Kiobel v. Royal Dutch Petroleum presents the question of whether, under the Alien Tort Statute, the “law of nations” can be applied against an entity that is not a natural person: a corporation. Because Congress never gave U.S. courts the power to entertain lawsuits alleging corporate malfeasance involving foreign actors abroad, the answer has to be no.
As Cato argues in the amicus brief we filed, the Alien Tort Statute must be interpreted in a manner consistent with Congress’s original jurisdictional grant. This interpretation maintains that the Constitution gives Congress the sole power to determine the scope of federal courts’ jurisdiction. Allowing courts to expand their own jurisdiction without Congress’s consent would create a democracy gap—which would be particularly serious here, in a case involving issues of foreign affairs that are appropriately the province of the political branches.
The Supreme Court has made clear in cases like Grupo Mexicano de Desarrollo v. Alliance Bond Fund (1999) that evolving methods of interpreting international law do not inform the Alien Tort Statute's jurisdictional reach, which has not changed since 1789. Nonetheless, lower courts are split on the issue of corporate liability, largely because of differing interpretive methods.
Judge José Cabranes, who authored the ruling that the Supreme Court is now reviewing (and was Justice Sonia Sotomayor’s mentor on the Second Circuit Court of Appeals), set out the correct interpretive method in Flores v. Southern Peru Copper Corp. (2003). Judge Cabranes’s reasoning there embodied both the guidance that the Supreme Court would give in Sosa v. Alvarez-Machain (2004) and the teachings of classical theorists like Grotius, by defining customary international law as “composed only of those rules that States universally abide by, or accede to, out of a sense of legal obligation and mutual concern.”
Judge Cabranes used as relevant evidence the States’ formal lawmaking actions, such as international conventions that establish “rules expressly recognized by the contesting states.” He further acknowledged that the method used in 1789 to interpret what comprised the law of nations defined both the claims and the parties cognizable under international law. By looking to the proper sources, Judge Cabranes correctly concluded that corporations cannot be held liable for violations of international law under this statute, and in so doing recognized the constitutional checks that prevent courts from expanding their own jurisdiction.
So where does that leave those who want to punish corporations for human rights abuses? They can seek justice in the countries where the bad behavior took place or where the guilty companies are based. Or they can ask Congress to amend the Alien Tort Statute.