Modern-Day Pirates: Why Domestic Parent Corporations Should be Liable Under the Alien Tort Statute for Violations of Workers' Rights Within Global Supply Chains

68 Am. U. L. Rev. 1933 (2019).

* Junior Staff Member, American University Law Review, Volume 68; J.D. Candidate, May 2020, American University Washington College of Law; B.A., History, 2015, Boston College. I would like to thank Professor Susana SáCouto for her invaluable feedback and the staff of the Law Review for their editing assistance. I would also like to thank Hannah Stambaugh and Nicholas T. Hillman for their constant guidance and support throughout the editorial process. Finally, I am incredibly grateful to Professor Eric Laufgraben and Stephanie Wald for their instruction and mentorship.

Due to a growing international focus on corporate social responsibility, transnational corporations increasingly have greater societal and legal duties to disclose and take responsibility for workers’ rights within their supply chains. For example, countries have introduced reporting requirements for corporations of certain sizes, and wronged supply chain workers have successfully brought suit against transnational parent corporations. In 2018, a United Nations working group introduced a draft treaty that would hold transnational corporations liable for human rights violations arising in the context of business operations.

This Comment argues that the Alien Tort Statute (ATS) is an appropriate mechanism to provide U.S. courts with jurisdiction over claims that foreign workers bring against U.S. parent corporations for workers’ rights violations within supply chains. The ATS provides district courts with jurisdiction over claims brought by foreign plaintiffs for torts committed in violation of the law of nations. Given the growing international trend of holding corporations responsible for workers’ rights, U.S. courts should recognize a broader array of actionable torts under the ATS and U.S. parent corporations should reasonably foresee the risk of workers’ rights violations within their supply chains. Accordingly, the ATS should remain an available option for foreign workers to hold U.S. parent corporations responsible for such violations.

Introduction

In April 2018 the Supreme Court’s decision in Jesner v. Arab Bank, PLC¹ categorically foreclosed the possibility of foreign plaintiffs bringing suits against foreign corporations in U.S. courts under the Alien Tort Statute (ATS).² Joining a line of Supreme Court precedent restricting the applicability of the ATS, the Jesner decision further limited the jurisdictional grant of the ATS to provide recourse for wronged plaintiffs.³ Writing in dissent, Justice Sotomayor described the Court’s holding as “absolv[ing] corporations from responsibility under the ATS for conscience-shocking behavior.”⁴ Referring to the appropriate ATS defendants through the lens of international norms existing at the establishment of the ATS,⁵ the dissent identified the lingering question as, “Who are today’s pirates?”⁶ Who, as Justice Breyer wrote years before, are the “common enemies of all mankind”?⁷

Corporations are modern-day pirates, potential common enemies of mankind. Beasts of business, corporations possess the power to do both good and bad,⁸ and they are increasingly independent of government control.⁹ As corporations outsource production needs, their supply chains become more vast and complex; thus, corporations continue to expand their global reach and presence.¹⁰ Internationally, States and corporations have recognized the indelible role they now play in safeguarding basic human rights within these global supply chains.¹¹ Accordingly, the ATS should remain an available “statute that helps to protect basic human rights.”¹²

Despite recent jurisprudence further limiting the scope of the ATS, this Comment will argue that the ATS is an appropriate mechanism to provide wronged foreign supply chain workers with their day in court. Part I will address the histories of supply chains and corporate civil liability. Part II will discuss the legal framework of the ATS, the seminal cases that transformed the jurisdictional grant of the ATS, and recent cases whose legal arguments have relied upon ATS jurisdiction. Part III will first argue that the practice of corporate responsibility for workers’ rights violations is crystallizing into a norm of customary international law. Part III will then analyze why the ATS is well-suited for global supply chain workers to bring claims against domestic parent corporations and further suggest that the criteria for actionable ATS torts should grow to encompass a broader array of torts that supply chain workers incur in unsafe working conditions, given the international trend of holding corporations responsible for workers’ rights. This Comment will assert that the ATS should remain a mechanism through which U.S. courts have jurisdiction over cases from foreign plaintiffs holding domestic parent corporations liable for violations of workers’ rights within supply chains, to incentivize greater transparency and promote the global enforcement of fair working conditions.

I. Background

Corporations and human rights are intrinsically linked in modern society. Historically, corporate acts that directly impacted human rights could evade governmental regulation or oversight. Today, however, the balance is starting to favor the worker as States and international bodies continue to implement guidelines and legislations intended to improve global working conditions.

A. The Intersection of Supply Chains and Human Rights

Over 450 million people work in global supply-chain related jobs.¹³ In an increasingly inter-related global economy, supply chains have become more complex. The International Labour Organization (ILO) characterizes global supply chains as “the cross-border organization of the activities required to produce goods or services and bring them to customers through inputs and various phases of development, production and delivery.”¹⁴ Supply chains emerge through the practice of outsourcing, whereby a parent company buys goods or services from outside suppliers rather than producing the goods or services within the parent company itself.¹⁵ Parent companies outsource the production of a good or service to a subcontractor.¹⁶

The impact of supply chains on foreign workers is double-edged. Supply chain jobs often provide opportunities for foreign workers,¹⁷ but the culture and business practices of subcontractors can have drastic effects on the workers.¹⁸ For example, in 2010, the stressful work environment at Foxconn, a Chinese subcontracting factory for Apple iPhones, led assembly line workers to commit suicide by jumping off the factory rooves.¹⁹ Heightened societal interests in sustainability and decent working conditions have stimulated an interest in “conscious consumption.”²⁰ Consumers’ desires to not mistakenly endorse human rights abuses through the purchase of commodities have helped to reinvigorate a push for brands’ transparency about the workings of their supply chains.²¹

1. Corporate accountability for supply chain transparency

Internationally, organizations and countries have implemented action plans and legislation to promote safe working practices. In 1976, the International Covenant on Economic, Social and Cultural Rights (ICESCR) entered into force.²² State Parties, in their obligation under the UN Charter to promote universal respect for human rights, “recognize the right of everyone to the enjoyment of just and favourable conditions of work.”²³ Under the ICESCR, favorable working conditions include safe and healthy working conditions, fair wages, equal opportunity for promotion, and reasonable rest days.²⁴

Broadly, the ILO’s resolutions and conventions emphasize a continuing commitment to respect workers’ rights.²⁵ In 1998, the ILO adopted the Declaration on Fundamental Principles and Rights at Work, wherein member states respect and promote the following: the right to collective bargaining, elimination of forced labor, abolition of child labor, and elimination of discrimination in employment.²⁶ One 187 countries are members of the ILO, and the ILO has eight fundamental Conventions, two of which the United States has ratified: the Abolition of Forced Labor Convention and the Worst Forms of Child Labor Convention.²⁷

The launch of the UN Guiding Principles on Business and Human Rights (UNGPs) in 2011 spurred an international movement toward better business practices and business responsibility.²⁸ The UNGPs recognize the important role business corporations play in respecting human rights and the need for effective remedies upon a breach of their obligations²⁹:

Business enterprises . . . should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved . . . [and] seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.³⁰

