EXECUTIVE SUMMARY

To begin any seminar on corporate social responsibility by examining the prospects of domestic litigation is in some ways to look through the wrong end of the telescope. After all, corporations have demonstrated that they are willing to adopt voluntary codes of conduct and to exploit those segments of the markets that make consumption and investment decisions on the basis of a company’s perceived commitment to human rights. In this paper, I shall argue however that the market incentives and the liability litigation are not mutually exclusive and that they can actually reinforce one another. That is, without at all suggesting that one induced the other, it does seem clear that the prospect of litigation may have accelerated the voluntary, marketplace initiatives and that litigation will define the primitive minimum beneath which the market will not operate. In particular,  I will suggest that litigation is an appropriate response to corporate complicity in human rights violations in certain well-defined and not particularly radical circumstances. The market should work and be allowed to work, but there are times when the market works best because there are clear liability rules that the courts will enforce.

Of course, some preliminary questions of principle and practice must be addressed, e.g. how can there be any international legal standards governing corporations and enforceable in the courts when international law traditionally imposes obligations only on states? And what established standards are there in the real world for judging a company’s human rights record in court? Here, I will argue that, for at least two hundred years, it’s been understood that there are acts or omissions for which international law imposes responsibility on individuals: treaties tell us that things like genocide, some forms of terrorism, slavery, some forms of pollution, violate international law even when done privately. Of rather more recent vintage is the notion that a private actor can be so enmeshed with the government or a government function that international legal standards are triggered, just as in many domestic legal systems, including the United States,  a seemingly private actor may exercise public functions or act under color of state law in such a way as to trigger constitutional or public obligations. I will close suggesting that the Rube Goldberg machinery that is the US court system is not some cost-free or final solution to the problem of enforceability. There is an incremental and improvisational quality to the common law which means that it can offer at best modest advance guidance to companies attempting in good faith to meet human rights obligations or to embrace best practices in the protection of human rights. And I will also suggest, on the other side of the “v” in a lawsuit, that human rights advocates should and do understand  the intrinsic limitations on litigation in domestic courts -- costly, scattershot, and unilateral as it can be.

With all of that said, however, the evolving relationship between litigation, regulation, and the marketplace, seems to me reminiscent of the ancient lex mercatoria – a set of good mercantile practices, growing out of the needs of the market, that ultimately gives rise to law in more recognizable and more enforceable form.  Some now routine doctrines of commercial law -- like the holder in due course doctrine or the law of sureties -- grew out of what medieval and renaissance merchants considered to be the best practices of the day, or what we might now call due diligence. In other words, if law emerges from this buzzing blooming confusion of developments and initiatives, it would not be the first time that law had gradually crystallized from commercial practices that were grounded in what the entrepreneurial class considered to be in its own long-term self-interest; indeed, I think it is possible to see in the recent development of the corporate responsibility movement the outlines of a new law merchant, comprising a body of authority, grounded in the needs and customs of merchants, and ultimately codified in municipal commercial law and international standards. And definition of that sort would strike representatives of the human rights NGO’s, corporations, and inter-governmental organizations as progress of a sort.

THE FOUR REGIMES

The emerging regime of domestic corporate liability is but one regime of many that gets us past the received wisdom that human rights is some kind of utopian moralizing in some public realm, while corporate practice is in some private realm, governed only by the laws of the marketplace. Specifically, we must distinguish among four regimes of corporate responsibility, emerging as it were simultaneously in the human rights field and very much inter-related:

First, a market-based regime, under which corporations compete for consumers and investors by conforming to international human rights standards. Voluntary codes of conduct, statements of corporate principles, industry coalitions, and social accountability auditing (SA 8000) are all examples of what we might call “human rights entrepreneurialism,” that is, efforts by companies to compete with one another for consumers or investors through a commitment to human rights. Self-regulation is of course one technique for avoiding regulation and defining industry practices in such a way as to avoid liability lawsuits.

Second, a regime of domestic regulation, exemplified by directives and legislation in the United States, which, through human rights conditionality, recruit the transnational corporation as an instrument of foreign policy. Legislation designed to curb the corporate presence in Burma, Libya, and Cuba, preceded in the United States by the Anti-apartheid Act of 1986, exemplifies this approach.

