Yesterday the Supreme Court heard argument in Kiobel v. Royal Dutch Petroleum, the case (which I’ve discussed before and in which Cato filed a brief) that asks whether, under the Alien Tort Statute, the “law of nations” can be applied against an entity that is not a natural person: a corporation. As the majority of the Court seemed to think, and as I wrote in the New York Times online, the answer is no because Congress never gave U.S. courts the power to entertain lawsuits alleging corporate malfeasance involving foreign actors abroad.
It seems like a discrete enough issue – does this statute contemplate corporate liability? – one that international law junkies and the “human rights” establishment are passionate about, but not one that should have much broader purchase. Yet the blogosphere, not least the response to my Times piece, is up in arms about organizations like Cato saying that “corporations are people” when it gets them political speech rights (Citizens United) but not when it subjects them to liability for their dastardly deeds (Kiobel).
But to make this charge – whether labeled shilling for corporations or just plain hypocrisy – is to misunderstand both Citizens United and Kiobel.
Before explaining why, let me just reiterate that I agree with the keen point that corporations are not human beings. But that brilliant observation is legally irrelevant. Corporations are formed by individuals as a means of exercising their constitutionally protected rights. Corporate personhood is simply a convenient legal fiction that we use to enable that rights-pooling for all sorts of purposes. If using the word “person” in relation to an inanimate entity is confusing or offensive, you could try calling it something else (but then nobody you’re talking to would understand you, so we’re stuck with the word, for better or worse). In any event, as I explain in my recent law review article – “So What If Corporations Aren’t People?” – none of this changes how the law treats corporations.
Now then, I’m not saying that corporate personhood is operative for purposes of political speech but not for purposes of liability for malfeasance. Instead, I’m clarifying two areas of law as they relate to corporate actors. First, the First Amendment guarantees that rights-bearing individuals don’t forfeit their rights (to speak about politics or anything else) when they associate in groups, whether in corporate form or otherwise. Second, the Alien Tort Statute – a peculiar law by which Congress gave federal courts jurisdiction over ”law of nations” violations alleged by foreigners against other foreigners – doesn’t recognize corporations as a type of party that can in that manner be haled into our courts. That is so because the “law of nations” doesn’t extend to corporate actions (for reasons explained in our brief and elsewhere that I won’t repeat here).
Kiobel has nothing to do with corporate liability in general – e.g., liability for manufacturing defective products, dumping chemicals, etc., in violation of U.S. or even foreign law – but rather only concerns corporate liability for human rights abuses and other violations of the “law of nations” by foreign corporations in foreign countries.
The law can surely be “a ass,” but you have to understand what law you’re discussing to understand what type of ass it might be.