such as piracy have encouraged the development of private sec tor corporate activity that benefits from contractual undertakings historically dominated and relegated to the modern nation state. In particular, the privatization of military and security operations illuminate an emerging area of legal uncertainty. Here, private sector actors, undertaking traditional state functions, are not subject to the same rules as states under international law. In effect, the distribution of such activity may be viewed as an allocation of essential public sector functions. This rai ses the complex judicial question of whether allocation of such functions ought to erode the veil of private sector insulation from 82 See F ORTUNE M AGAZINE 26 July 201 0 available at http://money.cnn.com/magazines/fortune/global500/2010/full_list/.
36 public international law accountability. These private public undertakings blur traditional distinctions between public and private international law. 83 T his complex allocation of power could be altered by incorporating notions of state responsibility by contract to non state actors who perform public functions for state actors. Although an apparently simple solution to a comple x issue, the reality is that often the purpose of privatizing these functions and activities may be precisely to avoid state responsibility. In the absence of a private agreement or universally recognized rules regulating the conduct of legal persons, such as the ATS, corporations operate in a legal no land of voluntary corporate responsibility; global corporate enterprise activity seemingly occurs within an ungoverned legal space. 83 International law may no longer be conveniently divided into public and private separate spheres. See C EDRIC R YNGAERT J URISDICTION IN I NTERNATIONAL L AW 19 (2008). Among the most vocal legal scholars espousing this result the fields of public and private international law may ultimately be (re See als o H.L. B UXBAUM The Private Attorney General in a Global Age: Public Interests in Private Antitrust Litigation 26 Y ALE J I NT L 262 (2001) (noting that the public and private distinction in intentional law is unproductive).
37 CHAPTER 3 THEORETICAL FRAMEWOR K OF INTERNATIONAL L EGAL PERSONALITY In ternational Personality i n Theory 84 Recognition of legal personhood confers not only the very life of the corporation, but also adds a dimension of legitimacy because the corporation is accounted for under the law. 85 Similar to domestic law, the notion of legal personality is used to distinguish between entities being account for in international law and those actors excluded from it. C onsequently, there are various theories and positions on how to determine precisely which actors are recognized, by what criteria the actor acquired its personality and the results of the acquired personality, such as corresponding rights and duties. This uncertainty and lack of predictability in the international legal system is troubling ; it is disconcerting that this uncertainty influences legal outcomes. Theoretical Conceptions o f International Legal Personality There are several conceptions of legal p ersonality in international law. 86 According to Roland Portmann, the re are five main perspectives are (1) states only, international legal personality as exclusive to states; (2) recognition, views states as organizations or the primary person with other en tities acquiring personality; (3) individualistic, conception of legal personality recognizes individuals as international persons in the field of fundamental norms; (4) formal, emphasizes that international is an open system and carries no presumptions: every entity that is an addressee of norms has international personality; and (5) actor, considers the 84 Jan Klabbers, 11 I US G ENTIUM 35, 37 (2005). 85 Id 86 R OLAND P ORTMANN L EGAL P ERSONALITY IN I NTERNATIONAL L AW 13 (2010).
38 specific rights and duties of all effective actors of international relations and these determine international personality decision making. 87 These ideal ized categories span the main positions invoked in international legal practice and to a certain extent reflect the historical origin and development of modern international law. 88 Each of these five perspectives form the framework applied within the legal arguments surrounding whether corporations are subjects of international law. With five perspectives, each with different substantive positions on international personality, the concept of international personality provides merely a framework for each po 89 In A Theory of Justice John Rawls noted that even though there are varied conceptions of the concept of international personality, there is an overarching formulation of the concept itself. 90 Here, Rawls implicitly notes the importance of distinguishing between a concept and various conceptions thereof. 91 Rawls, among other legal philosophers, put forth the notion that certain concepts have agreed upon purposes with un clear details. 92 For example, justice as a concept has a basic purpose that may be agreed upon, yet there is no clear consensus on what exactly justice entails. 93 Practically speaking, people may agree that the concepts of justice and 87 Id at 13 4; compare with Hans Aufricht, Personality In International Law in I NTERNATIONAL L EGAL P ERSONALI TY 47 (Fleur Johns ed., 2010) (noting that in the context of the legal personality of the individual, four perspectives are present: (1) the private individual has no legal personality; this attribute is reserved for the states. (2) The private individual is the object, not the subject of, international law. (3) The legal personality of the State is international law, but the validity of rules concerning individuals is not excluded.). 88 Id. 89 The distinction between concept and conception was first argued by WB Gallie. P ORTMANN at 13. 90 P ORTMANN at 13. 91 Id 92 P ORTMANN at 14; see also J OHN R AWLS A T HEORY OF J USTICE 5 6 (1999); see also R ONAL D D WORKIN T AKING R IGHTS S ERIOUSLY 103 5 and 134 5 (1977). 93 P ORTMANN at 15.
39 fairness are relevan t to the discourse of whether corporations should be held liable for human rights abuses. 94 However, each may conceptualize justice or fairness differently leading to varied opinions of what precisely would represent a fair or just outcome. 95 This tension is notably present in the instant scenario of corporate legal personality. In large, the denial of legal personality to corporations in international law is only compatible with the states only perspective and it has been argued that nobody adheres to thi s restrictive and antiquated position. 96 States o nly 97 There are no conditions for international personality of than having acquired the international system is a community of states. 98 The conception of International Persons is derived from the conception of the Law of Nations. As this Law is the body of rules which th e civilized States consider legally binding in their intercourse, every State which belongs to the civilized states, and it is, therefore, a member of the Family of Nations, is an International Person. Sovereign states exclusively are International Person s -i.e. subjects of international law. 99 This perspective is based not upon natural law; rather it is the common will of states that creates international law. 100 From this conception, the source of national law is the will of a 94 P ORTMANN at 14 15. 95 Id 96 P ORTMANN only] is today very rarely, if at all, explicitly advocated. But it is important in historical context and i 97 P ORTMANN at 13. 98 Others include Heinrich Triepel and Dionisio Anzilotti. See P ORTMANN at 43. 99 P ORTMANN at 43 (quoting L ASSA O PPENHEIM I NTERNATIONAL L AW : A T REATIES 99 (1 st ed.) (1905). 100 Id at 44.
40 single state actor. 101 By cont rast international law is the aggregate will of a number of states. 102 Portmann encapsulate this perspective in two basic assertions: (1) The international community consists only of states. No other entities form part of the international realm. Individual s do not exist as independent entities outside the boarders of their state of nationality. (2) International law slowly emanates from common state will. International law is created by states and applies alone to those states having consented to it. It ca nnot apply to an entity not having consented to the rule in question. Thus, only states can be bound by international law, since only they can consent to it. This represents the link between source and personal application of international law, that is, of sources and legal personality. 103 Portmann identifies several important manifestations of the states only view that it is the sole legal person. 104 The first significant manifestation of the states only perspective is the Mavrommatis formula, which espouses t he notion of diplomatic protection a state must invoke 105 If an individual has no international rights then what is envisioned is that a state must invoke its rights on behalf of an injury to its national 106 The Mavrommatis formula is found in an ICJ case arising out of a concession agreement for public infrastructure improvements in Palestine. 107 The court stated the classic Mavrommatis formula when it argued: In the case of the Mavrommatis Concessions it is true that the dispute was at first between a private person and a State i.e., between M. Mavrommatis and Great Britain. Subsequently, the Greek Government took up the case. The dispute then entered a new phase; it entered the domain of international law and became a 101 Id 102 Id 103 Id at 47. 104 Id at 64. 105 The Mavrommatis Palestine Concessions (Greece v. U.K.), Jurisdiction, 1924 PCIJ Series A No. 2, at 12. 106 Diplomatic Protection 107 P ORTMANN at 13.
41 dispute between two states By taking up the case of one of its subjects and by resorting to diplomatic action or international juridical proceedings on his behalf, a State is in reality asserting its own rights. The question, the refore, whether the present dispute originates in an injury to a private interest, which in a point of fact is the case in many international disputes, is irrelevant from this standpoint. Once a State has taken up a case on behalf of one of its subjects be fore an international tribunal, in the eyes of the latter the state is the sole claimant. 108 As we will see, this perspective has been espoused by the ICJ in Barcelona Traction and the Draft Articles of Diplomatic Protection. 109 Moreover, the corporation emerg ed as a national for the purposes of standing. 110 Recognition 111 Even though other entities may acquire international personality, the mechanism is exclusively via the explicit or implicit recognition by states. 112 Often this method Once the State recognizes an entity, this new entity has fundamental r ights, duties, and capacities relevant to its legal personality which are analogous to those of the State itself. 113 Individualistic the purposes of fundamental nor 114 Additionally, any entity, from this perspective, can 108 Id at 66 (quoting The Mavrommatis Palestine Concessions at 12). 109 See generally Barcelona Traction, Light and Power Company, Limited (Belg. v. Sp.), Second Phase, Judgment, 1970 I.C.J. Rep. 32 (1970); draft Articles on Diplomatic Protection, ILC Report, doc. A/61/10 (2006). 110 See e.g. Barcelona Traction and its progeny. 111 P ORTMANN at 13. 112 Id. 113 Id. 114 Id.
42 possess international legal personality, so long as they are addressees of a particular international norm. 115 resp 116 117 Formal law to be an open system, without any preexisting presumptions as to whom is an entity with legal personality under international law. 118 international person that according to general principles of interpretation is the addressee of the 119 Actor ional notions of legal 120 The international decision making process determines the rights and duties held by each and every entity, and each entity participates in the 115 Id. 116 Id. 117 Id. 118 P ORTMANN at 13. 119 P ORTMANN at 13 14. 120 P ORTMANN former President of the ICJ; however, her appro ach to international legal personality is attributed to Myers S. II as part of their policy oriented approach to international law. See P ORTMANN at 208 (noting that Higgins studied under Myers S. McDougal while studying law at Yale and he supervised her doctorate at Yale Law School).
43 decision making process depending on the entities effective power. 121 dissolves the dichotomy of subjects and objects and considers only participants. Under this model, all entiti making process. 122 All participants within the international legal system are labeled international persons. 123 An Appraisal o f t he Five Theoretical Conceptions Conceptions resting on assumptions clearly at odds with contemporary conceptions cannot claim any legal value within contemporary international legal argument. 124 According to between state power and indiv idual freedom, the sources on international law, and the role of the 125 Portmann notes that the underlying assumptions of international legal personality have been discarded in international law. 126 Portmann concludes that [ t ] he assumptions informing the individualistic and the formal conceptions are to a considerable degree in line with the premises of contemporary internation al law: the state is a legal status, the individual has to be protected from the state power rather than being entirely subjected to it, and there are general norms of international law transcending state consent, including overriding legal principles of p eremptory character which cannot be derogated from as a result of policy considerations. In all these aspects, the two conceptions [individualistic and formal] and their assumptions conform to the posi tion of international law today 127 121 Id 122 Id 123 Id. at 210. 124 See P ORTMANN at 269. 125 Id. 126 Id. 127 Id. at 269 70.
44 Thus, dings contemporary international legal personality regarding corporations ought to be framed by combining the principles of the individualistic and formal conceptions of i nternational legal personality and notes that the combination leads to international law representing an open system. 128 possesses international personality which supports corporate liability for violations of international law and the viability of the ATS to hold corporations accountable. Even t hough Portmann emphasized the conceptualization of international legal personality as an open system, the actor conceptualization of international legal personality provides the most appropriate framework supporting corporate liability on the basis of its international legal personality, the actor conception provides the most coherent approach to understanding the development of legal standards governing domestic remedies for tort remedies under the ATS for holding corporate actors accountable for violation s of international law. Here, this particular theoretical inquiry will not only address the specific question of whether corporations should be held accountable for human rights violations, but will also address the trends and practice of legal personality In addition to trends, I also examine the dominant trends in theory of international legal personality. On the basis of international scholarship, these have a clear and legitimate status as a source of international law. Research Design a nd Framing t he Social Process This thesis adopts the and will approach the question of corporate legal personality for the purposes of determining liability for violations of human rights in United States Courts under the ATS. This approach to international 128 Id at 271 quoting James R. Crawford, International Law as an Open System 27 8 (2002).
45 legal personality is policy oriented approach to international law. 129 Developed by W. Michael Reisman, Myers S. McDougal and Harold D. Lasswell, this approach to international law is often referred to as the New Hav en School perspective 130 Together these individuals founded the New Haven School perspective of international law. 131 From the perspective of the New Haven School, international lawmaking, or prescription, is seen as a process of communication involving a co mmunicator and a target audience. 132 The substance of this communication functions as signs or symbols of policy content, symbols of authority, and symbols of controlling intention. 133 escription, 134 In other words, a core philosophy of the School is that in order to count as law, international law must have a prescriptive policy content, it must be accompanied by symbols or signs indicative of widespread community acceptance 129 McDougal and Lasswell offer a configurative conception of jurisprudence that is the end result of an authoritative decision making process. See H ARO LD L ASSWELL & M YRES M C D OUGAL J URISPRUDENCE FOR A F REE S OCIETY 24 5 (1992). They argue that a scientifically grounded answer to any policy oriented problem can be reached that might promote the common interest to achieve a world order based on fundamental principles of human dignity. Id at 34 36. Scholars and policymakers regard their approach to decision making as a rigorous one embedded in a social context. Id See also Rosalyn Higgins, Conceptual Thinking about the Individual in International Law B RITI SH J. I NT L S TUDIES 4 (1978). 130 The founding members of Yale's New Haven School examined how governing hegemons manipulate social deve l opment and world public order. See generally H AROLD L ASSWELL W ORLD P OLITICS AND P ERSONAL I NSECURITY (1935). 131 Consistin g initially of Harold Lasswell, Myres McDougal, and their colleagues, the New Haven School seeks to illumine the world p o litical process by ascertaining and examining meaningful cultural, financial, psychological, and emblematic factors that lay beneath so cial behaviors. To follow this process, the New Haven School created a comprehensive contextual mapping system of human social structures. See generally H AROLD L ASSWELL P OLITICS : W HO G ETS W HAT W HEN H OW (Meridian ed. 1958). 132 See generally, H AROLD L ASSW ELL W ORLD P OLITICS F ACES E CONOMICS (1945); H AROLD L ASSWELL & A BRAHAM K APLAN P OWER AND S OCIETY : A F RAMEWORK OF P OLITICAL I NQUIRY (1950); H AROLD L ASSWELL & M YRES M C D OUGAL J URISPRUDENCE FOR A F REE S OCIETY (1992). 133 Id 134 Id
46 (because the community is the notional basis for authority in international law), and it must be accompanied by a concept ion that some institutionalized control exists to ensure that the prescribed law is real. 135 Designing t he System o f Inquiry To provide some orientation to the problem of corporate legal personality, this thesis borrow s from decision making theory and the s cholarship basically suggest that law at any level presents problems of give and take within the social process. 136 The strength of this theory compels consideration of the social reality from which law is constructed and in particular in the context of the Cabranes. The approach to international law, formulated by New Haven School, is the most direct international legal theory to address the social context and reality of law. This thesis posits that t he creditability of law is its ability to respond to problems within the social context and that the social process brings an element of reality to this type of problem and provides value to address the critique of both the active decision maker and to identify the scope of the problems that emerge. The model provided by this perspective, simply stated is that law is applicable only in the social process. 137 In short, human beings or associations seek to purposefully realize value via legal claims or demands through social institutions. In the next section, this study will 135 See Myres S. McDougal et al. The World Constitutive Process of Authoritative Decision 19 J. L EGAL E DUC 253 (1966 67). See also W. Michael Reisman, International Lawmaking: A Process of Communication A M S OC I NT L L. P ROC 108 10 (1981) (discussing three aspects of prescriptive c ommunication that essentially convey legal norms because they designate policy that both emanates from a source of authority and creates an expectation in the target audience that the policy content of the communication is intended to control.). 136 See gene rally W. Michael Reisman, International Lawmaking: A Process of Communication A M S OC I NT L L. P ROC (1981). 137 See H AROLD L ASSWELL & M YRES M C D OUGAL J URISPRUDENCE FOR A F REE S OCIETY 34 36 (1992) (arguing a scientifically grounded answer to any policy or iented problem can be reached that might promote the common interest to achieve a world order based on fundamental principles of human dignity).
47 identify certain markers to guide the inquiry into corporate liability for human rights violations under the ATS The Community Process First, it is necessary to i dentify the participants by looking at the law to determine t he active participants i n the international legal decision making process. Today, we can all agree that governments are central to the international participants in the decision making process. A dditionally, there are members of the international community, such as corporations, NGOs, political parties, lobby groups, and even global crime cartels. Importantly, this study emphasizes the emergence of multinational corporate legal personality in and under international law. From the New Haven perspective, once the participants are identified then the question turns to determining the identity of these participants and to examine whether they have an innate or ascribed identity. In the context of the corporation, for instance, we create and ascribe its identity N ext s model, the inquiry turns to an assessment of the scope of the corporate identity. T he corporation has an identity that is different from individuals b ecause its identity is ascribed. In fact, all human associations have an identity appropriately different from the individuals that comprise it. Consequently, t his inquiry into identity is more complex with individuals escription of the social process claims of identity must be explicit. Importantly this model recognizes that incorporated under domestic law. This is an imp licit recognition that identity only has meaning Accordingly, international rights and duties derive from an
48 Effective Power Process oriented approach to international law, the inquiry turns toward an examination of particular actors systemic demands. From th is perspective of demand, the goal is the freedom to engage the global community with the least restrictive environment. This activity can be viewed as an aggregation of market power. The main point is that the primary demand of the corporate actor is to maximize wealth and this demand can only be tempered by the rule of law. Next, in the description of the social process, from the perspective of the co rporate this demand also generates the expectation of legal compliance. Notably, the corporation is dependent upon law to protect its expectations therefore the very ne ed of legal protection generates the expectation that the corporation must also comply with the law. So, the law that provides protection for its expectation it is parallel that the corporation expects to be subject to law. If there is no corporate identity in international law then there no expectation of protection of its activity within the rule of law. What basis of power does the corporation have at its disposal to advance its global wealth identity, meaning that it can call upon the state of incorporation to protect its interests. The authority of the state is the c Additionally, wealth is another basis of corporate power and may be leveraged to reproduce even more wealth. If the corporate actor goes abroad its wealth can leverage its power towards its inte rests. There must be limitations on the methods by which an actor may leverage its wealth toward garnering greater power in order to protect against an abuse of power Also, the wealth
49 generating power can leverage all other values respect, skill affecti on, enlightenment, well being, and rectitude Clearly, the corporation as a wealth producing entity derives its bases of power implicit ly from its existing wealth and is characterized by its ability to produce more wealth and therefore generate more power. With wealth as a basis of power, certain strategies are employed to support the wealth generating power of the corporation. The corporation employs many strategies either coercive or permissive as its basis of power. What this study seeks to determine i s whether justice is served for an actor, here the corporate actor, which has the right to engage in coercive strategies, either direct or indirect that may violate international legal norms and rules and whether it can also be liable for its violations I n this context, the corporation effectuates numerous strategies and often resorts to economic coercion via its political power; it can deploy ideological coercion and even can seek its home state to intervene on its behalf or it may even hire military or quasi military entities such as private military contractors, mercenaries or even governments where it is asserting its activity. Also, the corporate actor can resort to pr opaganda as a strategy to ensure its basis of power. For instance, the corporations can demonize its opponents via advertising and public relations espousal and ad herence to voluntary corporate responsibility schemes. Additionally, law can be a basis of power for the corporation. The arenas where the corporation functions may be geographic or institutional. Outcomes of the Power Process Lastly, two further theoretic al issues remain in the context of the outcomes of corporate basis of power or the strategies employed. Wherever the corporation may operate they may violate international law, thus the outcomes must be identified and the effects of corporate
50 activity exam ined. That is social realism the outcomes of the social process will be the generation of legal claims and counterclaims. The question then turns on determining how far the actor, here the corporation, ought to be permitted to go. To complete the model, the outcome of the social context is the power process. Indeed, the corporat e connection to the power process is that they can use wealth to gain power in the domestic and international sphere. Through this lens, the corporation maximizes its demands towar d a favorable outcome by using it wealth as power to b u y more power to maximize greater wealth which in turn generates more power and so on. oriented approach to solving problems in the social context, t his paper will argue that the corporation is a direct participant in international sphere; the corporation is not a power entity itself, by contrast its wealth is a critical basis of power, thus the corporation has a heightened resp onsibility to use its wealth wisely. This posit implicates theoretical problems and legal practice, and this paper will examine the corporate actor and deploy trends in practice of corporate liability and trends in legal theory to determine corporate legal personality in international law.
