Editorial: Corporations don’t deserve a free pass on human rights lawsuits

The Supreme Court on Tuesday made it harder — again —for victims of human rights violations to seek justice in American courts. Five conservative justices held that an 18th century law that allows foreigners to bring lawsuits for violations of the “law of nations” can’t be used against foreign corporations — even if the alleged violations took place in the United States. It was a cruelly cramped reading of the law from a court that in other contexts, such as the 1st Amendment and election law, has treated corporations as persons.

The decision came in a lawsuit brought by victims of terrorism in the Middle East against Arab Bank, a Jordanian institution with offices in New York City that had been accused of facilitating the transfer of fund to terrorists. But the court’s holding will preempt all sorts of suits by foreign plaintiffs against corporations accused of violating human rights.

The plaintiffs in the lawsuit against Arab Bank, led by the father of a young British man killed by a suicide bomber in Israel in 2002, had tried to take advantage of the Alien Tort Statute, a law passed by the first Congress in 1789 giving U.S. district courts jurisdiction over “any civil action by an alien for a tort committed in violation of the law of nations or a treaty of the United States.”

Apparently Congress had in mind a small number of torts — civil wrongs — including piracy and attacks on ambassadors. The Alien Tort Statute gathered dust for almost 200 years until it was rediscovered by lawyers who believed it could be used to win compensation for victims of human rights violations.

In 2004, the Supreme Court seemed to encourage such hopes. Even as it rejected a claim brought under the Alien Tort Act by a Mexican citizen kidnapped and brought to the U.S. to face a murder charge, the court seemed to leave the door open to other lawsuits by foreign nationals for violations of international norms that were as “specific, universal and obligatory” as the ones Congress sought to shore up in 1789.

But in later cases, the court has made it harder for victims of torture, terrorism, and other human rights abuses to sue under the Alien Tort Statute. In 2013, the court ruled against a group of Nigerian plaintiffs who had sued the Royal Dutch Petroleum Co. The plaintiffs argued that the firm had “aided and abetted” a government crackdown on opponents of oil drilling that included beatings, rapes and murders. The court said the suit couldn’t go forward because the alleged actions occurred outside the U.S.

But in the case decided Tuesday, the financial transactions that plaintiffs say assisted terrorists allegedly did take place at Arab Bank’s U.S. offices. Even so, the justices affirmed a federal appeals court ruling dismissing the lawsuit.

Writing for the court, Justice Anthony M. Kennedy said that foreign corporations couldn’t be sued under the Alien Tort Statute because “foreign corporate defendants create unique problems” and “courts are not well suited to make the required policy judgments.”

This is a familiar theme for the court’s conservatives: that Congress, not the court, should authorize particular kinds of lawsuits. But the Alien Tort Statute was enacted by Congress, and almost 14 years ago the court suggested that it could be adapted to modern-day violations of the “law of nations.”

Kennedy also argued, unpersuasively, that the court should be guided in this case by the fact that an entirely different federal law — the 1991 Torture Victims Prevention Act — allows lawsuits only against individuals who engage in torture or extrajudicial killing. But, as Justice Sonia Sotomayor pointed out in her dissenting opinion, just because Congress saw fit to permit suits only against individuals for torture and extrajudicial killing doesn’t mean it meant to bar suits against corporations in connection with other “law-of-nations” violations.

Sotomayor made a persuasive case that the Alien Tort Statute should indeed be interpreted to cover wrongdoing by corporations as well as individuals. She also noted the irony that under Tuesday’s ruling, “foreign corporations — entities capable of wrongdoing under our domestic law — remain immune from liability for human rights abuses, however egregious they may be.”

That would change if Congress decided to rectify the court’s decision, as it should, by passing legislation clarifying that such lawsuits are allowed. The problem is that assembling majorities in both houses of Congress for such legislation in these polarized times will be an arduous undertaking. Congress wouldn’t have to act if the court had taken an appropriately generous view of the Alien Tort Statute.

American courts can’t provide a remedy for every atrocity or act of oppression, but they ought to be open to victims — including foreigners — who can’t obtain justice elsewhere. Tuesday’s decision made such relief even harder to achieve.

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