The Organisation for Economic Co-operation and Development (OECD) introduced its Guidelines for Multinational Enterprises³¹ in 2011, which encourage business partners, including suppliers and subcontractors, to apply principles of corporate conduct compatible with the Guidelines.³² Although the Guidelines are legally nonbinding, the OECD Investment Committee encourages adhering member countries, one of which is the United States, to implement these recommendations.³³ In 2018, forty-eight countries adopted and agreed to support implementing the OECD Due Diligence Guidelines for Responsible Business Conduct, which is the first government-backed standard for corporate due diligence across all economy sectors and pertains to the human risks within global supply chains.³⁴

The UN Global Compact continues to support the underlying principle of promoting fair working conditions.³⁵ In 2015, countries adopted the 2030 Agenda for Sustainable Development, whose Sustainable Development Goals (SDGs) represent a universal blueprint to build upon the Millennium Development Goals³⁶ and “balance the three dimensions of sustainable development: the economic, social and environmental”to create decent work for all.³⁷ Goal 8 of the SDGs, Decent Work and Economic Growth, has two targets that expressly focus on promoting fair working conditions.³⁸

Recently, the UN charged an open-ended intergovernmental working group with constructing a treaty addressing the intersection of business enterprises and human rights.³⁹ In 2018, the Permanent Mission of Ecuador introduced a zero draft of a legally binding instrument to regulate the transnational activities of corporations and other enterprises.⁴⁰ Within the purview of legal liability, Article 10(6) of the Zero Draft expressly states that those with transnational business activities shall be liable for human rights violations that arise in the context of their business operations, including “to the extent risk ha[s] been foreseen or should have been foreseen of human rights violations within its chain of economic activity.”⁴¹ Such a treaty would serve the purpose of ensuring that victims of transnational business human rights violations have effective access to justice and remedies for harms that they incur while working.⁴²

Regionally, the 2014 European Union (EU) Directive on Non-Financial Reporting encourages EU corporations to disclose the social and environmental impacts of their business activities within non-financial statements.⁴³ The Directive on Non-Financial Reporting advances the transparency goals of corporate social responsibility and expressly states that the non-financial statement should include relevant information about a corporation’s supply and subcontracting chains to identify and prevent adverse social impacts.⁴⁴ The non-financial reporting requirements should include, at the minimum, information on social and employee matters and respect for human rights.⁴⁵ All EU Member States had incorporated these disclosure rules through national legislation by the end of 2017.⁴⁶

Keeping abreast of the broader international movement, individual States have also taken initiatives to implement national legislation that focuses on corporate due diligence for working conditions within supply chains. In 2015, the United Kingdom acted to regulate corporate disclosure about potential human rights abuses and implemented the landmark UK Modern Slavery Act (“UK MSA”),⁴⁷and in 2017 France and Germany followed suit by passing the “Loi relative au devoir de vigilance des sociétés des mères et des entreprisesdonneuses d’ordre”⁴⁸ and the CSR Directive Implementation Act.⁴⁹ In 2019, Australia introduced a similar reporting requirement through its own Modern Slavery Act.⁵⁰

Emerging modern slavery legislation continues to percolate on the international stage. Most recently, Hong Kong, and Dutch governments echoed the United Kingdom’s call to attack human rights risks within supply chains.⁵¹ Pending enactment, the laws would respectively combat modern-day slavery through public statements, civil actions against involved parties, and plans to eradicate child labor from supply chains.⁵² The trend continues to spread as other countries consider implementing anti-slavery, pro-due diligence legislation for national corporations that conduct business activities abroad.⁵³

2. Domestic efforts

The U.S. government’s response to addressing supply chain human rights abuses has primarily manifested in the form of regulation and disclosure laws. At the federal level, the Federal Acquisition Regulation (FAR) places due diligence requirements on the supply chain activities of government contractors with particular emphasis on eradicating human trafficking.⁵⁴ The government implemented FAR to combat human trafficking in federal contracting, after President Obama’s Executive Order 13627, “Strengthening Protections againstTrafficking in Persons in Federal Contracts,”⁵⁵ bolstered the government’s approach to not tolerating trafficking.⁵⁶ FAR requires contractors to certify that they have implemented compliance plans to prevent the occurrence of prohibited acts, and the rule contains “flow-down provisions” through which contractors will be responsible for the acts and omissions of subcontractors and agents at every tier of the supply chain.⁵⁷ Accordingly, contractors need to verify that they have conducted due diligence and none of their agents or subcontractors are involved in trafficking-related activities.⁵⁸

Perhaps more well-known, § 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)⁵⁹ is an example of regulating supply chains due to likely human rights violations associated with conflict minerals.⁶⁰ Under the Dodd-Frank Act, all publicly traded U.S. corporations must annually disclose whether any of their products contain conflict minerals.⁶¹ Efforts to minimize connections to tainted goods later led to the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA),⁶² which stipulates that U.S. Customs and Border Protection (CBP) can enforce regulations that govern imports and exports.⁶³

By way of pending legislation, the Business Supply Chain Transparency on Trafficking and Slavery Act, a proposed bill introducedin both the House and Senate, would require corporations to annually disclose their efforts to identify and combat supply chain abuses.⁶⁴ If enacted into law, the bill would require public companies with over $100 million in global gross receipts to publicly disclose—as part of their annual reports to the U.S. Securities and Exchange Commission (SEC)—their efforts to prevent human trafficking, slavery, and child labor within their supply chains.⁶⁵

Most recently, President Trump introduced his own Executive Order to address global corrupt practices. Executive Order 13,818, “Blocking the Property of Persons Involved in Serious Human Rights Abuses or Corruption,”⁶⁶ strengthens implementation of the Global Magnitsky Human Rights Accountability Act (Global Magnitsky Act)⁶⁷ by seeking to “impose tangible and significant consequences on those who commit serious human rights abuses.”⁶⁸ Congress passed the Global Magnitsky Act in 2016, authorizing the President to impose sanctions against human rights violators with the capacity to target conduct by former or current government officials anywhere in the world.⁶⁹

Supply chain awareness persists beyond the purview of federal and executive action. On a state level, California became the first, and remains the only, state that has directly implemented disclosure requirements as a tool to combat the continuation of workers’ abuses.⁷⁰ Under the California Transparency in Supply Chains Act,⁷¹ large retailers and manufacturers doing business in California with annual worldwide gross receipts exceeding $100 million must provide consumers with information about their efforts to end human trafficking and slavery within their supply chains.⁷² Privately, individual corporations have begun to pick up the torch to mitigate their supply chain abuses by voluntarily modifying their fundamental working principles or codes of conduct.⁷³ The heightened efforts to eradicate forced labor from production have transitively implicated pushes for more, or fully, transparent supply chains.⁷⁴

The ABA Business Law Section created the Working Group to Draft Human Rights Protections in International Supply Contracts (“Working Group”) to spearhead such an effort.⁷⁵ With an aim to achieve “protection that is legally effective and operationally likely,”⁷⁶ the Working Group proposed Model Contract Clauses (“MCCs”) that could help companies comply with an increasing amount of human rights-focused legislation and minimize corporate risk.⁷⁷ The Working Group designed the MCCs to protect workers by applying to corporate policies that address a broad range of human rights issues.⁷⁸

B. History of Corporate Liability

Judicial systems across the world continue to interpret the question of corporate “personhood” under the law. International courts have increasingly exercised jurisdiction over corporations for civil actions, and domestic courts have begun to more readily recognize civil corporate liability.