51 CHAPTER 4 MULTINATIONAL CITIZENSHIP INCORPORATED Conceptualizing International Legal Personality in Practice 138 Through this lens, corporations mus t enjoy legal personality in and under international law if there is a showing that international rules address the corporation. Some of these rules may be directed to states and practically still affect corporations. Here, corporate legal personality de pends upon whether such rules are found in international law. Everyone can agree that corporations possess legal personality in domestic law, but the inquiry becomes more complex when a domestic court must determine what international law is and then how t o apply it locally. In a globalized world corporate liability for harm done by internationally wrongful conduct. Globalization and the Juridical Person Modernity an d globalization, in particular, brought about a number of changes in the citizenship to define the political, social, and cultural landscape has been shifted to corporate entities whose loyalties lie in the economic well 139 In much of the existing scholarship, the research in this area tends to focus on determining whether corporations are subject to human rights obligations. 140 Here, the central question is whether corporations are subject to and subjects of international law. Although, as already mentioned, 138 See Hans Aufricht, Personality In International Law in I NTERNATIONAL L EGAL P ERSONALITY 53 (Fleur Johns ed., 2010). 139 B ERTA E SPERANZA H ERN NDEZ T RUYOL AND S TEPHEN J. P OWELL J UST T RADE 79 (N.Y.: N.Y. Univ. Press, 2009). 140 See Saskia Sassen Truyol (ed.), M ORAL I MPERIALISM 135, 137, 141, 1 64 (engaging in an in depth analysis of corporate power on the institution of citizenship).
52 nation states typically are the bearer of human rights obligations in international law, society now recognizes that corp orations bear human rights responsibilities. As one author commented: At a moral level it would appear that there exists a widening consensus that MNEs should observe fundamental human rights standards. This can be supported by reference to the fundamental need to protect humans from the assaults against dignity regardless of whether their perpetrators are state or non state actors. 141 However, despite the strong theoretical and moral case for extending human rights beyond the nation state to the corporation, the legal responsibility of the modern transnational corporation for human rights violations remains uncertain. 142 But, it has been noted that: Under customary international law, emerging practice and expert opinion increasingly do suggest that corporation s may be held liable for committing, or for complicity in, the most heinous human rights violations amounting to international crimes, including genocide, slavery, human trafficking, forced labor, torture and some crimes against humanity. 143 Nevertheless, to see where transnational corporate citizenship is trending, one must understand In nearly all legal systems within the international community of sovereign states, legal entities possess legally enforceable rights and duties. Although a circular argument, to deny an entity of its duty is to deny and deprive it of rights. Just like the evolution of corporate personality under United States law developed alongside the corporate perso n, adjusting to fit the corporate person into the domestic legal order, international law transformed toward greater recognition of legal personalities. 141 The Oxford Handbook of International Investment Law (200 8) Id. at 655 (footnote omitted). 142 P.T. M UCHLINSKI M ULTINATIONAL E NTERPRISES AND T HE L AW 517 (2007). 143 and Transnational Corporations and Othe Id. at para. 60.
53 Corporate Rights and Duties to increase its 144 rooted in Amer ican jurisprudence and remains the dominant justification of the corporate decision making process. 145 This tension between corporate duties and societal notions of corporate social accountability led to the development of modern notions of corporate social responsibility; however, as mentioned, the corporation, has the legal duty to act within the best interest of the bottom line and does not necessarily take into account social well being is not easily commoditized. Profit Over People American jurisprudence over ninety years ago, first grappled with these concepts and the tension between CSR and the profit motive inherent in the corporation questions. 146 Dodge v. Ford a case that came befor e the Michigan Supreme Court in 1919. 147 Henry Ford, the majority shareholder and president of 144 Milton Friedman, The Social Responsibility of Business is to Increase its Profits The New York Times Magazine, September 13, 1970. 145 Dodge v. Ford Motor Company 204 Mich. 459, 170 N.W. 668. (Mich. 1919) (h eld that Henry Ford owed a duty to the shareholders of the Ford Motor Co. to operate his business for profitable purposes rather than charitable). 146 Dodge v. Ford. 147 Id at 15.
54 the money back into the business based on his belief that this strategy wo uld produce a long term benefit for the company. 148 spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do th is, we are putting the greatest share of our profits back 149 The minority of the shareholders objected to this strategy and brought suit. In Dodge v. Ford the court held that a for profit business corporation is organized to create wea lth and profit for the stockholders, as opposed to the community or its employees. 150 The court found that the discretion of the directors must be exercised in the choice of means to attain that end. 151 The court reasoned that because this company was in busin ess for profit, Ford could not turn it into a charity. 152 assets in the form of shareholder value. 153 The court therefore upheld the decision of the trial court that ordered the directors declare an ex tra dividend of $19 million to be paid to the shareholders. 154 Yet, much has changed in society and it is now accepted that corporate social open legal quest ion whether the best interests of the corporation extends beyond the 148 Id 149 Id 150 Id 151 Id 152 Id 153 Id 154 Id
55 in the decision making process. 155 rs that back to the long term interests of the shareholders. Voluntary Codes of Corporate Responsibility Largely in response to the influence of the court o f public opinion, many multinational corporations have adopted formal policies and practices of corporate responsibility. The corporate 156 Indeed, this form of self regulation is premised upon the acc eptance of legal duties. 157 Recognition of the Corporate Form Domestic Corporate Personality Looking back one hundred fifty years ago in United States history, the corporate form was an unheard of business entity and a fairly insignificant institution. 158 T oday, the modern institution. This section of the paper examines the evolution of the corporation from a relatively insignificant business organization to a dom inant institution. The corporate person in United States history The rise of the modern corporation in American and other Western societies is a product 155 See generally Ian B. Lee, Citizens hip and the Corporation 34 L AW & S OC I NQUIRY 129 (Winter, 2009) (examines the concept of corporate citizenship through the lens of political theory to illustrate the constituent relationships of participation within the corporate structure). 156 Steven R. Ratner, Corporations and Human Rights: A Theory of Legal Responsibility 111 Y ALE L.J. 443, 531 (2001) (providing commentary on corporate ATS cases). 157 Id 158 Until the mid nineteenth century, a specific legislative act was required to form a corporation i n the U.S. and at the same time, the U.K. had similar rules which required a charter from the Crown or an act of Parliament. See P HILIP I. B LUMBERG T HE M ULTINATIONAL C HALLENGE TO C ORPORATION L AW 22 (1993); See also Susan Pace Hamill, From Special Privile ge to General Utility: A Continu a tion of Willard Hurst's Study of Corporations 49 Am. U. L. Rev. 81, 84 (1999).
56 of the past century. These business entities emerged as a consequence of the modern industrial era. Ini tially, corporations were given a narrow legal mandate and were associations of person joined to perform a particular function, and the legislature, upon petition, would issue a specific e o r 159 Back then the corporation was essentially a quasi 160 At this ti me in American history, it was widely understood that 161 In short, there were ver y few corporations in early American history and those that did exist at that time were formed for a public purpose and the corporation, in both law and society, was considered a gift from the people and mandated to serve the public good. 162 Following the ci vil war and the industrial revolution there was significant growth in American commerce and the corporate form, at the time, was considered too restrictive for the changing business environment. 163 In response the bundle of rights we now associate with corpo rations took root to meet the changing business environment. 159 J. H URST T HE L EGITIMACY OF THE B USINESS C ORPORATION IN THE L AW OF THE U NITED S TATES 1780 1970, 15 6 (1970) (reprint 2004). 160 H ANDLIN & H ANDL IN O RIGIN OF THE A MERICAN B USINESS C ORPORATION 5 J. Econ. Hist. 1, 22 (1945). 161 R. S EAVOY O RIGINS OF THE A MERICAN B USINESS C ORPORATION 1784 1855, 5 (1982). 162 At the beginning of the nineteenth century, there were only 317 corporations in the U.S. and P rofessor Hurst enterprise special charter from 1780 to 1801 in the states, nearly two thirds were for enterprises concerned with transport (island navigation, turnpikes, toll bridges); another 20 percent were for banks o r insurance companies; 10 percent were for the provision of local public services (mostly water companies); H URST supra note 311 at 17. 163 Although ge n eral incorporation was introduced du ring the Jacksonian era, it did not fully take root until after the Civil War. Blu m berg, supra note 310, at 22, 31. See also Gregory A. Mark, The Personification of the Business Corporation in American Law 54 U. C HI L. R EV 1441, 1444 (1987) (discussing the business preference for sole proprietorships and partnerships in early American history).
57 Recognition of domestic corporate personality Since the nineteenth century, American Courts have increasingly recognized the aw today that the corporation is a legal person, the Courts have not always recognized the legal personality of the e court in Bank of U.S. v. Deveaux concluded that for the purpose of diversity jurisdiction corporations are not citizens, but in 1822, the Court in Charleston R.R. Co. v Leston held that for the purposes of diversity jurisdiction the corporation is a citi zen of the state they are incorporated. 164 By the end of the nineteenth century it was settled law that the Equal Protection Clause of the Fourteenth Amendment applied to the 165 Citizens U nited the American legal systems continues toward wider acceptance that the freedoms and protections of 166 In brief, corporations in the U.S. domestic courts have not been immune from crimina l nor civil liability; however, the same is not true under international law and corporations have legal support for claiming a lack of subject matter jurisdiction for the purpose of criminal and civil liability under international law. 164 See Louisville, Cincinnati & Charleston R.R. Co. v. Letson 43 U.S. (2 How.) 497, 555 (1844); but see Bank of United States v. Deveaux 9 U.S. (5 Cranch) 61, 88 91 (1809). 165 Santa Clara County v. Southern Pacific Railroad 118 U.S. 394, 396 (1886) (the court said that it would not hear an argument on whether the Fourteenth Amendment to the Constitution, which forbids a state to deny any person equal protection, Fourteenth Amendment became law, the Supreme Court began to demolish it as a protection for blacks, and to See H OWARD Z INN A P EOPLE S H ISTORY OF THE U NITED S TATES 260 61 (2001). 166 Citizens United v. Federal Election Commission 175 L. Ed. 2d 753 (U.S. 2010) (held that under the First Amendment corporate funding of independent political broadcasts in candidate elections cannot be limited); compare with Federal Communications Commission v. AT&T 562 U.S. ___ (2011) (held that corporations do not have a right of personal privacy that would protect them from the disclosure of public records that have been handed over to fede ral agencies).
58 International Corpo rate Personality 167 Recognition of legal personhood confers not only the very life of the corporation, but also adds a dimension of legitimacy because the corporation is accounted for under the law. 168 matter jurisdiction over corp orations under the ATS because (1) unlike individuals and states, they cannot be guilty of international law; and (2) international law does not recognize conspiracy and related forms of inchoate liability. 169 Corporations have limited legal support for clai ming a lack of subject matter jurisdiction under international law for the purpose of civil liability under the ATS, notably not under the domestic law of the United States. Subjects of International Law New Rules, Old Actor Political, economic and social power have shaped notions of jurisdiction throughout the development of the rule of law. In 1649, Charles I, King of England, was tried, convicted, and ultimately sentenced to death by a so called kangaroo court which he argued lacked the legal authority t o try the tyrannical absolute monarch for waging war against his subjects. 170 The idea 167 Jan Klabbers, 11 I US G ENTIUM 35, 37 (2005). 168 Id 169 See e.g., Jonathan Bush, The Prehistory of Corporations and Conspiracy in International Law: What Nuremberg Really Said 109 C OLUM L. R EV 1094 1098 (2009). According to the U.S. Supreme Court in Hamdan conspiracy is not traditionally considered a crime in violation of the law of war, thus the crime of conspiracy would not normally be tried by before a military tribunal. See Hamda n v. Rumsfeld, 548 U.S. 557, 598 612 (2006). 170 See generally G EOFFREY R OBERTSON T HE T YRANNICIDE B RIEF (2005). Additionally, much of the story of the trial of King Charles that follows has been adapted from a law school lecture given by Prof. Joe Little at the Levin this story, but also for his contribution to my legal education generally and the quality of professionalism he instills in his students.
59 of trying the King, in 1649 was a novel approach. Although previous monarchs had been deposed by their subjects or even their successors, the notion of putting the King on trial was novel. In fact the Act of Parliament, that created the court, to try the King, illustrates common separation of power issues and the trial of Charles I, King of England is often pointed out as an crimes of treason were based upon the notion that the King had used his power to pursue his own personal interests, rather than the common good. Just like King Charles boldly asserted lack of jurisdiction, corporations now are arguing lack of subject matt er jurisdiction in international law and under the Alien Tort Statute (ATS). defining moment in the power of courts to assert jurisdiction over actors not traditi onally believed subject to or a subject of the rule of law. 45), Parliament had fully expected Charles to accept a new legal order and give into d emands for the establishment of a constitutional monarchy. 171 Even though defeated, Charles managed to provoke a second period of the English Civil War (1648). 172 Following the first Civil War, members of Parliament accepted the premise that although wrong, Ch arles was justified in his fight. Consequently, under a new constitutional settlement parliamentarians provided the King with limited powers. But by continuing to wage war, Charles unjustifiably caused significant 171 During his reign, Charles I, King of England became embroiled in a power and economic struggle with the his levying taxes with Charles continued to challenge Parliamentary authority by asserting his divine right to overrule and negate acts of Parliament. Civil war broke out in England in 1642. 172 being returned to Parliament; in the meantime, Charles continued to wage war against his subjects by enlisting the Scots and later the R oyalist. Finally, at the end of 1648, Charles was delivered into Parliamentary custody.
60 bloodshed and thousands of deaths. 173 Parlia ment was now determined that the King should be punished for waging war against the people. 174 The trial of Charles I, King of England began with what I can only imagine must still be today one of the greatest moments in courtr oom drama. At the opening of proceedings, then Solicitor General John Cooke stood beside the King to announce the indictment; no sooner than Cooke began to speak when Charles I took his cane, tapped Cooke sharply on the shoulder, and order Cooke to stop. B ut Cooke continued to speak. Charles then poked Cooke more forcefully n rest between them. Charles then demanded Cooke retrieve the top of his cane, but Cooke still ally, Charles bent down toward the ground to fetch the broken pieces and the historic proceedings against him continued. Following the reading of the indictment, although Charles was provided an opportunity to speak he refused on the grounds that there ca n be no court with jurisdiction over the King because his authority was derived from God. 175 Here, King Charles argued that the High Court 173 It is estimated that the fist and second civil wars in England resulted in the loss of approximately 200,000 people. It is reported that 84,830 killed directly parti cipating in hostilities and an equivalent number of death from war related diseases. Notably, the population of England in 1650 was reported at just over 5 million and considering that nearly 200,000 were estimated killed as a result of the wars, England l ost approximately 3.5 percent of its population under the rule of Charles I. To put the number deaths in perspective, when compared with United States civil war these estimates are nearly proportionally double. See M ICHAEL C LODFELTER W ARFARE AND A RMED C ON FLICT : A S TATISTICAL R EFERENCE TO C ASUALTY AND O THER F IGURES 1618 1991 (1992). 174 Puritan Revolution 1625 1660. available at http://oll.libertyfund.org/ 175 pro confesso Id. Gardiner (ed.) (1906).
61 of Justice lacked jurisdiction because the King could not be subject to any existing law. Moreover, if such a law exi sted then surely the King could change that law because the King was g) in 176 Essentially the King stood before the Court and stated its lack of 177 ued that under the laws of the treasons, murders, rapines, burni ngs, spoils, desolations, damages and mischiefs to this 176 Saddam Hus sein reportedly paraphrased King Charles in his opening statement to Iraqi Special Tribunal in the Compare with King Charles defiantly already made my protestations, not only against the illegality of this pretended Court, but also, that no earthly power can justly call me (who am your King) in question as a delinquent, I would not any more open my mouth upon this occasion, more than to refer myself to what I have spoken, were I in this case alone concerned: but the duty I owe to God in the preservation of the true liberty of my people will not suffer me at this time to be silent: for, how can any free born subject of England call life or anything he possesseth his own, if power without right daily make new, and abrogate the old fundamental laws of the land which I now take to be the present case? See o 1660. available at http://oll.libertyfund.org/. 177 lie against the King, they all going in his name: and one of their maxims is, that the King can do no wrong. Besides, the law upon which you ground your proceedings, must either be old or new: if old, show it; if new, tell what authority, warranted by the fundamental laws of the land, hath made it, and when. But how the House of Commons can erect a Court of Judicature, which was never one itself (as is well known to all lawyers) I leave to God and the world to judge. And it were full as strange, that they s ts of the Puritan Revolution 1625 1660. available at http://oll.libertyfund.org/.
62 178 Three days later Charles was beheaded. 179 Modern Subjects of International Law Today the international community and United States courts in particular are confronted with recognizing another actor the corporation but before turning attention to determining whether the corporate actor is accounted for in and under international law, certain parallels can be drawn from other non s tate actors functioning in and among the international community. In principle, corporations, formed under municipal law lack international legal personality, but just ect of international plane. 180 However, to merely classify ei ther an individual or a corporation as a qualities which it may not possesses. 181 According to the International Court of Justice (ICJ) a subject of law is an enti ty capable of possessing international rights and duties and the capacity to maintain its rights by bringing 178 Puritan Revolution 1625 1660. available at http://oll.libertyfund.or g/. 179 was himself tried and convicted of treason for his involvement in the trial. But before John Cooke was drawn and quartered, he reportedly wrot enfranchised the people and secured the welfare of the whole groaning creation, if the nation had not more delighted G EOFFREY R OBERTSON T HE T YRANNI CIDE B RIEF 418 (2005). From a practical standpoint, legal practice can be quite hazardous when seeking to hold powerful actors accountable under the rule of law. How that relates to asserting jurisdiction over corporations is for the reader to infer. 180 I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 67 (4 th ed. 1990) (dedicating an entire section to personality and recognition). 181 Id
63 claims. 182 As Ian Brownlie points out, this conventional definition is circular since the indicia depend on the existence of a legal person. 183 Despite this caveat on whether a particular actor is a subject of international law, it is agreed that dominant actors on the international scene today include nation states, supranational international organizations, individuals, and associations of individuals, such as trade unions, non governmental organizations (NGOs) and corporations. 184 Each of these actors possesses rights and duties in and under international law with legal personality for their particular purpose. 185 Increasingly, these actors impact the inte rnational sphere. Even though the nation state dominated the international sphere, the supranational international organization ascended into the international system, and today, the corporation is impacting international relationships. 186 The modern nation state is the dominant actor in international law. In fact, modern states have been characterized as corporations. 187 The personality of the nation e noted that 182 Reparations for Injuries Suffered in the Service of the United Nations 1949 I.C.J. 174, 179 (Adv. Op., Apr. 11). 183 I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 59 (4 th ed. 1990) (dedicating an entire section to personality and recognition). 184 Scholars disagree about the extent to which recognition is required to establish legal personality, or if legal person ality can indeed exist independently of recognition. If legal personality can exist without recognition, recognition is transformed into a legal duty possessed by the state. See P ETER H.F. B EKKER T HE L EGAL P OSITION OF I NTERGOVERNMENTAL O RGANIZATIONS 74 (1 994). 185 I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 59 (6 th ed. 2003) (dedicating an entire section to personality and recognition). 186 Although corporations are formed under domestic law, they often conduct activity beyond the reach of domestic la w. One notable advent of the modern legal system is that corporations have attained greater rights without corresponding duties. For instance, it is now possible for a corporation to have standing to assert its rights under certain investment treaties (i.e NAFTA) and enter into contractual relationships with nation states ( i.e., voluntary corporate codes of conduct). 187 See Hans Aufricht, Personality In International Law in I NTERNATIONAL L EGAL P ERSONALITY 35 (Fleur Johns ed., 2010) (noting the corporate i dea in its relationship to the state concept).