Third, there is an emerging regime of international regulation and soft law by  intergovernmental organizations have attempted to channel corporate conduct in ways that are thought to be socially responsible. Here the inkblot includes the OECD’s principles, the UN’s Global Compact, the Human Rights Commission’s Proposed Draft Human Rights Code of Conduct for Companies, and the decisions of the international financial institutions, which by historical standards anyway increasingly reflect human rights concerns.

Fourth, now overarching and perhaps propelling those regulatory and market-based initiatives is a regime of civil liability enforced through private lawsuits in domestic courts. Here we start with the truth that various domestic courts in the United States have ruled that corporations may in principle be obliged to pay substantial damage awards for their complicity in abuses by the governments with which they do business.

Consider for example the Holocaust cases, which have generated the most attention in the popular press: these are suits, sometimes authorized by special statutes in particular states, addressing Holocaust claims, brought against Swiss, German, Austrian, and French companies including banks, insurance companies, and manufacturers, to recover looted assets or converted accounts, or seeking damages for wrongful death or slave labor. In Bodner v. Banque Paribas, decided last summer for example, descendants of Jewish customers of French financial institutions sued those institutions claiming damages arising from their participation in a scheme to expropriate the assets of customers during the Nazi occupation and the failure to disgorge the assets to the rightful owners. The federal court in New York ruled in favor of its own jurisdiction and rejected the pre-trial defenses of the defendants. Similar cases have been filed by prisoners of war, slaves, and comfort women against Japanese companies and the government of Japan,  though most of the Japanese cases have been kicked out of court for reasons discussed below.

Of course, not all of these private lawsuits arise out World War II. Currently pending in the California Supreme Court for example is a suit against Nike under the state statute regulating deceptive advertising and unfair business practices. The complaint is that Nike falsely proclaims a commitment to human rights that is allegedly violated in fact. The theory of liability is that manufacturers cannot lie about the processes by which they make and market their products. A consumer who relies on Nike’s human rights commitment in deciding which sneakers to buy has been just as misled – assuming that the commitment is more public relations than reality – as someone who buys a gallon of milk falsely labeled “pasteurized.” That case was dismissed in March 2000 on the ground that the particular plaintiff had no standing to complain, but the underlying theory of the case remains to be tested.

Other possible litigation or litigation-like vehicles for the enforcement of corporate human rights standards are the so-called quo warranto proceedings which seek the cancellation or the forfeiture of a company’s corporate charter for abusing the public trust or acting ultra vires. It would of course take more than a failure to live up to best practices to justify such an extraordinary remedy, but again one can imagine the argument that a corporation acting consistently in violation of international law would lose the privilege of the corporate form.

A very different and so far hypothetical alternative arises out of the power of the US Securities and Exchange Commission to issue disclosure regulations as “necessary or appropriate in the public interest or for the protection of investors.”  In a seminal article in the Harvard Law Review (The SEC and Corporate Social Transparency, 1999), Professor Cynthia Williams has argued that the SEC should expand the requirements for so-called social disclosure, including information on the countries in which a company does business; information on its domestic and global labor practices, and on its domestic and global environmental effects. The legislative history of the Securities Act of 1933 provides for the “use of disclosure as a regulatory means to foster greater public accountability in the corporate enterprise” and is enforced through penalties for false or incomplete disclosure. Obviously as investors begin to care more about the human rights records of companies, the SEC may find an opening for exercising its regulatory powers under section 14(a), which will in turn I suspect lead to litigation. Even more specialized statutory grounds for corporate liability litigation in the U.S. are provided by the Racketeer Influenced and Corrupt Organizations Act (RICO), which has been invoked to advance human rights claims against companies engaged in human rights violations that take criminal form.

Let us focus, not on these somewhat specialized or speculative possibilities, but rather on a series of actions under the Alien Tort Claims Act of 1789 (“ATCA” or “Section 1350”), seeking monetary damages from corporations for their complicity in human rights violations abroad. In my experience, human rights advocates tend to think of the ATCA first, and because the litigated cases under the act offer a microcosm for testing the legal status of the norms at issue and the doctrinal or logistical obstacles to litigating human rights claims against private entities.

ALIEN TORT LITIGATION

In its modern form, the Alien Tort Claims Act provides that “the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” The text of the statute suggests that claims under it must satisfy three requirements: the plaintiff must be an alien, the claim must be a tort (i.e. a civil wrong as distinct say from a breach of contract or a violation of the criminal law), and the tort must be in violation of the law of nations (now understood to mean customary international law) or a treaty of the United States.