1. Internationally

The international community now recognizes the capacity to hold corporations directly responsible for civil violations,⁷⁹ and transnational corporations (“TNCs”)⁸⁰ have direct duties under certain multilateral conventions.⁸¹ That TNCs have the power to enforce their rights, through mechanisms like arbitration or dispute resolution proceedings, indicates an international legal personality.⁸² David Scheffer, in his amicus brief in support of the Kiobel v. Royal Dutch Petroleum Co.⁸³ petitioners, emphasized the consensus at the negotiations for the Rome Statute that corporate civil—but not criminal—liability stood as a recognized, general principle of law.⁸⁴

International organizations have also introduced initiatives with the intent to influence business practices. In 1999, the UN Secretary General Kofi Annan proposed a “Global Compact” of shared values, which encouraged businesses to voluntarily support and adopt nine key principles, addressing general human rights obligations, environmental protection, and labor standards.⁸⁵ In 2003, the UN Sub-Commission on the Promotion and Protection of Human Rights approved “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights,” which, although not a treaty and accordingly not binding, the UN intended to also apply to domestic enterprises when relevant.⁸⁶

Legal systems of individual States have permitted lawsuits that necessitate some finding of corporate liability or shared responsibility to the extent that courts may exercise jurisdiction.⁸⁷ In 2015, a German court exercised jurisdiction over a compensation claim that survivors of a Pakistan factory fire brought against KiK, a German corporation that was the factory’s main customer.⁸⁸ In the same year, an appeals court in The Hague ruled that Royal Dutch Shell could be liable for the actions of its Nigerian subsidiary, when Nigerian farmers filed suit for the destructive pollution from oil spills.⁸⁹ Within the United Kingdom, a court upheld claims that Zambian citizens brought against Vedanta Resources for injuries stemming from pollution and damages of copper mine discharges.⁹⁰ The court reasoned that since Vedanta was the holding company of the mine and thus had superior knowledge, Vedanta would be better suited to protect the subsidiary’s employees against the risks of injury.⁹¹

2. Domestically

Domestically, “[t]he idea that corporations are ‘persons’ with duties, liabilities, and rights has a long history in American domestic law.”⁹² During apartheid in South Africa, U.S. corporations with affiliates in South Africa signed on to an agreement that called for the equal treatment of non-white employees. The Sullivan Principles, as this agreement came to be known, constituted a voluntary code of conduct designed to promote equal employment practices of U.S. corporations operating in South Africa. By signing on to the agreement, U.S. corporations affirmed their support for a high standard of labor practices that could contribute to ending apartheid.⁹³

Case law demonstrates that U.S. plaintiffs face difficulties in “piercing the corporate veil” and convincing a court to exercise jurisdiction.⁹⁴ In Daimler AG v. Bauman,⁹⁵ the Supreme Court limited situations in which federal and state courts can exercise personal jurisdiction over a corporation by stating that jurisdiction is likely limited to the state or country where the corporation is incorporated or headquartered.⁹⁶ Judicial hesitancy to exercise jurisdiction over corporations can also stem from reticence to interfere with foreign policy if the corporation is foreign.⁹⁷

Increasingly, scholars have considered tort modes of liability as feasible methods of holding corporations responsible for the acts of their associates.⁹⁸ Scholars have proffered the possibility of direct liability⁹⁹ or the agency principle. The agency principle could impose liability based on contract concepts and find the parent corporation liable for the acts of a subsidiary “agent” that was under its control.¹⁰⁰

II. ATS Litigation

A. Historical and Legal Foundations

Originally part of the Judiciary Act of 1789,¹⁰¹ the ATS, also known as the Alien Tort Claims Act (ATCA),¹⁰² 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.”¹⁰³ The First Congress enacted the ATS to protect the United States from liability for violations of international norms by holding individuals, rather than the then-young nation, responsible for violations of such norms committed against other nations or their citizens.¹⁰⁴ The ATS allowed Congress to comply with the United States’ obligation to rectify its citizens’ violations of the law of nations.¹⁰⁵

The term “law of nations” denotes “international law,” which imposes obligations that can govern the behavior of States and private actors.¹⁰⁶ Article 38(1) of the Statute of the International Court of Justice (ICJ Statute), the foremost enumeration of international law sources, lists four distinct sources from which international law could arise: (1) international conventions; (2) “international custom, as evidence of a general practice accepted as law”; (3) general principles of law recognized by civilized nations; and (4) judicial decisions and teachings of highly qualified publicists.¹⁰⁷

Binding international legal “norms”¹⁰⁸ create, change, or terminate duties for States.¹⁰⁹ Binding legal norms primarily derive from conventions, such as treaties that States have ratified, or customary international law, which consists of norms that are not codified but nevertheless are the product of “general and consistent practice of [S]tates followed by them from a sense of legal obligation.”¹¹⁰ Essentially, States observe customary rules because they consider those rules to be binding.¹¹¹ When plaintiffs bring ATS suits, the plaintiffs allege that the defendant committed a tort that violated the law of nations—generally meaning that the committed tort violated a substantive prohibition on particular conduct, and under international law that prohibition was legally binding.¹¹²

Absent a treaty, custom can give rise to legally binding norms through the existence of State practice and opinio juris.¹¹³ State practice need not be universal, but such practice must be general, consistent, and representative “at least of all major political and socio-economic systems.”¹¹⁴ Diplomatic acts and instructions, public measures and acts, and official statements of policy, whether unilateral or undertaken in cooperation with other States, can characterize a growing State practice.¹¹⁵ Of equal importance, opinio juris is the State’s conviction that it follows a certain practice as a matter of law, rather than out of comity.¹¹⁶ For example, a State’s express statement that a particular rule is obligatory or customary can provide clear evidence of the State’s legal conviction, as can votes that States cast during the UN drafting process.¹¹⁷ A State that persistently objects, however, is not bound by an eventual customary rule if the State has consistently maintained its objections since the rule began to form.¹¹⁸

To assert jurisdiction under the ATS, then, plaintiffs must prove that the alleged tort violated a norm of international law.¹¹⁹ Supreme Court jurisprudence has narrowed the applicable scope of international law, but the text of the ATS only requires that international law universally condemns the alleged conduct.¹²⁰

B. Cases that Defined the Modern Scope of the ATS

Plaintiffs rarely invoked the ATS until the 1980s, when lower courts started to hear claims that relied on the ATS as an avenue for foreign citizens to sue other foreign citizens for violations of international law that occurred on foreign soil.¹²¹