64 theory of the state ( Staatsslehre ) and the theory of the corporation ( Genossenschaftslehre the interrelationship between the theories still pres ents conceptual problems. 188 Traditionally, states, via their governments, create, apply, and enforce international law. 189 Over time, certain basic rules emerged in international law to determine whether an entity is in fact a state, and to determine who the government of that state is. 190 Once a state is recognized it is enjoys certain rights and duties under United States domestic laws; however, United States law also has given effect to unrecognized quasi ion. 191 Here, issues of state recognition generally dominate questions of international law pertaining to who is 188 Id at 39. 189 I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 58 70 (4 th ed. 1990). See H.L.A. H ART T HE C ONCEPT OF L AW 97 114 (1961) (explaining that some laws are backed by threats of the sovereign and other laws are based on a system of primary rules of obligation). See also H ERSH L AUTERPACHT R ECOGNITION I N I NTERNATIONAL L AW 4 6 (1946) (distinguishing the viewpoint that an entity that satisfies the criteria of statehood is bound to legal rights and du ties under international law whether or not other states recognize it from the viewpoint that only the act of recognition by already recognized states can transform unrecognized entities into sovereign states subject to international law). See generally Mi chael Scharf, Musical Chairs: The Dissolution of States and Membership in the United Nations 28 C ORNELL I NT L L.J. 29 (1995). 190 Under traditional elements of international law, an entity seeking recognition as a state must have: (1) a defined territory; ( 2) a permanent population; (3) and effective government; and (4) the capacity to enter into relations with other states. See Inter American Convention on the Rights and Duties of States, Dec. 26, 1933, 49 Stat. 3097, 165 L.N.T.S. 19 (Montevideo Convention) ; See also, H.L.A. H ART T HE C ONCEPT OF L AW 97 114 (1961) (suggesting monarchy, as rulemaking institutions). The foundation of the German co nstitutional state is its Grundgesetz (Basic Law), which is an intricately structured framework of rules and values. Each constitutional provision manifests a binding legal norm that obliges complete, unequivocal implementation. The Constitution represents the Grundnorm, or basic norm, which governs and validates the legal order. Accordingly, any law or practice that is not reconcilable with the Basic Law is by definition unconstitutional. See generally H ANS K ELSEN G ENERAL T HEORY O F L AW A ND S TATE 115 (1961 ) 191 see, e.g., Pfizer Inc. v. India 434 U.S. 308, 318 20, 98 S.Ct. 584, 590 91, 54 L.Ed.2d 563 (1978) (for the diversity jurisdiction); Ban co Nacional de Cuba v. Sabbatino 376 U.S. 398, 408 12, 84 S.Ct. 923, 929 32, 11 L.Ed.2d 804 personality, United States courts have regularly given See, e.g. United States v. Insurance Cos. 89 U.S. (22 Wall.) 99, 101 03, 22 L.Ed. 816 (1875) (seceding states in Civil War); Thorington v. Smith, 75 U.S. (8 Wall.) 1, 9 12, 19 L.Ed. 361 (1868) ( same); Carl Zeiss Stiftung v. VEB Carl Zeiss Jena 433 F.2d 686, 699 (2d Cir.1970), cert. denied, *245 403 U.S. 905, 91 S.Ct. 2205, 29 L.Ed.2d 680 (1971) (post World War II East Germany). Kadic v. Karadzic 70 F.3d 232 (2d Cir. 1995) (discussing the rights of non state
65 the legitimate government and even whether to acknowledge new state actors. 192 Previously, state recognition issues confronted the international co mmunity in the context of de colonialism, yet today, as democratic uprising occur throughout the Middle East, in Egypt, Bahrain, Libya, and beyond the question of either implicit or explicit recognition of these new entities will confront the international community. 193 Importantly, once an international actor materializes in the international spheres, the specific attributes of the actor help determine its international personality. In the context of the corporate actor, we must ask ourselves whether corpo rations have the power to enter into international agreements; whether corporations may bring claims on its own behalf; and whether the corporation may be sued by other actors. Often, the constitutive instrument of the organization provides for its legal s tatus and character; constituent instruments often contain express provisions regarding the entities legal status, yet in its absence legal personality might be implied given the entities object and purpose. 194 In short, once an international actor is recogn ized international law provides corresponding rights and duties. In the first place, the question of the subjects of international law is most often discussed as whether not only states but also individuals are subjects of international law. 195 The question presented here is whether a theory of legal personality supports corporate liability for violations 192 The criteria for statehood are widely accepted by the international legal community, the declaration of such status remains conteste d. See I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 85 106 (4 th ed. 1990) (noting that an entity is ipso facto compare with the Charter of the Organization of American States which U.N.T.S. 3, as amended by protocols of 1993 [hereinafter OAS Charter]. 193 Br iefing: After Mubarak T HE E CONOMIST Feb. 19, 2011, at 47 53. 194 Reparations for Injuries Suffered in the Service of the United Nations 1949 I.C.J. 174, 179 (Adv. Op., Apr. 11). 195 See Hersch Lauterpacht, The Subjects of the Law of Nations in I NTERNATIONA L L EGAL P ERSONALITY 174 (Fleur Johns ed., 2010).
66 of the law of nations. In the second place, Brownlie notes that a corporation formed under domestic law, whether public or private, may engage in activity beyond the territory other than 196 However, renowned commentator Philip Jessup noted that corporations or partnerships may also be pr operly considered subjects of international law. 197 Often corporations can and do make agreements, for instance concession agreements for oil or mineral rights, but these international agreements are not necessarily treaties in a formal sense, rather they ar e more akin to contracts. 198 Corporations in the last few decades have gained greater recognition within a multinational trading regime; for instance, corporations have standing to challenge governmental action under certain free trade agreements. 199 Arguendo, corporate codes of conduct are inherently more in the nature of an international agreement and provide a stronger basis of support toward corporate actor recognition. In international law the concept of recognition affects the natural and legal persons to a greater degree than international organizations. Yet the corporation is intrinsically involved in international creation, interpretation, and obligation/compliance. Increasingly, corporations are 196 I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 67 (4 th ed. 1990). 197 Philip C. Jessup, The Subjects of a Modern law of Nations, 45 Mich. L. Rev. 383, 387 (1947). 198 See generally The Mavrommatis Pale stine Concessions (Greece v. U.K.), Jurisdiction, 1924 PCIJ Series A No. 2. 199 Many international law scholars point to the successful interplay between state autonomy and international governance functions manifested by multilateral treaty regimes. Specif ically, Hersh La u terpacht identifies the conception of international society. Hersh Lauterpacht, The Grotian Tradition in International Law 23 B RIT Y.B. I NT L L 1, 19 (1946); see also Harold Hongju Koh, Why Do Nations Obey International Law? 106 Y ALE L.J. 2599, 2602 (1997) (noting the complex process of institutional interaction whereby global norms are not just debated and interpreted, but u ltimately internalized by domestic legal systems). Other commentators have identified a new type of sovereignty, which is created by the interpenetration of multilateral treaty regimes across sovereign borders. the state must submit to the pressures that international regulations impose... [because] sovereignty... is status -A BRAM C HAYES & A NTONIA H ANDLER C HAYES T HE N EW S OVEREIGNT Y 27 (1995).
67 involved in the law making function previously reserved t o the state. In the United States, corporate political spending will likely help corporations buy future government official and corporate friendly laws. 200 200 See generally, Citizens United v. Federal Election Commission 175 L. Ed. 2d 753 (U.S. 2010) (held that corporate political speech cannot be limited because corporations are people and entitled to protections under the First Amendment of the United States Constitution); see also Kiobel at 118 n. 11 (noting that in and under U.S. law
68 CHAPTER 5 CORPORATE ENTERPRISE S IN AND UNDER A MOD ERN LAW OF NATIONS Corporations In and Under International Law opportunity for the development of a modern law of n 201 That statement was made over excitement of international law lies not in its past, but in its future growth and development as a means for maintaining w 202 This section will provide the reader with an introduction to the sources of interna tional law as applied by courts and permit the reader to determine whether the majority opinion in Kiobel properly applied inter national law. International law, in its most pure form, principally pertains to the legal norms that operate among states. 203 International law is primarily concerned with the legal norms that regulate conduct between a state and the individuals within the s its borders. 204 International law, unlike most domestic law such as in the United States, is largely decentralized and consequently the international legal system consists of a conglomerate of legal systems. 205 201 P HILIP C. J ESSUP A M ODERN L AW O F N ATIONS 1 (1956). 202 G ERALD J. M ANGONE T HE E LEMENTS OF I NTER NATIONAL L AW 470 (1967). 203 States are also generally referred to as nations and countries. For the purposes of this thesis, these terms are used interchangeably. 204 See e.g. I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW (6 th ed. 2003); P HILIP C. J ESS UP A M ODERN L AW OF N ATIONS (1956). 205 Id
69 Every legal sys tem requires a body of law, but no single international code exists. 206 Of the numerous distinctions between international law and domestic legal systems, the absence of a single compilation of rules complicates determining what precisely one means by intern ational law. Just like any body of law, international law did not jump into being full panoply; all legal systems have their origin in the societies in which they govern. 207 Sources of International Law In the absence of a global or world legislature, inter national law is not created by statute as other legal systems are; by contrast, international law is found in a variety of sources. Some of the sources of international law are codified by the Statute of the International Court of Justice. 208 Thus, internat ional and domestic courts, seeking to identify and apply international law, commonly consult the following: (1) international conventions (treaties); (2) customary international law evidenced by state practice and opinion juris ; (3) general principles of law recognized by civilized nations; and (4) judicial decisions and the teachings of the most qualified publicists. 209 Notably, there are disagreements among international legal commentators as to whether these sources are listed in order of importance ( i. e. whether there is a hierarchy) and whether these sources are exclusive. 210 Individuals familiar with the common law legal tradition often 206 P HILIP C. J ESSUP A M ODERN L AW O F N ATIONS 4 (1956). 207 J ESSUP at 1. 208 Statute of the International Court of Justice, art. 38 (1), June 26, 1945, 59 Stat. 1055 [hereinafter, ICJ statute]. 209 Art. 38(1)(a) (d), ICJ Statute; compare with H AZEL F OX Time, History, and Sources of Law, Peremptory Norms: Is There A Need For New Sources of International Law in T IME H ISTORY A ND I NTERNATIONAL L AW (Matthew Craven, Kalgosi Fitzmaurice &Maria Vogiatzi eds., 2007). It is al so worth noting that judicial decisions and teachings are considered subsidiary means. Art. 38(1)(d), ICJ Statute. 210 H AZEL F OX Time, History, and Sources of Law, Peremptory Norms: Is There A Need For New Sources of International Law in T IME H ISTORY A N D I NTERNATIONAL L AW (Matthew Craven, Kalgosi Fitzmaurice &Maria Vogiatzi eds., 2007). B RIERLY T HE L AW O F N ATIONS at 66
70 overlook the status of precedent in international law; the concept of stare decisis the doctrine of precedent, is t echnically non existent in international law. 211 D ecisions of the International Court of Justice (ICJ) are binding only on the parties to the case and without formal effect as precedent. 212 However, in practice, the ICJ often cites its prior decisions as persu asive authority, pursuant to Article 38(1)(d), and the ICJ will frequently evaluate rules of customary international law in their opinions and often will subsequently rely upon those evaluations in later decisions. 213 Even though courts typically begin thei r analysis of international law with the four enumerated sources of international law contained in the 1945 ICJ statute, these four sources are not exhaustive. It should be noted that both opinions in Kiobel to attempt to frame the issues appropriately, ye t Judge Cabranes omits several sources of international law and fails to look beyond the Nuremburg precedent to determine whether international law recognizes the corporate actor. This section will provide the reader with a coherent understanding of the mo dern sources of international law. Following a source by source analysis of international law, this Chapter then examines developments in international and domestic law pertaining to the determination of corporate legal personality under international law. Treaties or Conventions Treaties are agreements between and among States, by which parties obligate themselves to act, or refrain from acting, according to the terms of the treaty. 214 Similar to when two 211 Under stare decisis judicial decisions when the same points arise again. See B LACKS L AW D ICTIONARY 212 Article 59, ICJ Statute; see also B RIERLY T HE L AW O F N ATIONS 56 66 (1963). 213 See e.g. Kiobel 214 ement concluded between States in written form and governed by international law, whether embodied in a single instrument or in
71 individuals seek to enter into a contract and evidenc e their obligations by writing, two or more countries can contract through treaties. 215 Like contracts between individuals, treaties cover a number of substantive issues and can be lengthy or limited. Rules regarding treaty procedure and interpretation are defined in the Vienna Convention on the Law of Treaties (VCLT). 216 Since international law lacks any procedural body of rules, the VCLT of Treaties was adopted to codify because just like other agreements among states, each party must consent to be bound by the instrument. Although there is no official hierarchy to the sources of law the sources do vacillate in their significance. Notably, treaties, just like contracts, encapsulate the notion of mutual assent contract leads to one of the most basic fundamental principles relating to treaties, pacta sunt servanda which pro 217 One significant distinction between the treaty and the applying and sim ultaneous law creating character. Once a State becomes a party to a treaty, it is bound by that treaty; however, a treaty does not create rights or obligations for States that are not parties to the treaty. 218 Even if a State is not party to a treaty, the tr eaty may serve as evidence of customary international law, and thus 215 B RIERLY at 56 66. 216 See Vienna Conven tion on the Law of Treaties, 23 May 1969, 1155 U.N.T.S. 331. [herein VCLT]. 217 VCLT at Article 26 218 VCLT at Article 34
72 parties. 219 States are likely to be bound by the VCLT through customary international law. This is because many c ourts regard the VCLT as reflecting state practice. 220 Consequently, the VCLT is nearly always considered relevant when courts seek to determine how a party should act in light of its treaty obligations. Importantly, situations often arise where some provis ions of a treaty may reflect or codify customary international law, while other parts do not. 221 Customary International Law The second source of international law is customary international law. 222 A rule of customary international law is one that, whether o r not it has been codified in a treaty, has binding force of law because the community of States treats it and views it as a rule of law. In contrast to treaty law, a rule of customary international law is binding upon a State whether or not it has affirma tively assented to that rule. In order to prove that a particular rule has become a rule of customary international law, two elements must be proved: widespread state practice ( i.e., uniform and consistent) and opinion juris the mutual conviction that t he recurrence (of state practice) is the result of a compulsory rule. There is a certain tautology to the second requirement, such as state practices is 223 219 Article 38, VCLT. See also F.R.G. v. Denmark North Sea Continental Shelf Cases (1969) (recognizing this treaty may become binding on non parties). 220 Id. 221 For instance, some provisions of the International Covenant on Civil and Political Rights (ICCPR) may reflect and essentially codify customary international law, while other provisions may not. 222 Art. 38( 1)(b), ICJ Statute. 223 See e.g. I AN B ROWNLIE P RINCIPLES OF P UBLIC I NTERNATIONAL L AW 4 10 (4 th ed. 1990); B RIERLY at 59 61.
73 Objective element: state practice ctive element, and simply stated means that a sufficient number of states behave in a regular and repeated manner consistent with the customary norm. Evidence of State practice may include a codifying treaty, if a sufficient number of States sign, ratify, and international law. First, whether the practice of a small number of states in a particular region 224 Second, whe ther the practice of particularly affected states ( e.g. space law), can create custom that binds other states. The ICJ has signaled such a possibility may exist. 225 Subjective element: opinion juris Opinio juris is the subjective element of customary interna tional law. It requires that the State action in question be taken out of a sense of legal obligation, as opposed to mere expediency. As one commentator put it, opinion juris following a certain practice as a matte r of law and that, were it to depart from the practice, some 226 Customary international law is shown by reference to treaties, decisions of national and international courts, national legislation, diplomatic correspondence, opinions of national legal 224 Michael P. Scharf, Times of Fundamental Chang e 43 C ORNELL I NT L L. J. 439, 440 (2010). 225 The ICJ, in the Asylum case, accepted that there could be a Latin American customary rule regarding the right of a state to issues a unilateral and definitive grant of political asylum. See generally, Asylum (Co lom. V. Peru), 1950 I.C.J. 266 (Nov. 20 ). 226 M ARK E. V ILLIGER C USTOMARY I NTERNATIONAL L AW AND T REATIES 4 (1985).
74 advisers, and the practice of international organizations. 227 Each of these items might be employed as evidence of State practice, opinion juris or both. Corporations are subjects of customary international law a nd using the notion of a transformative development in which new rules and doctrines of customary international law emerge with unusual rapidity and acceptance ( i.e. Grotian Moment) I argue that a consequence of globalization and the significant political and economic strength of the corporation, customary international law developed rapidly to incorporate these new corporate actors. This is true even if international law has never found corporation criminally or civilly liable. Just like customary interna tional law developed at Nuremberg in a Grotian Moment to hold individuals accountable, domestic courts in the U.S. and other industrialized countries recognized the transformative development of corporate and political power in a Grotian Moment to hold cor porate accountable for violations of the law of nations. It may be argued that the limited practice of the few industrialized states seeking to hold corporations accountable for violations of international law is insufficient to create customary internatio nal law, but as the ICJ has noted customary international law can develop regionally or from particularly affected states, thus the customary international law of corporate liability emerged in domestic rules, like the ATS, and years of United States juris prudence under the ATS holding corporations liable are an important source of international law evidencing a customary practice to be considered by courts. 227 The party asserting a rule of customary international law bears the burden of proving it meets both requirements. See e.g. North Sea Contine ntal Shelf Cases
75 General Principles of Law 228 Such principles are gap filler provisions, utilized by the ICJ in reference to rules typically found in domestic courts and domestic legal systems in order to address procedural and other issues. The bulk of recognized general principles are procedu ral in nature ( e.g. burden of proof and admissibility of evidence). Many others, such as waiver, estoppel, unclean hands, necessity, and force majeure, may sound familiar to a common law practitioner as equitable doctrines. The principle of general equity in the interpretation of legal documents and relationships is one of the most widely cited general principles of international law. 229 Subsidiary Means to Determine International Law The final source of international law is judicial decisions and teachings of scholars. 230 231 Judicial decisions and scholarly writings are, in essence, aids for the Court, used to support or refute the existence of a customary norm, to clarify the bounds of a ge neral principle or customary rule, or to demonstrate state practice under a treaty. 232 Judicial Decisions Judicial decisions, whether from international tribunals or from domestic courts, are useful to the extent they address international law directly or de monstrate a general principle. 228 Art. 38(1)(c), ICJ Statute. 229 an inter legem (within the case) application of equitable principles, and not a power of the Court to decide the merits of the case ex aequo et bono (that is, to simply decide the case based upon a balancing of the equities), which is a separate matter and provided for under Article 38(2) of the ICJ Statute. 230 Art. 38(1)(d), ICJ Statute. 231 Id 232 Id
76 Here, past decisions by international and domestic courts provide a rule making function. Additionally, the treatment of corporations in and under international law by courts evidences that general principles of the state of incorporation govern the determination of personality for the purpose of corporate liability. This issue will be discussed further in the next section. Also, United States jurisprudence under the ATS holding corporations liable for human rights violations has a rule creating character under international law and helps fill the gaps on whether corporations are subject to international law and whether corporations may be held civilly liable under the ATS. Teachings of Learned Scholars writings of learned scholars. Many make the mistake of 233 Moreover, there i include international legal scholars like Grotius and Brownlie, there are additional scholars who field. Contemporary Sources of International Law Much in the international community has changed since 1945 when the ICJ Statute first codified the sources of international law. Even though courts typically begin their analysis with these four sources, mo international law. First, international organizations have created another source of international 233 Id
77 law. Second, an area of so called soft law emerged to create new international norms. L astly, 234 International Organizations International organizations, such as the United Nations or the Organization of American States, are conferred with the authority to create rules that may ultimately bind their members. 235 Importantly, these quasi legislative bodies operate in a more narrow sense than their state equivalents. Additionally, it must be noted that United Nations General Assembly Resolutions are not, in and of themselves, bindi ng; even though these Resolutions may evidence customary international law, the General Assembly is not analogous to a domestic legislature, such as Congress. 236 Additionally, non binding international instruments increasingly affect international haviors and as a result have helped crystallized customary international law on a variety of issues. 237 Often new situations are discovered in international law and just like every 234 B RIERLY at 66. 235 Many international law scholars point to the successful interplay between state autonomy and international governance functions manifested by multilateral treaty regimes. Specifically, Hersh La u terpacht identifies the conception of international society. Hersh Lauterpacht, The Grotian Tradition in International Law 23 B RIT Y.B. I NT L L 1, 19 (1946); see als o Harold Hongju Koh, Why Do Nations Obey International Law? 106 Y ALE L.J. 2599, 2602 (1997) (noting the complex process of institutional interaction whereby global norms are not just debated and interpreted, but ultimately internalized by domestic legal s ystems). Other commentators have identified a new type of sovereignty, which is created by the interpenetration of multilateral treaty regimes across sovereign borders. hat international regulations impose... [because] sovereignty... is status -the vindication of a state's existence as a member of the international A BRAM C HAYES & A NTONIA H ANDLER C HAYES T HE N EW S OVEREIGNTY 27 (1995). 236 The International Court of Justice (ICJ) has advanced the notion that each UN General Assembly Resolution is a form of soft law that in itself gradually becomes a binding form of law. The ICJ asserted in the Nuclear Weapons de evidence important for establishing the existence of a rule or the emergence of opinio juris .... [A] series of [General Assembly] resolutions may show the gradual evolution of opinio juris See Advisory Opin ion, Legality of the Threat or Use of Nuclear Weapons, 1996 I.C.J. 226, 254 55 (July 8). 237 Oscar Schachter contends that a unanimous assertion in good faith by all -or at least nearly all -states manifests opinio juris communis (instant custom) and as a re See O SCAR S CHACHTER I NTERNATIONAL L AW IN T HEORY AND P RACTICE IN I NTERNATIONAL L AW 114, 116 (Barry E. Carter & Phillip R. Trimble eds., 1991); See Panel Discussion, A Hard Look at Soft Law 82 A M S OC I NT L L. P ROC 371 (1988).
