Treaties as contracts: textualism, contract theory, and the interpretation of treaties.

• Author: Mahoney, Curtis J.

INTRODUCTION I. STATE OF THE DOCTRINE A. Treaty Interpretation in the Supreme Court B. The Theoretical Problem II. THE CASE FOR TEXTUALISM APPLIED TO TREATIES A. Originalism and Treaty Interpretation B. Public Choice Theory and the Structural Case for Textualism in Statutory Interpretation C. The Structural Argument Applied to Treaty Interpretation D. The Practical Application of Textualism to Treaty Interpretation III. A CONTRACT REGIME FOR TREATY INTERPRETATION A. Relational Contract Theory 1. Good Faith 2. Past Practice 3. Parol Evidence B. Assessing a Contract Regime in Treaty Interpretation CONCLUSION INTRODUCTION

The Supreme Court has long stated that treaties adopted under Article II of the Constitution are not acts of "legislation" but rather "contracts" between sovereign nations. (1) This contract analogy was most recently invoked by both the majority and the dissent in Olympic Airways v. Husain. (2) Increasingly, however, the Court's treaty jurisprudence has borne the mark of "new textualism." (3) Starting with his concurring opinion in United States v. Stuart, (4) Justice Scalia has vigorously argued that separation of powers and rule of law concerns dictate that the Court restrict its inquiry in treaty interpretation cases to the four corners of the agreement. Although the Court as a whole has not accepted all aspects of Scalia's argument--such as his aversion to the use of materials from Senate ratification debates (5)--textualism has become influential in treaty interpretation.

The coexistence of these two themes in treaty jurisprudence--textualist methodology and the notion that treaties are contracts--is problematic. Contracts are valid only to the extent that there is mutual assent by the contracting parties to a shared proposition. (6) The text of the contract document is important in determining the scope of the agreement, but it serves only as evidence of what the agreement is. In the legislative context, the text of a statute is the agreement. As a result of this divergence, the interpreter's tasks in the construction of contracts and statutes are fundamentally different. The interpreter in a contractual dispute is interested primarily in how the parties themselves would interpret the terms of the contract. An interpreter of statutes following a textualist methodology focuses on the meanings that neutral third parties ascribe to particular terms.

This Note will argue that between these two contending principles of treaty interpretation, the contract analogy should prevail. The strongest justifications for textualism in statutory interpretation--adherence to the Article I, Section 7 lawmaking process and greater legislative accountability-do not extend to the treaty context. Likewise, as a practical matter, it is harder to apply textualism to treaty interpretation because certain interpretive aids that textualists employ--linguistic canons and references to how given terms are used in the U.S. Code at large--are inappropriate guides to resolving ambiguities in treaties. The contract approach, by contrast, has strong grounding in the text, structure, and history of the Constitution. Further, contract theory could succeed where existing treaty doctrine fails, by providing a consistent, well-grounded framework for courts to use when resolving ambiguities in treaties.

Specifically, the courts should borrow from relational contract theory in developing new canons of treaty interpretation. Within this framework, contract formalism--textualism's private law cousin--would continue to play a role in treaty interpretation, particularly for treaties of limited scope that resemble one-time, discrete contracts in a commercial setting. However, a more flexible interpretive approach should apply to treaties that govern repeat interactions between parties over a long period of time. In the context of these "relational" treaties, the range of sources available to the interpreter would be much broader than that endorsed by textualists in the statutory context, and over time this approach could both reduce the costs of treaty negotiation and encourage foreign parties to assent to dispute resolution by U.S. courts.

1. STATE OF THE DOCTRINE

   With the nation's treaty commitments proliferating (7) and foreign affairs cases constituting a growing share of the Supreme Court's docket, (8) it is surprising how undertheorized the field of treaty interpretation remains. The Court has developed well-worn interpretive canons in statutory cases that implicate the international obligations of the United States, (9) but the rules for interpreting the treaties that give rise to those obligations remain few and underdeveloped. Similarly, most scholarship on treaty interpretation is focused on the separation of powers, (10) the subject-matter limitations on the scope of the treaty power, (11) or the distinctions between self-executing and non-self-executing treaties. (12) Despite the renaissance in statutory interpretation scholarship over the past decade, there has been relatively little discussion either in court opinions or in the scholarly literature of the proper tools and methods that judges should use to interpret the text of a treaty.

