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Are human rights just for American corporations? That is a question left hanging by the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum Co.
As many readers will know, the Supreme Court in Kiobel refused to apply the Alien Tort Statute extraterritorially against a Dutch corporation for actions harming Nigerians overseas. (See Ingrid Wuerth’s excellent discussion of the case at 107 Am. J. Int’l L. 601 (2013).) But the Court left the door open to human rights suits that “touch and concern” the United States with sufficient force. Because American corporations are likely to have more contacts with the United States, suits against them are more likely to satisfy this standard. After Kiobel, American corporations thus face the risk of human rights lawsuits that their foreign peers do not.
I flesh out this argument in my essay in the American Journal of International Law titled Unshackling Foreign Corporations: Kiobel’s Unexpected Legacy. In this inaugural blog post for the new online companion to AJIL, I want to offer a few extensions to my claim.
Let us begin by imagining how the majority in Kiobel would like to see human rights issues resolved across the world. One might imagine a well-ordered world in which every state takes care of human rights issues arising within its boundaries. But given that most international law violations are predicated upon an offense involving state action, one would have to be confident that a state’s courts would impartially hear claims against the government or its private sector allies. Experience suggests that this would be foolhardy.
An alternative might be for multinational corporations to be regulated abroad by their home country courts. If they commit human rights abuses in countries without the will or capacity to police them, then the home country courts would prove a welcome alternative. Such a system might work if the home jurisdictions of multinational corporations in fact took on this task of policing their companies abroad. (Some other papers have described the approaches taken outside the United States. See Robert McCorquodale, Waving Not Drowning, Kiobel Outside the United States (in the AJIL Agora); Caroline Kaeb & David Scheffer, The Paradox of Kiobel in Europe (in the AJIL Agora); Michael D. Goldhaber, Corporate Human Rights Litigation in Non-U.S. Courts: A Comparative Scorecard, 3 U.C. Irvine L. Rev. 127 (2013).) Furthermore, where such possibilities exist, they generally do not carry the same procedural advantages offered to plaintiffs in U.S. courts or the extent of the remedies provided under U.S. law. Thus, the home country court for a European or Asian multinational is likely to prove far less threatening than an American court.
The end result, as I argue in my AJIL essay, is a playing field tilted against American corporations, who are bound by human rights laws in ways that their global competitors are not. The Court’s decision last week in Daimler AG v. Bauman further deepened the different risks of being haled into U.S. court between U.S. multinational corporations and foreign ones. In Bauman, the Court held that there was no general jurisdiction in California court over claims brought by Argentinians against Daimler for its actions in Argentina. Would the Court have dismissed a similar case involving Ford or General Motors? It remains unclear.
There are at least three possible responses to this unequal playing field—accept it, remove human rights constraints for American corporations, or extend human rights constraints to foreign corporations. Assuming that many will find an uneven playing field unfair to U.S. corporations, will lawmakers and courts be more likely to remove human rights constraints altogether or to extend them to foreign companies?
One hopes that removing human rights constraints for American companies is an unpalatable strategy. Furthermore, there is a precedent for Congressional action to extend civil rights extraterritorially. Two decades ago, when the Supreme Court denied the extraterritorial application of a United States human rights law (one that wasn’t a clear part of international law), Congress moved to remedy this. After the Court’s ruling in EEOC v Arabian American Oil Company in 1991, Congress quickly amended the 1964 Civil Rights Act’s Title VII to apply explicitly to U.S. citizens overseas.
The Supreme Court explains its decision in Kiobel in part as a matter of judicial humility, that United States law “does not rule the world.” But it is striking that the result is to place our own corporations at a disadvantage. And it is even more peculiar that the Court would invoke a desire not to be imperial when enforcing international law. Enforcing a global norm against torture is hardly declaring that U.S. law rules the world.
Human rights must not be for American companies alone.
Anupam Chander is the Director of the California International Law Center, Martin Luther King, Jr. Hall Research Scholar, and Professor of Law at the University of California, Davis.