Sovereign immunity

The U.S. government

The U.S. government, including its federal agencies, asserts that it enjoys sovereign immunity from all civil and criminal claims, unless it waives immunity or agrees to be pursued in a particular case. The ATS is not considered a waiver of immunity. Recently, however, courts have found and plaintiffs are increasingly arguing that the United States cannot enjoy immunity for jus cogens violations. 1 In Al Shimari v. CACI (discussed above), the district court issued a 58-page decision in which it traced the origins of sovereign immunity under customary international law and found that domestic sovereign immunity was contrary to States undertaking under international law to prohibit, punish and provide a remedy for jus cogens violations, including torture. 2

The situation regarding government officials is more complex, and depends on whether the person acted as an official within the scope of his or her authority, 3 which is often difficult to determine.

In certain specific cases, however, the government has waived immunity. The Federal Tort Claim Act (FTCA) allows foreign U.S. residents and non-residents to bring civil claims in U.S. courts for harm caused by a federal employee. The FTCA contains many exceptions which could hypothetically result in the lifting of immunity. In addition, the dispute will be subject not to international law, but to the tort laws of the United States, specifically the law of the place where the act of negligence or omission occurred. 4 Some sections of international law, however, are incorporated into the laws of individual states, and thus certain provisions of international law are considered to be an integral part of domestic law and may be heard under the FTCA.

Foreign states

By virtue of the Foreign Sovereign Immunities Act (FSIA), a Foreign state, understood to be “a political subdivision of a foreign state or an agency or instrumentality of a foreign state,” 5 benefits from absolute immunity in civil actions heard by U.S. courts. 6 “Agency” and “instrumentality” are defined as “any entity— (1) which is a separate legal person, corporate or otherwise, and (2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof.” 7

Although the scope of the ATS has been reduced by decisions of the American courts 8 , and under the FSIA, foreign states benefit from absolute immunity, there are still some exceptions laid down in the FSIA under which foreign states do not enjoy immunity. Furthermore, in 2016, the Justice Against Sponsors of Terrorism Act (JASTA) was adopted. This act narrows the scope of sovereign immunity 9 . So, as much as the scope of the ATS gets smaller, it does not mean that foreign states cannot be judged by the American courts. With the adoption of JASTA, it is observed that the U.S. legislative body is pushing for a more nationalist vision, a greater protection for U.S. nationals. The ATS allows U.S. citizens and non-U.S. citizens to introduce a claim. Whereas JASTA only allows U.S. nationals to bring a claim before the court 10 .

There are several exceptions to the granting of such immunity. One is a commercial exception. Immunity is absolute when an act is carried out on public authority, in other words, when a foreign state acts in its sovereign capacity. However, foreign states do not enjoy immunity from acts that have caused damage when the acts are governed by private law in the context of commercial transactions, in other words, when the state conducts an act of management as opposed to an act of sovereignty. The commercial exception covers loan agreements, investment offers, purchase and sales contracts and employment contracts. A link to the U.S. must be established: this is most often done when the commercial activity is conducted directly by the foreign state on U.S. soil (e.g. when a company whose majority shareholder is a foreign state is located in the U.S.), or where an act linked to the foreign state’s business was carried out on U.S. soil (e.g., the signing of a commodities contract in the U.S.) 11 .

Doe v. Unocal

Both the trial and appellate courts recognized the immunity of SLORC and MOGE, ruling that the security of the Yadana pipeline, for which they were responsible under the framework of their joint venture with Unocal, was not a commercial activity 12 within the meaning of the definition of exceptions lifting immunity. The SLORC and MOGE were therefore able to rely on the immunity granted by the Foreign Sovereign Immunities Act.

Questions regarding immunity for agents of a foreign government are a point of contention in U.S. federal courts. In June 2010, the Supreme Court ruled in Samantar v. Yousuf that the FSIA statute itself provides no recognition of sovereign immunity for individuals representing a foreign state. However, the Court left open the possibility that such individuals might still enjoy immunity outside the FSIA, under common law.