78 other body of law, international law will never sufficiently develop to cover every situation or actor that emerges upon the international sphere. In these situations, the judicial entity confronted with a gap in international law must apply reasoning to cover the new situation. 238 Soft Law Increasing recognition of corporate legal personality has significantly increased as nations turn attention toward third generation human rights such as democracy. One perceived threat to consolidation of democratic global governance is corruption and consequently the international legal communi ty has developed. In the context of corruption, there are a variety of multilateral, regional and bilateral conventions or treaties that attempt to deal with corporate social responsibility. Generally, these international instruments focus on the individua l wrongdoer such as a bribe giver or recipient. 239 Unlike human rights conventions, the conventions dealing with corruption, such as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, do obligate stat es to promise not to engage in corrupt practices or to combat corruption globally; rather, these instruments merely encourage nations to enact domestic legislation and by implication, they require states to enforce these domestic measures. 240 Consequently, e ven customary law derived from conventions combating corruption would be limited to an obligation to enact and enforce domestic laws. 238 Brierly, means that a principle to c over the new situation is discovered by applying methods of reasoning which lawyers everywhere accept as valid. Examples include the consideration of judicial precedent, reasoning by analogy, es underlying the rules of law already B RIERLY at 66. 239 See, e.g. Foreign Corrupt Practices Act (FCPA), 15 U.S.C.A. §§ 78dd 1 (1998). 240 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, OECD, 21 Nov. 1997 [herein OECD Convention]; OECD Guidelines for Multinational Enterprises OECD, 27 June 2000; Decision of the OECD Council on the OECD Guidelines for Multinational Enterprises, OECD, June 2000.
79 The concept of the corporate personality in international law is well settled in modern treaty law. As far back as the 197 0s, international law recognized the emerging concept of the multinational enterprise. 241 For example, the International Labor Organization (ILO) promulgated the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy whi ch states, in relevant part, that [T]he advances made by multinational enterprises in organizing their operations beyond the national framework may lead to abuse of concentrations of economic power and to conflicts with national policy objectives and with the interest of the workers. In addition, the complexity of multinational enterprises and the difficulty of clearly perceiving their diverse structures, operations and policies sometimes give rise to concern either in the home or in the host countries, or in both. 242 Additionally, the Organization for Economic Co operation and Development (OECD) promulgated the OECD Guidelines for Multinational Enterprises which states, in relevant part, operating in their territories to observe the Guidelines wherever they operate, while taking into account the particular circumstances of each host country. However, both the Tripartite Declaration and the OECD Guidelines skirt the issue of defining the le in international law. But the Tripartite Declaration does explain that [ T ] o serve its purpose this Declaration does not require a precise legal definition of multinational enterprises; this paragraph is desig ned to facilitate the understanding of the Declaration and not to provide such a definition. Multinational enterprises include enterprises, whether they are of public, mixed or private ownership, which own or control production, distribution, services or o ther facilities outside the country in which they are based. The degree of autonomy of entities within multinational enterprises in relation to each other varies widely from one such enterprise to another, depending on the nature of the links between such entities and their fields of activity and having regard to the great diversity in the form of 241 International Labor Organization, Tripartite De claration of Principles Concerning Multinational Enterprises and Social Policy, 17 I.L.M. 422, 424 Economic Co operation & Development, Guidelines for Multinational Enterprises ava ilable at 242 Tripartite Declaration at para. 1.
80 ownership, in the size, in the nature and location of the operations of the enterprises is used in this Declaration to designate the various entities (parent companies or local entities or both or the organization as a whole) according to the distribution of responsibilities among them, in the expectation that they will cooperate and provide assistance to one another as necessary to facilitate observance of the principles laid down in the Declaration. 243 Similarly, the OECD Guidelines offer no precise definition of the international legal personality of a multinational enterprise; rather, the O ECD Guidelines state that A precise definition is not required for the purposes of these Guidelines. [Multinational Enterprises] usually comprise companies or other entities established in more than one country and so linked that they may co ordinate their operations in various ways. While one or more of these entities may be able to exercise a significant influence over the activities of others, their degree of autonomy within the enterprise may vary widely from one multinational enterprise to another. Own ership may be private, state or mixed. The Guidelines are addressed to all the entities within the multinational enterprise (parent companies and/or local entities). According to the actual distribution of responsibilities among them, the different entitie s are expected to co operate and to assist one another to facilitate observance of the Guidelines. 244 Although neither of these international instruments are indented to bind its members, they merely provide a framework to regulate corporate activity and cle arly signal the concept of the international legal personality of the multinational corporate enterprise in and under international law. The General Policies of the OECD Guidelines illustrate international obligations for multinational enterprises and aim for the respect of human rights and sustainable development in conjunction with good corporate governance. Moreover, this development in international law ought to effect U.S. courts interpretation of corporate liability under the ATS. This section provide d the reader with an adequate appraisal of the sources of a modern law of nations. International practitioners and their domestic counterparts seeking to determine questions of international law must consider a wide variety of sources; however, internation al 243 Tripartite Declaration para. 6. 244 OECD Guidelines section I(3)
81 law generally leaves questions of civil liability to domestic states. The next section will examine the development of corporate liability in practice under the domestic law of the United States and then under international law since Nuremburg. Sources of Corporate Accountability in International Relations Today, there is significant debate to whether corporations have been held liable, either civilly or criminally, in an under international law. 245 In domestic law, we value corporate liability and hold i ts personhood as sacrosanct; however, international law is undeveloped in the area of the law of persons. 246 An examination of corporate criminal liability in international law, following WWII, far from settles the issues of corporate liability. 247 Importantly it is clear that no international criminal court has been granted jurisdiction to prosecute corporations for violations of international law, and it follows that no corporation has even been found liable for violations of international criminal law. Duri ng war crimes proceedings against the defeated Axis enemy, only individuals were charged in the initial phase of the Nuremburg Tribunal and the Tokyo Tribunal. 248 Subsequent Nuremburg trials did eventually tackle corporate activity; however, the trials again st giant German enterprises focused on the managers, directors, and owners, not the corporate entity. 249 guilt or innocence of corporate complicity in war crime is rooted in The Nuremberg Charter 245 Bush at 1098. 246 Id 247 See Case No. 57, The I.G. Farben Trial, U.S. Military Tribunal, Nuremberg, 14 Aug. 1947 July 29, 1948, 10 Law Reports of Trials of War Criminals 1; see also Beth Stephens, The Amorality of Profit: Transnational Corporations and Human Rights 20 B ERKELEY J. I NT L L. 45, 76 (200 2) (noting that the Tribunal found that the I.G. Farben Corporation had violated international law.). 248 Id 249 The trials against German corporations focused primarily on Krupp, Flick, I.G. Farben, and some attentions to Hermann Goering Works (HGW) and Dres dner Bank. These cases alleging war crimes against corporate actors where brought under the authority of Control Council Law No. 10.
82 which authorized the criminal prosecution of individuals only, rather than legal persons such as corporations. 250 Nuremburg Precedent The Nuremburg Tribunal, following World War II, decisively rejected the prevailing majority view that only state actors and not individuals could be held accountable for violations committed by men, not by abstract entities, and only by punishing individuals who commit such crimes 251 Although there is some case law relating to, it appears that these proceeding are where corporations may draw significant historical support for corporate immunity to criminal liability. 252 One probl em is that United States courts have a tendency to rely on the Nuremberg precedents to determine whether corporations can be held liability under international law. 253 Courts construe these precedents as the Holy Grail and seek to apply them as some sort of time ago. Even the legal arguments were fairly unrefined and were early actions see king attempts to expand accountability beyond the state to the individual, United States courts and even international 250 Michael P. Scharf, Times of Fundame ntal Change 43 C ORNELL I NT L L. J. 439, 440 (2010) (arguing the Nuremburg precedent was paradigm shifting coupled with endorsement of the Nuremburg Principles by the U.N. General Assembly resulted in the accelerated formation of customary international la w). 251 Trial of Major War Criminals before the International Military Tribunal 223 (Nuremburg 1947); The Nuremburg Trial, 6 F.R.D. 69, 110 (1946). 252 Id 253 See e.g. Kiobel ; Presbyterian Church of Sudan v. Talisman Energy, Inc. 244 F. Supp. 2d 289, 308 2 0 (S.D.N.Y. 2003); and Khulumani v. Barclay Nat'l Bank Ltd ., 504 F.3d 254 (2d Cir. 2007) (the court issued three separate opinions, each relied on the Nuremberg precedents, each reach a separate conclusion.).
83 legal commentators heavy reliance of these embryonic notions of liability frustrate a determination of corporate liability in internation al law today. Take for instance Khulumani v. Barclay Nat'l Bank Ltd ., 504 F.3d 254 (2d Cir. 2007) the court issued three different outcomes of corporate liability based upon the Nuremburg so called precedent. 254 On commentator noted that even the legal schol ars get the Nuremburg precedent incorrect. 255 and rules on international liability existing at that time in history. At the time of Nuremburg, international liability be yond the state was an undeveloped area of law. Nevertheless, international law continues to develop and the Nuremberg tribunals were instances of first impressions for international law and merely signal the development of new norms requiring further elabo ration. At the present time in history, the corporation is in a much different position 254 In Khulumani v. Barclay Nat'l Bank Ltd. 504 F.3d 254 (2d Cir. 2007), the opinions relied heavily on Nuremberg precedents, albeit each drawing different conclusions by the three separate opinions in. Two judges found, for different reasons, that aiding and abetting violations of international law is itself a violation of international law that is accepted by the international community, and one judge dissented. 255 In the most comprehensive work on corporations and criminal liability Jonathan Bush suggests that no corporations has even been held liable for war crimes and that there are suggestions to the contrary by human rights scholars are mistaken. Jonathan Bush, The Prehistory of Corporations and Conspiracy in International Law: What Nuremberg Really Said 109 C OLUM L. R EV 1094 1098 (2009) [herei n Bush] See, e.g. Harold Hongju Koh, Separating Myth from Reality About Corporate Responsibility Litigation 7 J. I NT L E CON L. 263, 266 (2004) (confusing Nuremberg tribunals that tried Flick, Krupp, and I.G. Farben officials with Nuremberg tribunal tha t was corporations or firms); Beth Stephens, The Amorality of Profit: Transnational Corporations and Human Rights, 20 B ERKELEY J. I NT L L. 4 abundant, with legal finding of corporate guilt as an entity). Id. at 1098, n.9. According to Bush, the I.G. Farben case attracts the bulk of the misunderstanding, and he not the firm were charged often go on to claim that individual defendants were convicted on charges relating to See, e.g., In re Agent Orange Prod. Liab. Litig. 3 73 F. Supp. 2d 7, 98 (E.D.N.Y. 2005) Tort Liability for Human Rights Abuses il and hold the individual directors liable, say, for selling large quantities of Zyklon B to the administrators of the death involvement wit h slave labor at Farben factories at Auschwitz, every Farben defendant involved with Zyklon B was Bush at 1098, n.9.
84 256 Since Nuremburg, the corporate entity developed, and so too has the law. Courts must now include in their examination of corpora te liability modern precedents of corporations in international law. The approach to international law by United States Courts today is insufficient to determine notions of corporate liability because they continually frame questions of corporate liability under international law within an antiquated conceptualization of the contemporary sources of law and fail to consider developments in both law and society. The time has come for United States courts and those beyond our borders to exercise jurisdiction o ver corporations, rejecting notions to the contrary in favor of the progressive nature of international law. Just like their Nuremburg predecessors, the time has come for U.S. legal practitioners to find a coherent approach to international law. Importantl y, the judicial decisions of these courts form the contemporary corpus on judicial works as a source of law. Indeed, the legacy of ATS judicial decisions will help develop notions of legal personality and liability for years ahead. It is unlikely these iss ues will be resolved anytime soon, yet the approach to international law under the ATS requires incorporation of domestic conceptions of legal personality. Looking Beyond Nuremburg Determining corporate nationality is increasingly problematic. Globalizatio n, neo liberalism, free trade, and economic integration challenge the general rule that a corporation is a national of the place of incorporation. This widely cited holding from Barcelona Traction (Spain v. Belgium) must now be reexamined within the contex t of a global trading environment because multinational enterprises operate via a variety of corporate entities. 257 In the past, the legal status 256 See e.g., Jonathan Bush, The Prehistory of Corporations and Conspiracy in International Law: What Nuremberg Really Said 109 C OLUM L. R EV 1094 1098 (2009). 257 Belgium v. Spain I.C.J. Reports 1970.
85 of foreign corporations and their cross border maneuverability belonged exclusively to private law, and attempts culminated in two recognition theories of corporate personality, in common legal parlance 258 of in the context of the corporation under the law is to consider the foreign company as a legal subject ( i.e a bearer of rights and duties). 259 Dual identity of corporate nationals ce of the corporate veil, separating the corporations from its members and endowing it with rights and 260 Generally, international courts respect the corporate veil in cases where a state asserts diplomatic protection for injuries suffere d by its corporate national. 261 In fact, The reasoning for courts respecting the integrity of the corporate veil is clear, corporation have rights and duties of their own, and it follows from this legal truth that the corporation itself and not its members a re in need of protection. internationals law and the attempts to protect the dual personalities of the modern corporate form. Here, the personality of the corpo ration has dual identities, the corporate legal entity itself and the identity of the shareholders; each identity of the corporate legal personality possesses certain rights and duties distinct from the other. To understand the dual identity of the modern corporation we can frame the inquiry in the context of claim to diplomatic protection to examine 258 S TEPHAN R AMMELLO C ORPORATIONS IN P RIVATE I NTERNATIONAL L AW 9 (2001). 259 Id at 10. 260 I GNAZ S EIDL H OHENVELDRERN C ORPORATIONS I N A ND U NDER I NTERNATIONAL L AW 3 (1987). 261 See, e.g. Barcelona Traction.
86 whose interests states have commonly asserted. Importantly, both the individual and the corporation lack status and standing under the ICJ Statute and this has led to domestic courts now concluding that corporations are not subjects of international law. However, because litigation under the ATS includes the individual, the corporation and the quest for an international law of corporations can be formulated with in espousals of diplomatic protection. Since the corporation is a legal fiction, the issue arises as to which state is entitled to protect its interests. In the case of an individual or citizen this would be the state of the 262 The nationality of a corporation is determined no differently. 263 Moreover, the corporation has a legal personality independent of its members. 264 Governments confer upon legal personhood which creates a corporate personality independent of its shareholders. This act implies granting it rights over its own property, rights which it alone is capable of protecting. Finally, in the international context, the determination of corporate nationality only the State of nationality may exercise diplomatic protection on beha lf of the company when its rights are injured by a wrongful act of another State. 265 What is envisioned 262 Id. Compare with, the Nottenbohm Case (Liechtenstein v. Guatemala), Second Phase Judgment, 6 April 1955. In the 1955 Nottenbohm Case was a naturali Nottenbohm, did not live in Liechtenstein nor di d he intend to live there, he had no business activities or interests Barcelona Traction which involved a corporation ( i.e. natural person), the Nottenbohm Case involved the nationality of an individual ( i.e. n atural person), in the Nottenbohm Case the ICJ Nottenbohm Case poration, rather than the incorporation test pronounced in Barcelona Traction See e.g. Lawrence Jahoon Lee, Barcelona Traction in the 21st Century: Revisiting its Customary and Policy Underpinnings 35 Years Later 42 S TANFORD J OURNAL OF I NT L L AW 237 (20 06) 263 Id. 264 Belgium v. Spain I.C.J. Reports 1970 p. 34, para. 40; see also Lawrence Jahoon Lee, Barcelona Traction in the 21st Century: Revisiting its Customary and Policy Underpinnings 35 Years Later 42 S TANFORD J OURNAL OF I NT L L AW 237 (2006) 265 Bel gium v. Spain I.C.J. Reports 1970 p. 34, para. 40.
87 protect a violation of its rights. Courts will not likel y pierce the corporate veil to hold the shareholders liable for violations of international law. In Barcelona Traction the ICJ held that Belgium lacked standing or jus standi, s a distinct legal entity and Barcelona Traction was not a Belgian national. 266 In Barcelona Traction the court ruled that a corporation is a national of the country in which it is incorporated, not where the majority of its shareholders are nationals; in f act, the majority expressly rejected the argument for nationality based upon the location of the majority of the shareholders as an alternative to the place of incorporation test to determine corporate nationality. 267 Even though the incorporation rule provi ded the basis of the conclusion, the court suggested, in obiter dictum several hypothetical exceptions to the rule of incorporation. 268 The first exception suggests the court would permit an exercise of diplomatic protection on behalf of the national s whose direct rights as shareholders, as opposed to rights owed to the company itself were violated. 269 In fact, the ICJ cited to municipal law as the source of the shareholders rights they expressed. 270 The second exception suggests the court would permit an exercise of diplomatic protection on behalf of the nationals for harm to the company as a matter of equity. 271 This 266 Id at 43 45. 267 Id. 268 Id. 269 Barcelona Traction at para. 46 47. 270 Id. 271 Id
88 exception would apply if the company ceased to exist. It would also apply if the state of incorporation is the same state alleged to have cau sed the harm. 272 Although the ICJ refused to confer standing upon Belgium, the Court articulated a theoretical exception that might allow the national state of the shareholders to bring a claim; the that the State of the shareholders has a right of diplomatic protection when the State whose responsibility is invoked is the national State 273 The Court in Barcelona Traction the corporation would th e shareholders have no possibility redress through the company and government ( i.e., Belgium) have an independent right of action for them (the shareholders) arise. 274 Reg ulating corporations Even if the corporate enterprise is a multinational corporation international law affords no it is asserted by the state under whose law the legal entity is organized. 275 A state may not afford diplomatic protection to one of its nationals against a state whose nationality such person also possesses. 276 In Barcelona Traction the court in its analysis characterized corporations under nation al law, and emphasized that a corporation has a separate legal existence. 277 Importantly, 272 Id. at para. 92. Note that in separate opinions; only three judges supported this exception. Id. at 72 75, 134, 191 93; by contrast four judges vigorously opposed this exception, Id. at 240 241, 257 259, 318. 273 Id. at para. 92. 274 Id at p. 34, para. 40. 275 Id 276 Art. 4, Hague Convention (1930). 277 Belgium v. Spain, I.C.J. Reports 1970 p. 37.