What little legislative history exists suggests that the First Congress of the United States intended to empower the federal courts to hear tort cases implicating the fundamentally federal interests in foreign nationals and the interpretation of international law. Any young government, eager to be accepted as a serious international partner, would need to publicize some such commitment to the law of nations. In addition, the framers understood that transitory or transboundary torts would have fallen within each state’s general jurisdiction. In this, they were simply following the practice of the English courts, which had long established that any one who committed a tort was under an obligation to make reparation for it wherever he or she went. So that if a tort were committed in France and the tortfeasor then traveled to England, if the tort were transitory, the victim would be able to use the English courts to redress the wrong committed in France. The framers of Section 1350 understandably endorsed the option to bring such cases in our federal courts whenever the case involved international law.

The Alien Tort Claims Act remained dormant for nearly two centuries until 1980, when it  became a vehicle for human rights cases with the Second Circuit’s decision in Filartiga v. Pena-Irala – a case that involved no claims against corporations, but which, because it is now central to the use of US courts to enforce corporate responsibility, rewards a careful analysis.

In Filartiga, a Paraguayan national named Joelito Filartiga was tortured to death by Pena-Irala, the Inspector General of Police in Asuncion. Pena came to the United States, where Dolly Filartiga -- Joelito’s sister -- sued him under the ATCA. The only litigated issue was the applicability and the meaning of the law of nations. After all, the Filartigas were plainly aliens in the United States. Death by torture is plainly a tort, though not of the garden variety. The primary litigated issue under the statute was whether a government’s torture of its own citizens constitutes a violation of the law of nations or not.

The precedents were not favorable on that issue, because of the received orthodoxy that a state’s treatment of its own nationals was not within the reach of international law, and the lower court dismissed the case on precisely those grounds. But the Court of Appeals reversed, reinstated the case, and ruled that deliberate torture perpetrated under color of official authority violates universally-accepted principles of international law. To reach that conclusion, the court drew on a variety of declarations, treaties, constitutions, and submissions from the executive branch to establish that the law of nations had changed: a state was no longer free to treat its citizens any way it wished, and jurisdiction under the ATCA would be proper whenever the torturer could be properly served within the boundaries of the United States. A default judgement was ultimately awarded, though Dolly Filartiga to this day has not received a penny of the compensation she was awarded by the court.

In the intervening twenty years, numerous cases that fit the Filartiga paradigm have been brought successfully against a variety of defendants: Ferdinand Marcos, former president of the Philippines, for human rights abuses during the martial law regime; an Ethiopian policeman for torture and rape during the terror; and against numerous commandantes and superior officers who bore command responsibility for abuses on their watch. Actual recovery of damages in these cases continues to be an issue, and the cases themselves tend to go off on default proceedings rather than a full trial, but Congress has approved the Filartiga result, codified it, and extended it to US citizens in the Torture Victim Protection Act.

The other 1350 case that facilitated the transition to corporate human rights liability was Kadic v. Radovan Karadzic, in which the former leader of the Bosnian Serb faction was successfully sued for genocide and similar violations of the law of nations. Here too, the lower court had held that section 1350 could not be satisfied because Karadzic, being a non-state actor, could not have international obligations and therefore could not have committed a tort in violation of the law of nations. According to the lower court, because "the current Bosnian-Serb warring military faction does not constitute a recognized state," subject matter jurisdiction under the Alien Tort Claims Act and the Torture Victim Protection Act must fail. "Acts committed by non-state actors do not violate the law of nations." But the court of appeals reversed that position because conventional and customary international law explicitly imposes human rights obligations on a variety of persons who are not “state actors”.

Specifically, the court ruled that “the law of nations as understood in the modern era [does not] confine its reach to state action. Instead, 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.” and the court distinguished between certain acts like torture or summary execution which violate international law only when committed by state officials or under color of law, from piracy, slave trading, and certain war crimes which do not require state action. As suggested below, one of the key questions in the corporate responsibility litigation is what degree of relationship is required to trigger the greater range of obligations. Here too – as in Filartiga – the case was remanded, liability was established through default proceedings rather than a full trial, multi-million dollar damages were awarded, and no part of the substantial damage award has actually been recovered.

