Can Boeing Make the U.S. Government Pay Up?: Human Rights Litigation and “Who Pays” Arbitration
posted by Melissa Waters
Last week, the ACLU filed a federal lawsuit against a subsidiary of Boeing Company, on behalf of alleged victims of the U.S. government’s “extraordinary rendition” program. The lawsuit, filed under the Alien Tort Statute, claims that Boeing’s subsidiary knowingly aided the CIA in transporting terror suspects to secret overseas locations, where they were tortured. The ACLU did not name the U.S. government itself as a co-defendant in the suit, presumably because it feared that the U.S. would successfully plead some sort of governmental immunity as a defense, and that Boeing might be able to free ride on that defense.
The ACLU’s strategy – go after the corporate accomplice, and leave the government perpetrator out of it – is increasingly typical of human rights litigation under the Alien Tort Statute and its sister statute, the Torture Victim Protection Act. Frustrated in their attempts to hold U.S. and foreign governments themselves legally accountable for abuses, human rights lawyers have increasingly turned their sights on multinational corporations who “aid and abet” governments in committing human rights abuses. (According to business groups who track these suits, claims against corporations now make up roughly 75% of all lawsuits filed under the ATS and TVPA.)
Not surprisingly, this state of affairs has transformed corporate lobbying groups into mortal enemies of the Alien Tort Statute – but thus far, their efforts to kill the ATS have yielded little. Congress has declined to repeal or amend the ATS to protect corporate interests, and the Supreme Court has left the ATS door open to suits against private actors.
Would corporations be better off abandoning their “kill the ATS” strategy altogether, and instead seeking a kind of compromise with human rights groups? Should they refocus their efforts toward shifting the blame – and the litigation costs – to the state actors who perpetrated the human rights abuses in the first place? That’s the question posed by Roger Alford in an intriguing article, “Arbitrating Human Rights” (forthcoming in Notre Dame Law Review). (You can download it here.)
The problem, as Alford sees it, is that all too often, “human rights litigation against corporations is a proxy fight in which the accomplice is pursued while the principal evades punishment.” He (rightly, in my view) questions a state of affairs in which the corporate accomplice alone bears the cost, while the primary malfeasor – the state itself – escapes liability.
Alford’s proposed solution? Corporations should look to the fine print in their existing contracts with sovereigns. Contracts between corporations and sovereigns typically include provisions regarding waivers of sovereign immunity and arbitration. Alford asserts that a corporation found liable for aiding and abetting human rights abuses should invoke these provisions to pursue a “who pays” arbitration claim against the sovereign itself for contribution or indemnification.
He points out that in the domestic context, joint tortfeasors may sue the U.S. government for contribution under the Federal Tort Claims Act, even where a suit against the government by the injured party itself would be barred by sovereign immunity. He argues that this principle should be extended to encompass lawsuits against foreign sovereigns under the Foreign Sovereign Immunities Act, as well.
Alford also points out that a “who pays” arbitration strategy is not only useful for corporations attempting to shift the costs for existing ATS lawsuits. It can be used preemptively, as well, by corporations who are good corporate citizens, who want to contract for compliance with basic human rights: They can draft contracts that include “who pays” arbitration schemes to encourage their vendors and suppliers to comply with human rights obligations. Alford makes a convincing case that by “including human rights as a substantive contractual obligation and arbitration as a procedural guarantee, corporations can establish a firm basis for contractual enforcement of human rights.”
In my view, the real advantage of Alford’s “who pays” approach is its flexibility in reallocating responsibility for human rights abuses from corporate accomplice to sovereign malfeasor. As Alford points out, in some cases, a corporation will be able to seek total indemnification from the costs of an ATS lawsuit, essentially invoking the benefit of the contractual bargain it struck with the sovereign. In the case of contribution claims, an arbitration proceeding will result in shared liability that allocates the costs according to the level of wrongdoing of each of the parties. Thus “arbitrating the question of who pays closes the loop in those cases that essentially are proxy claims that would have been brought against the sovereign if they could.”
In short, Alford’s proposal is an intriguing attempt to turn human rights litigation into a more effective, two-step process that would offer real benefits to human rights victims. An ATS suit followed by a successful “who pays” arbitration proceeding would enable human rights lawyers to overcome the sovereign immunity barrier that has thus far plagued ATS litigation. Under Alford’s proposal, corporate accomplices themselves would be partially responsible for ensuring that the primary culprits in these cases — sovereign governments — bear the costs of their actions.
Well worth adding to your summer reading list.
June 11, 2007 at 2:16 pm
Posted in: International & Comparative Law
Print This Post
Responses (1)
David Cheifetz - June 12, 2007 at 12:03 am
What’s the legal basis for the contribution or indemnity claim between corporation and the US gov’t, assuming there’s no express or implied contractual basis? Does US state or federal law allow contribution between joint tortfeasors even if the contribution defendant could never have been held to the injured person for the damages sought from, or recovered from the joint tortfeasor claiming contribution?
David Cheifetz
Canada
Leave a Reply