89 the law of state responsibility does not attempt to regulate conduct between a state and its own nationals. 278 Although Corporations are a legal entity under domestic leg al systems, they lack status and standing under international law. 279 Here, the ICJ, given the lack of international turns its inquiry to domestic rules; general principles of domestic law fill the so called void in international law. 280 In light of this holdi ng, the corporate person is the only possibly identity that could be sued under international law it is clear that for recognition purposes, the corporation has legal personality in international law. Diplomatic protection of corporate persons Notably, ove r a quarter of a century has lapsed since the Barcelona Traction was decided and international law continually develops new rules. Although the ICJ refused to confer standing upon Belgium in Barcelona Traction subsequent courts vacillated in their decisio ns although resolute in recognition of the juridical person and a general respect for the corporate veil. The ICJ, in contrast to its holding in Barcelona Traction allowed the United States to bring a case against Italy to redress the harm suffered by a nd Italian company, wholly owned by United States shareholders. 281 Notably, the ICJ did not provide an explanation for allowing a claim for diplomatic protection to protect the direct rights of shareholder in ELSI ; however, separate opinions by two other jud ges indicates the United States was permitted to exercise diplomatic protection to protect the shareholders direct rights granted under a treaty between the United States and Italy. A subsequent judgment by the ICJ in Ahmandou Sadio Diallo indicated that t he ICJ in ELSI allowed the United States to exercise diplomatic protection to protect the 278 Art. 1, draft Articles on Diplom atic Protection (2006), ILC Report, doc. A/61/10, p. 24. 279 See e.g. ICJ Statute. 280 Often the ICJ imports significant bodies of general principles including, but not limited to enterprise law, agency theory, principles of equity, estoppel, etc. 281 Elettroni ca Sicula S.p.A. (ELSI) (U.S. v. Italy), 1989 I.C.J. Rep. 3 (1989) [herein ELSI ]
90 direct rights of shareholders granted by a Treaty of Friendship, Commerce and Navigation concluded between the United States and Italy. 282 Additionally international rules of diplomatic protection were established in 2004 and 2006, when the International Law Commission (ILC) in the aforementioned case, as well as other sources of customary international law. 283 In fact, these draft articles, arguably rise to the level of customary international law and at the very least are a source of law under 38(1)(d) as the work of particul arized learned scholarship. 284 Most recently, in 2007, the ICJ confirmed in the case of Ahma n dou Sadio Diallo that diplomatic protection can be exercised on behalf of a national whose direct rights as a shareholder in a foreign corporation or other business entity have been violated. 285 Unlike the ELSI to the dispute, the court in Diallo stated that the direct rights of the shareholders should be derived from the munic ipal law of the Respondent State. In Diallo the ICJ also held that diplomatic protection by substitution is not a customary norm of international law and the ICJ in respect of diplomatic protection of associs and shareholders, is of the opinion that these do not reveal at least at the present time an exception in customary international law allowing for protection by substitution 286 The ICJ noted, 282 Ahma n dou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo) Judgment of 24 May 2007 [herein Diallo] ; see also ELSI. 283 See, e.g., draft Articles on Dipl omatic Protection (2006), ILC Report, doc. A/61/10. 284 Art. 38(1)(d), ICJ Statute. 285 Diallo at para. 89. 286 Diallo at para. 89.
91 [t]he fact invoked by Guinea that various international agreements, such as agreements for the promotion and protection of foreign investments and the Washington Convention, have established special legal rgimes governing investment protection, or that provisions i n this regard are commonly included in contracts entered into directly between States and foreign investors, is not sufficient to show that there has been a change in the customary rules of diplomatic protection; it could equally show the 287 In it s statement, the ICJ notes that with respect to corporations, the exercise of diplomatic protection has become less important in a globalized trading system comprised of bilateral investment treaties and other investor protection regimes. The take away fro m these statements is that the court seemingly reaffirms the general treatment of corporations under customary international law and is recognizing the international legal personality of the corporation. Importantly, the ICJ in Barcelona Traction alluded to the fact that a State would be entitled to espouse claims of non nationals if the allegations amounted to an egregious violation of human rights. 288 In dicta in Barcelona Traction, [obligations erga omnes ] are the c oncern of all States. 289 In view of the importance of the rights 290 Among the 287 Diallo at para. 90. 288 See Barcelona Traction, Light and Power Company, Limited (Belg. v. Sp.), Second Phase, Judgment, 1970 I.C .J. Rep. 32 (1970) 289 In international law, the concept of an obligation erga omnes is a powerful tool for showing standing. Taken at face value, if a State breaches an obligation erga omnes, then any State in the world would have standing to seek a judici al determination prohibiting the breach. Barcelona Traction, Light and Power Company, Limited (Belg. v. Sp.), Second Phase, Judgment, 1970 I.C.J. Rep. 32 (1970); compare Nottebohm The ICJ, in Barcelona Traction, noted the source of obligations erga omnes principles and rules concerning the basic rights of the human person, including protection from slavery and racial 289 In fact, the list of erga omnes obligation s enumerated in 1970 by the ICJ in Barcelona Traction is limited to acts of aggression, genocide, slavery and racial discrimination. 290 East Timor Case (Port. v. Aust.), 1995 ICJ Rep. 4. In 1995 the ICJ recognized the right of a people to self determination as erga omnes. See East Timor Case (Port. v. Aust.), 1995 ICJ Rep. 4. In 1997 the ICJ recognized the theoretical existence of such a right in the context of large scale environmental injury. See Gabcikovo Nagymaros Case (Hung. v. Slov.), 1997 ICJ Rep. 4.
92 violations listed by the ICJ that would trigger universal standing are crimes against peace, war crimes and crimes against humanity, piracy and slavery. But international law is constantly developing customary law and has recognized self determination and theoretically large scale environmental injury to the list of erga omnes 291 Drawing upon the paramount importance attributed to obligations erga omnes by the Court in Barcelona Traction many commentators have drawn a link between the obligations erga omnes and the notion of jus cogens norms of international law. 292 Thus the question of corporate liability tu rns on whether the human rights claims are sufficient to assert universal jurisdiction. 293 Jurisdiction in International Law Under international law, states generally assert extraterritorial jurisdiction over legal and natural persons and conduct occurring o utside their borders under the following six bases: (1) the e.g. narcotics and human trafficking, antitrust laws, and corrupt 291 In 1995 the ICJ recognized the right of a people to self determination as erga omnes. See East Timor Case (Port. v. Aust.), 1995 ICJ Rep. 4. In 1997 the ICJ recognized the theoretical existence of such a right in the context of large scale environmental injury. See Gabcikovo Nagymaros Case (Hung. v. Slov.), 1997 ICJ Rep. 4. 292 Barcelona Traction, Light and Power Company, Limited (Belg. v. Sp.), Second Phase, Judgment, 1970 I.C.J. s conclusion, it conflicts with a peremptory norm of general international law [ jus cogen negotiations of Article 53 indicate that the drafters had a very short list in mind, and include aggressive war, sla very, slave trade, piracy and genocide. 293 South West Africa cases. The South West Africa cases provide some guidance on whether a violation is sufficient to trigger universal standing and what rights rise to the level of erga omnes In the South West Africa cases the ICJ held that Liberia and Ethiopia lacked standing to bring claims against South Africa for its practice of apartheid in present day Namibia. In 1966, Namibia was know as South West Africa and administered by South Africa under a League of Nati ons mandate. Even though in 1966 the ICJ denied an of erga omnes basis for standing for South adopted by the U.N. General Assembly which equ ate apartheid with crimes against humanity. As a result of this development in international law apartheid practices would rise to the level of erga omnes thus, subject to universal standing under the Barcelona Traction dicta.
93 affects the essential security interests of the prosecuting state ( e.g. e.g. crimes against humanity, genocide, war crimes, piracy, slaver y). 294 Jurisdiction Over Multinationals The United States is entitled to exercise universal jurisdiction over multinational corporations. Today, universal jurisdiction is gaining greater acceptance in United States courts and beyond. 295 The resurgence of pirac y, a classic crime, presents modern challenges to the international legal community. Pirates are the classic archetype for exercise of universal jurisdiction and piracy is the classic crime from both the modern and historical perspective which states have supported a legal basis for extraterritorial jurisdiction. The history of universal jurisdiction is well rooted in international law. 296 In fact, the ATS represents a United States 294 See Kenneth C. Randall, Uni versal Jurisdiction Under International Law 66 TEX. L. REV. 785 (1988). 295 See J EFFERY D AVIS J USTICE A CROSS B ORDERS : T HE S TRUGGLE FOR H UMAN R IGHTS IN U.S. C OURTS 239 (2008). The notion of universal jurisdiction exercised by an individual state or sovere ign is deeply rooted in British practice of the Nineteenth Century. Acts of piracy violated the law of nations. See O PPENHEIM supra note 77 at 505. The rules relating to the prohibition of slavery and piracy were considered to be rules of universal prescr iptive force. In other words, every nation had the right to punish the perpetrators, regardless of where and against whom the acts were committed. See H ENRY W HEATON E LEMENTS OF I NTERNATIONAL L AW 176 (3d ed. 1846). It should be noted that even at this poin t in history, judges and jurists carefully drew a distinction between universally prohibited acts of piracy on the high seas and acts prohibited by domestic municipal laws of any given State. See O PPENHEIM supra note 77, at 506. James Brierly, the British publicist, justified this early version of universal jurisdiction when he wrote that in cases of piracy, offending ships were regarded as stateless entities. By virtue of the offenders' commission of acts of piracy, they effectively forfeited any protecti on afforded by their national flags. See J. L. B RIERLY T HE L AW OF N ATIONS 306 07 (Sir Humphrey Waldock ed., 6th ed. 1963). The enforcement of these rules was left to the institutions and practices of individual states. See id Great Britain outlawed slave ry in all of its territories in 1833 and used its political, diplomatic, and military competence to enforce these international law rules of universal import. The importance of British historical practice seems to escape the attention of the Kiobel court. 296 In the sixth century, Codex Justiniani Additionally, Roman law permitted plain tiffs the ability to bring an action against vagrants (persons without domicile and citizenship) wherever they might be found. See R YNGARET J URISDICTION IN I NTERNATIONAL L AW at 108.
94 manifestation of the theory of universal jurisdiction. 297 Although conflicts o f jurisdiction in international law are frequent, the international law of jurisdiction does not prioritize the bases of jurisdiction. 298 United States courts may exercise universal jurisdiction over corporations even though there may be a more appropriate f orum. 299 300 Often the home states of multinational corporations are under social pressure to regulate the activity of its the recognition that many of the largest multinational corporations operate in hosts states that are either unwilling or unab le to enforce minimum human rights standards. This power asymmetry, relating to the expectations of human rights standards presents a regulatory vacuum in international law that may be filled by either the state of nationality or under a theory of universa l jurisdiction. 301 Undoubtedly, the extraterritorial imposition of regulatory standards is susceptible to criticism by proponents of free trade. It may very well be that the host state set its standards to 297 In one empirical studies employing multivariate logistics analysis of c ases decided under the ATS, the data show that federal courts are edging toward greater acceptance of universal jurisdiction; and, increasing federal courts are abandoning traditional notions of sovereignty and territorial jurisdiction. J EFFERY D AVIS J UST ICE A CROSS B ORDERS : T HE S TRUGGLE FOR H UMAN R IGHTS IN U.S. C OURTS 239 (2008). 298 See Laker Airways Ltd v Sabena national law precludes an exercise of jurisdiction solely because an (Third) § 402 comment b). 299 See Laker Airways Ltd v Sabena 731 F. 2d 909, 935 (DC Cir 1984) (finding no principle of international law no rule of international law holding that a long as both are in fact, consistent with the limitations on jurisdiction imposed by internati 300 See C EDRIC R YNGAERT J URISDICTION IN I NTERNATIONAL L AW 132 (2008). 301 See C EDRIC R YNGAERT J URISDICTION IN I NTERNATIONAL L AW 132 (2008). See also M Anderson, Transnational Corporations and Environmental Damage: Is Tort Law the Answer? 41 W AS HBURN LJ 399, 409 (2002); see e.g. D Mzikenge Chirwa, The Doctrine of State Responsibility as a Potential Means of Holding Private Actors Accountable for Human Rights 5 M ELBOURNE J I NT L L 1, 35 (2004).
95 attract foreign direct investment in order to ach ieve domestic development goals. These states would likely argue that the extraterritorial imposition of the home states standards is a continuation of Western imperialism or even a form of protectionism. 302 Consequently, for such situations, where a state m ay impose universal jurisdiction or even extraterritorial jurisdiction acceptable solution to resolve these issues. 303 Moreover, human rights litigation in United States courts has already implicitly recognized this possibility in dismissing ATS actions against corporate defendants under theory such as FNC. It is now universally held, in both international law and domestic jurisprudence, that individuals have the ri ght to be free from torture. 304 However, one United States, court held that even a campaign of widespread and systematic rape does not rise to the level of an international crime. 305 For example, in Doe v. Karadzic, the United States district court found that it had no jurisdiction to hear a civil suit based upon an alleged campaign of rape and torture by Bosnian Serbs under the United States Alien Tort Statute. 306 The court ruled that the ATS only covered international crimes, and equated these to crimes carried out under State authority; in contrast, 307 Since the campaign was carried out by militiamen who did not act on behalf of a recognized State (no Bosnian/Serb 302 See C EDRIC R YNGAERT J URISDICTION IN I NTERNATIONAL L AW 133 (2008). 303 Id 304 U.S. courts recognized the right to be free from torture as universal in Filartiga v. Pena Irala, 77 I.L.R. 185 (1984) and British courts recognized the right in Regina v. Bow Street Metropolitan Stipendiary Magistrate, ex parte Pi nochet Ugarte (Amnesty International Intervening) (No.3), 2 All ER 97 (1999) 1 L 482 269. See generally Winston P. Nagan & Lucie Atkins, The International Law of Torture: From Un i versal Proscription to Effective Application and Enforcement, 14 H ARV H UM R TS J. 87 (2001). 305 Doe v. Karadzic, 866 F.Supp. 734 (U.S. S.D.N.Y., 1994). 306 Id. 307 Id.
96 State existed), the crime did not fall under the ambit of the ATS. The decision was overturned on appeal; the appellate court specifically rejected an overly formalist approach which requires a 308 Universal J urisdiction 309 However, a regional custom crystallized corporate liability under international law amo ng the Western legal community when, years ago, the state practice emerged to criminally prosecute and allow civil suit against violators of international human rights law in domestic legal systems under a theory of universal jurisdiction. In the United St ates this practice is evidenced by human rights litigation under the ATS. Additionally, there is an established state practice within the domestic legal systems of a growing number of European Community members to hold individuals and corporations liable f or human rights violations. Conceptually, universal jurisdiction is well settled in international law and emerged early in the modern law of nations. The concept of universal jurisdiction is present in the four Geneva Conventions of 1949 and additional tre aties. 310 codified by the Geneva Conventions whereby States parties are required to find and legal 308 Kadic v. Karadzic 74 F.3d 377 (2d Cir. 1996). 309 See C EDRIC R YNGAERT J URISDICTION IN I NTERNATIONAL L AW 127 (2008); see e.g. Cedric Ryngaert, Universal Tort Jurisdi ction over gross Human Rights Violations NYIL 3 (2007). 310 See, e.g. Convention (I) for the Amelioration of the Condition of the Wounded and Sick in Armed Forces in the Field, U.N. T S. No. 970, vol, pp. 31 83 (1950), signed at Geneva, 12 August 1949, at Contracting Party shall be under the obligation to search for persons alleged to have committed, or to have ordered to be committed, such grave breaches, arid shall bring such persons, regardless of their nationality, before i ts own the Taking of Hostages of 17 December 1979, at art. 8 (State parties shall try to extradite accused hostage takers
97 location. In addition to the concept of mandatory universal jurisdiction introduced by the Geneva eral other treaties that permit the exercise of criminal jurisdiction over a violator of international humanitarian law. 311 Today, many nations throughout the world have implemented legislation to enable the exercise of universal jurisdiction which is genera lly based upon the jurisdictional grants of treaties. 312 Even though there is often some debate over which violations of international law are subject to universal jurisdiction, slavery is frequently cited as one crime that justifies the exercise of universa l jurisdiction Also, the violation of any jus cogens generally justifies the exercise of universal jurisdiction. 313 311 See, e.g., TVPA, supra note 362. 312 See, e.g. Belgian Law of 16 June 1993, as modified 1999 (permitting the prosecution of genocide and grave violations of international humanita rian law). In fact, the aforementioned Belgian Law was at issue in the 2000 Arrest Warrant Case between the Democratic Republic of the Congo and Belgium and in particular the exercise of universal jurisdiction thereunder even though the ICJ declined the op portunity to discuss the legality of the exercise of universal jurisdiction. See S TEVEN R. R ATNER AND J ASON S. A BRAMS A CCOUNTABILITY FOR H UMAN RIGHTS A TROCITIES IN I NTERNATIONAL L AW : B EYOND THE N UREMBERG L EGACY 141. See also United Kingdom War Crimes Act of 1991 (permitting prosecution of war crimes committed in Germany during WWII); Australian War Crimes Act of 1991 (permitting domestic prosecution of WWII era violations); Criminal Code of Canada 1985, art. 7 (conferring a broad jurisdictional grant to d omestic courts). However, some domestic courts have refused to prosecute defendants without either a territorial or personality nexus in the absence of an explicit treaty grant of universal jurisdiction. See, e.g., In re Javor 1996 Bull.crim., no. 132, at 379, French Cour de Cassation, Criminal Chamber, March 26, 1996 (noting that because the Genocide Convention does not explicitly provide for universal jurisdiction the French courts are powerless to prosecute violations unless there is a nexus between Fra nce and the violator). But following this decision, the French Criminal Code was amended on two separate occasions to allow for the prosecution of crimes within the Cognizance of the international criminal tribunals for Rwanda and Yugoslavia. See Brigette Stern, International Decisions, 93 A M J. I NT L L. 525, 528 at notes 20 & 21 (1999). See also New International Legal Process 93 A M J. I NT L L. 334, 341 (1999), citing a Danish case, Director of Public Prosecutions v. T. (discussing the trial of a Croatian national accused of war crimes in the former Yugoslavia). 313 See, e.g., VCLT, infra note 292.
98 CHAPTER 6 A SHORT HISTORY OF HUMAN RIGHTS LITIGATION IN UNITED STATES COURTS UNDER THE ALIEN TORT STATUTE A Long Story in Brief: Kiobel v. Royal Dutch Petroleum Co. In Kiobel v. Royal Dutch Petroleum Co. the Second Circuit became the first United States appellate court to hold that corporations are not subject to liability under the ATS. The majority found that corporate defendants have nev er been held liable, either criminally or civilly, for violations of international law, and held that in the absence of an international rule of subject matter jurisdiction. 314 Kiobel represents a significant departure from ATS precedent. To date, the Supreme Court has decided only one case under the ATS and provided little guidance to lower courts. 315 The case in Kiobel was brought by Nigerian plaintiffs brought their class action claims for aiding and abetting property destruction; forced exile; extrajudicial killing; and violations of the rights to life, liberty, security, and association under the ATS. All of the three judge panel agreed that this particular case should be dismissed; however, Judge Leval refused to join the international law that exempts juridical persons from compliance with its rules. 316 314 Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 114 115 (2d Cir. 2010) (In Kiobel the majority reasoned versal practice among nations of imposing civil damages on corporations for violations of 315 Sosa v. Alvarez Machain 542 U.S. 692 (2004 ). 316 Kiobel at 155.