CORPORATE LIABILITY UNDER THE ALIEN TORT CLAIMS ACT

The Filartiga and Karadzic precedents have suggested to some courts the limited circumstances under which corporations may be found liable under Section 1350 for their complicity in human rights violations abroad. In September 2000, for example, a federal appeals court announced its decision in Wiwa v. Royal Dutch Petroleum, allowing the case to go forward in U.S. courts. The case, which  challenges Shell’s complicity in human rights violations in Ogoniland, Nigeria, had been dismissed on the assumption that similar actions could be filed in the United Kingdom and the Netherlands, which were thought to be superior fora. In the courts of the United States, the inconvenient forum doctrine – or forum non conveniens – applies whenever the United States is a disproportionately inconvenient forum to try the case and some more convenient forum exists. But the appellate court allowed the case to proceed in the United States, declaring that the district court had given inadequate weight to the interest of the United States, as expressed in the ATCA and the Torture Victim Protection Act, “in providing a forum for the adjudication of claims of torture in violation of the standards of international law.” The U.S. Supreme Court announced in March 2001 that it would not review the case.

Similar cases have been brought against Gap and other clothing manufacturers, a case that settled in August 1999 for $1.25 million and various other companies in the extractive industries, including Chevron, Texaco, and Freeport-MacMoran. But in my view, the most significant and the most advanced of these cases is Doe v. Unocal, currently before the federal appeals court in California.

The complaint in that case is that Unocal was part of a joint venture gas drilling project in the Yadana natural gas field in Burma, and that to clear the way for the pipeline and provide a supply of cheap and compliant labor for the venture, SLORC forcefully relocated villages, displaced indigenous peoples from their traditional lands, committed acts of torture and rape, and put scores of people into forced labor.

The claim is not that the corporate defendants just happen to have maintained a business relationship with a government that commits human rights violations. Nor is there a claim that the corporation is somehow vicariously liable for the action of its state-owned joint venture partner. Rather, the allegation is that Unocal knew at the time of its joint venture that SLORC had a history of human rights abuses, that Unocal understood that those violations would be continued in order to make the gas pipeline project a reality and that the company actually benefitted from those violations. In 1997, the district court in Unocal denied the defendant’s motion to dismiss, ruling that a corporation could in principle be liable for human rights violations. Of course, three years later, in September 2000, after discovery had been completed and the facts had been submitted to the court, the district court ruled in favor of Unocal’s, granting summary judgment in its favor. In the court’s interpretation of the facts, Unocal was insufficiently connected to the acts alleged in the complaint, and it is that disposition that is now on appeal to the Ninth Circuit.

The summary judgment order from September 2000 leaves intact some of the key principles adopted by the district court on the motion to dismiss in 1997, though some advocates have concluded that if the facts of that case are insufficient to establish liability, no case will establish liability. If we focus on the principles in play instead of the court’s interpretation of facts, however, the result is potential guidance for corporations seeking in good faith to avoid liability for complicity in human rights abuse.

The 1997 court actually articulated two separate circumstances under which a nominally private actor might nonetheless bear international responsibility: the first in those instances when the individual commits one of a narrow class of wrongs identified by treaty and custom as not requiring state action to be considered wrongful, and the second in those more general circumstances when the offensive conduct is sufficiently infused with state action as to engage international standards.

The first category, a group of per se wrongs, comprises conduct requiring no state action as a matter of law. For at least two hundred years, it has been recognized that there are acts or omissions for which international law imposes responsibility on individuals and for which punishment may be imposed, either by international tribunals or by national courts. There are multiple examples of treaties defining private wrongs. The Genocide Convention for example requires that persons committing genocide be punished, “whether they are constitutionally responsible rulers, public officials or private individuals.” Certain aspects of the war crimes regime of the Geneva Convention, especially common Article 3, similarly bind non-state actors when they are parties to an armed conflict. This hardly erases the distinction between state and non-state actors altogether, as some human rights advocates have urged, but it is sufficiently common to support the Karadzic court’s more modest conclusion 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 military tribunal at Nuremberg similarly found that private corporate actors could be guilty of such international crimes as economic plunder and enslavement, or the mistreatment of civilians and prisoners of war, many of whom were forced to work under inhumane conditions in the defendants’ private mines and factories. In the cases against Flick, Krupp, and Krauch for example, the tribunal made its now-famous declaration that the application of international law to individuals is no novelty. The allies convicted forty-three private German citizens for committing crimes against humanity, specifically holding that their actions were independent of those of their government. In our own time, the Statute of the International Criminal tribunal for the Former Yugoslavia sets no per se limit on the types of individuals who or what may be liable.