In Filartiga v. Pena-Irala,¹²² Paraguayan citizens sued a Paraguayan official whom they claimed tortured and killed their son.¹²³ Employing an expansive approach to the ATS, the Court of Appeals for the Second Circuit found that the ATS permitted federal jurisdiction when a foreign citizen sued for a violation of the law of nations.¹²⁴ In so doing, the Filartiga court introduced the threshold question for ATS claims: whether the alleged conduct violates the law of nations.¹²⁵ The court found that torture fit within the law of nations, given that modern international law prohibited torture and the international community universally abhorred torture.¹²⁶ The court looked to numerous international agreements to verify the universal condemnation of torture and ultimately deemed that the law of nations “may be ascertained by consulting the work of jurists, writing professedly on public law; or by the general usage and practice of nations; or by judicial decisions recognizing and enforcing that law.”¹²⁷ Granting that the “alien” appellants properly brought the ATS action in federal court for a tort committed in violation of the law of nations, the court reaffirmed the jurisdictional standard under the ATS: “It is only where the nations of the world have demonstrated that the wrong is of mutual, and not merely several, concern, by means of express international accords, that a wrong generally recognized becomes an international law violation within the meaning of the statute.”¹²⁸ According to the Second Circuit, “the torturer has become—like the pirate and slave trader before him—hostis humani generis, an enemy of all mankind.”¹²⁹

More than two decades after the Second Circuit decided Filartiga, the Supreme Court first reviewed the jurisdictional scope of the ATS in Sosa v. Alvarez-Machain.¹³⁰ Respondent Humberto Alvarez-Machain, a Mexican physician, brought a suit against petitioner Jose Francisco Sosa, alleging that Sosa violated the norm prohibiting arbitrary arrest and detention when Sosa and others abducted Alvarez-Machain and brought him from Mexico to Texas, where federal officers arrested him.¹³¹ Considering whether the courts could recognize new, enforceable international norms in ATS lawsuits, the Supreme Court found that as a jurisdictional grant, the ATS action must “rest on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the [eighteenth century] paradigms we have recognized.”¹³² Absent an established rule of international law, Alvarez-Machain attempted to demonstrate that the prohibition against arbitrary arrest amounted to binding customary international law.¹³³ Although Alvarez-Machain cited two international agreements—the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights (ICCPR)—to support his customary international law argument, neither instrument created enforceable obligations for the United States,¹³⁴ and the Court reasoned that Alvarez-Machain cited little authority to support his claim of a binding customary norm.¹³⁵ Ultimately, the Court found that a single illegal detention for less than one day, accompanied by a lawful transfer to authorities, did not violate a norm of international law so well defined as to permit a federal remedy through the ATS.¹³⁶

Adhering to the Supreme Court’s decision that the ATS only provides jurisdiction over violations of specific international norms, the Second Circuit analyzed the creation of such a norm in Abdullahi ex rel. Abdullahi v. Pfizer, Inc.¹³⁷ In Abdullahi, Nigerian children and their guardians sued Defendant Pfizer, alleging that Pfizer violated a customary international law norm prohibiting involuntary medical experimentation on humans by using children to test experimental antibiotics without the children’s consent or knowledge.¹³⁸ The Second Circuit reversed the district court and held that the prohibition against nonconsensual medical experimentation fulfilled the Sosa stipulations for a law of nations norm.¹³⁹ The court referred to the ICJ Statute, which binds all UN members as parties, to identify authorities that provide proof of the sources of international law: international conventions, custom, general principles of law recognized by civilized nations, and judicial decisions.¹⁴⁰

To analyze whether the prohibition amounted to a well-defined and universal norm, the court considered international and domestic actions.¹⁴¹ In the United States, patient-subject consent has been required in drug research since 1962, when Congress mandated it; the FDA passed regulations regarding informed consent; and the government generally attributed importance to this norm.¹⁴² International actions further supported the norm: in 2001, European Parliament and the Council of the EU passed a Directive requiring member States to adopt rules protecting those incapable of giving informed consent.¹⁴³ Additionally, since 1997, thirty-four member States of the Council of Europe had signed the Convention on Human Rights and Biomedicine, a binding convention and source of customary international law.¹⁴⁴

In 2013, the Supreme Court further narrowed the reach of the ATS when it decided Kiobel and invoked the presumption against extraterritoriality to restrict foreign access to U.S. courts.¹⁴⁵ Nigerian nationals sued Dutch, British, and Nigerian corporations under the ATS, alleging that the corporations aided and abetted the Nigerian government in violating the law of nations.¹⁴⁶ The Court focused on the following questions: (1) whether the law of nations recognizes corporate liability and (2) whether, and under what circumstances, the ATS allows courts to recognize a cause of action for violations of the law of nations occurring within a territory of a foreign sovereign.¹⁴⁷

Significantly, the Court identified a link between the ATS and a presumption against extraterritoriality: even when claims “touch and concern” the United States, the claims need to do so with “sufficient force to displace the presumption against extraterritorial application.”¹⁴⁸ In this case, all of the relevant conduct occurred outside of the United States, the petitioners were foreign, and the respondents were foreign companies.¹⁴⁹ Concerned with the ramifications of judicial interference in foreign policy,¹⁵⁰ the Court declined to find that the petitioners’ claims, and mere corporate presence in the United States, overcame the presumption against extraterritoriality.¹⁵¹

C. Modern ATS litigation and Corporate Defendants

Post-Kiobel litigation heralded a circuit split over ATS jurisdiction and a continuing debate over whether the ATS applies broadly to both individuals and legal persons.¹⁵² After the Court foreclosed plaintiffs’ ability to bring suit against a foreign corporation because the corporation lacked sufficient ties to U.S. soil, the circuit courts diverged over how to characterize the scope of the ATS.¹⁵³ The contested question became whether corporations could be defendants under the ATS.

A series of successive cases highlighted the discord over the scope of ATS jurisdiction. In Al Shimari v. CACI Premier Technology, Inc.,¹⁵⁴ the plaintiffs claimed that the defendant’s employees’ abusive treatment of Abu Ghraib prisoners violated the law of nations, including the prohibition against torture.¹⁵⁵ The Court of Appeals for the Fourth Circuit held that the ATS provided a cause of action even though the acts occurred on foreign soil because: (1) the alleged torture occurred at a U.S. government-operated military facility and was perpetrated by U.S. citizens who were employed by the defendant; (2) the defendant was a U.S. corporation; and (3) the U.S. Department of the Interior issued the defendant’s performance contract to conduct interrogations at Abu Ghraib.¹⁵⁶ The court noted that further litigation, the result of granting jurisdiction under the ATS, would also not interfere with foreign policy because the political branches had already indicated that the United States would not tolerate acts of torture.¹⁵⁷

In Doe I v. Nestle USA, Inc.,¹⁵⁸ the Court of Appeals for the Ninth Circuit considered a class action filed by former Ivorian child slaves against Nestlé for allegedly aiding and abetting child slavery by sourcing cheap cocoa from Ivorian farms.¹⁵⁹ After holding that the norm against slavery was universal and could be brought against the corporate defendants,¹⁶⁰ the Ninth Circuit ultimately declined to decide whether the presumption against extraterritoriality barred the claim, and it remanded the complaint for plaintiffs to amend to allege that some of the underlying activity took place in the United States.¹⁶¹