Immunity under the common law is complex and unresolved, but certain aspects are important for human rights litigation. Firstly, high ranking officials, such as heads of state, may enjoy immunity for all of their acts while they hold their offices. Secondly, officials may enjoy immunity for acts within their duties, even after they have left office. 13 However, some courts have ruled such immunity does not extend to violations of jus cogens. 14 Others have found this immunity does extend to jus cogens violations; thus the issue is an open one. 15 Finally, the Court may apply or withhold immunity according to the State Department’s recommendation. 16

Act of state immunity

U.S. courts may also invoke the act of state doctrine to refuse to hear a lawsuit, particularly when a foreign state does not enjoy immunity under the FSIA. This doctrine further restricts the scope of a foreign state’s liability, when the case would require the court to pass on certain of the foreign states acts. The doctrine is grounded in the idea that the courts of one state shall not judge the acts of a foreign government carried out in that government’s state. 17 Like the political question doctrine (see below), act of state immunity in U.S. courts is also partially grounded in the court’s unwillingness to interfere with or contradict U.S. foreign policy largely entrusted to other branches. 18 The more likely a case is to require the court to make a determination that would frustrate or contradict U.S. foreign policy, the more likely the Court is to invoke the act of state doctrine.

Acts of state could include, for example, another state’s adoption of a law or decree, or a police action or military activities carried out on a state’s own soil. As the name suggests, acts such as these are governmental in nature. They are also of an official nature, carried out by government officials acting in the name and on behalf of a foreign state. The abovementioned list is not exhaustive. The court has the discretion to determine whether an act is an act of state by assessing the case’s implications for U.S. foreign policy through three criteria:

  • The behaviour in question. In evaluating the dispute, the court must consider the degree of international consensus regarding the behaviour. The more international consensus there is prohibiting the behaviour, the less necessary courts will consider the act of state doctrine. Some consider that universally condemned serious human rights violations (particularly jus cogens norms) cannot constitute acts of state. 19 The application of the act of state doctrine in the field of human rights remains ambiguous, however, although most U.S. courts have ignored the doctrine when faced with human rights violations committed by state agents.

  • The significance for U.S. foreign policy. The less important the issue is for U.S. foreign policy, the less likely a Court is to invoke the act of state doctrine. the continued existence of the state committing the act.. 20 If the state that committed the act on which the court must pass is no longer in existence, the act of state doctrine is less likely to apply, since any pronouncement is less likely to offend the current country or aggravate U.S. foreign relations.

The act of state doctrine has rarely been used in ATS cases. In Sarei v. Rio Tinto, a claim based on environmental damage, the court invoked the act of state doctrine and justified it based on a lack of international consensus on the specific nature of the violation. 21 Du Daobin v. Cisco Systems, Inc., concerned Cisco’s aiding and abetting in the torture of Chinese dissidents. The court invoked the act of state doctrine, because of the second of the factors above: it found that a U.S. pronouncement on China’s application of Chinese law against Chinese citizens, which the case would involve, would significantly impact and damage U.S. foreign relations. 22 Mezerhane v. Republica Bolivariana de Venezuela concerned a foreign sovereign taking property in violation of human rights law. The Court appeared to adopt a similar analysis, but went as far as to suggest that acts committed by a foreign sovereign outside the U.S., and to a foreign plaintiff were always acts of state. 23

Political question doctrine and international comity doctrine

Defendants may also rely on political question doctrine and international comity doctrine to block lawsuits targeting them.

The political question doctrine is often invoked in transnational disputes relating to human rights, and more generally in terms of foreign policy. It allows U.S. courts to decline jurisdiction when the case at hand raises a “political” question relating to the executive and legislative branches of government. The doctrine prevents the judiciary from interfering in politically sensitive affairs and poses an obstacle to the application of international law. Most importantly for international human rights litigation, an issue is likely to be political when as with the act of state doctrine, the court’s ruling on it could frustrate or contradict U.S. foreign policy. An issue may also be political when it entails it entails a court’s judgment about the propriety of the executive’s exercise of a power committed to it, such as the power to conduct foreign affairs and the military.

Corrie v. Caterpillar , for example, concerned a suit against a manufacturer for providing bulldozers it knew would be used for the demolition of homes in violation of international law. 24 The Court dismissed the case on political question grounds. Firstly, because a court’s ruling would implicate the legality of U.S. foreign policy of other branches – its aid to Israel, since the U.S. had helped purchase the bulldozers. Secondly, a ruling could make U.S. foreign policy manoeuvring on the Israeli-Palestinian conflict very difficult, since it would require the court’s finding that Israel’s demolitions were illegal under international law.