In a sense, the least controversial aspect of the Alien Tort Claims Act is that private individuals who commit torts in the course of violating international law fall squarely within its jurisdictional reach. Pirates, the very exemplar of intended defendants under §1350, were not always or necessarily considered "state actors," and there was never any question that their depredations were in violation of the law of nations. One of the earliest exercises of jurisdiction under the Act involved an unlawful seizure of property by a non-state actor. Nor was there any doubt that private citizens who infringed the rights of ambassadors or diplomats could be sued under §1350, and that statute clearly provided jurisdiction over a child custody dispute that involved a breach of the law of nations. There is no suggestion here that the Alien Tort Claims Act internationalizes family law, only that it is no radical insight that private entities -- including corporations -- can bear a measure of international liability that can be enforced in domestic courts.

We are then in a position to respond to the first question posed above, namely “how can there be international legal standards governing corporations and enforceable in the courts when international law traditionally imposes obligations only on states?” The simple proposition is that there can be no prophylactic rule against private obligations under international law, especially for well-defined, egregious violations of the law. There is in short no doctrinal firebreak that keeps private corporations from being liable for any violation of international law, ever.

But according to the Unocal court in 1997 there is another and in some ways less extreme set of facts that might trigger corporate responsibility – a second category of non-state liability, namely, conduct that becomes internationally wrongful by virtue of the actor’s relationship with a state. In Karadzic, the plaintiffs were entitled to prove their allegations that the defendant acted in concert with Yugoslav officials or with significant Yugoslavian aid, and in Unocal, the plaintiffs were allowed to prove that the defendants’ corporate conduct involved sufficient state action to expose the corporation to a strict set of human rights standards. The Unocal court specifically noted the allegation that Burmese government entities were

agents of the private defendants; that the defendants are joint venturers, working in concert with one another; and that the defendants have conspired to commit the violations of international law alleged in the complaint in order to further the interests of the Yadana gas pipeline project.... Plaintiffs have alleged that the private [defendants] were and are jointly engaged with the state officials in the challenged activity, namely enforced labor and other human rights violations in furtherance of the pipeline project.

In determining whether these allegations were sufficient to trigger a finding of state action, the 1997 Unocal court, like other courts applying the Alien Tort Claims Act,^[1] ruled that the plaintiffs were entitled to prove the existence of such a relationship using the “‘color of law’ jurisprudence” adopted by U.S. courts under Section 1983 of the federal antidiscrimination statutes.^[2] This approach necessarily triggers complex legal and factual issues for future litigation, because the decisions interpreting Section 1983 “have not been a model of consistency”^[3] according to the Supreme Court itself.  And of course the commercial relationships between transnational corporations and governments obviously assume a bewildering variety of forms, and that will trigger a great deal of litigation.

In its September 2001 order, for example, the Unocal court determined that the company’s relationship with the government of Burma did not satisfy any of the standard tests for state action. The company was not engaged in sufficiently joint action, was not exercising a public function, was not acting under state compulsion, and did not otherwise have a sufficient nexus with the government to trigger liability. Although these tests under 1983 might be marginally better than nothing, the nexus standards under that act offer insufficient guidance to multinational corporations attempting in good faith to avoid liability under the Alien Tort Claims Act.

It is possible of course that special legislation or perhaps some international instrument would attempt to define the requisite relationship more directly, and doubtless as the cases proliferate, the pressure for that kind of legislative instrument will build. But I am not optimistic that legislation will anticipate every nexus issue that is likely to arise in future cases; indeed, if the history of codifying common law causes of action proves anything, it is that the common law process doesn’t stop just because there is a statute in the picture. The process of interpretation will continue even if there is a statutory framework, as the American antitrust laws and the British human rights act demonstrate: definitions are fine, and in many cases better than indefinition, but it is naive to think that they preclude rather than generate litigation.

OBJECTIONS REVIEWED

It is critical finally to review some of the objections to these actions, some of which have become borderline ritualistic and some of which illuminate properly the limits on the ATCA as a vehicle for human rights enforcement against corporations. Of course, not all of these objections are limited to the use of litigation but go to the very premises of the corporate responsibility project generally: the argument for example that social responsibility movements subvert the implicit promise of corporations to their shareholders or require an expertise that corporations cannot be expected to have; that none of the four regimes adequately distinguishes degrees of corporate culpability or gives adequate notice of the corporation’s human rights responsibilities; that Unocal and its progeny impose a uniquely American form of liability that disadvantages U.S. corporations in the global marketplace; or that imposing greater human rights obligations just as corporations are voluntarily beginning to undertake them demonstrates the truism no good deed goes unpunished.