   1. Treaty Interpretation in the Supreme Court

      A trio of cases, United States v. Stuart, (13) Chan v. Korean Air Lines, Ltd., (14) and Olympic Airways v. Husain, (15) illustrates the Court's recent approach to treaty interpretation. Two dominant themes run through these cases: recognition that a treaty interpreter should start with the text of the agreement, and acknowledgment that treaty interpretation is different from statutory interpretation because treaties are contracts, not acts of legislation. (16)

      Stuart involved a bilateral tax treaty between the United States and Canada that required tax authorities in both countries to share information necessary to determine taxpayer liability. The taxpayer in Stuart argued that U.S. law prohibited the IRS from issuing an administrative summons to collect information about a taxpayer's liability if the matter had been referred to the Justice Department for possible criminal charges. (17) The treaty with Canada did not contain an express prohibition on information-sharing in the context of a criminal investigation, but it did stipulate that the respective tax collection agencies were obliged to provide only as much information as each agency could "obtain under its revenue laws." (18) The question presented to the Court was whether tax authorities in the United States needed assurance from Canadian authorities that they would not seek criminal charges against the taxpayer before complying with information requests. The majority disagreed with the taxpayer's interpretation of the relevant U.S. "revenue law," but suggested that the purposes of the treaty supported a holding that compliance with the information request was required. (19) The majority drew support from the Senate pre-ratification debate, the negotiating materials, and the past practice of the treaty signatories. (20) Likewise, the Court reaffirmed dicta from an earlier treaty case, Bacardi Corp. of America v. Domenech, (21) stating that a treaty should generally be "construe[d] ... liberally to give effect to the purpose which animates it." (22)

      Concurring in the judgment in Stuart, Justice Scalia argued that it was inappropriate for the Court to resort to extratextual aids because the meaning of the relevant terms in both the statute and the treaty were sufficiently clear. (23) As a normative matter, Scalia argued that sticking to the text would ensure greater predictability in treaty interpretation than recourse to context and negotiating materials:

      [N]o one can be opposed to giving effect to "the intent of the Treaty parties." The critical question, however, is whether that is more reliably and predictably achieved by a rule of construction which credits, when it is clear, the contracting sovereigns' carefully framed and solemnly ratified expression of those intentions and expectations, or rather one which sets judges in various jurisdictions at large to ignore that clear expression and discern a "genuine" contrary intent elsewhere. To ask that question is to answer it. (24) Scalia went on to criticize dicta in other treaty cases suggesting that extratextual material could be used to override the text of a treaty. (25) Justice Scalia's concurrence in Stuart coincided with the Court's increased focus on the plain meaning of the text in statutory interpretation (26) and has been recognized as his attempt to import the same interpretive method to the construction of treaties. As one commentator put it, Justice Scalia's concurrence is "as clarion an expression of the textualist canon of treaty interpretation [as] one is likely to find in a Supreme Court opinion." (27)

      On the textualist view, judges should not divine the intent of particular legislators but should focus instead on the commonly understood definitions of the words in the statute. (28) By relying on neutral, third-party understandings rather than the subjective interpretations of the legislators who drafted the statute, judges will be less inclined to find ambiguity as a vehicle for importing their own policy views into the law. The resulting interpretive methodology is said to be more predictable (29) and more consistent with both the rule of law (30) and the role of an Article III judge. (31)

      As applied to treaties, the textualist approach soon garnered a majority of the Court in Chan. (32) Chan addressed whether an airline carrier loses the benefit of liability limitation under the Warsaw Convention for failure to provide notice of such limitations on passenger tickets in the 10-point font required by amendments to the treaty. (33) Neither the original treaty nor any of the amending agreements specified the sanctions that would result from an airline's failure to comply with the notification procedures...