In Doe v. Drummond Co.,¹⁶² the Eleventh Circuit determined that U.S. corporate status was relevant to Kiobel’s “touch and concern” test because the extraterritorial application could be assuaged or inapplicable, given that the court would not be haling foreign nationals into U.S. courts to defend themselves.¹⁶³ In Drummond, the plaintiff brought the action on behalf of more than 100 Colombian citizens killed in an armed conflict with the Autodefensas Unidas de Colombia, a Colombian paramilitary group, and filed against multiple defendants, including an Alabama-based coal mining company.¹⁶⁴ The ATS claim put forth that the U.S. citizens aided and abetted or contributed to human rights violations outside the United States.¹⁶⁵ The court acknowledged that the plaintiffs may pursue claims against corporations, based on both direct and indirect theories of liability.¹⁶⁶ However, although the court found that the (1) U.S. citizenship and corporate status of the defendant, (2) U.S. interests implicated by the claims, and (3) alleged U.S. conduct were relevant in considering whether claims “touch and concern” the United States, the court concluded that the factors were not sufficient to displace the presumption against extraterritoriality.¹⁶⁷

The most recent Supreme Court decision involving the ATS, Jesner, ultimately serves to further limit corporate liability under the statute. The petitioners, victims who were injured or killed in foreign terrorist attacks, sought to impose liability on Arab Bank—a Jordanian institution with a New York branch—for its role in facilitating or causing those terrorist attacks.¹⁶⁸ The international legal and human rights community hoped that the Supreme Court decision would affirm that corporations were appropriate ATS defendants.¹⁶⁹ However, the majority framed its analysis to ascertain whether international law evinced a Sosa-level norm of holding corporations liable for human rights abuses and weighed whether Congress would be better suited to decide on a practice of corporate liability.¹⁷⁰ Ultimately, the majority looked to the language and purpose of the ATS to deny corporate liability, holding that foreign plaintiffs cannot sue foreign corporations under the ATS.¹⁷¹ Notably, the Court declined to expressly foreclose the ability to bring ATS claims against domestic corporations for foreign human rights abuses.¹⁷²

In contrast, the dissent criticized the majority for categorically absolving foreign corporations of responsibility under the ATS.¹⁷³ The dissent argued that the majority incorrectly applied the first part of Sosa, because the majority asked whether “a specific, universal, and obligatory norm of corporate liability” existed while Sosa’s “norm-specific first step” focuses on substantive norms of international law that prohibit certain conduct.¹⁷⁴ Rather than whether international law evinced a specific and universal norm of corporate liability, the dissent characterized the inquiry as whether the law demonstrates any reason why the ATS would distinguish between a corporation and natural person who allegedly violated the law of nations.¹⁷⁵ Although the Sosa precedent requires an international consensus about the violated norm, it does not require an international consensus that corporate liability is a norm as universal and specific as the main three norms identified in Sosa.¹⁷⁶ The dissent looked to States’ collective and individual enforcement actions to determine that corporations are subject to certain international law obligations, noting that various international agreements require State parties to hold corporations liable for certain conduct.¹⁷⁷

Plaintiff reliance on the ATS as a remedy for human rights violations continues. In October 2018, the Ninth Circuit ruled that Nestlé and Cargill workers could sue the corporations under the ATS with allegations of slave labor.¹⁷⁸ While the plaintiffs’ counsel argued that these claims “touch and concern” the United States because Nestlé’s Headquarters in the United States decided to give money and technological support to the foreign farmers,¹⁷⁹ Nestlé argued that the claim was barred because the focus was on an injury that occurred in the Ivory Coast, not an alleged act of aiding and abetting that happened in the United States.¹⁸⁰ Thus, the appeals judges’ ruling in favor of the plaintiffs demonstrates that the circuit split is likely to continue regarding the dual issues of whether (1) a specific tort is actionable under the ATS and (2) domestic corporations are appropriate defendants under the ATS.¹⁸¹

III. Analysis

The First Congress created the ATS as one mechanism to grant civil redress and fulfill the government’s obligations under the law of nations.¹⁸² By recognizing the law of nations as referring to international law,¹⁸³ the ATS becomes intertwined with norms of customary international law and should remain true to its purpose to provide recourse to wronged foreign plaintiffs.¹⁸⁴ Because corporate responsibility for violations of workers’ rights within supply chains is crystallizing into a norm of customary international law, the ATS provides foreign workers with a remedy to sue domestic parent corporations for working conditions that amount to violations of certain specific, universal norms. To the extent that Supreme Court jurisprudence declines to find that certain other violations are actionable torts under the ATS, the United States fails to provide effective remedies to wronged workers and falls out of step with the international movement that increasingly finds corporations liable for a broader array of torts.

A. Corporate Responsibility for Violations of Workers’ Rights as a Crystallizing Customary International Law Norm

Article 38(1) of the ICJ Statute lists customary law as one of four recognized sources of international law.¹⁸⁵ The product of State practice and opinio juris, customary law is equally as binding upon States as a ratified treaty.¹⁸⁶ Although still in the drafting process, the UN’s proposed binding treaty on business and human rights denotes the strength of the movement to hold corporations responsible for supply chain violations, under the standard that corporations should have foreseen the risk of workers’ rights violations.¹⁸⁷ Current international and national behaviors and trends indicate that States are increasingly able and willing to hold corporations responsible for violations of workers’ rights within supply chains. Considering public acts and official statements of policy as instructive of practice that States follow as a matter of law, the trend of corporate responsibility for the violations of workers’ rights in supply chains is crystallizing into a norm of customary international law.

1. International acts demonstrate a crystallizing norm of corporate responsibility for violations of workers’ rights

International movements toward establishing corporate responsibility for the well-being of all “human components” within business enterprises largely fall into two practices: guidelines that are binding or suggestive and legislative acts of individual States.

The UN Guiding Principles serve as an overarching global framework that exhorts corporations to promote business practices that “mitigate adverse human rights impacts,” even if the corporations have not directly contributed to those harmful impacts.¹⁸⁸ While international organizations have long maintained a general recognition of the right to “favourable conditions of work,”¹⁸⁹ over the past decade alone international bodies have increased efforts to align ethical business practices with respect for human rights. In 1998, the ILO adopted the Declaration on Fundamental Principles and Rights at Work, which mandates that member States respect and promote the elimination of deplorable practices such as forced and child labor.¹⁹⁰ The ILO champions the campaign to equalize working conditions and, with 187 member countries who can ratify conventions, can give weight to growing trends based on the number of States that ratify various conventions.¹⁹¹ For example, of the ILO’s eight fundamental conventions, 182 States have ratified the Worst Forms of Child Labour Convention, 171 ratified the Minimum Age Convention, and 178 ratified the Abolition of Forced Labour Convention.¹⁹² In ratifying these conventions, member States affirm their commitment to abide by the labor standards that each convention propagates.

