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

Though it largely flew under the radar, the SCOTUS decision in Jesner v. Arab Bank is a large step backwards in the fight for human rights.

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 U.S. 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 hale 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.

The views expressed are the author’s own and not neces­sar­ily those of the Bren­nan Center for Justice.