99 The Alien Tort Statute 317 This law, the Alien Tort Statute (ATS), is merely thirty three words long and consists of a single sentence, yet has generated significant jurisprudence and academic scholarship. 318 Arguably, no single piece of United States legislation has the potential to affect international trade and h uman rights as does the ATS. Following enactment in 1789, the ATS sat undisturbed and for that matter largely unnoticed until 1980 when the Second Court of Appeals decided Filartiga v. Pena Irala 319 Despite nearly two hundred years of dormancy, the ATS emer ged as a viable tool to advance human rights norms outside of the United States. 320 There are only a few hundred cases involving the ATS and the vast majority of the cases were decided after 2000. 321 Nevertheless, 317 28 U.S.C. §1350. When the ATS was originally enacted in 1789, the ATS conferred jurisdiction to the federal the se veral states, or the circuit courts, as the case may be, of all causes where an alien sues for a tort only in (1789). 318 See supra note 55. 319 Filartiga v. Pena Irala 630 F.2d 876, 879 (2d Cir. 1980). In the 1790s only two cases referred to the ATS. Moxon v. The Fanny 17 F. Cas. 942, 948 (D. Pa. 1793) (denying ATS jurisdiction for ship claim for Bolchos v. Darrell 3 F. Cas. 810 (D.S.C. 1795) (finding jurisdiction over a suit for restitution of illegally seized property in violation of the law of nations); see also B ETH S TEPHENS et al I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS 6 (2008 ) ( at issue in Bolchos ; thereby illustrating the evolution of international law because the court made no mention of an wrongdoing in connection with slavery). See also P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 437 (2009) litigation in United States courts) 320 Between 1795 and 1976, very few cases or controversies invoked the ATS. see B ETH S TEPHENS et al I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS 7 (2008) ( noting fewer than two dozens cases) quoting Kenneth C. Randall, Federal Jurisdiction over International Law Claims: Inquires into the Alien Tort Statute 18 J. I NT L L. & P OL 1, 4 5 n. 15 17 (1985) (counting twenty one cases claiming ATS jurisdiction prior to Filartiga ). There is a plethora of academic literature about Filartiga and its progeny. See generally Pamela J. Stephens, Translating Filartiga: A Comparative and International Law Analysis of Domestic Remedies For International Human Rights Violations 27 Y ALE J. I NT L L. 1 (2002). 321 See P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 5 (2009).
100 the ATS has been invoked by a growing number o f global actors, both within and from far beyond the territorial boarders of the United States. Moreover, legal practitioners have used the ATS to hold multinational enterprises accountable for their involvement with alleged human rights violations in Lati n America and beyond 322 Origin and Development The ATS was enacted following ratification of the United States Constitution as part of the first legislative act of the new United States Congress. 323 The ATS is believed to have been included in the Judiciary A ct of 1789 to show that the newly formed American government 324 However, no written record of the legislative history of the ATS withstood the tests of time. 325 Despite a lack of legislative history, this first act of the United States is believed to evidence the desire of the founders to enforce, in United States federal courts, existing international standards that conform to international obligations of state responsibility. 326 In fact, enactment has been trace d to a necessity to provide 322 P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 24 (2009) (noting tha t litigation under the ATS will continue to expand into other areas unless the parameters of actionable claims in and under international law are defined by U.S. courts) 323 The ATS is also referred to as the Alien Tort Claims Act (ATCA). 324 A provision of the peace treaty concluded between the United States and England following the American lawful Impediment to the Recovery of the full Value in Sterling Money of all bona fide Debts heretofore See P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 28 (2009) (quotin g Kenneth C. Randall, Federal Jurisdiction over International Law Claims: Inquires into the Alien Tort Statute 18 J. I NT L L. & P OL 1, 28 29 (1985)); see also Sosa v. Alvarez Machain, United States declared their inde pendence, they were bound to receive the law of nations, in its modern state of purity and r e Ware v. Hylton, 3 Dall. 199, 281, 3 U.S. 199, 3 Dallas 199, 1 L. Ed. 568 (1796) (Wilson, J.)). 325 See B ETH S TEPHENS et al I NTERNATIONAL H UMA N R IGHTS L ITIGATION IN U.S. C OURTS 3 (2008). 326 See P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 28 (2009) (noting that because several states violated United States treaty obligations by enacting legislation hostile to British commercial interest s, a political decision was made to allow British creditors to pursue claims in a less bias federal court system).
101 a venue for aliens to prosecute claims fulfilled United States treaty obligations. 327 Early references to the purpose of the ATS in the context of private actors and commercial interests considered a proper defendant under the ATS. The First Congress provided a framework, by enacting the ATS, to hold private actors accountable for their commercial interests. Even though there were relatively few corporations enactment, the corporation is a proper defendant under the ATS and 328 In one historic reference to the ATS, when asked whether an American citizen alleged to have participated in the plunder and pillage of a Bri tish colony could face criminal prosecution, Attorney General William Bradford was uncertain but made it clear that the injured aliens could bring a civil action against the American citizen: But there can be no doubt that the company or individuals who ha ve been injured by these acts of hostility have a remedy by civil suit in the courts of the United States; jurisdiction being expressly given to these courts in all cases where an alien sues for a tort only, in violations of the law of nations, or a treaty of the United States. 329 In fact, the Supreme Court in Sosa v. Alvarez Machain analyzed this early historical reference to support its holding that the ATS provides federal jurisdiction and that the Congress by enacting the ATS fully intended for common law claims arising out of a violation of the law of nations to be recognized by the federal courts. 330 In Sosa, when the Supreme Court made reference to the 327 Id. For additional discussion of the influence of the British debts controversy on the scope of the First Judiciary Act, see Wythe Holt, T o Establish Justice: Politics, The Judiciary Act of 1789, and the Invention of the Federal Courts D UKE L.J. 1421 (1989). 328 At the beginning of the nineteenth century (1780 1801), there were only 317 corporations in the U.S. including banks and insuranc See H URST infra note 308 at 17. 329 see also Mujica v. Occidental Petroleum Corp. 381 F. Supp. 2d 1134, 1174 ( 330 Sosa v. Alvarez Machain, 542 U.S. 692, 716 (2004).
102 ha m stru 331 Noting the lack of corporations in existence at the time the ATS was drafted, the evident, however, is that the development of the juridical person in American law and corresponding jurisprudence provides the general principles of international law which ought to guide a determination of whether corporations are permissible entities under the ATS for the purposes of liability for human rights violations. The Statutory Elements Under the plain meaning of the ATS, there must be e ither a violation of the law of nations or a violation of a treaty of the United States. 332 These are redundant because a treaty is one of the sources of the law of nations. 333 Additionally, under the ATS, three basic requirements must be met: (1) the claimant must be an alien (2) the claim must be for a tort, and (3) the claim must allege a breach of the law of nations. 334 Generally, in litigation under ATS, the first element and 331 Sosa v. Alvarez Machain, 542 U.S. 692, 716 (2004) (quoting J. Madison, Jou r nal of the Constitutional Convention 60 (E. Scott ed. 1893) (internal citation omitted)). 332 See B ETH S TEPHENS et al I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS 215 227 (2008) ( discussing a violation of a treaty of the United States and noting that ATS jurisprudence relies almost exclusively on the law o f nations prong). 333 See S ARAH J OSEPH C ORPORATIONS AND H UMAN R IGHTS L ITIGATION 53 54 (2004) (noting that the alternative to a violation of the law of nations, a violation of a treaty of the United States, has remained redundant since enactment); see also A rt. 38(1)(a), ICJ Statute. 334 ee Tel Oren v. Libyan Arab Republic enacted); s ee also Sosa v. Alvarez Machain, universally agreed princip les such as rights of a countries ambassador, rules of safe conduct, war prize law, and law has developed since the eighteenth century, courts still examine the law of nations within this paradigm and Commentaries Compare Sosa at 716 quoting Blackst one; and Kadic v. Karadzic 70 F.3d 232 (2d Cir. 1995) (discussing the rights of non state actors and considering a dismissal for lack of subject
103 second element are easily met, and not subject to much controversy under the ordina ry meaning significant difficulties in application by United States courts. 335 Conceptual Problems The primary conceptual problem presented by the ATS, is that the traditional states only conception of international law believed that international law exclusively regulates so called public law. In contrast, private law or the law of torts is aimed at regulating private actor conduct. Notably, the ATS combines bo th public and private law. This mix results in tension for judicial application of tort law, generally governing private actor conduct, and public international law. The dual nature of the ATS provides courts with the ability to regulate private conduct w ith the rules of the public order. Consequently, the ATS regulates private conduct under public international legal norms. The ATS, by requiring not only a violation of the law of nations, but also a tort, combines both the public and private sphere becau se it not only incorporates public international law by reference, but equally forms a part of federal tort law. 336 Constitutionality and the Federal Common Law Academics and jurists alike have gone as far as questioning the constitutionality of the ATS. 337 S ince the Supreme Court in Sosa held that the ATS is merely jurisdictional, it is reasonable to infer that Art. III of the United States Constitution provides a basis for the ATS. 338 335 K OEBELE at 4. See, e.g., 336 K OEBELE at 322. 337 See generally William S. Dodge, The Constitutionality of the A lien Tort Statute: Some Observations on the Text and Content 42 V A J. I NT L L. 687 (2002); see also U.S. Const. art. I, § 8 cl. 10, which vest the legislative power to define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations 338 See P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 26 (2009). B ut see Curtis A. Bradley, The Alien Tort Statute and Article III 42 V A J. I NT L L 587, 597 (2002) (concluding that the drafters of the United
104 Additionally, in early ATS litigation prior to Sosa commentators believed t hat the ATS created a federal tort action for violations of international law. In Sosa the Court explained that the ATS modest number of international law violat 339 This is complicated by the hybrid nature of the ATS. Since the ATS requires the application of both international law and the federal common law of torts, courts must examine and arguably al common law. 340 International l aw as United States l aw Legal practitioners in the United States have a tendency to view the domestic legal system as an isolated system, free from outside interference and influence. In reality, the interplay of internatio nal law and foreign law are often at issue in United States Courts. 341 and administered by the courts of justice of appropriate jurisdiction, as often as questio ns of right 342 Although it is generally accepted that customary international law is the law of the land, there is an increasing vocal minority that argue federal courts are prohibited from apply ing customary international law jurisdiction over claims arising under the law of nations). 339 542 U.S. at 724. 340 See Curtis A. Bradley & Jack L. Goldsmith, Customary International Law as Federal Common Law: A Critique of the Modern Position 110 H ARV L. R EV 815 (1997); see also Curtis A. Bradley & Jack L. Goldsmith, Federal Courts and the Incorporation of Internationa l Law 111 H ARV L. R EV 2260 (1998). 341 Compare Bradley & Goldsmith, Customary International Law as Federal Common Law at 853 54 (rejecting federal or state law as precluded by Erie ), with Ernest A. Young, Sorting Out the Debate Over Customary International Law 42 V A J. I NT L L. 365 (2002) (arguing for this possibility that federal courts could treat the law of Erie ). 342 The Paquete Habana 175 U.S. 677, 700 (1900).
105 because these norms are part of the so called federal common law which courts may no longer discover. 343 This further complicates jurisdictional matters in the United States. Application of the ATS in Human Rights Litigation Since Filartiga v. Pea Irala courts have allowed ATS suits against government officials, both past and present members of armed forces, heads of state and corporations. Twenty years after the Second Court of Appeals decided Filartiga however, it recentl y held federal courts lack subject matter jurisdiction to hold corporations accountable for violations of international law under the ATS. 344 Related to Filartiga the significance of the United States Second Circuit decision in Kiobel v. Royal Dutch Petrole um Co. cannot be overlooked or understated. 345 First, twenty years prior to Kiobel the Second Circuit ushered in the modern era of ATS litigation with Filartiga. Second, between the fifty page opinion of Judge Cabranes, who was joined by Judge Jacobs, and t he eighty eight page separate opinion of Judge Leval, the opinion in Kiobel has already and will continue to influence human rights litigation in United States courts under the ATS. 346 Third, the Second Circuit decision in Kiobel presents a clearly articulat ed perspective of international law divided among ideological lines that will likely 343 See The Paquete Habana 175 U.S. 677, 700 (1900) (noting international law is part of the federal common law). B ut see Erie v Tompkins 304 U.S. 64 (1938) (held that there is no general federal common law). 344 See, e.g., Abdullahi v. Pfizer, Inc ., 562 F.3d 163 (2d Cir. 2009) (holding corporate defendant liable for engaging in non consensual medical experimentation on human subjects in viola tion of law of nations), cert. denied 78 U.S.L.W. 3049; Sinaltrainal v. Coca Cola Co., 578 F.3d 1252, 1263 (11th Cir. 2009) (holding corporate defendants are subject to liability under the ATS and may be liable for violations of the law of nations); Romer o v. Drummond Co., Inc ., 552 F.3d 1303, 1315 (11th Cir. 2008) (finding that the ATS provides no express exception for corporations); but see Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 114 115 (2d Cir. 2010) (holding that corporate defendants are no t liable under the ATS). 345 621 F.3d 111 (2d Cir. 2010). 346 See United States v. Hasan 2010 U.S. Dist. LEXIS 115746, 2010 A.M.C. 2705 (E.D. Va. 2010) (following Kiobel ); Flomo v. Firestone Natural Rubber Co ., 2010 U.S. Dist. LEXIS 108068 (S.D. Ind. Oct. 5 2010) (citing, following, and explaining Kiobel ); Viera v. Eli Lilly & Co. 2010 U.S. Dist. LEXIS 103761 (S.D. Ind. Sept. 30, 2010) (following Kiobel ).
106 influence other judges and provide support for either perspective 347 Lastly, the legal divide in ime in on the debate and provide further guidance about the ATS. 348 Filartiga v. Pea Irala (1980) Although human rights litigation under the ATS is not a subject exclusive to Latin American Studies, modern human rights litigation in United States courts und er the ATS began from a dispute arising in Paraguay. 349 Dr. Joel Filartiga and his daughter Dolly, both citizens of Paraguay, brought an action relying on ATS jurisdiction against Mr. Pea Irala, for torturing and Irala was inspector general of the Asuncin police department. 350 an extension of human rights protections and such an act of brutality committed by an individual illegally li ving in the United States presented the issues in a clear and dramatic manner. 351 Nevertheless, the district court dismissed the complaint for lack of subject matter jurisdiction. 352 In 1980, in Filartiga v. Pea Irala the United States Second Court of Appea ls the same court which also recently decided Kiobel reversed and held that: deliberate torture perpetrated under color of official authority violates universally accepted norms of the international law of human rights, regardless of the nationality of t he parties. Thus, whenever an alleged torturer is found and served with process by an alien within our borders, § 1350 provides federal jurisdiction. 347 621 F.3d 111 (2d Cir. 2010). 348 Id. at 123. 349 Filartiga v. Pea Irala 630 F.2d 876, 878 (2d Cir. 198 0). 350 Id 351 S TEPHENS et. al at 8. 352 Filartiga at 879.
107 Accordingly, we reverse the judgment of the district court dismissing the complaint for want of federal j urisdiction. 353 Importantly, to reach this conclusion, the court resolved many issues arising under the ATS: the Second Circuit noted the evolving nature of international law and threshold jurisdictional issues which in its decision placed no limitation to the ultimate reach of the ATS. Such lack of limitation is of particular importance to the issue of whether courts today have subject matter jurisdiction over corporations under the ATS. In Filartiga the Second Court of Appeals refused to draw a distinctio n between a foreign national (alien) and a citizen for application of customary international law. 354 Thus, the court human rights that universally exist. Here, the court underscored an approach to interpreting customary international law as it exists today rather than at the time of the enactment of the ATS. evolved and ex 355 It characterized customary international law as a fluid concept, thereby alluding to an expanded use going forward. Despite Kiobel holding that corporations are not appro priate defendants under the ATS, the Filartiga legacy will continue because the ATS remains an effective mechanism to hold private individuals accountable for violations of international law. 356 353 Id. at 878 354 Id 355 See Ware v. Hylton law of nations). 356 See generally Filartiga v. Pea Irala 630 F.2d 876 878 (2d Cir. 1980); compare with Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111, 114 115 (2d Cir. 2010). B ut see Kadic v. Karadzic 70 F.3d 232 (2d Cir. 1995)
108 Doe v. Unocal (2003) Filartig a to hold individuals liable for human rights violations, the ATS expanded to hold corporate actors liable for human rights violations. 357 Doe v. U noca l Corp. provided the initial legal basis to hold corporate defendants liable for violations of internation al law under the ATS 358 In Unocal Burmese citizens alleged in a class action that Unocal was liable for human rights violations committed by the Burmese military in conjunction with an enterprise venture to build a pipeline in Burma. 359 The ruling regime of Burma committed numerous human rights violations. 360 In Unocal the Burmese military was alleged to to construct a gas pipeline. 361 engaging in business relations with a government entity with a long and documented history of human rights abuses was liable for the violations of international law committed in furtherance of the pipeline project whic h could be imputed to the defendants on various theories of liability. 362 In addition to the ATS, the plaintiffs in the class action based their case on Torture 357 See P ETER H ENNER H UMAN R IGHTS AND THE A LIEN T ORT S TATUTE 437 (2009) (noting three wave of human rights litigation in United States courts under the ATS) 358 Doe v. Unocal Corp ., 963 F. Supp. 880 (C.D. Cal. 1997) (concluding that a private party, a corporation, may be subject to suit under the ATS without any showing of state action), 395 F.3d 932 (9 th Cir. 2002), vacated 395 F.3d 978 (9 th Cir. 2003); compare with Presbyterian Church and In re Agent Orange Prod. Liab. Litig ., 373 F. Supp. 2d 7, 56 (E.D.N. Y. 2005). 359 Burma is officially called Myanmar. 360 Id 361 Id 362 To establish liability the plaintiffs relied upon various theories including but not limited to joint venture, vicarious liability in their efforts to hold Unocal jointly and severally liable f or the actions of the Burmese military in conjunction with the project. Unocal at 947 n.20.
109 Victim Protection Act (TVPA). 363 At the close of the saga, the parties settled out of court for an undisclosed sum and the case against Unocal was vacated. 364 One commentator noted that this case implicates problems of attribution of jurisdiction in cases involving multinational corporations and simultaneously illustrates the effectiveness of entity law s hielding overseas multinational corporate group affiliates from jurisdiction. 365 Sosa v. Alvarez Machain (2004) At a time of judicial uncertainty, many lower courts where looking for guidance by a higher judicial authority. Finally, in 2004, the Supreme Cou rt in the only case, so far, where the Court has enunciated interpretations of the ATS, the Court explicitly labeled both the recognized the possibility of corporate l iability under the ATS. 366 The Supreme Court apparently assumes that the ATS, although incorporating international law, is still governed by and forms part of the domestic law of torts which applies equally to natural and legal persons, unless of course the statute provides otherwise. 367 The Supreme Court in Sosa v. Alvarez Machain resolved several lingering issues under the ATS providing some guidance to the open question of whether corporations can be held liable for overseas human rights violations. 368 Unfortu nately, the standard under which 363 256, 106 Stat. 73 (codified at 28 U.S.C. § 1350 note) (unlike the ATS, the TVPA explicitly exempts corporations, contains a ten year statute of limitations, and an exhaustion of remedies requirement) [herein TVPA]. 364 The precise terms of the settlement are undisclosed, but some estimate that the Unocal case settled for $30 million. See A Milestone for Human Rights B USINESS W EEK Jan. 24, 2005. 365 Phillip I. Blumberg, Asserting Human Rights Under United States Law: Conceptual and Procedural Problems 50 A M J. C OMP L. 493, 500 (2002). 366 Sosa 542 U.S. at 733 n.20 (citation omitted). 367 KIOBELE at 208. 368 Sosa v. Alvarez Machain, 542 U.S. 692 (2004) [herein Sosa ].
