Alien Tort Claims Act Alert

Introduction

Since the 1980s, the Alien Tort Claims Act ("ATCA") has been used in the United States federal courts to litigate human rights violations ranging from extrajudicial killings, slavery, torture, and rape. Human rights activists are now waging a new campaign to use the ATCA to stop multi-national corporations ("MNCs") that knowingly participate in human rights violations. It is still too early to decide on the effectiveness of this campaign even with the recent Doe v. Unocal decision by the Ninth Circuit Court of Appeals and The Presbyterian Church of Sudan v. Talisman Energy decision by the US Federal District Court in the Southern District of New York where the courts allowed the cases to go forward against the respective corporations.

As a consequence of the human rights campaign to use the ATCA to support human rights endeavors, business groups are privately lobbying Congress to either make changes to or repeal the ATCA. Although the business groups have yet to propose any specific legislation changes, they have begun to meet with congressional aides most likely in the attempt to build alliances. USA Engage is a coalition, which includes the U.S. Chamber of Commerce, the National Federal Trade Council, and other pro-trade business groups, that believes the ATCA lawsuits discourages companies from investing in developing nations. Business groups feel that fixing the underlying legislation will change the process and will stop discouraging effective business practices. MNCs that systematically violate human rights in their business dealings, however, should attempt to more fully understand the ATCA and how the law really works in regard to corporations that violate basic fundamental human rights.

Background

The Alien Tort Claims Act (ATCA) was enacted by the Founding Fathers in the Judiciary Act of 1789. The statute confers original jurisdiction on federal courts when an injured alien brings suit for a tort that was "committed in violation of the law of nations or a treaty of the United States." Little is known from the legislative history why the Founding Fathers created the ATCA. Some scholars believe that it is a logical conclusion based on the belief in the eighteenth century that the law of nations was viewed as a "universal law binding upon all mankind." Consequently, the Founding Fathers most likely viewed the law of nations as binding all peoples, thus it became a part of the common law. The ATCA was meant to apply to crimes so heinous that the international community would want to suppress them. According to Blackstone, in the era that the ATCA was enacted, the "principal offences against the law of nations…are of three kinds; violation of safe-conducts; infringement of the rights of embassadors; and, piracy."

For almost two hundred years the statute was largely unused until 1980 when the landmark case Filartiga v. Pena-Irala came before the Second Circuit. The case involved a Paraguayan citizen, Dolly Filartiga, who moved to the United States after her brother was tortured and killed by Pena, a Paraguayan state official. When Filartiga found out that Pena was visiting the United States on a visitor visa, she with her father, Dr. Joel Filartiga, brought a wrongful death action against Pena in the federal court under the ATCA. The Court of Appeals reversed the district court's dismissal for lack of subject matter jurisdiction and held that the state sponsored torture had been a violation of the law of nations. Moreover, the court held that the ATCA provided jurisdiction for the case to be heard in the United States although the torture occurred in Paraguay and involved a Paraguayan citizen. The court stated that the law of nations is not stagnant but evolves according to the international norms of acceptable behavior. Accordingly, the court decided that torture violated human rights norms and Pena was found guilty of violating the law of nations.

The Filitarga case proved to be a watershed opinion because it opened up a new role for the ATCA; it was now possible to use this mostly unknown statute as a means for "vindicating rights under international law". It should be understood, however, that the Filartiga precedent did not make suing for human rights violations an easy task. The court's holding is very narrow in that "the requirement that a rule command the 'general assent of civilized nations' to become binding upon them all is a stringent one. Were this not so, the courts of one nation might feel free to impose idiosyncratic legal rules upon others, in the name of applying international law." The courts are constrained in their decisions under the ATCA because it must be a violation of a "well-established, universally recognized norms of international law," such as piracy, slave trading, genocide, war crimes and airplane hijacking. The Supreme Court has declined to overturn Filartiga, which allows the ATCA to be a viable weapon against human rights violations.

