Will the real ATS please stand up?

Author:Chomsky, Judith
Position:Alien Tort Claims Act

    In many impoverished and remote areas of the world, multinational corporations enter into joint ventures and other commercial arrangements with governments that have poor human rights records. Then, protected by their government partners, the corporations engage in business practices far below the standards expected in the West. Both the multinationals and their host government partners focus solely on maximizing the profits of their joint venture with little concern for the operational effects borne by the local population or environment. The activities of the corporations in the developing world frequently contradict the codes of conduct that they publicly espouse. Host governments lack incentives to enforce any existing regulatory systems that might reduce profits. The host communities lack the power and opportunity to oppose these practices. All too frequently the partner governments are ready to use unrestrained force to suppress criticism and protect the corporate operations in which they have an interest.

    Legal developments in the United States, however, provide a framework through which the most egregious human rights violations by multinational corporations may be addressed. For example, in a 1997 case, Doe v. Unocal, (1) the U.S. District Court for the Central District of California determined that under the Alien Tort Claims Act (ATS), a U.S.-based energy company engaged in a joint pipeline project with Burmese government officials could be held accountable for forced labor and other human rights abuses committed while advancing the project. (2)

    From the landmark decision in Unocal to present ATS cases against corporate defendants, spokespersons for the business community have warned the litigation would have negative consequences for the competitive position of U.S. business, as well as on the global economy as a whole. The U.S. government frequently joins in the protests against corporate ATS cases, arguing that they impair the government's response to the "war on terror." Some foreign governments also complain about what they consider challenges to their sovereignty. This essay explores the gap between such predictions regarding the effects of the ATS litigation and its demonstrable consequences.


    The human rights cases filed against corporate defendants are part of a developing ATS jurisprudence. The ATS is a one- sentence statute enacted as part of the Judiciary Act of 1789 that provides federal court jurisdiction for tort claims brought by aliens for violations of customary international law and treaties. (4) In the late 1970's, in Filartiga v. Pena-Irala (5), lawyers from the Center for Constitutional Rights used the largely-forgotten ATS to sue a former Paraguayan police officer for torturing a Paraguayan citizen to death. In that case, the Second Circuit held that the ATS authorized claims for violation of international human rights. (6) The Filartiga case laid the foundation on which the Unocal decision rests.

    Two more legal advances were necessary to support the litigation against corporate defendants involved in human rights violations under the ATS. The defendant in Filartiga was the direct perpetrator of torture. Human rights claims against corporations, however, rarely allege that the corporate defendant engaged directly in the human rights abuses. (7) Because most ATS claims against corporate officials are based on their complicity in the direct human rights violations of a third party, the possibility of vicarious liability under the ATS was a necessary element for the majority of ATS corporate cases. The possibility for vicarious liability under the ATS was recognized in a series of cases against the former dictator of the Philippines, Ferdinand Marcos, and his daughter. (8)

    The Second Circuit decision in Kadic v. Karadzic (9) provided the final prepatory step necessary to corporate ATS cases. Kadic held that the ATS grants jurisdiction over private actors when they commit violations of customary international law norms, which do not require state action, such as genocide and war crimes. (10) Kadic also held that a private actor may be liable for violations of norms such as torture, which require state action, if the private actor performs in concert with state actors. (11) Taken together, the Marcos cases and Kadic supplied the remaining principles upon which most corporate ATS cases rest. Liability for a corporate defendant may be vicarious in nature and a private corporation may be liable for violating norms requiring state action when it acts in concert with a state actor.


    The Unocal case was the first corporate accountability lawsuit in which a court analyzed corporate liability under the ATS. (12) The Unocal plaintiffs, Burmese villagers, alleged that they were subjected to extrajudicial killing, forced labor, rape, and other forms of torture in connection with Unocal's construction of a gas pipeline through their region. The plaintiffs alleged that Unocal was liable for their damages because, inter alia, Unocal and its joint venture partners, the French oil firm Total and the Burmese state-owned Myanmar Oil and Gas Enterprise (MOGE), hired the Burmese military to provide security and other logistical support for the pipeline with knowledge that the military had a long record of violent human rights abuses. (13) In a companion case, NCGUB v. Unocal, (14) the court considered the basis of corporate liability and found, "[i]n the typical action under the ATS against a non-state actor, courts look to the standards developed under 42 U.S.C. [section] 1983 to determine whether the claim will stand." (15)

    The issue of vicarious liability under the ATS, and particularly corporate liability, continues to be very controversial and intensely litigated. (16) Even when corporate liability is not raised in a case, business groups are eager to have the issue addressed by the Supreme Court and find a way to bring in the issue. When the Supreme Court considered an ATS claim challenging arbitrary detention in Sosa v. Alvarez-Machain, (17) neither party was a corporate entity. Nevertheless, many amici were focused on the issue of corporate liability. (18) Present litigation involving a single corporation continues to attract amici from both sides of the issue of corporate liability.


    Since the Unocal decision, the business community has been ringing the alarm against ATS corporate cases, charging that the litigation will harm both U.S. business interests and the prospects of development for poorer nations. One analysis expressed this concern in very dramatic language, stating:

    For almost 200 years the ATS slept. It is now an awakening monster. Unless checked by Congress or the Supreme Court, trial lawyers will seek to expand the scope of ATS awards to such an extent that investment and trade in developing countries will be seriously threatened. The ultimate loser will be millions of impoverished people denied an opportunity to participate in the global economy. (19) Yet another commentator wrote: "[t]he growing role of U.S. courts in defining standards of corporate conduct in the global economy represents a direct challenge to U.S. foreign policy leadership." (20) The Bush administration joined its voice in opposition to ATS corporate litigation with similar claims about the negative impact. The U.S. State Department submitted a letter to the district court supporting the corporate defendant Exxon Mobil in a case against its conduct in Indonesia's Aceh province. (21) The letter stated "the Department of State believes that adjudication of this lawsuit at this...

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