110 corporations could be held liable was not at issue in Sosa. 369 Yet, in one footnote the Supreme consideration is whether inte r n ational law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or 370 Sosa while nomi nally concerned with the liability of non state actors, supports the broader principle that the scope of 371 In Kiobel the court n t ernational law to determine both whether certain conduct leads to ATS liability and whether the scope of liability under the ATS 372 Finally in 2004, the Supreme Court, agreeing with the Second Court of Appeals reasoning in Filartiga emphasized that according to the plain language of the ATS, the statute is only jurisdictional. 373 Prior to Sosa United States courts were uncertain whether an independent cause of action was required for actionable claims or whether an indepe ndent cause of action was required to proceed under the ATS. 374 Sosa provided some 369 Sosa clearly preserved the private right of action for tortuous violations of international law in United States Courts. See generally Brad R. Roth, Sosa v. Alvarez Machain; United States v. Alvarez Machain, 98 A.S.I.L. 798 (2004). 370 Sosa 542 U.S. at 733 n.20 (citation omitted). 371 Presbyterian Church of Sudan v. Talisman Energy, Inc. 582 F.3d 244, 258 (2d Cir. 2009). 372 Kiobel at 128. 373 Sosa at 712. Justice Breyer, concurring in part and concurring in the judgment, expressed the view that an additional consideration for recognizing, under the ATS, a norm of international law ought to be to ask whether the exercise of jurisdiction would be consistent with those notions of comity that led each nation to respect the sovereign rights of other nations by limiting the reach of the nation's own laws and their enforcement. Sosa at 720. 374 Sosa at 712.
111 guidance by articulating a two step analytical inquiry to determine whether there is an actionable claim under the ATS. 375 Under the Sosa test, the first step of this analytical inquiry is whether federal courts have subject matter jurisdiction. 376 Federal subject matter jurisdiction is only satisfied if all three of the following statutory conditions are met: first, an alien must sue; second, it must be for a tort; and third, the complaint must allege an actionable violation of the law of nations. 377 If these three conditions are met, courts then turn their inquiry to the second step to determine whether a common law cause of action should be creat ed. The Supreme Court in Sosa explicitly limited the types of actionable offenses to those that they believe the drafters intended to fall under the 378 Accordingly, actionable claims under the ATS by the civilized world and defined with specificity comparable to the features of the 18th century 379 As an initial obse rvatio n, the 18 th century framework is inconsistent with the plain meaning of the statute because the jurisdictional not be read and applied within the 18th ce Lastly, actionable ATS claims generally fall within two categories: those claims that may be brought only if state action is found and claims that may be brought without a showing of 375 Id. 376 Id. 377 Id. 378 Sosa v. Alvarez Machain, 542 U.S. 692 724 25 (2004). 379 Id
112 s tate action. 380 The subject of what precisely is actionable under the ATS is still a matter of great controversy, yet, the most troubling issue is still whether corporations are appropriate defendants under the ATS. 381 The Supreme Court in Sosa left the issue of corporate liability nearly unexamined. 382 Following Sosa the take away ought to have been a more narrow approach to the ATS by lower courts. 383 Yet, lower courts still proceeded with claims and allowed plaintiffs the opportunity to establish claims by perm itting large scale discovery which some have criticized as 384 Lower courts have, in fact, heightened the pleading requirements in ATS cases. 385 Notably, since Sosa was decided, the composition of the Supreme Cou rt has changed. 386 380 Id 381 See, e.g., Presbyterian Church of Sudan v. Talisman Energy, Inc ., 582 F.3d 244, 261 n. 12 (2d Cir. 2009). 382 r national law extends the scope of liability for a v iolation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or Sosa at 732 n. 20. 383 ead as having been enacted on the understanding that the common law would provide a cause of action for the modest Sosa at 724. 384 Kiobel v. Royal Dutch Petroleum C o. 621 F.3d 111 (2d Cir. 2010), petition for rehearing denied 2011 U.S. App. LEXIS 2200 (2d Cir. Feb. 4, 2011); see also Curtis A Bradley and Jack Goldsmith, Rights Cases Gone Wrong: A Ruling Imperils Firms and U.S. Diplomacy T HE W ASHINGTON P OST Apr. 19, 2009, available at http://www.washingtonpost.com/wp dyn/content/article/2009/04/17/AR2009041702859.html. 385 Sarei v. Rio Tinto, PLC 487 F.3d 1193 (9th Cir. 2007) (concluding that non frivolous claims against a corporation for vicarious liability for vi olations of jus cogens norms were sufficient to warrant exercise of federal jurisdiction under the ATS), vacated in part on other grounds 550 F.3d 822 (9th Cir. 2008); Sinaltrainal v. Coca Cola Co., 578 F.3d 1252, 1263 (11th Cir. 2009) (applying a heighte ned pleading standard); Presbyterian Church of Sudan v. Talisman Energy, Inc ., 582 F.3d 244, 259 (2d Cir. 2009) (holding that liability under the ATS for aiding and abetting violations of international human rights and ruling that corporate liability lies only where the aider and abettor acts with a purpose to bring about the abuse of human rights). 386 Since the 2004 decision in Sosa the composition of the United States Supreme Court has changed significantly. In 2005, Chief Justice Rehnquist was replaced replaced by Justice Alito. In 2009, Justice Souter was replaced by Justice Sotomayor. Lastly, in 2010, Justice Stevens was replaced by Justice Kagan. These changes will undoubtedly affect any a ttempt to revisit unresolved issues.
113 Suing Corporations U nder the ATS The ATS does not identify nor limit who is a proper defendant under the plain text of the statute, but international and domestic practice shows that individuals and other entities beyond nation states ar e subject to international rights and duties. Following broadening of the ATS to include corporate actors as permissible defendants; legal practitioners and human rights organizations developed a tool to hold large multinational corporations accou ntable for human rights violations. 387 A Nightmare Scenario Following the broadening of the ATS to include corporate actors as permissible defendants, some authors predicted that the use of the ATS would have profound consequences for the world economy and in particular curtail international trade and investment in the United States. 388 For instance, it was predicted that by 2013, hundreds of thousands of Chinese plaintiffs would sue multinational corporations such as General Electric, Ford, General Motors, T oyota, Motorola, or Nokia in United States Courts under the ATS. 389 Undoubtedly, this nightmare scenario failed to materialize By contrast courts have heightened the pleading standards and recently narrowed the application of the ATS to excluded corporate liability In the failed to materialize. Moreover, the standard for imposing accessorial corporate liability that developed following Unocal show that the defendant provided substantial assistan ce with the purpose of facilitating the 387 See e.g ., Wiwa v. Royal Dutch Petroleum Co ., 226 F.3d 88 (2d Cir. 2000) ; Aguinda v. Texaco, Inc. 303 F.3d 470 (2d Cir. 2002) 388 G ARY C LYDE H UFBAUER & N ICHOLAS K. M ITROKOSTAS A WAKENING M ONSTER : THE A LIEN T ORT S TA TUTE OF 1789, 1 (2003) (predicting that the expansion of ATS jurisprudence to hold multinational corporations liable for collusion with unsavory states practices outside of the United States would bring trade and international investment in the United Stat es to a halt). 389 Id.
114 390 In short, judicial restraint in accordance with the jurisdictional grant of the themselves temper ed further application of the ATS beyond direct or purposeful participation with governmental human rights abuses. From Unocal through Presbyterian Church v. Sudan the defense of lack of legal personality for corporate liability under the ATS had never been raised by corporation s. 391 Not until Presbyterian Church did courts even consider the issue of whether subjecting corporate actors to civil liability for a violation of international law under the ATS was proper. 392 In Presbyterian Church an international commentator noted that prior to the current wave of human rights litigation in American courts, no corporation has ever been charged with or convicted of a crime under international law. 393 Despite the fact that corporate defendants have often raised lack of personal jurisdiction as a defense in ATS cases none had raised lack of subject matter jurisdiction over corporations under international law. 394 In fact, in Presbyterian Church the court specifically noted that the question of corporate liability remains an open question in the Second Circuit. 395 In Presbyterian Church the court assumed without deciding a tions may be held liable for the violations of customary international law that 390 Presbyterian Church, 582 F.3d 244, 248 (2d Cir. 2009) 391 KIOBELE at 197 (indicating that because no decision in the current wave of ATS litigation against corporate defendants prior to Presbyterian Church, 582 F.3d 244 (2d Cir. 2009 ) raised the issue of legal personality it was clearly understood that courts implicitly recognized corporate liability under the ATS) 392 Presbyterian Church, 582 F.3d 244 (2d Cir. 2009). 393 In Presbyterian Church without deciding, that corpor a tions may be Id at 263 n. 12. 394 B ETH S TEPHENS J UDITH C HOMSKY J ENNIFER G REEN P AUL H OFFMAN & M ICHAEL R ATNER I NTERNATIONAL H UMAN R IGHT S L ITIGATION IN U.S. C OURTS 249 51 (2008). 395 Presbyterian Church of Sudan v. Talisman Energy, Inc ., 582 F.3d 244, 261 n. 12 (2d Cir. 2009).
115 396 that the 397 But the Second Circuit seemingly answered the question in its groundbreaking decision in Kiobel Often cases against multinational corporations under the ATS arise in the context of mineral and gas operations. 398 In one continuing saga still percolating in United States and Foreign courts, Texaco is alleged to have polluted the rain forests and rivers of Ecuador and Peru during their oil exploration activities in the Andean region of South Amer ica. 399 In Aguinda v. Texaco, Inc. citizens of Ecuador and Peru brought an ATS action against a multinational oil and gas company alleging that between 1964 and 1992 Texaco improperly disposed of large 396 Id. 397 See Kiobel at 117 n 10; citing Khulumani 504 F.3d at 282 83 (Katzmann, J., concurring) (noting that, becaus e defendants did not raise the i s sue, the Court need not reach the question of corporate liability); id at 321 25 (Korman, J., concurring in part and dissenting in part) (expressing the view that corporations cannot be held liable under the ATS); Brief of the United States as Amicus Curiae in Opposition to the Petition for a Writ of Certiorari 9 n.2, Pfizer Inc. v. Abdu l lahi No. 09 case to consider whether suits under the ATS can was not a d (internal quotation marks omitted)). And at least one district court in ano ther circuit has recently held that there is no corporate liability under the ATS. Doe v. Nestle No. CV 05 5133, 2010 U.S. Dist. LEXIS 98991 at 191 203 (C.D. 398 See, e.g., Kiobel v. Royal Dutch Petroleum 621 F.3d 111 (2d Cir. 2010) ( oil and gas multinational; largest energy company, and second largest company in the world measured by revenue); Mujica v. Occidental Petroleum Corp. 381 F. Supp. 2d 1134 (C.D. Cal. 2005); 564 F.3d 1190 (9 th Cir. 2009) (Texas based American oil and gas ex America); Presbyterian Church of Sudan v. Talisman Energy, Inc. 244 F. Supp. 2d 289 (S.D.N.Y. 2003); 582 F.3d 244 (2d Cir. 2009) (Canadian mult inational petroleum company with operations around the world); Romero v. Drummond Co., Inc ., 552 F.3d 1303, 1315 (11th Cir. 2008) (Alabama based American mining company); Sarei v. Rio Tinto, PLC 487 F.3d 1193 (9th Cir. 2007), vacated in part 550 F.3d 822 (9th Cir. 2008) (en banc) (British American multinational mining group); Bowoto v. Chevron Corp ., 557 F. Supp. 2d 1080 (N.D. Cal. 2008) (California based American multinational energy company); Flores v. S. Peru Copper Corp. 406 F.3d 65 (2d Cir. 2003) (m ultinational mining company with operations in Mexico and Peru, subsidiary of Mexican mining conglomerate Grupo Mexico); Wiwa v. Royal Dutch Petroleum Co ., 226 F.3d 88 (2d Cir. 2000) (global oil and gas company). 399 See Aguinda v. Texaco, Inc. 303 F.3d 470 (2d Cir. 2002) (action for environmental harm dismissed on forum non conveniens grounds); see also Jota v. Texaco Inc., 157 F.3d 153 (2d Cir. 1998).
116 quantities of toxic byproducts of the drilling process into the local eco system. 400 The citizens alleged that despite the prevailing industry standards of pumping these byproducts back into the well, Texaco dumped these hazardous products into the environment which caused the citizens of Ecuador and Peru variou s physical injuries, including precancerous growths. 401 These Ecuadorian and Peruvian citizens sought monetary damages under theories of negligence, public and private nuisance, strict liability, and various other actionable violations under the ATS. 402 A lthough it is still an open question whether environmental harm is actionable under the ATS, Aguinda v. Texaco massive industrial undertaking extending over a substantial period of time and with major 403 Ultimately the court dismissed the claim against Texaco on the grounds of a more adequate and available forum and the case to proceeded in Ecuadorian Courts. 404 On February 14, 2011, an Ecuadorian court ruled that Chevron (si nce merged with Texaco) was responsible for widespread environmental harm in the Ecuadorian rainforest, and fined Chevron eight billion dollars. No sooner had the judge ruled, than Chevron noted it would 400 Aguinda v. Texaco, Inc. plaintiffs brief at 4. 401 Id 402 Id 403 Aguinda v. Texaco, Inc ., 303 F.3d 470 (2 d Cir. 2002) (dismis s ing ATS case against corporate defendant on forum non conveniens grounds, because courts of Ecuador pr o vided adequate alternative forum); see also Jota v. Texaco Inc., 157 F.3d 153 (2d Cir. 1998) (vacating district court's dismissal o f ATS case against corporation on forum non conveniens grounds and remanding for further proceedings); compare with Flores v. S. Peru Copper Corp. 343 ntly definite to Beanal v. Freeport McMoran, Inc 197 F.3d 161, 166 67 (5th refer to a ge but see Gabcikovo Nagymaros Case (Hung. v. Slov.), 1997 (ICJ recognized the theoretical existence of such an environmental right of action based upon international law in the context of large scale environment al injury). 404 Aguinda v. Texaco, Inc ., 303 F.3d 470 (2d Cir. 2002); see also Jota v. Texaco Inc., 157 F.3d 153 (2d Cir. 1998).
117 405 Prior to the Ecuadorian ruling, Chevron sought and received a temporary order halting enforcement of an anticipated judgment in favor of 30,000 people affected by the pollution, including farmers and indigenous groups. 406 Even t hough United States District Judge Lewis Kaplan issued a temporary order halting enforcement of any award, he refused to extend it beyond March 8 when the order was set to expire, requiring attorneys in the long standing saga to do more research into Ecuad orian law prior to him ruling whether the judgment is enforceable. 407 This case represents an eighteen year struggle to resolve this dispute. Arguably the dismissal of the ATS action on the FNC grounds coupled with a refusal by United States courts to enfor ce a foreign judgment may rise to a denial of justice under international law. Often, multinational corporate activity occurs in developing nations like Ecuador, where corporate economic and political power exceed that of the host nation. 408 Today, Chevron is one of the largest economic entities in the world. When Texaco was operating in Ecuador, its annual Ecuador, Texaco operated with the active support of the Unit ed States government. 409 This multinational corporations within a states only conception of international legal personality. 405 NPR, Attorney: Ecuador Court Fines Chevron $8 Billion (Mon., Feb. 14 th 2011) available at http://www.npr.org/2011/02/14/1337 54813/attorney ecuador court fines chevron 8 billion; see generally Martin Kaste, Chevron Texaco Sued in Ecuador All Things Considered, NPR (Oct. 24, 2003). There is an American documentary film, Crude (2009) that follows the progress of the case against Chevron between 2006 and 2007. See C RUDE (Entendre Films 2009). 406 Grant McCool and Basil Katz, U.S. judge delays decision in Chevron Ecuador case, Reuters (Fri. Feb. 18, 2011), available at http://www.reuters.com/article/2011/02/18/us chevron ecuador idU STRE71H4R520110218. 407 Id. 408 Chris Jochnick, Confronting the Impunity of Non State Actors: New Field for the Promotion of Human Rights 21 H UM R TS Q. 56, 65 (1999) 409 Id. at 58.
118 Unfortunately though, most of the existing scho larship in international human rights is framed within the international legal personality of the state and individual ( i.e. natural persons) rather than the corporation ( i.e., juridical persons) and its enterprise activity. In particular, scholars and Un ited States courts fixate upon international corporate criminal liability without recognizing the nuances of civil liability in international law. 410 In this chapter, I will examine prevailing jurisdictional notions of corporate personality and the rights a nd duties that flow from legal personhood. Multinational Corporate Liability Under the ATS Particularized issues arise under the ATS when alleged human rights violations are against large MNEs. The complexity of the modern structures of corporate entities and enterprises constitute corporations consolidating efforts into a single entity enterprise have woven a complex web of parent subsidiary relationships spanning the entire globe. 411 In U.S. law and under entity law generally, the rules are directed at each constituent entity and treat each as a T each entity possess ing its own legal rights and duties The dual identity of the corporate actor will likely remain separate and the corporate identity will remain distinct from the shareholders identity 412 410 Leval noting no concept of international civil liability even, in the cont ext of criminal conduct. Kiobel 411 Kiobel 412 Even though the parent and its subsidiaries are treated alike, each is typically liable for conduct attributable to their particularized officers, directors, and employees. Often, though, courts will employ doctr ines of equity to impute liability throughout the complex corporate structure of MNEs.
119 Determining Who to Sue Nationality is an essential condition of jur isdiction. 413 As the corporate entity rose to dominance through a process of globalization, determining corporate nationality has become increasingly complex. The structure of MNEs further complicates the filing of a suit under the ATS. Plaintiffs seeking re dress under the ATS are confronted and often frustrated by threshold issues, such as determining precisely which corporate entity to sue. As already noted, MNEs operate in a complex network of parent, subsidiary, and affiliate relationships among a variety of undertake a specific project. That entity, under normal circumstances would be the obvious defendant; however, plaintiffs often implead the parent company. 414 As a result, nearly all ATS cases filed against a corporation name parent companies or other group entities. 415 In light of the ATS is growing increasingly c omplex. Personal Jurisdiction Several notable cases arising under the ATS raised lack of personal jurisdiction. 416 To complicate an already complicated endeavor, United States courts must distinguish between specific and general jurisdiction. 417 In Unocal the court applied a three part test to determine 413 See Hersch Lauterpacht, The Subjects of the Law of Nations in I NTERNATIONAL L EGAL P ERSONALITY 175 (Fleur Johns ed., 2010). 414 K OEBELE at 305 (2009). 415 Id 416 See, e. g. ; Doe v. Unocal Corp ., 963 F. Supp. 880 (C.D. Cal. 1997), 395 F.3d 932 (9 th Cir. 2002), vacated 395 F.3d 978 (9 th Cir. 2003).For a detailed examination of personal jurisdiction under the ATS see K OEBELE at 305 22 (2009). S ee also S TEPHENS et al. I NTERNATIONAL H UMAN R IGHTS L ITIGATION IN U.S. C OURTS at 249 51 (2008). 417 Helicopteros Nacionales de Colombia S.A. v. Hall 466 U.S. 408, 414 (1984).
120 personal jurisdiction of Total SA. 418 The court concluded there was no specific personal jurisdiction over the MNE. 419 In fact, more often than not, actions against foreign corporations brought under the ATS fail f or lack of personal jurisdiction. 420 In order to establish jurisdiction over foreign parent corporations and hold them liable for extraterritorial violations under the ATS courts must find sufficient minimum contacts to the forum state. 421 The three part test requires: (1) purposeful availment, which requires that the defendant must have performed whether claims arise out of the forum related actions; and (3) reasonableness of the courts exercise of jurisdiction. 422 Alternatively, some courts have more lenient standards for establishing jurisdiction over foreign parent corporat ions. For example, courts have asserted jurisdiction over foreign parent companies under a theory of agency. 423 Forum Non Conveniens One problem arising under ATS litigation is that government defendants are often privilege to numerous defenses to liability thus the only potent ial defendant remaining are often corporations. However, corporations have available defenses to liability under the ATS. For instance, e ven if United States courts have personal jurisdiction over a corporate defendant in an ATS proce eding, the court may still exercise its discretionary power to dismiss the claim for a 418 Unocal at 922. 419 Unocal at 925. 420 Id. 421 K OEBELE at 322. 422 K OEBELE at 309 11. 423 See, e.g.,Wiwa v. Royal Dutch Petroleum Co. 226 F.3d 88 (2d Cir. 2000).