Hwang Geum Joo v. Japan concerned a suit against Japan, by Filipina, Chinese, Taiwanese and South Korean “comfort women” forced into sexual slavery during World War II by the Japanese army. 25 The Court was presented with whether the “commercial exception” to the FSIA discussed above applied to Japan. However, it rejected the case on political question grounds. Japan had signed a peace treaty with the United States waiving suits by U.S. nationals for acts committed during the war, and subsequent peace treaties with China, Taiwan and South Korea that did not explicitly extinguish liability. China, Taiwan, and South Korea maintained that neither agreement extinguished their nationals’ claims against Japan, though Japan disagreed. The Court found that the suit would involve a declaration about which states’ interpretations were correct, which the executive noted could damage delicate regional relations and undo stability in the region. The Court found that since the case would be of considerable significance for the Executive’s foreign relation policy, the case was a political question it would not adjudicate.

In Saldana v. Occidental Petroleum Corp , family members of union leaders sued Occidental Petroleum for funding a brigade committing the murder of civilians and other human rights abuses, with full knowledge of the brigade’s acts. 26 The United States had also provided substantially more funding to the same brigade, and the court thus found that the case would also involve ruling on the propriety of how the executive exercised its foreign relations power. Consequently, it found the case raised a political question, and rejected it.

Courts have also, however, refused to invoke the political question doctrine. In re South African Apartheid Litigation , for example, concerned a suit against multinational corporations for aiding and abetting the South African government in implementing apartheid. 27 The Court found that since the act in question was a violation of jus cogens, judging the propriety of the executive’s actions cannot be politically fraught, and the political question could not apply for this reason. It also found that a judicial determination would not contradict U.S. policy: a determination about businesses’ aiding and abetting apartheid would not affect business in South Africa more generally. In Doe v. Exxon Mobil Corporation , Indonesian plaintiffs sued Exxon Mobil for its knowing employment of Indonesian soldiers engaged in torture and extrajudicial killings in Indonesia. 28 Indonesia had informed the State Department that adjudicating the claim and deciding on the legality of the soldiers’ actions would upset U.S. foreign policy commitments to peace in Indonesia and the Helsinki Accord. The court rejected exxon’s claim; holding that since the State Department had not released a recent or definite statement on the matter, the Court would not assume the issue would have significant foreign policy implications for the U.S., and so invocation of the political question doctrine was inappropriate. 29

International comity doctrine is more an act of courtesy than an obligation binding the judiciary. U.S. courts may decline jurisdiction under international comity doctrine where there is a conflict of law between the legal systems of the U.S. and a foreign state.

In a recent case, the Animal Science Products v. Hebei Welcome Pharmaceuticals case 30 , the Chinese Ministry of Commerce intervened to explain the Chinese law regarding the issue at stake, the price-fixing of vitamin C exports. The district court did not give dispositive weight to China’s brief. The Supreme Court later determined that when a foreign government submits a statement on the interpretation of its domestic law, the U.S. court should give careful consideration to the brief. But the weight of the foreign government’s views should depend regarding the circumstances of the case at hand. 31 This case confirms that international comity doctrine is an act of courtesy by the U.S. courts.

Aguinda v. Texaco – Jota v. Texaco 32

This dispute opposed some 30,000 indigenous Ecuadorian farmers and the U.S. corporation Chevron-Texaco, which extracted oil in Ecuador’s Oriente region from 1972-1992. The company reportedly used operating techniques that were outdated or banned in other countries due to their adverse environmental and health consequences. Texaco, the Government of Ecuador, and Petroecuador, Ecuador’s national oil company, have consistently denied liability for the environmental damage and health problems that resulted from such practices. Since 1972, Texaco has been accused of discharging toxic waste and more than 70 billion gallons of polluted water into rivers and streams. Soil has also been contaminated and the pollution has affected the indigenous peoples and farmers, whose ways of life depended on these natural resources (securing water, irrigating agriculture and fishing). Particularly high rates of cancer, leukaemia, digestive and respiratory problems, birth defects, miscarriages and other ailments have also been noted.

The affected communities filed their first claim in a New York federal Court in 1993. The Ecuadorian government intervened in the trial, claiming in particular that it alone had the authority to adjudicate disputes concerning public land in Ecuador and that individuals could not sue to defend their rights with regards to public lands. The Ecuadorian government’s reluctance for the trial to take place in the United States was a key factor in the U.S. federal court’s decision to decline jurisdiction under international comity doctrine. U.S. federal courts finally agreed to hear the case under the ATS, but only after a new government in Ecuador expressed a desire for the trial to proceed.

