Ramsey: International Law Limits on Investor Liability in Human Rights Litigation

Michael D. Ramsey (Univ. of San Diego -Law) has posted International Law Limits on Investor Liability in Human Rights Litigation (Harvard International Law Journal, forthcoming). Here's the abstract:

The article assesses efforts in U.S. court, principally under the Alien Tort Statute (ATS), to hold foreign investors liable for human rights violations committed by the governments of countries in which they invest. It is primarily focused on suits targeting non-U.S. entities. Examples currently pending include claims against multiple investors, such as Barclays Bank and Izusu Motors, for investments in apartheid-era South Africa, and claims against Talisman Energy, a Canadian corporation, for operations in Sudan. These suits, and others like them, typically do not rest on claims that the investors themselves committed human rights violations, but rather that investors can be reached through some variety of third-party liability such as aiding and abetting.

The article argues that these suits, though pitched as efforts to find remedies for international law violations, in fact raise substantial tensions with international law. First, as a doctrinal matter, to the extent they target non-U.S. entities, they raise serious questions about the U.S.'s prescriptive jurisdiction over the alleged conduct. They do not fit easily within any of the usual categories of extraterritorial prescriptive jurisdiction, and claims to universal jurisdiction over the alleged conduct, especially those depending upon theories of third-party liability, seem difficult to establish. Second, as a conceptual matter, these suits appear to misunderstand the source of customary international law principles, which should arise from the actual practice of nations rather than from controversial analogies to existing practice in other areas. Focusing directly on the idea of investor third-party liability shows that the United States would in fact be an outlier in the world in recognizing such claims. While the United States is of course permitted under international law to impose such liability upon its own corporations, it cannot claim to be doing so as matter of enforcing international law, nor can it - consistent with international law - impose liability upon entities over which it lacks prescriptive jurisdiction.