There are also potential objections the human rights perspective, especially the argument that the current body of corporate human rights concerns is pretextual, unambitious, skewed towards labor rights, and largely unenforceable aside from the scattershot and somewhat serendipitous coincidence under the ATCA that a willing plaintiff and a vulnerable defendant are in the United States at the same time. Some human rights advocates resist any argument to the effect that a corporate human rights agenda is “good business”, because such an argument commodifies basic principles of human dignity and thereby surrenders the moral high ground. In this view, corporations should protect human rights because it is the right thing to do, whether it is profitable or not. Moreover, critics argue, shifting the focus to economic rights or forcing all human rights under the “rule of law” rubric undermines whatever coherence the human rights movement has achieved over the last half century.

Because I have been asked to address the potential role of domestic courts in the enforcement of corporate responsibility, I will show how these general objections take specific form in the context of litigation, especially under the ATCA. One stock skepticism starts with the assertion that there is simply no connection to the United States in these Alien Tort Claims cases: skeptics argue that there is no clear link to the United States in Filartiga or Marcos or especially in Karadzic, and that therefore there is a distinct unilateralism in sequence of cases. Of course, on the face of the statute, the only explicitly required link is that there be a violation of the law of nations or a treaty of the United States. In Filartiga the court ruled that the United States had  has an interest in common with all other countries -- a mutual, long-term sophisticated self-interest -- in punishing certain kinds of  behavior wherever the perpetrator can be found. The Court deployed the ancient notion of hostes humanis generis, the enemy of all mankind, and equated the modern-day torturer with the 18th century exemplar of mankind's enemy, namely pirates.

The principle of universal jurisdiction expresses this sense that some international wrongs are sufficiently intolerable that every state has a legally-protectable interest in its suppression to apply its own law. From this perspective, the domestic courts are not acting unilaterally. They are acting as agents for the international legal order. And, it must be said, in each of these cases, there was a link in fact: the defendant was physically in the United States and brought the dispute within US territory, triggering the transitory tort doctrine -- the ancient idea that committing a tort creates an obligation to make reparation and that obligation follows the defendant  wherever he or she goes in the world. Of course the inconvenient forum doctrine might apply in the right circumstances, but there must be an alternative forum before that doctrine can apply, and that clearly was not plausible in Filartiga or in most similar cases. And perhaps ultimately on the issue of unilateralism, in a world where states can be expected to protest loudly when their interests are violated, it is significant that no state has ever protested the exercise of jurisdiction under the ATCA.  The contrast to certain sections of the trade act or the antitrust statutes or the labor laws could not be more stark.

A second stock skepticism is that these cases are simply too political for a domestic court to handle. It is certainly true that the courts will find some cases beyond their competence because there are no judicially manageable standards or because the constitution vests the resolution of the issue in one of the political branches of government. In these circumstances, the so-called political question doctrine may be available to dismiss the case and keep the court from acting beyond its institutional competence. But the doctrine is limited: Filartiga, Marcos, Karadzic – Unocal itself – arose in circumstances that were highly-charged politically, and in each the court had the opportunity to avoid the case on political grounds. But not one did so, in part because each court was convinced that there was adequate law for it to apply.

The specialized foreign affairs equivalent of the political question doctrine, the so-called act of state doctrine, is similarly unlikely to serve as a necessary obstacle to litigation of this type. Under the act of state doctrine, domestic courts will not sit in judgment of the official acts of a foreign state taken within its own territory. Here too, the act of state doctrine has considerably less bite in ATCA cases than may at first appear. The politics of human rights abuse are such that it is extremely difficult for governments to claim the abuse as policy, and without that sense of ratification, the act of state doctrine cannot apply.

The defense was not available in Filartiga for example because there was no ratification of the torture by the sovereign, no metaphorical arm around Pena-Irala; moreover, the Supreme Court has ruled that the lower courts need not apply the act of state doctrine when there is consensus about the underlying norm of international law. That is, the doctrine is most likely to apply when there is disagreement about the status or meaning of the international norm in question. But in Filartiga, court suggested that the international consensus prohibiting torture vitiated the act-of-state hurdle. In sum, that doctrine is potentially relevant, but it is not necessarily a preclusive consideration in cases under 1350.