Currently, the international community has placed renewed emphasis on improving working conditions. Pursuant to the UN Global Compact, the transfer from the Millennium Development Goals (“MDGs”) to the Sustainable Development Goals (“SDGs”) represents a long-term commitment to promoting economic and social development within States.¹⁹³ Whereas the MDGs had no mention of better working practices, Goal 8 of the SDGs calls for “immediate and effective measures to eradicate forced labour” and the protection of labor rights for all workers.¹⁹⁴

Increasingly, non-binding regulations and guidelines have begun to focus on the responsibilities of corporations in affirming the protection of workers’ rights and eradicating abusive practices. Non-binding declarations also demonstrate States’ willingness to adhere to a greater degree of responsibility for businesses in reference to human rights. The 2014 EU Directive on Non-Financial Reporting explicitly called upon States to implement legislation requiring corporations to divulge the social and environmental impacts of their subcontracting chains, and by 2017, the national legislations of all EU Member States contained complying disclosure rules.¹⁹⁵ OECD’s transition from the 2011 Guidelines for Multinational Enterprises to the 2018 Due Diligence Guidelines for Responsible Business Conduct further depicts the renewed emphasis on corporate due diligence. Through this transition, the OECD moved from encouraging business partners to adopt certain working principles to implementing a government-backed due diligence standard in all economic sectors. These new standards are backed by forty-eight of OECD’s member States.¹⁹⁶

Respective States have also enacted legislation that regulates corporate disclosure of possible slavery within supply chains, and the growing movement for corporate responsibility supports the trend of a crystallizing customary norm. The landmark UK MSA was the first in a relatively quick series of State-specific implementation of legislation.¹⁹⁷ Within three years of the UK MSA’s introduction, France passed its own vigilance law.¹⁹⁸ With slight variations, each law introduced compliance and disclosure plans that require corporations, which qualify based on threshold gross receipts or employee numbers, to disclose their steps to eradicate human slavery within their operations.¹⁹⁹ Germany announced its CSR Directive Implementation Act to mandate that corporations disclose information about workers’ rights and provide an option for parent companies to include individual disclosures within a main group report on nonfinancial issues.²⁰⁰ The nonfinancial information must contain details on workers’ issues, respect for human rights, and environmental impacts.²⁰¹

These concrete legislative acts are joined by budding proposals from other States. Joining its European counterparts, the Dutch Parliament’s proposed Child Labour Due Diligence Law became yet another example of how State governments are imposing duties on their corporations to ensure the safety of their supply chains.²⁰² A continent away, the Hong Kong government released plans detailing the formation of its own anti-slavery law, which would require annual publishing of actions combatting slavery.²⁰³ Hong Kong legislators imposed further restraints on corporate power and await final approval of their bill that would allow civil actions against defendants who benefited from business that they knew or should have known would involve slavery.²⁰⁴

Prevalent adherence to the soft-law²⁰⁵ principles and guiding documents propels the international acceptance of corporate regulation into a practice that States increasingly adhere to as a matter of law. Although difficult to ascertain, opinio juris²⁰⁶ manifests itself through the deference States afford to conventions, directives, and respective national policies that promote workers’ rights. For example, while the 178 ratifying members of the ILO Abolition of Forced Labour Convention indicates a consensus of State practice, the ratification of the individual convention also represents a State’s conviction that it must strive to abolish forced labor as a matter of law.²⁰⁷ State endorsement of voluntary guidelines and principles further conveys that a State feels bound to recognize corporate liability for workers’ rights violations. Forty-eight States signed on to the new OECD Guidelines that promote corporate due diligence among all economic sectors,²⁰⁸ and States implemented the requirements of the EU Directive on Non-Financial Information by transforming national legislation to acknowledge the well-being of workers.²⁰⁹ Considering the expansive implementation of national legislations restricting corporate behavior and the emphasis on, and State compliance with, international guidelines that promote corporate responsibility, the practices of the international community indicate that corporate responsibility for workers’ violations is a crystallizing norm of customary international law.

2. U.S. domestic practice demonstrates the United States’ recognition of a crystallizing customary international norm to promote corporate responsibility

Domestic regulation and disclosure efforts, bolstered by consistent executive statements, indicate that the United States falls in line with the growing international practice of holding corporations responsible for the well-being of workers within their supply chains. Rather than objecting to the growing international norm, the United States’ behavior evinces an acceptance of the crystallizing customary norm of holding parent corporations responsible for supply chain workers’ rights violations.²¹⁰

The totality of legislative actions, implemented within the last decade alone, indicate congressional willingness to impose due diligence, disclosure requirements, and government oversight on corporations to mitigate the risk of workers’ rights violations. Focused solely on the federal sector, FAR imposes direct responsibilities upon federal contractors to ensure that their subcontractors and involved subsidiaries neither knowingly or unknowingly, directly or indirectly, partake in human trafficking.²¹¹ Federal contractors must produce and adhere to compliance plans if their activities involve a certain threshold of work abroad, and they must verify that they continue to conduct their own due diligence investigations into the human impact of their supply chains.²¹²

Section 1502 of the Dodd-Frank Act further reaffirms the government’s commitment to disavow connections to potential human rights violations because it expressly requires corporations to disclose whether their products contain conflict minerals;²¹³ such a stipulation requires, in part, that corporations have visibility into their supply chains to accurately report as to the presence of conflict minerals. Most comparable to international legislations’ disclosure laws, albeit limited to enforcement in one state, California’s Transparency in Supply Chains Act mandates that corporations provide consumers with published information on the corporations’ efforts to eradicate trafficking and slavery within their supply chains.²¹⁴ Perhaps most promising is the prospect of the pending Business Supply Chain Transparency on Trafficking and Slavery Act, which would impose national compliance guidelines like those that the California Act promulgates and require corporations to annually disclose efforts to combat supply chain abuses.²¹⁵

Efforts to restrict the flow of tainted goods into the United States also evince a desire to restrict the imports of foreign-sourced goods from corrupted supply chains. Through the TFTEA, U.S. Customs and Border Protection exercises the power to restrict the importation of goods from at-risk geographical areas or industries.²¹⁶

Executive statements or initiatives can serve as another factor that bolsters the finding of a State practice adhered to as a matter of law. Three of the last four Presidents have issued Executive Orders that pertain to recognizing the necessity of workers’ rights while at the same time abating the risk of associating with tainted goods or corrupt practices. In 1999, President Clinton’s Executive Order 13,126, “Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor,”²¹⁷ intended to prevent federal agencies from obtaining foreign goods produced by forced or child labor. In 2012, President Obama introduced Executive Order 13,627, “Strengthening Protections against Trafficking in Persons in Federal Contracts,”²¹⁸ which prohibited federal contractors and their employees from engaging in human trafficking activities. Most recently, President Trump continued the presidential disavowal of inhumane business activities with his Executive Order 13,818, “Blocking the Property of Persons Involved in Serious Human Rights Abuses or Corruption,”²¹⁹ which strengthened enforcement of the Global Magnitsky Act²²⁰ and authorized the President to issue sanctions against global offenders of human rights.²²¹ Secretary of State Rex Tillerson even remarked that the sanctions regime indicated that the government would continue to pursue consequences for those who violate human rights.²²² By consistently aiming to prohibit involvement with goods or services tied to workers’ rights violations within supply chains, the Executive Branch has conveyed an awareness that the international community disfavors associations that are connected to at-risk business enterprises.

