Exploring the future and viability of ATS
The applicability of ATS to US corporations
After the decision of the Jesner case on liability of foreign corporations, it is still uncertain as to whether that decision shall be extended to U.S. corporations.
In fact, in Jesner, the Court only ruled on the liability of foreign companies without addressing the issue of U.S. companies. As Justice Alito stated; “[…] because this case involves a foreign corporation, we have no need to reach the question whether an alien may sue a United States corporation under the ATS”
. However, Justice Kennedy’s majority opinion suggests additional limitations which could exclude national corporations from lawsuits under the ATS
. Indeed, Justice Kennedy, writing for a three-justice plurality, put forward two reasons for negating the liability of corporations, both domestic and foreign, under the ATS: the possibility of alternative means of redress and the danger for U.S. corporations that could result from a reciprocal extension of corporate liability by other jurisdictions
Moreover, some believe that there is a range of reasons to suspect that defendant societies might use Jesner to limit the ATS to lawsuits against individuals.
Unfortunately, in this context of uncertainty, the Supreme Court does not intend to rule on this issue. The question thus remains open. There was the same criticism after the Kiobel decision. The court didn’t rule on the “touch and concern” standard. Therefore, Federal district courts couldn’t effectively apply this standard and were often confused and distraught about its application 4 .
For instance, in the Kaplan case, the court fully applies the findings of the Jesner decision. The facts are the same and there is no new cause of action in the case. But when a case raises questions which are not covered by Jesner, the application of Jesner becomes complex. This is the case for the issue of corporate liability for U.S. corporations. Lower courts are also divided on Jesner’s impact. In Doe I, the Court refused "to recognize the liability of national societies under the ATS"
. Or in Estate of Alvarez, the Court held that Jesner "did not exclude the possibility" of liability under ATS for national societies, for which "the need for judicial caution is clearly reduced", and in Al Shimari, it was concluded that "the Jesner Court did not intend to disrupt" the split in the circuit concerning ATS liability "to national societies".
In another case (Correctional Service corporation V. Malesko), the court took the same position as it did in Jesner. The question of US corporation’s liability is a new cause of action and it is not within the jurisdiction of the judiciary to decide this issue. It is the duty of Congress. Indeed, some lower courts have used the Jesner’s skepticism towards the creation of new causes of action to dismiss ATS cases
The Brill v. Chevron case didn’t provide more answers. Its position is really ambivalent about Jesner. The court decided to leave this matter for "another day", rejecting instead the complaint on the basis that it lacks the necessary justification for Chevron to have a real willingness to finance the terrorist group and to commit the alleged facts.
Moreover, at least two district courts have suggested that Jesner could lead to a liability ban for both domestic and foreign companies. The lower court’s opinions are quite discordant and inaccurate as to the implications of the Jesner decision for US corporations.
If US corporations were concerned by the Jesner case law, the solution for claimants in subsequent cases could be the private liability of the employee. However, this is strongly debated because it creates a serious imbalance between physical people and moral people, an imbalance that would be contrary to the goals and objectives of the ATS. Furthermore, this distinction creates an imbalance between rights and responsibilities 7 . Indeed, the distinction would limit the obligations and responsibilities of corporations after having recognized their right to freedom of expression and political financing.
In short, the application of the ATS is uncertain, imprecise and indefinite for US corporations. Moreover, the solutions envisaged are no more convincing.
Claims still covered by ATS after ’Jesner’
Throughout the years and after the Filartiga case
, it is observed that the scope of application of the ATS has significantly been reduced by the Supreme Court
. One of the first big cases where the court has taken a step back is the Sosa v. Alvarez-Machain (2004) 10 . In this case, the Court recognized that human rights cases could be brought under the ATS but imposed the condition that the violations in question should relate only to international norms that are "universal, obligatory, specific and definable" 11 . In the Kiobel v. Royal Dutch Petroleum (2013) 12 , the Court further narrowed the scope of the ATS by establishing that complaints brought under the ATS must displace the presumption of extraterritoriality. Indeed, the Court held that the ATS does not apply extraterritorially and cases must therefore "touch and concern" the territory of the United States with sufficient force 13 . Finally, in 2018, in Jesner v. Bank 14 , the Supreme Court held that claims based on the ATS could not charge foreign corporations.
While human rights obligations are increasing via diligence and disclosure obligations (US Federal and States laws 15 ), it is remarkable that the Supreme Court is reluctant to create new causes of action under the ATS, especially in the Jesner case 16 . This pattern is part of a broader jurisprudence. Indeed, the Jesner decision is now being used as an additional reference to support the skepticism of U.S. courts regarding new implied causes of action beyond the ATS. This can be seen in the Bentley v. Hilliard 17 , Clemmons v. United States 18 and Kirtman v. Helbig 19 decisions, which concern the Bivens theory, and in the Williams v. Lynch 20 decision, which concerns access to a court and conditions of detention 21 .
The Jesner ruling now excludes foreign legal persons from the scope of the ATS 22 , so that plaintiffs can no longer bring an action challenging the liability of foreign companies on the basis of the ATS 23 . In order to avoid this problem, one solution considered by the court is to try to hold individual agents of companies liable rather than the companies themselves, such as managers or employees 24 .
The prohibition of the liability of foreign companies on the basis of the ATS is partly because courts are afraid that this would lead to reciprocal actions and create a precedent that would discourage foreign investment. Moreover, this would involve legal issues of political and foreign policy concern, for which judicial restraint is advisable 25 . Some observers have noted that a very small number of cases would meet the requirements of the ATS and would eventually succeed, if one combines Jesner with Kiobel’s presumption against extraterritoriality and the limitations of Sosa’s two-step framework 26 .
With the scope of the ATS greatly reduced, individuals will have to turn to other instruments in order to hold individuals and corporations accountable. After the enactment of the Justice Against Sponsors of Terrorism Act, in 2016, one section has given a possibility to bring claims before US courts. Indeed, in the 4th section, JASTA refers to section 2333 of the 18th title of the US Code, which states that : “(…) as of the date on which such act of international terrorism was committed, planned, or authorized, liability may be asserted as to any person who aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism.” 27
As we can observe, this section refers to “any person who aids and abets” 28 . In subparagraph (d)(1), the US Code give a special attention to the word “person”, referring to section 1, title 1 of the US Code for its meaning 29 . According to Section 1 of title 1, the word “person” refers to individuals, as well as “corporations, associations, firms, societies and joint stock companies” 30 .
Through JASTA, the principle of sovereign immunity has been interfered with as foreign states can be held accountable for their action regarding sponsoring terrorism under the jurisdiction of the US courts. It also important to state that JASTA has also expanded the scope of the civil liability of organization 31 . With JASTA’s 4th section, US citizens can bring a claim before a US court, which will be able to exercises its jurisdiction when an individual or a corporation has aided a person in committing an international terrorist act.