More On Supreme Court Ruling Limiting International Lawsuits

by Hans Bader on April 19, 2013

in International, Legal

Earlier, I wrote about the Supreme Court’s closing the door on lawsuits by foreigners alleging nebulous violations of “human rights” or international norms by multinational corporations. (It did that in the course of dismissing a lawsuit by Nigerians against three oil companies affiliated with Shell.)

George Mason University law professor Michael Greve agrees, saying that prior to the Supreme Court’s ruling, the Alien Tort Statute [ATS] had “become a playpen for a cabal of international law enthusiasts and plaintiffs’ lawyers.” If the Supreme Court were to adopt the expansive view of the ATS pressed by international-law enthusiasts (including the ability to sue over violations of “customary international law,” including vague international norms not contained in any treaty ratified by the U.S. Senate), he notes, that would create the potential for foreign employees working overseas to sue corporations and corporate employees in the U.S. over run-of-the-mill workplace discrimination and harassment claims that should be resolved elsewhere.

(They would sue here, rather than in their home country, because the U.S. is more favorable to trial lawyers and plaintiffs in permitting things like punitive damages, which are forbidden in much of the world. The U.S. also more broadly permits corporate liability for the unauthorized acts of corporate employees than do the laws of most countries. That encourages foreigners to try to sue in America rather than in their home country, even though the evidence and witnesses in their case are located thousands of miles away in their home country, making a suit here inefficient and at times unfair. The federal appeals courts have split over whether foreigners can sue corporations for the wrongdoing of corporate employees under the ATS, with the D.C. Circuit saying they can, and the Second Circuit categorically saying they cannot, since the ATS is a vehicle for bringing lawsuits over violations of international law, which itself does not provide for corporate liability.)

Here are some additional reactions to the Supreme Court’s decision Wednesday: Julian Ku/Opinio Juris (“this means that the ATS wars over corporate liability are almost over”) and more (discussing death of “universal civil jurisdiction” idea, and speculating that the narrower rationale for rejecting the lawsuit contained in the four justice concurrence by the generally pro-trial-lawyer liberal justices was an unsuccessful attempt to pick up potential swing vote Anthony Kennedy, who joined the five-justice majority opinion authored by Chief Justice Roberts); Roger Alford (ATS “as we know it is dead… [Kiobel] has destroyed an entire cottage industry”; transnational state-court torts and choice of law likely to rise in importance as replacement); Ilya Shapiro, Cato Institute; Eugene Kontorovich (academics scoffed when “foreign-cubed” ATS lawsuits were called into question, yet all nine justices have now rejected them).

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