The second element of customary international law, opinio juris, is “the conviction of a State that it is following a certain practice as a matter of law and that, were it to depart from the practice, some form of sanction would, or ought to, fall on it.”²²³ Thus, U.S. attentiveness in controlling the imports of tainted goods through the TFTEA may provide one indicia of acting under the sense of a broader legal obligation. Executive invocation of the Global Magnitsky Act and Executive Orders—consistent over three presidencies—can also demonstrate desire to refrain from associating with sectors or countries that have a risk of forced labor, which can lend support to the possibility that the government follows such a practice under the conviction that it might otherwise be subject to sanctions. Legislatively, the government has imposed strict guidelines upon its contractors and suppliers through the FAR requirements, and FAR expressly provides for a mode of corporate liability for violations of workers’ rights that occur within the contracting chains. Although opinio juris is often less distinct than State practice, the consistency with which the United States affirms the importance of clean supply chains while distancing itself from at-risk industries and regimes demonstrate its subjective understanding that protecting workers’ rights is a crystallizing customary international norm.

B. The Prohibition Against Workers’ Rights Violations as an ATS-Actionable Universal Norm

Pursuant to the Supreme Court’s decision in Sosa, actionable ATS torts must rise to the level of a violation of an international norm that is specific, well-defined, and universal.²²⁴ Violations of workers’ rights can rise to the level of Sosa standards when the violations are of a particularly egregious nature, such as forced labor. To the extent that lesser violations may be actionable torts, such violations would likely be precluded pursuant to the Sosa standard, but preclusion would be inconsistent with international momentum to uphold equitable working conditions.

1. The limited scope of the current ATS framework under Sosa

Sosa jurisprudence requires that actionable torts under the ATS are specific, universal, and well-defined.²²⁵ Pursuant to those stipulations, violations of the prohibitions against forced labor would provide plaintiffs with actionable torts under ATS jurisprudence.

In Filartiga, the Second Circuit established that torture amounted to a Sosa norm because of the universal renunciation of torture.²²⁶ As evidence of this norm, the Second Circuit examined international treaties and accords, such as the ICCPR and European Convention for the Protection of Human Rights and Fundamental Freedoms, and looked to modern national laws that banned torture.²²⁷ The Second Circuit later deemed in Abdullahi v. Pfizer, Inc.that nonconsensual medical experimentation violated international law and amounted to the universal and specific nature of an actionable Sosa norm,²²⁸ after once again looking to international treatment and the domestic history of medical consent.²²⁹

Following the Second Circuit’s analytical approach—considering historical evolution of and adherence to a standard—the prohibition against forced labor fulfills the Sosa criteria of being universal, specific, and well-defined. Internationally, under the ILO’s Declaration on Fundamental Principles and Rights at Work, member States have pledged to promote the elimination of forced labor and child labor.²³⁰ The ILO defines forced labor as “all work or service which is extracted from any person under the threat of a penalty and for which said person has not offered himself or herself voluntarily.”²³¹ The ILO has 187 member countries, which transitively implies that 187 countries acknowledge the ILO’s characterization of forced labor. The ILO’s fundamental conventions also include the abolition of forced labor.²³²

Goal 8 of the UN Development Programme specifically promotes “tak[ing] immediate and effective measures to eradicate forced labour . . . and secur[ing] the prohibition and elimination of the worst forms of child labour,” with the provision to end child labour by 2025.²³³ The ILO’s Forced Labour Convention has 178 ratifying countries,²³⁴ 175 countries have ratified the Abolition of Forced Labour Convention,²³⁵ and 182 countries have ratified the Worst Forms of Child Labour Convention.²³⁶

Within the domestic sphere, the U.S. government has fought, and continues to fight, the presence of forced labor within trade. The Tariff Act of 1930²³⁷ defines “forced labor” as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily” and prohibits the importation of goods produced by convict or indentured labor.²³⁸ Pursuant to the TFTEA, U.S. Customs and Border Protection has the authority and duty to prevent the importation of goods possibly associated with forced labor.²³⁹

Although certain U.S. courts have already recognized slave labor as a sufficiently defined norm that falls within the Sosa parameters,²⁴⁰ modern developments further exemplify just how appropriate and suitable the ATS is for claims of forced labor.

2. Why workers should have the right to bring ATS actions for “lesser” violations

The UN Guiding Principles on Business and Human Rights serve as an example of a collective body of rights that are essential yet whose violations would likely fail the Sosa test to become actionable torts under the ATS.²⁴¹ The narrow Sosa standard prevents U.S. courts from hearing ripe claims and precludes important violations from gaining jurisdiction. For example, the United States has ratified the ILO convention against the worst forms of child labor.²⁴² However, under current Sosa restrictions, U.S. courts would potentially lack the jurisdictional grant to hear any claims based on violations of the prohibition against child labor. For instance, in Flomo v. Firestone Natural Rubber Co.,²⁴³ Liberian employees and children attempted to bring a case against a corporate employer, but the Seventh Circuit held that the plaintiffs failed to provide concrete evidence of customs and practices of States to show that States feel themselves to be under a legal obligation to impose liability on employers of child labor.²⁴⁴ The court declined to find a universal, cohesive perspective on child labor because of the diversity of economic conditions around the world and found it difficult to glean a defined rule from plaintiff’s three relied-upon conventions: UN Convention on the Rights of the Child, ILO Minimum Age Convention, and ILO’s Convention 182: The Worst Forms of Child Labor.²⁴⁵

Additionally, international courts have granted jurisdiction over claims alleging corporate liability for violations of health and safety conditions, violations which would likely fail under the Sosatest. A German court allowed the continuation of a claim against a German company, KiK, for a fire in a subsidiary-owned factory in Pakistan that occurred due to the factory’s lack of safety measures.²⁴⁶ Similarly, a British court upheld jurisdiction for a case involving asbestos within a corporation’s subsidiary company.²⁴⁷ Both aforementioned cases would likely fail to meet the first threshold for ATS jurisdiction because the alleged torts—violations of safe and healthy working conditions—are not sufficiently specific to compare to the magnitude of the 1789 law of nations norms of safe conducts, ambassador rights, and piracy. However, the international community is championing a world that recognizes a sustainable economy with decent working conditions, and fair working conditions are arguably rising to, if not already at, the status of an international norm. The 2030 UN Agenda for Sustainable Development evinces such a desire, as the introduction of the declaration calls for the creation of conditions that promote shared prosperity and inclusive economic growth for all,²⁴⁸ and Goal 8.8 of the Sustainable Development Goals calls for safe working environments for all workers.²⁴⁹

Furthermore, the actions of various corporations and multinational organizations indicates that they believe that safe working conditions are a basic right worth protecting. Corporations are proactively adapting their codes of conduct to mirror this trend,²⁵⁰ and public opinion continues to advocate for greater corporate diligence in ensuring safe working conditions. The federal courts’ continued adherence to the Sosa standard, however, likely forecloses the possibility of a foreign worker attaining redress from a parent corporation for a workplace tort, therefore leaving the injured workers without an effective remedy and arguably defeating the promising purpose of the ATS.²⁵¹ In doing so, the United States has fallen out of step with the international movement to hold corporations accountable for the safety of workers within their supply chains.

C. Parent Corporation Liability for Extraterritorial Human Rights Abuses within Global Supply Chains

The Supreme Court majority decision in Jesner significantly restricted the ability of foreigners to bring claims against corporate defendants because the majority held that foreign corporations are not appropriate defendants under the ATS.²⁵² However, the majority refrained from conclusively specifying whether domestic corporations remain suitable defendants. Accordingly, corporate civil liability allows for foreign workers to bring claims against parent corporations under the ATS. Suits against domestic parent corporations do not implicate the Kiobel concerns of extraterritorial application because traditional theories of tort liability connect the parent corporation to the foreign acts of its subsidiaries.