Filartiga skeptics also argue that some sort of immunity ought to apply in these cases, especially sovereign immunity, diplomatic immunity, and head-of-state immunity. But each of those defenses is fact-dependent, and none applied in Filartiga or Karadzic or Unocal.  Sovereign immunity is available for example only to a foreign state or its agencies and instrumentalities, and even then certain kinds of corporations and certain acts do not qualify for the immunity. For example, a corporation may qualify as an agency or instrumentality but only if the foreign state owns more than half of its shares – among other limitations. The other immunities – notably diplomatic immunity and head-of-state immunity –  would not self-evidently apply to the garden variety corporation. These obstacles in short may bar particular actions in the future but given the fact-dependency of these doctrines there is no reason to think that there is some per se obstacle to corporate liability for complicity in human rights violations.

A quite separate category of objection is actually a constellation of related concerns, grounded in the suspicion that  the law of nations is too manipulable to qualify as real law. From the plaintiff’s perspective, the concern was described by Paul Hoffman as the “blank stare phenomenon”: domestic judges are rarely trained in or experienced with international legal standards or their status as domestic law, and to invoke the law of nations is to invite a certain skepticism from the bench. Moreover, the reluctance of the United States to ratify and implement even the basic human rights treaties, and the practice of adopting treaties with significant reservations and declarations, suggests an intolerable double standard that makes it peculiar for a U.S. court to be in the business of enforcing human rights standards abroad, especially when the U.S. Supreme Court seems to interpret international treaties with a literalism that undermines the international understanding of the agreement (e.g. Alvarez-Machain and Sale). All of this qualifies as bad news from the plaintiff’s perspective about the status of international law in domestic courts.

From the defendant’s perspective, the bad news is that the law of nations is simply too vague and too impressionistic to provide meaningful guidance. A self-styled school of academic revisionists has argued that there is something fundamentally illegitimate in a domestic court’s application of customary international law. No court has gone that far yet, but there is no doubt that the ATCA reference to the law of nations invites the courts to apply a form of law that does not take the usual form. And it is true that customary international law does not (or need not) arise out of the deliberations of a parliament or a congress, and so, in a legal system committed to legislative supremacy, the law of nations must be a rare bird.

But lawyers understand that the courts routinely consider the law of nations to be part of the common law, to be ascertained and administered whenever questions based upon it are presented for review. The evidentiary standard for proving the existence of a customary norm is extremely high and screens out idiosyncratic and aggressive interpretations. Specifically, custom requires a near-universal practice of states, pursued out of a sense of legal obligation. Courtesy and good politics do not give rise to custom. In practice, this requires that extravagant or overly creative claims for customary international law will be routinely rejected.

Alien Tort cases alleging for example that fraud violates the law of nations, or that there is a customary analog to the free speech provisions of the First Amendment, have not survived motions to dismiss, because the state practice and sense of legal obligation requirements were not satisfied. Custom, for all of its peculiarity, is not infinitely manipulable. It is not – as Doctor Johnson said of second marriages – the triumph of hope over experience.

CONCLUSION – TOWARDS A NEW LEX MERCATORIA

These objections are far from trivial, though they are in my view ultimately insufficient to derail the corporate human rights initiative altogether. In the article-in-progress on which these observations are made, I explore in detail the analogy between the corporate responsibility initiatives and the ancient lex mercatoria, a set of good mercantile practices, growing out of the perceived needs of the marketplace, that ultimately gave rise to law in more recognizable and more enforceable form.  Some now routine doctrines of commercial law -- like the holder in due course doctrine or the rule of sureties -- grew out of what medieval and renaissance merchants considered to be “best practices” or “due diligence” to use the modern idiom.

In other words, if law emerges from this buzzing blooming confusion of developments and initiatives in corporate responsibility, it would not be the first time that law gradually crystallized from commercial practices that were grounded in what the enterepreneurial class considered to be in its own long-term self-interest; indeed, I think it’s possible to see in these recent developments the outlines of a new law merchant, comprising a body of authority, grounded in the needs and customs of merchants, and ultimately codified in municipal commercial law and international standards.

But rather than defend the analogy in detail here, let me conclude that domestic litigation offers one imperfect but legitimate mode for maintaining the general impetus towards corporate responsibility in the human rights field. But I suspect that the proliferation of such cases will justify a global standard that is so grounded in international law as to offer corporations a measure of protection from overly aggressive or idiosyncratic approaches to human rights.

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ENDNOTES