In response to Filartiga and to confirm their agreement with the court's final decision, the United States Congress adopted the Torture Victim Protection Act ("TVPA") in 1991. The TVPA provides that an individual who "under actual or apparent authority, or color of law, of any foreign nation" subjects another to torture or extrajudicial killing is liable for damages in a civil action by representatives of the victim. It allows a federal civil remedy for individuals who have been subjected to torture, and supplements the remedies already available under the ATCA. The TVPA was established to address the problems of world governments that still engage in or allow torture of their citizens.

It is difficult to collect on favorable judgments made in ATCA cases and most have gone unpaid. For example, the Filartiga family was awarded a substantial amount of money that has never been collected. Much of the reward was in the fact that a court of law heard their case and the family was vindicated. Moreover, it has been argued that the principle achievement that comes from an ATCA case involves the publicity that the case generates. Publicity can often cause governments to push for changes within their own countries where human rights violations have occurred. Unfortunately, publicity may only be effective in liberal democracies that are sensitive to such world pressure. It is not often that those countries that continuously violate human rights are swayed by world opinion. ATCA suits can also be used as a tool by the United States government in diplomatic negotiations with other countries.

Limitations

The ATCA only applies to a small class of cases: both parties must be aliens, the "victims must be able to identify and serve process on violators of human rights not protected by sovereign immunity, yet capable of committing a violation of international law" and the violation must be recognized as a violation of customary international law or a treaty of the United States. In addition, before a party can be held liable under ATCA, there must be evidence that it knowingly participated in the violations.

Federal courts will not allow frivolous lawsuits under the ATCA. Lawsuits must prove all of the aforementioned requirements before a court will even entertain the use of the ATCA in an action against an MNC. Consequently, very few suits against MNCs have been heard successfully before the U.S. courts; proving that the MNC violated a universal and obligatory law of nations, is a substantial burden to overcome in a successful lawsuit. The courts have interpreted recognized violations of customary law as including only genocide, war crimes, extrajudicial killing, slavery, torture, unlawful detention, and crimes against humanity. Moreover, a successful lawsuit under the ATCA against an MNC would have to prove that it was directly implicated in these types of violations that are clearly defined under international law.

International law is constantly evolving. For added clarification though, the sources of international law are found in Article 38 of the Statute of the International Court of Justice. According to the statute, the sources include:

1. international conventions, whether general or particular, establishing rules expressly recognized by the contesting states;
   
2. international custom, as evidence of a general practice accepted as law;
   
3. the general principles of law recognized by civilized nations;
   
4. subject to the provisions of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.
   

The Second Circuit has cited this Article as indicative of where the sources of international law are found. The Supreme Court's articulation of the sources of international law is similar.

Even with such a high standard, a key argument against using the ATCA to prosecute MNCs who engage in human rights violations is that they will be detrimental to foreign investment. The State Department's Legal Advisor, William H. Taft IV, offered this argument in his letter to the court urging the dismissal of the case against Exxon Mobil. Exxon Mobil hired the Indonesian military to provide security for its natural gas facilities knowing that the troops, based on previous actions and reports from the U.S. Department of State, would engage in human rights violations. It is absurd, however, to consider dismissing a legitimate claim against a corporation because investments trump basic human rights. The international community has reached a consensus that these rights are inviolable and should be upheld. Furthermore, the United States is only providing a forum for the arguments to be justly litigated.

Yale University Law School Professor Harold Koh, a former Assistant Secretary of State for Democracy, Human Rights and Labor, filed an affidavit with the court in the ExxonÐMobil case arguing that it is "repugnant to U.S. policy and values to promote the competitiveness of U.S. companies by providing them with legal immunity." He cited the Foreign Corrupt Practices Act as an example of a law that the courts would not ignore just to allow U.S. companies to use bribery regardless if it is entrenched in local custom and their business counterparts practice it regularly. This form of control by the U.S. government logically should be extended to cover those U.S. corporations that choose to engage in practices, such as slavery or torture, which would never be accepted if committed on American soil. Crimes that are considered violations of international customary law need to be upheld in a court of law and corporations should be held accountable for any and all illegal action performed.