1. Piercing the corporate veil with foreseeable risk

Practices such as limited liability have historically shrouded corporations from suit; however, international players are increasingly relying on the law to directly impose duties or responsibilities on corporations and “pierce the corporate veil.” Notably, TNCs have acquired direct duties under some multilateral conventions that impose liability on corporations.²⁵³ The UN Open-Ended Intergovernmental Working Group is working on a proposed Treaty on Business and Human Rights, and Article 10(1) of the current “zero draft” explicitly identifies that legal persons may be held civilly liable for business activity-related human rights violations.²⁵⁴

Persuasively, international judicial systems have pierced the corporate veil to find that parent corporations were liable for the actions or omissions of their foreign subsidiaries. A German court upheld a lawsuit that foreign workers brought against KiK, a German company, for poor fire safety measures that contributed to a destructive factory fire,²⁵⁵ while English courts held that parent corporations owed a duty of care to subsidiaries’ employees in Chandler v. Cape PLC,²⁵⁶ Lubbe v. Cape PLC,²⁵⁷ and Lungowe v. Vedanta Resources PLC.²⁵⁸ Considering the four factors the Chandler court weighed before imposing a direct duty on the parent corporation for the asbestos conditions of its subsidiary²⁵⁹ and the call for transparent supply chains,²⁶⁰ U.S. corporations should be on notice of the possibility of workers’ rights violations within their global supply chains. The Chandler court considered a key question to be: should the parent have known that the subsidiary’s work system risked workers’ rights?²⁶¹

Given the current domestic and international push for regulatory disclosure and due diligence,²⁶² U.S. parent corporations should reasonably foresee the risk of violations within their supply chains, such that parent corporations should be responsible for violations because they breached the duty of care they owed to the workers within their supply chains. Corporate social responsibility is effectively trending and topically at the forefront of multinational organizations of which the United States is a member.²⁶³ Domestically, the United States has previously demonstrated a willingness to find corporations liable for human rights violations under certain conditions.²⁶⁴ Legislatively, the FAR epitomizes parent liability through its flow-down provisions by which contractors will be responsible for commissions and omissions of subcontractors and agents at each tier of the supply chain.²⁶⁵ Although the FAR only applies to government contractors,²⁶⁶ the willingness to find parent contractor liability for acts along the supply chain indicates that such a chain of liability is possible and in practice.

Notably, U.S. corporations are stepping up and altering their workplace codes of conduct to comply with the international focus on corporate social responsibility.²⁶⁷ Through these voluntary commitments, corporations are thereby acknowledging—at least to an extent—that an onus is on them to manage their societal impact. Regardless of whether corporations knew of workers’ rights violations within their supply chains, corporations should have foreseen the possibility of such a risk and therefore should not be able to evade responsibility.

2. Displacing the Kiobel presumption against extraterritoriality

In Kiobel, the majority held that even when claims “touch and concern” the United States, the claims need to do so with “sufficient force to displace the presumption against extra-territorial application.”²⁶⁸ The Kiobel court declined to exercise jurisdiction over the Nigerian corporation because it found that all relevant conduct took place outside the United States and emphasized the importance of not wanting to create a precedent where other countries could hale U.S. citizens into foreign courts for alleged violations of international law.²⁶⁹ However, these judicial concerns do not carry the same weight in claims against domestic parent corporations.

Significantly, allowing claims against parent corporations would not entail hauling foreign nationals into domestic courts because the concerned parent corporations would have been incorporated in the United States. Additionally, jurisdiction over alleged violations of workers’ rights within global supply chains would not unduly interfere with the power of other political branches. In Al Shimari, the Fourth Circuit upheld jurisdiction over an ATS claim for torture abroad and specifically noted that allowing further litigation would not interfere with U.S. foreign policy because the political branches had already demonstrated that the United States would not tolerate acts of torture.²⁷⁰ With specific reference to supply chains and corporate liability, current congressional legislation suggests that permitting courts to hear ATS claims against domestic corporations for acts abroad would not unduly interfere with foreign policy.²⁷¹

Further, connecting the parent corporation to the acts of its subsidiaries through modes of tort liability could displace presumptions against extraterritorial application. Superior or agency liability theories prevent corporations from remaining free of responsibility for actions within their supply chains.²⁷² Directly linking corporations to the failures of their subsidiaries would encourage vigilance in avoiding the corporate excuse of ignorance as to poor operational practices and instead offer victims the appropriate avenue for redress from the parent corporation.²⁷³ Given that holding domestic parent corporations responsible for the commissions or omissions of their foreign subsidiaries would neither implicate the Kiobel presumption against extraterritoriality nor unduly surprise the corporate defendants, courts should recognize domestic parent corporations as appropriate defendants under the ATS for workers’ rights violations within global supply chains.

Conclusion

The Jesner dissent emphasized that the true lingering ATS question must remain, “Who are today’s pirates?”²⁷⁴ Piracy, historically involving high seas conduct and ships considered stateless, fell under no specific national jurisdiction.²⁷⁵ Pirates, enemies of all mankind, could accordingly be prosecuted wherever found, regardless of their nationality or where the piratic acts occurred.²⁷⁶ Today, corporations are pirates: corporations have global reach, yet can often act with relative impunity in advancing their enterprises.²⁷⁷ Corporations are arguably the most appropriate defendants under the ATS because they are global actors with power over individuals and, importantly, they are increasingly independent of government control.²⁷⁸ A foreign worker’s ability to sue a parent corporation in federal court under the ATS could incentivize corporations to undertake more diligent compliance obligations. If corporations know that the ATS remains an open door for foreign supply chain workers to have access to U.S. courts, these parent corporations could investigate and improve the transparency of their supply chains to tackle the risk of labor violations.

Although the current Sosa and Kiobel-colored ATS jurisprudence narrowly construes definitions of actionable torts and defendants, under the current international corporate social responsibility movement U.S. courts should hold the ATS doors open for foreign supply chain workers. U.S. parent corporations are, or should be, aware of the risk of workers’ rights violations within their supply chains, and many corporations have shouldered the responsibility by improving their workplace codes of conduct. In finding in favor of the plaintiff in Filartiga, the Second Circuit reasoned that “courts must interpret international law not as it was in 1789, but as it has evolved and exists among the nations of the world today.”²⁷⁹ As international law exists among the nations of the world today, corporations have greater social and legal obligations to disclose and take responsibility for the human impact of their global supply chains. Accordingly, the ATS remains one of the most vital pathways into U.S. courts for wronged foreign workers.

If U.S. courts truly have an interest in preventing the nation from “serving as a safe harbor for today’s pirates,”²⁸⁰ the courts should recognize a broader array of actionable torts under the ATS and allow foreign workers to bring suits under the ATS to hold domestic parent corporations responsible for workers’ rights violations within their global supply chains.

Modern-Day Pirates: Why Domestic Parent Corporations Should be Liable Under the Alien Tort Statute for Violations of Workers' Rights Within Global Supply Chains

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