Meanwhile, in 1999, the Ecuadorian parliament adopted the Environmental Management Act (EMA) which allows individuals to bring action seeking redress for environmental damage affecting public lands. Throughout the trial, Chevron argued that according to forum non conveniens, Ecuadorian courts alone are an appropriate forum. In 2002, a New York court of appeals affirmed Chevron’s argument and referred the matter to Ecuadorian courts, with the stipulation that Chevron must submit to the jurisdiction of Ecuadorian courts and their rulings.

In 2003, the same victims filed a class action suit against Chevron in the Superior Court of Nueva Loja, Ecuador, under the EMA. On 12 November 2013, Ecuador Supreme Court upheld the August 2012 ruling against Texaco/Chevron for environmental damage but halved damages to $9.51 billion. Since then, Chevron has multiplied legal actions.

Lawsuits took place or are taking place in the U.S., in Ecuador, in Canada (see below in this section) and before an investment tribunal. Most notably, a lawsuit in the U.S. was initiated by Chevron following the Supreme Court’s decision in Ecuador: Chevron filed a racketeering lawsuit against the plaintiffs’ lawyers and representatives in US federal court on 1 February 2011 in an attempt to block collection of the $9.5 billion Ecuadorian civil judgment against the company. In a 2014 decision, a New York judge blocked enforcement of the Ecuadorian judgment against Chevron after declaring that it was the product of bribery and fraud. A federal appeals court upheld the decision in 2016 finding that Donziger conducted a “pattern of racketeering activity”. Donziger was ordered to pay millions of dollars in Chevron’s legal costs and the company was granted seizure of his laptop and cellphone. When he appealed, the NY judge hit him with criminal contempt charges, upheld on appeal, that led to his house arrest that has been ongoing since August 2019. This is considered by many as an unprecedented SLAPP action in the United States. 33 In 2018, following a complaint by Chevron, the Hague’s Permanent Court of Arbitration found that the Ecuador Supreme Court ruling had been obtained through fraud, bribery and corruption, invalidated the judgement and ordered the company be awarded hundreds of millions of dollars in costs. 34 In September 2020, a Dutch court rejected a request from the government of Ecuador to annul the arbitral award. 35 In parallel, affected villagers also used legal strategies to enforce the decision. In October 2014, Ecuadorian rainforest communities filed a communication at the International Criminal Court in respect of Chevron chief executive’s acts to prevent the ordered clean-up of toxic waste in the Amazon. 36 In 2019, following an action by Amazon villagers, Canada’s Supreme Court refused to hear an appeal, effectively bringing their legal action in that country to the end of the road 37 .

Apartheid in U.S. courts 38

In 2002, a group of South African nationals brought action under the ATS against 20 banks and companies accused of aiding and abetting human rights violations committed by the South African government during apartheid. The plaintiffs were victims of extrajudicial killings, torture and rape. The South African government publicly opposed the trial before both the district and appellate courts in the United States. In October 2007, the court of appeals overturned the trial court’s dismissal of the case. The defendants appealed the overturn, but the U.S. Supreme Court upheld the appellate court’s decision in May 2008. On 8 April 2009, a district court judge dropped several of the charges, while allowing a continuation of the suit against Daimler, Ford, General Motors, IBM and Rheinmetall Group. The judge refused to accept the defendants’ arguments invoking the doctrines of political question and international comity. The judge also rejected arguments that the statute of limitations had expired. In a September 2009 letter to the judge describing the district court as the “appropriate forum”, the South African government announced its support for the trial to proceed. The defendants then filed an interlocutory appeal (an appeal filed in civil proceedings prior to the court’s ruling) with the Second Circuit Court of Appeals. Before accepting jurisdiction, the court of appeals asked the parties to submit their arguments on the question of whether companies can be held accountable for violations of customary international law.

In particular, the victims needed to prove that companies can be held civilly and criminally liable under customary international law. In April 2014, federal judge Shira A. Scheindlin concluded that companies may be held civilly liable under customary international law and the ATS. 39 However, Judge Scheindlin dismissed the case, finding that it did not touch and concern the United States. In July 2015, the Second Circuit found that the mens rea required for liability under the ATS for aiding and abetting required that the defendant acted with the purpose of facilitating the Commission of the crime, rather than knowledge that it would be committed. 40 The Court found that such purpose was not present in the case, and while the defendants could have known their efforts would further the violations, it was not their specific purpose to do so. The Court therefore affirmed Judge Scheindlin’s dismissal, and on September2015, the Second Circuit refused to rehear the case.