An MNC would also have to knowingly participate in, or provide substantial assistance to, the human rights violations. The Court in Doe reiterated the standard that a corporation must meet to be held liable as a "direct perpetrator of the criminal act or 'aid and abet' the direct perpetrator" which requires "knowing practical assistance or encouragement that has a substantial effect on the perpetration of the crime." The court established a bright line rule requiring the MNC to knowingly participate in the violation of fundamental human rights. Investing in a country where human rights violations occur is not enough to hold the corporation liable.

Another obstacle to prosecuting MNCs for human rights abuses involves proving that private actors (as opposed to state actors) may also violate the law of nations. One of the more recent cases, Kadic v. Karadzic, extended the scope of the ATCA. The case was a lawsuit against Radovan Karadzic, the leader of the Bosnian Serbs during the war in the Balkans. In Karadzic, the Second Circuit held that the ATCA was appropriate for proving jurisdiction in the crimes of genocide, crimes against humanity, and war crimes. In addition, the court found that private actors as well as public actors could commit certain international human rights violations. The court held that "certain forms of conduct violate the law of nations whether undertaken by those acting under the auspices of a state or only as private individuals." The ACTA then applies to violations committed by private actors, when the international law indicates, as it does in the Convention on the Prevention and Punishment of the Crime of Genocide, that the prohibition binds both state and non-state actors.

The recent Talisman ruling rejects the notion that corporations are not legally capable of violating international law. The court relies on precedent such as Filartiga, Karadzic, and Unocal as support that corporations may be liable for violations of international law. International tribunal rulings, international treaties, and the practice of international organizations also support the court's ruling. The court does say that the Supreme Court has yet to address the question of corporate liability in regard to international law violations, but the Second Circuit has dealt with the issue in a clear and consistent manner.

Corporate Liability Under International Law

International law does not provide a framework for addressing transnational corporations that violate human rights. Traditionally international law has addressed the conduct of states. This has evolved and individuals now have rights under international law. In addition, corporations are viewed to have certain rights but international law does not address that corporations may also be the "bearers of legal obligation under international criminal law." This may be attributed to the idea that states are responsible for holding corporations accountable when they engage in criminal activity but that may not always be the case.

MNCs are essentially without any human rights guidelines under international law even under the auspices of following customary international law. The international community has not yet agreed on how to handle corporate criminal liability. At the 1998 Rome Conference on an International Criminal Court, the draft statute under consideration included a French proposal to extend the jurisdiction to legal persons which would have included corporations in their jurisdiction. The states did not agree on this draft and the Rome Conference provided jurisdiction only over natural persons or individuals.

There has been some international movement in addressing the transnational nature of corporations. Recent multilateral treaties addressing bribery, corruption, and organized crime extend to legal persons with the states being responsible for providing legal remedies. One such example is a major International Labor Organization convention ratified by more than 150 nations, which states that "[w]orkers shall enjoy adequate protection against acts of antiÐunion discrimination in respect of their employment." The language in the convention "presupposes…a duty on the corporation not to interfere with the ability of employees to form unions."

Other treaties that impose direct liability directly on corporations include the 1960 Paris Convention on Third Party Liability in the Field of Nuclear Energy. It states that the "operator of a nuclear installation shall be liable for…damage to or loss of life or any person" and damage to property. The International Convention on Civil Liability for Oil Pollution Damage finds "the owner of a ship at the time of an incident…shall be liable for any pollution damage caused by oil which has escaped or been discharged from the ship as a result of the incident." Similarly, the 1963 Vienna Convention on Civil Liability for Nuclear Damage states that the "operator of a nuclear installation shall be liable for nuclear damage upon proof that such damage has been caused by a nuclear incident." The Talisman Court finds that the line of instruments previously cited indicate that precedent exists for holding corporations liable for large-scale torts. Furthermore, the court concludes by reasoning that if corporations can be held accountable for unintentional torts such as nuclear accidents and oil spills, then "logic would suggest that they can be held liable for intentional torts" such as torture and complicity in genocide.

Nonetheless, it can be argued that the United Nations Universal Declaration of Human Rights, which enumerates a series of fundamental rights, is binding on states as well as corporations:

The General Assembly proclaims this Universal Declaration of Human Rights as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance.