121 more appropriate forum under the doctrine of Forum Non Conveniens (FNC). 424 The discretionary doctrine of FNC is well rooted in United States common law legal tradition; h owever, the doctrine is without a parallel in the civil law tradition. 425 FNC has been invoked under the ATS with mixed results. 426 Confronted with a FNC motion, courts must conduct several different analyses because cases arising under the ATS can raise non j usticability grounds such as comity issues, the political question doctrine, and acts of state doctrine. 427 Generally, courts will not dismiss a claim on FNC grounds unless there is an available alternative forum. 428 Of course the moving party bears the burden of proof to show the availability of alternative fora. 429 To determine the alternate fora availability, courts consider several factors such as the statute of limitations, the integrity of the foreign court and operational efficiency. 430 424 FNC is a discretionary ground for declining jurisdictional and in the United States FNC governed by a specific statutory provision. See more appropriate place to hear the matter. FNC is distinct from an exhaustion of remedies requirement generally required under international law. See, e.g. Interhandel Case (Switzerland v. U.S.), I.C.J. Rep. 1959. 425 Alejandro M. Garro, Title 35 U. M IAM I I NTER A M L. R EV 65 (2003 04) (noting that in civil law systems courts jurisdiction). 426 See Aguinda v. Texaco, Inc ., 303 F.3d 470 (2d Cir. 2002) (dismis s ing ATS case against corporate defendant on FNC grounds, because courts of Ecuador pr o vided adequate alternative forum); Jota v. Texaco Inc., 157 F.3d 153 (2d Cir. 1998) (vacating district court's dismissal of ATS case against corporati on on forum non conveniens grounds and remanding for further proceedings); compare with Wiwa v. Royal Dutch Petroleum Co ., 226 F.3d 88 (2d Cir. 2000) (failed to successfully invoke FNC). 427 See, e.g., Sarei v. Rio Tinto, PLC 487 F.3d 1193 (9th Cir. 2007), vacated in part 550 F.3d 822 (9th Cir. 2008) (en banc). 428 John F. Carella, Of Foreign Plaintiffs and Proper Fora: Forum Non Conveniens and ATCA Class Actions, U. C HI L EGAL F. 717 (2003). 429 See Kathryn L. Boyd, The Inconvenience of Victims: Abolishing Forum Non Conveniens in US Human Rights Litigation 39 V A J. I NT L L. 41 (1998); compare with Aric K. Short, Is the Alien Tort Statute Sacrosanct? Retaining Forum Non Conveniens in Human Rights Litigation 33 N.Y.U. J. I NT L L. & P OL 1001 (2001). 430 One p articularly common example is In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India (S.D.N.Y. 1986) where the district court rejected the notion that the India court system was incapable of handling the case arising from the catastrophic leakage a compare with Bhatnagar v. Surrendra Overseas, Ltd. the courts inadequate to support a dismissal on FNC grounds).
122 Even though there ma y be an alternative, adequate and available forum supporting a dismissal on FNC grounds, courts must consider whether convenience factors weigh in favor of the foreign forum. Courts have imported these convenience factors from domestic notions and transpos ed them into the analysis under international litigation. The Aftermath of Kiobel v. Royal Dutch Shell Co. and Beyond Kiobel regarding whether corporations may be sued under the ATS arguably signaled the fina l chapter in the short history of human rights litigation in United States courts under the ATS against corporate entities The court ruled concept of corporat 431 It is premature, however, to declare an end of history to human rights litigation under the ATS. The Immediate Impact Kiobe l will likely influence the courts in and beyond the United States Second Circuit. 432 Dozens of courts cite to Kiobel as good law and dozens more following the Kiobel and numerous cases in the District Courts of the Second Circuit have cited and followed Kiobel 433 Even though only 431 Kiobel at 149. 432 Although there was an initial wave of cases that cited and followed new rule that the ATS does not provide subject matter jurisdiction to hold corporations accountable, these case halted when an appeal was filed in Kiobel. Just as this thesis was nearing completion, the United States Court of Appeals for the Second Circuit denied a petition for rehearing in the same dramatic form in which it decided the case. 433 Kiobel has been cited by the following Second Circuit District Cour ts: Webb Payne v. Smith 2011 U.S. Dist. LEXIS 6404 (E.D.N.Y. Jan. 21, 2011); Norton Griffiths v. Wells Fargo Home Mortg. 2011 U.S. Dist. LEXIS 2348 (D. Vt. Jan. 7, 2011); Maynes v. Unkechaug Tribal Council 2011 U.S. Dist. LEXIS 1481 (E.D.N.Y. Jan. 5, 2011); Vallen v. Miraglia 2010 U.S. Dist. LEXIS 137977 (E.D.N.Y. Dec. 30, 2010); Velez v. Sanchez 2010 U.S. Dist. LEXIS 126586 (E.D.N.Y. Nov. 30, 2010). Kiobel has been followed by the following Second Circuit District Courts: Saadya Mastafa v. Chevron Corp. 2010 U.S. Dist. LEXIS 128509 (S.D.N.Y. Nov. 29, 2010); Mastafa v.
123 binding in the Second Circuit, many other courts beyond the Second Circuit are following and applying the new rule that corporate defendants are not subject to jurisdiction for violations of internationals law under the ATS. 434 The impact of the historic decision of Kiobel is felt in all layers of the United States judicial system. The effect is felt in state, federal and administrative proceedings. For example, a jointly administered U.S. Bankruptcy panel applied and followed Kiobel in January 2011 and found a lack of subject matter jurisdiction over corporate defendants. 435 In In re Motors Liquidation Co ., decid ed in 2011, Apartheid Claimants, residents of South Africa, filed a motion for class certification in their prepetition actions against the debtors, formerly General Motors Corporation, presently in chapter 11 proceedings, alleging that they were victims o f the infamous system of apartheid in South Africa and that the debtor aided and abetted the perpetrators of the apartheid system. 436 The debtors sought to disallow the claims. The court denied the Apartheid Claimants motion for class certification and disal lowed the claims for lack of subject matter jurisdiction. The panel, on the question of corporate liability, corporation charged with aiding and abetting the violatio ns of international law, may be found to Chevron Corp. 2010 U.S. Dist. LEXIS 140289 (S.D.N.Y. Nov. 22, 2010); Abreu v. Nassau County Corr. Dep't 2010 U.S. Dist. LEXIS 120388 (E.D.N.Y. Nov. 3, 2010). 434 United States v. Ha san 2010 U.S. Dist. LEXIS 115746, 2010 A.M.C. 2705 (E.D. Va. 2010) (4 th Circuit U.S. District Court following Kiobel); Flomo v. Firestone Natural Rubber Co ., 2010 U.S. Dist. LEXIS 108068 (S.D. Ind. Oct. 5, 2010) (7 th Circuit U.S. District Court citing following, and explaining Kiobel ); Viera v. Eli Lilly & Co. 2010 U.S. Dist. LEXIS 103761 (S.D. Ind. Sept. 30, 2010) (7 th Circuit U.S. District Court following Kiobel ). 435 See In re Motors Liquidation Co. 2011 Bankr. LEXIS 240 (Bankr. S.D.N.Y. Jan. 28, 2011) (at 48. 436 The lawsuits were brought by under the Alien Tort Statute, 28 U.S.C.S. § 1350. In re Motors Liquidation Co., 2011 Bankr LEXIS 240 (Bankr. S.D.N.Y. Jan. 28, 2011) at 48.
124 doctrine of stare decisis, Kiobel binding authority from the Circuit, holds 437 Even though bound to the decision in Kiobel, the panel disallowed the claims for lack of subject matter jurisdiction. 438 s vigorous dissent in Kiobel on the issue of amenability of a corporation to suit; second they noted that the issue had been raised sua sponte in Kiobel not having been briefed by any party; third, they pointed out that a petition for rehearing en banc in Kiobel had been filed, and is pending; and that another panel had failed to issue the very quick similar decision. 439 court in the Second Circuit 440 Appropriateness of Defendants Even though the number of ATS cases involving corporate defendants had significantly increased following Unocal other ATS cases involving individual defendants ( i.e. natural persons) are not affected by the decision. Although illogical considering that the treatment of individuals and corporations under international law is nearly identical ATS action may only Kiobel the Fil artiga type case will continue against individual human rights violators under both the ATS and TVPA. It should not be forgotten that the Supreme Court explicitly approved the Filartiga type case. 441 Second, it is 437 Id. 438 Id. 439 Id. 440 In re Motors Liquidation Co. 2011 Bankr. LEXI S 240 (Bankr. S.D.N.Y. Jan. 28, 2011) at 48. 441 Sosa.
125 not entirely clear whether international la w or the federal common law informs the jurisdictional grant of the ATS with respect to determining who may be an appropriate defendant. Possibly, as personal juri sdiction, including the type of entity against which a claim can be asserted, [while] international law would provide the substantive, conduct relating rules that apply to private 442 Scope of Liability: An Open Question One peculiarity contained i key question: Finally, and most importantly, Judge Leval incorrectly categorizes the scope of liability under customary international law -that is, who can be liable for violations of international law -as merely a question of remedy to be determined indepen dently by each state. As we explained above, the subjects of international law have always been defined by reference to international law itself. Judge Leval question of who ca n be liable for violations of international law. Although international law does (as Judge Leval explains) leave remedial questions to States, the liability of corporations for the actions of their employees or agents is not a question of remedy. Corporate liability imposes responsibility for the actions of a culpable individual on a wholly new defendant -the corporation. In the United States, corporate liability is determined by a body of rules determining which actions of an employee or agent are to be im puted to the corporation. In this important respect corporate liability is akin to accessorial liability, which is a subject of international law not left to individual States. 443 After all is said and done, one can only hope that a higher judicial authority weighs in on the debate and provides lower courts with flexibility and guidance to apply a modern law of nations. The fact of the matter is that international law provides for minimum standards that are generally 442 Chimene I. Keitner, Conceptualizing Complicity in Alien Tort Cases 60 H ASTINGS L.J. 61, 72 (2008). 443 Kiobel at 147 8 (citations omitted).
126 applicable to the States only. 444 Internatio nal law does not prevent States from raising its legal standards by holding corporations liable for their involvement in international wrongdoing, so notes, international law leaves individual liability largely to domestic law. 445 444 K OEBELE at 208 n.75. 445 Id .; see also Kiobel at 147 8. In 200 3, it was noted that it can not be excluded that early human rights litigation against corporations, as an embryonic emergence of a universal norm thereby constituting an emerging rule of international law beyond U.S. courts which will ultimately lead to r ecognition, at least partially, of international legal personality of the corporation. Andre Nollkaemper, Concurrence Between Individual Responsibility and State Responsibility 52 ICLQ 615, 617 (2003). The aforementioned statement also reflects the reason ing of the court in In re Agent Orange Product Liability Litigation 373 F. Supp. 2d 7, 57 (E.D.N.Y. 2005).
127 CHAPTER 7 CONCLUSION This conclusion will undertake two complementary objectives. First, the principal conclusions of the study will be highlighted on a chapter by chapter basis. S econd, additional final thoughts concerning corporate liability in and under inter national law will be addressed. This section will highlight the issue of corporate liability under the Alien Tort Statute (ATS) and then briefly conclude with final remarks r Kiobel v. Royal Dutch Petroleum Co L astly, alternative avenues of corporate liability will be address ed. Principal Conclusions The statements that follow will synthesize the most significant conclus ions of this study by highlighting the findings of each of the previous chapters. Chapter Two served five preliminary purposes. First, the chapter provided an overview of the United States Second Circuit Court of Appeals decision in Kiobel v. Royal Dutch P etroleum Co. 621 F.3d 111 (2d Cir. 2010). The first section of Chapter Two highlight ed the facts of the case, the procedural posture, and the courts conclusion and recognized that this particular case did not meet the requirements to proceed under the ATS Second, Chapter Two examine d the majority opinion in Kiobel and the two step analysis employed by the court to reach its decision that corporations are not liable for violations of the law of nations. Third, Chapter Two introduce d the con curring opinion of Judge Leval. Fourth, Chapter Two briefly analyze d ed an introductory assessment of court s ruling. Ultimately, this study found that the majority opinion in Kiobel employed a misguided approach to international law, bot h in theory and in practice that lead the majority to incorrectly determine that corporations are not subjects of international law and as a result corporate entitie s are not liable under the ATS.
128 Chapter Three provided the theoretical framework to this t hesis First, it introduced five theoretical conceptions of international legal personality that inform the debate surrounding the issue of whether a corporation may be held liable for violations of international law. Second, Chapter Three borrowed its the oretical approach from decision making theory which at its most basic level posits that problems of law, such as determining corporate personality for the purposes of liability under the ATS, are problems derived from the social process. Following the appr oach created by the New Haven School, th is theoretical model recognized that all actors have rights and duties determined by the international decision making process. Chapter Three emphasized that all actors, including corporations, are effective actors w ithin the international decision making process. Through this configurative analysis approach to examining corporate liability, this chapter examined the outcomes of the power process. T his theoretical model was employed because it accounts for the social reality of law and under this model all international actors are accounted for in and under the rule of law. Chapter Four and Chapter Five examined corporations in and under international law. Chapter Four examined the development of legal personality. Cha pter Five examined the traditional and contemporary sources of international law and this chapter provided the reader with an orientation to international law. Taken together, Chapter Four and Chapter Five provided a coherent assessment of the development of corporate legal personality for the purposes of corporate liability under the ATS. Lastly, Chapter Six examined human rights litigation in United States courts and described the development of corporate liability under the ATS. Chapter Six reviewed the complicated historical development of the ATS and briefly reflected on the waves of litigation under the ATS. This chapter found that the decision in Kiobel is inconsistent with the plain
129 meaning of the ATS Additionally, this study found that the decision in Kiobel conflicts with the history and purpose of the ATS. Next Chapter Six analyzed three specific cases. First, Chapter Six analyzed Filartiga v. Pea Irala 446 This chapter found that the decision in Kiobel is udence that ushered in the modern era of human rights litigation in United States courts under the ATS Second, Chapter Six analyzed Doe v. Unocal Corp 447 Even though this case settled out of court, Doe v. Unocal Corp provided a characterization of corpora te liability which served as the legal basis for future decisions holding corporations liable for violations of the law of nations under the ATS. Finally, C hapter Six analyzed Sosa v. Alvarez Machain, the only ruling from the United States Supreme Court pe rtaining to the ATS. 448 C hapter Six found that the decision in Kiobel is inconsistent with the Sosa In short, Kiobel significantly conflict s with ATS jurisprudence generally the decision misconstrued international law and the majority manufactured a rule of limited liability for corporate violations of human rights norms Additionally, this chapter found that the majority opinion in Kiobel mis understood and language in Sosa Finally, t his chapter conc luded that majority opinion in Kiobel 446 630 F.2d 876 (2d Cir. 1980). 447 110 F. Supp. 2d 1294 (C.D. Cal. 2000); 395 F.3d 932 (9th Cir. 2002); 395 F.3d 978 (9th Cir. 2003). 448 542 U.S. 692 ( 2004).
130 Rehearing Denied On February 4, 2011, The United States Court of Appeals for the Second Circuit denied a petition for rehearing in Kiobel v. Royal Dut ch Petroleum Co 449 The opinion denying rehearing in Kiobel further illustrates the divide among the three judges sitting on the court. Although Kiobel with Judge Jacobs signing on, Judge Jacobs chimed in and au 450 rehearing. 451 hig warrants further examination. Judge Jacobs, writing for the Second Circuit denying rehearing, noted that he previously Kiobel and he 452 At the same time, Judge Jacobs, by to some tests of reality a Kiobel 453 Ultimately, this study conclude d that uence a Kiobel decision 449 Kiobel v. Royal Dutch Petroleum Co. 621 F.3d 111 (2d Cir. 2010), petition for rehearing denied 2011 U.S. App. LEXIS 2200 (2d Cir. Feb. 4, 2011). 450 Id 451 Id at 12 (Leval dissenting in the denial of rehearing). 452 Id 453 Id. at 2.
131 Final Thoughts Regarding Corporate Liability In the absence of ATS liability for corporate actor violations of human rights skilled legal practitioners will likely find alternative avenues to hold i nternational actors accountable for human rights violations. One author argues that governments of industrialized nations may aid and abet corporate violations of human rights other directly or indirectly. 454 One key foreign relations priority of industria lized states is to assist and promote the interests of its nationals. 455 Often governments negotiate trade agreements and lobby against trade barriers on behalf of their corporate nationals. 456 One commentator points out a state does not intend to allow corp orations to act and other state in a way that violates human rights; nevertheless a state by its actions or omissions may facilitate or otherwise contribute to a situation in which such violations by corporations occur. 457 The growth of multinational enterp rises operating across national borders has raised questions about how international law regulates these entities. The complexity of nationality and legal uncertainty over corporate legal personality under international law has created a new form of limit ed liability for corporate actors. 458 Despite numerous sources of international law that indicate corporations should have direct liability for violations of international law there is currently no specific international human rights or humanitarian law that explicitly holds corporations directly liable internationally 454 Robert McCorque odale and Penelope Simons, Responsibility Beyond Borders: State Responsibility for Extraterritorial Violations by Corporations of International Human Rights Law in N ON S TATE A CTORS AND I NTERNATIONAL L AW 505 32 (Andrea Bianchi ed., 2009). 455 Id. 456 Id. 457 Id at 505 06. 458 Kiobel (Leval, concurring).
132 for such violations. 459 Many have argued that there is no human rights law regulating corporations because human rights law developed to protect individuals from the state and that corporations d o not need protection from an oppressive state. 460 However, I argue that the same rationale applied to the individual does indeed apply to the c orporation. Take for instance cases of expropriations often oppressive governments seize corporate property and deprive them of their investment In this situation corporations need protection. Clearly, states can oppress the rights of a fictional person. One international commentator argues that if corporations cannot be held accountable for human rights violati ons under international law, victims may seek to impute responsibility to the home state of the perpetrators nationality 461 The main point is that states have an international obligation to ensure that its corporate nationals behave responsibly abroad. Arg uably, the United States may even have an obligation erga omnes to provide a forum to redress violations of human rights committed abroad because of the numerous multinational corporations originating from its territory and in conjunction with the universa lity of human rights norm This thesis sought to develop an international framework of corporate accountability to ensure that no state avoids its duty to protect the international rights of the juridical person ( i.e. the corporation) and that states may enforce its international obligations owed to all members of the international community. 459 Many international commentators have suggested corporate liability for violations of international law. See e.g. Norms of the Responsibilities of Transnational Corporations and other Business Enterprises wit h Regard to Human Rights, (2003) UN Doc E/CN.4/Sub.2. 460 Id. 461 Robert McCorqueodale and Penelope Simons, Responsibility Beyond Borders: State Responsibility for Extraterritorial Violations by Corporations of International Human Rights Law in N ON S TATE A CTO RS AND I NTERNATIONAL L AW 507 (Andrea Bianchi ed., 2009).
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147 BIOGRAPHICAL SKETCH Jason F. Taylor is also a Juris Doctor candidate at the Levin Col lege of Law at the University of Florida The author holds a Bachelor of Arts in political science and a minor in Latin American and Caribbean studies from the College of Charleston located in historic Charleston, South Carolina s in Latin America n Studies began early during his undergraduate career. Jason traveled to Central America where he was an interim third grade teacher, studied experiences in Cent ral America directed him to select a minor in Latin American and Caribbean Studies while at the College of Charleston and later inspired his graduate studies A program in Havana, Cuba and studied Cuban government and society. Additionally, as a graduate student, Mr. Taylor studied j udicial r eform in Santiago, Chile and also received a field research grant to study corruption and judicial reform in Ecuador.