The Moment of Truth Has Come – US Supreme Court to Decide whether the Alien Tort Statute “Categorically Forecloses Corporate Liability”

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On 3 April 2017, the US Supreme Court granted certiorari in Jesner v Arab Bank, PLC. The issue to be decided is whether the Alien Tort Statute (ATS) “categorically forecloses corporate liability”. If the Supreme Court decides that the ATS does indeed categorically foreclose corporate liability, it will be the end of ATS-based business and human rights litigation in the United States. This is a big deal and a case that will no doubt be of great interest to human rights scholars and practitioners.

Those following business and human rights litigation in the United States will remember that the US Supreme Court granted certiorari on the same point before. This was in 2011 in the Kiobel et al v Royal Dutch Shell case. In 2010, the Court of Appeals for the Second Circuit had ruled that the Alien Tort Statute didn’t allow corporate liability. In February 2012, oral arguments were held before the Supreme Court on this point. However, unexpectedly, the Supreme Court later asked the parties to submit supplemental briefs addressing a different question, that of jurisdiction. In April 2013, the US Supreme Court held that following the presumption against the extraterritorial application of statutes, only in the rarest of circumstances will courts have jurisdiction, under the ATS, over matters which fall under the jurisdiction of another sovereign state. For the US federal courts to be able to exercise jurisdiction, the Court further noted, the case must “touch and concern the territory of the United States with sufficient force” (see my blog post on this).

As disappointing as the Kiobel decision was for the human rights community, there was at least one reason to rejoice: the principle that corporations can be sued under the Alien Tort Statute was intact. The Court refused to address the question directly but it is hard to reconcile the Kiobel decision with the idea that corporations cannot be sued at all under the Alien Tort Statute. By noting for example that “it would reach too far to say that mere corporate presence” in the United States is enough to subject a defendant to ATS liability, the Supreme Court implied that something more than corporate presence could subject corporate defendants to such liability. If it was the Court’s intention to reject corporate liability under the ATS altogether, why make this point?

Logically, therefore, the US Supreme Court should decide that the ATS does not categorically foreclose corporate liability; and the ATS should remain an important tool in the fight against corporate impunity for human rights violations. I hope I am right, as the opposite decision would be a serious blow to global business and human rights litigation.