Because "[e]very individual includes juridical persons" then it holds true that "[e]very individual and every organ of society excludes no one, no company, no market, no cyberspace. The Universal Declaration applies to them all." Consequently, corporations are under the same obligation to respect the basic human rights of individuals such as the right to life, the right to be free from slavery, and the right to be free from torture.

Many MNCs have joined one or more voluntary initiatives in which they make a commitment to respect human rights but these compacts do not include an enforcement mechanism. One such example is the United Nation's "Global Compact" where signatories promise to "support and respect the protection of internationally proclaimed human rights." Many of the member corporations have signed this compact and are now complaining about being held responsible for their commitment made to the compact.

The lack of any type of system of accountability for MNCS encourages aliens to take advantage of the ATCA. Countries that support or allow systematic violations of fundamental human rights do not have the legal system to support those who have been harmed by transnational corporations. For example, the Talisman Court criticized an affidavit submitted by a professor of law at the University of Khartoum who believed that the claims could have been brought in Sudan because it lacked any "statement indicating that the Sudanese judicial system is fair and free from corruption, and that plaintiffs, who are alleging that Sudan committed genocide and war crimes, could get a fair trial." The lack of government action in various states throughout the world does not "nullify the existence of human rights and the duties of non-state actors to respect such rights." The Founding Fathers' foresight and belief that the common law includes the law of nations allows victims without a voice in their own country to be heard at the international level.

The Direction of Corporate Liability

Doe v. Unocal has gone further in the courts than any other case of its kind. The latest decision by the Ninth Circuit Court of Appeals rejected Unocal's motion for summary judgment based on the evidence that Unocal knowingly benefited from slave labor. The case will next be argued in front of the Circuit Court and if the court decides that Unocal is liable for the torture and slavery committed against the Burmese, precedent will be established for further cases. The ATCA cases against corporations also have the potential to yield large damage awards. Previous ATCA cases against foreign government officials have largely gone unpaid. That will not necessarily be the case for MNCs since they will most likely either be U.S. corporations or have enough significant U.S. contacts that the court will be able to enforce the judgments.

Another victory for the ATCA was the recent decision in The Presbyterian Church of Sudan v. Talisman Energy. The former and current residents of Sudan filed a class action suit against Talisman, a Canadian energy company, alleging violations of international law during the exploration of oil in Southern Sudan. Talisman purportedly collaborated with the Sudanese government to commit gross human rights violations, including extrajudicial killing, war crimes, rape, and enslavement. The Sudanese Government wished to exploit the oil reserves in Southern Sudan and use the money to buy guns, missiles and other objects for their war against the people in Southern Sudan. Talisman agreed to build the infrastructure necessary to extract the oil if Sudan cleared the surrounding area of the local population. The Sudanese Government used the roads, airfields, and transportation Talisman provided to carry on their genocidal atrocities against the Southern Sudanese. Talisman moved to dismiss the case for a number of reasons including lack of subject matter jurisdiction. The court denied their action holding that the ATCA established subject matter jurisdiction. The lawsuit will continue in the US District Court.

One recent case that was filed in November 2002, was the Khulumani Support Group, a non-governmental organization, against 21 multinational corporations and international banks for helping support apartheid in South Africa. The lawsuit claims the plaintiffs aided and abetted the commission of atrocities including extra-judicial killings, torture, and arbitrary detention between 1948 and 1993. There is speculation regarding whether or not this lawsuit will pass the requirements established by the ATCA and reiterated in Unocal. It has yet to be proven that the companies implicated in the lawsuit knowingly participated in the crime of apartheid or aided and abetted the state in its violations.

Conclusion

MNCs are powerful global actors that some states are unable to control due to lack of resources or power. States may even recruit a MNC to participate in atrocities for the gain of both the state and the MNC. It is impossible to rely on states, who are themselves participating in human rights atrocities, to prosecute MNCs who are violating international laws.

The limitations and requirements of the ATCA ensure that there is no room for frivolous lawsuits. In addition, the ATCA is a valid and needed statute that makes transnational corporations who knowingly participate in violations of fundamental human rights accountable for their actions. It is currently the most effective intervention the human rights community has at its disposal to compensate victims of international law violations, deter corporate complicity in genocide and war crimes, and deter corporate exploitation of slave labor.

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