While Few Notice, the Supreme Court Is Making Corporate Human Rights Abuses Easier

In our current news environment, any news that’s not about President Trump gets short shrift, even if it’s news emanating from the Supreme Court. On April 24, 2018, the Supreme Court decided the case of Jesner v. Arab Bank. The Court ruled that foreign corporations cannot be brought into US federal courts to stand trial for human rights abuses that happen abroad.

The facts in Jesner v. Arab Bank could not have been more gut wrenching. The plaintiffs were victims or families of victims of suicide bombings in the Middle East, mostly in the West Bank. The bank in the case is a Jordanian bank with a branch in the city of New York. The plaintiffs alleged that the bank was holding accounts used to pay “martyrs” for the families of the individuals who carried out the attacks. Put another way, these accounts are meant to incentivize suicide bombings because the bomber would know that his or her family will be financially taken care of after death. And the plaintiffs argued that because some of these transactions were cleared through the bank’s New York branch, the entire scheme of payments to the bombers “touched and concerned the United States” and thus it was case was properly brought in a New York federal district court.

But for the Supreme Court, the Jesner case was not really about the victims and their families. Instead, the Justices saw Jesner as a case that raised issues about the role of the judiciary, the scope of jurisdictions, international relations, and when it is appropriate to hail a foreign corporation into an American court to face responsibility for the most grievous torts. In the end, the Supreme Court ruled in favor the Arab Bank’s position that foreign corporations cannot be sued using the Alien Tort Statute.

As Justice Kennedy wrote for the majority of the Court, the question of whether to extend jurisdiction over foreign corporations should be left to Congress: “[J]udicial deference requires that any imposition of corporate liability on foreign corporations for violations of international law must be determined in the first instance by the political branches of the Government.”

Like many other cases, Jesner turns in part on how one reads history — and the Supreme Court seems to be taking the wrong lessons from the history of human rights law. Justices in the majority mention the Nuremberg prosecutions of Nazi industrialists at I.B. Farben. I wrote about Farben here. As a report on the Nuremberg industrialist trials written for the United Nations in 1949 explained, the use of slave labor was the primary violation of international law that the industrialists faced at Nuremberg: “It is well known that the German war system depended essentially on exploitation by the Germans of the industrial resources and the production of the occupied countries. Closely associated with that was the use of what has been called slave [labor], that is either the [labor] of deportees from occupied countries or the [labor] of the inhabitants themselves in those countries.”

In his opening statement of the Farben Tribunal, the Chief Prosecutor General Telford Taylor said, “[T]he indictment accuses these men of major responsibility for visiting upon mankind the most searing and catastrophic war in modern history. It accuses them of wholesale enslavement, plunder and murder. . . . They were the warp and woof of the dark mantle of death that settled over Europe.”

In the case of I.G. Farben, defendant directors at Farben were accused of human rights abuses through the firm. In particular, Count III against the Farben defendants alleged,

[T]he accused, individually, collectively, and through the instrumentality of Farben, with the commission of War Crimes and Crimes against Humanity . . . participated in the enslavement and deportation to slave [labor] of the civilian population of territory under the belligerent occupation or otherwise controlled by Germany; the enslavement of concentration camp inmates, including Germans; and the use of prisoners of war in war operations and work having a direct relation to war operations.

Farben had privately owned parts of the Auschwitz concentration camp known as Monowitz or Auschwitz III. At Monowitz, “IG [Farben] took over responsibility for food and health care — a distinction of singular irrelevance to most prisoners because the provision of both was as criminally inadequate as anything supplied by the [Nazi] state.”

In the end, in the Farben Tribunal at Nuremberg, “[Farben executive Carl] Krauch and four others of the accused were found guilty of the charges alleging the employment of prisoners of war, forced [labor] and concentration camp inmates in illegal work and under inhuman conditions.” Executives who were convicted got prison sentences ranging from eight years to eighteen months. After the tribunal had rendered its final decision, Judge Hebert wrote his dissent and sent it to be included in the trial record. Among other conclusions, Judge Hebert stated: “Utilization of slave labor in Farben was approved as a matter of corporate policy. To permit the corporate instrumentality to be used as a cloak to insulate the principal corporate officers who authorized this course of action is, in my opinion, without any sound precedent under the most elementary concepts of criminal law.”

Justice Sotomayor writing for the dissenters recognized the lesson from I.G. Farben that:

In fact, careful review of states’ collective and individual enforcement efforts makes clear that corporations are subject to certain obligations under international law. For instance, the United States Military Tribunal that prosecuted several corporate executives of IG Farben declared that corporations could violate international law.

But in the hands of Justice Kennedy, this World War II history is transformed into a reason to not hold corporations responsible for human rights abuses. As he wrote:

The Charter for the Nuremberg Tribunal, created by the Allies after World War II, provided that the Tribunal had jurisdiction over natural persons only. Later, a United States Military Tribunal prosecuted 24 executives of the German corporation IG Farben. Among other crimes, Farben’s employees had operated a slave-labor camp at Auschwitz and “knowingly and intentionally manufactured and provided” the poison gas used in the Nazi death chambers. Although the Military Tribunal “used the term ‘Farben’ as descriptive of the instrumentality of cohesion in the name of which” the crimes were committed, the Tribunal noted that “corporations act through individuals.” Farben itself was not held liable.

The dissenting Justices Sotomayor, Kagan, Breyer and Ginsburg, were alarmed at the result that the majority reached in Jesner v. Arab Bank. For example, Justice Sotomayor concluded that “the text, history, and purpose of the ATS plainly support the conclusion that corporations may be held liable.”

One saving grace the Jesner decision is that the holding — though a big step backwards in the fight for human rights — is limited to foreign corporations.