Thursday, September 20, 2012

Assorted Viewpoints in Kiobel


On October 1, the Supreme Court will rehear arguments in Kiobel v. Royal Dutch Petroleum (previous posts). In addition to that relatively uncommon development, the case has attracted a staggering 78 amicus curiae briefs, as compared to an average of 9 per case before the Court.
Also remarkable is the diversity of amici. In the course of this Supreme Court litigation, briefs were filed from parties ranging from the governments of the Republic of Argentina and the United Kingdom, to Nuremberg Scholars, to the U.S.-China Law Society.
While it is not terribly surprising that each of those friends of the court would take an interest in the international law issues at stake, the presence of two particular amici among this motley crew is more curious. Nobel Prize-winning economist Joseph Stiglitz filed a brief in support of Petitioners, and a libertarian thinktank, the D.C.-based Cato Institute, submitted one in support of Respondent. (Both briefs were filed in time for the original argument, held last February.) Finding their presence odd, this international lawyer decided to see what they had to say.

The Cato Brief
Cato was motivated to submit a brief because, it says, Kiobel
'raises vital questions about the role of judges in defining the scope of federal jurisdiction and will clarify when and how judges are to interpret international law.'
Cato argues that the Alien Tort Statute (ATS) is solely a jurisdictional statute and should be read narrowly to avoid overstepping the jurisdictional power that Congress granted to the federal courts. In Cato's view, a different reading would permit the courts to “expand the scope of their jurisdiction without an act of Congress, upsetting the balance of powers inherent in our Constitution.” The brief argues that jurisdictional overreach is of particular concern where a jurisdictional statute addresses issues of foreign affairs that the Constitution assigns to the political branches.
While Cato's brief is more concerned with U.S. constitutional law than with international law, it does express a view on how United States courts should determine the content of customary international law. It argues that the methodology for determining what constitutes the law of nations should be the same as that used in 1789. The point is a more subtle one than the notion that the content of customary law should, for ATS purposes, be frozen as at 1789. The brief describes the historical methodology as follows:
Hugo Grotius
'It involved applying a narrow set of principles drawn from classical sources like Hugo Grotius and using those principles to understand the norms that States viewed as universal and obligatory. These principles defined both the types of claims that could be asserted and those against whom claims could be asserted.'
One principle among the "narrow set" referenced was that an international rule, if not embodied in a treaty, could be discerned only by the practice of states in the international sphere, and not by examining the laws they enact within their own territories. Cato argues that Petitioners seek to introduce a newfangled method of determining customary international law by introducing federal common law and other domestic law “to fill in gaps left by the actual practice of States among themselves.”
If that were an accurate characterization of the Petitioners' argument, I would agree that it is problematic.
However, when Petitioners point to
'the universal availability of corporate civil liability in all legal systems,'
they do not argue that domestic practice reveals the content of customary international law. Instead, they argue that international law leaves questions of remediation for domestic enforcement of international law up to States. As far as I've seen, no one has argued that there is a new method for discerning the content of customary international law.

Joseph Stiglitz
The Stiglitz Brief
Stiglitz, who's a professor at Columbia University, identifies himself as an expert on economic theory and global economic development who wishes to
'clarify central principles of business investment and economic development relevant to the question of corporate liability under the Alien Tort Statute.'
His brief responds to the argument, raised by amici in other ATS cases, that recognizing corporate liability will deter investment in the developing world and make U.S. businesses less competitive. Stiglitz argues that, au contraire, corporate liability under the ATS would promote foreign direct investment and economic development and advance U.S. interests.
Two of his arguments call for comment:

► First, Stiglitz rejects as hyperbole the contention that recognizing corporate liability under the ATS will discourage investment in developing countries. He emphasizes that companies take multiple complex factors into account when deciding to invest.
This argument is overly simplistic. He may be right that interested groups overstate the likely impact on foreign direct investment in relatively high-risk countries. Nonetheless, it is surprising to see an economist dismiss so offhandedly the importance of marginal changes in risk on investment decisions – it is, after all, a basic tenet of economics that decisions are made at the margins. While investors might not withdraw completely, increasing their liability risk will at minimum increase the cost of capital in developing countries. That is true even if the potential investor respects human rights. We may decide that this is a worthwhile trade-off, but we should recognize that it is indeed a trade-off.
► Second, Stiglitz rejects the argument that recognizing ATS liability would disadvantage U.S. companies. He posits that without the ATS, litigants might turn to state common law to enforce human rights standards, which could lead to even greater tort liability for U.S. corporations. He also speculates that countries lacking strong enforcement mechanisms might “seek investment by corporations more likely to adhere to international human rights standards.”
Both propositions are dubious. It is highly doubtful that a developing nation would welcome an American corporation but exclude a Canadian one because the former can be sued under the ATS. The suggestion that rejecting corporate liability under the ATS would ignite an explosion of lawsuits in state courts against foreign corporations is imaginative, but nothing more.

In short, both briefs were underwhelming. See the full list of amicus briefs, with links to full text, at the ABA website.

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