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Judgment day

Will an obscure law bring down the global economy?

AS IF IRAQ didn't have enough problems, now there may be another obstacle to postwar reconstruction: lawsuits.


According to some conservatives, the abuse of an age-old law is scaring off the multinational corporations needed to rebuild the country. But that's not all. In a recent book, ''Awakening Monster: The Alien Tort Statute of 1789,'' Gary Clyde Hufbauer and Nicholas K. Mitrokostas warn that this same law is creating a ''nightmare scenario'' that threatens to destroy the global economy. Meanwhile, the US Chamber of Commerce and other business groups maintain it ''has become a serious impediment to US companies investing abroad.'' And former Supreme Court nominee Robert Bork complained recently in the Wall Street Journal that an ''unholy alliance of imperialistic judges and a leftish cadre of international law professors'' has turned this same statute into a tool for ''judicial imperialism.''

What is this dangerous act? The commotion concerns a hitherto obscure provision in the law that created our federal court system, the Judiciary Act of 1789. It reads: ''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.'' In other words, foreigners can sue in US courts for violations of international law. It is a potentially powerful weapon. And now, more than two centuries after its adoption, the Supreme Court has finally agreed to rule on its use.

. . .

For almost 200 years the Alien Tort Claims Act was invoked only rarely. But in 1979, the family of Joel Filartiga, a 17-year-old who had been tortured and killed in Paraguay, sued the police chief responsible. The federal appeals court in New York ruled that state-sponsored torture was indeed a violation of ''the law of nations'' - and therefore a legitimate target of the 18th-century law.

Since that ruling, the law has been used to sue a handful of brutes - including Bosnian Serb leader Radovan Karadzic, ex-Philippine dictator Ferdinand Marcos, and a former defense minister of Guatemala. Although victims in some cases have won large judgments - the Filartigas were awarded $10.4 million - few can ever collect, and the cases remained largely symbolic.

The real uproar began in the mid-1990s, when advocates began suing corporations, claiming they had collaborated with brutal foreign regimes to violate basic human rights. Since 1996, close to two dozen cases have been filed against major multinationals - including Royal Dutch/Shell, which is accused of complicity in the execution of Nigerian activist Ken Saro-Wiwa; Unocal, for abetting the murder, torture, and rape of Burmese villagers; and a slew of companies that allegedly conspired with the South African government during the apartheid years.

There has yet to be a single judgment issued against a corporation. Still, the business lobby's bell is sounding, and the Bush administration is heeding its call. In May, the Department of Justice filed an unusual friend-of-the-court brief with the Ninth Circuit Court of Appeals, which was hearing the case against Unocal. Instead of asking the court merely to rule against the Burmese villagers who brought the case, Justice Department lawyers urged a sweeping reversal in Alien Tort interpretation going back to 1980, arguing that the Filartiga case was wrongly decided - the Alien Tort Claims Act cannot support human rights claims at all.

Human rights advocates were outraged, with Kenneth Roth, executive director of Human Rights Watch, calling it ''a craven attempt to protect human rights abusers at the expense of victims.''

The Supreme Court may finally settle the question this summer, after it hears the case of Humberto Alvarez-Machain, a Mexican doctor forcibly abducted by US authorities in 1985 to stand trial in the United States for the torture and murder of a DEA agent. After Alvarez-Machain was acquitted, he sued the United States for false arrest, and, under the Alien Tort Claims Act, he also sued a Mexican national who had participated in his kidnapping. The Supreme Court now finally has an opportunity to decide what the Alien Tort Claims Act really means. The Unocal case is on hold pending its decision. (A parallel case against Unocal filed under California law is now in trial in a state court in Los Angeles.)

. . .

But what accounts for the disparate readings of the law? Politics aside, the debate is in part over theories of legal interpretation. The Justice Department contends the statute ought only to apply to whatever the ''law of nations'' meant back in 1789. Given that international law barely existed then, that would restrict the law's application to only three things, as famously defined by the 18th-century British jurist William Blackstone: ''violation of safe-conducts or passports,'' infringement of the rights of ambassadors, and piracy.

With the subsequent proliferation of human rights treaties, international law now bars slavery, genocide, torture, mass rape, and other ''crimes against humanity'' - a range of offenses the 1789 Congress could hardly have imagined. Does that matter? Anne-Marie Slaughter, dean of the Woodrow Wilson School of Public International Affairs at Princeton, thinks not. The law, she argued in a recent interview, ''was a way the framers could signal to the world that you had a remedy for violations of the law of nations. It was a way of proclaiming that we were members of the international system.''

Meanwhile, the Bush administration also claims that court rulings under the law could interfere with US foreign relations. Other critics say that for an American court to pass judgment on another country's practices is an affront to national sovereignty.

While the law's supporters dismiss such arguments, some cases do tread on sensitive ground. Take the South Africa suits, which have named more than 100 corporations so far - including Citigroup, Bank of America, IBM, and Eli Lilly. That country managed to avoid a violent revolution only through delicate negotiations that established a Truth and Reconciliation Commission to expose apartheid's atrocities. For American lawyers to question the validity of that compromise could upset a precarious balance. ''You could have the opposite effect of what [the Alien Tort Claims Act] has been intended to achieve,'' warns Slaughter.

Businesses, for their part, worry mostly about the threat of large money judgments against them. Hufbauer and Mitrokostas, for example, warn that US corporations doing business in China could be sued for as much as $26 billion for abetting China's denial of political rights. Paul Rosenzweig, a senior fellow at the Heritage Foundation, claims that in the case of the Iraq war ''companies that made the cruise missiles or the tanks or the planes whose weapons may have inadvertently killed Iraqi citizens could be hauled into court under the Alien Tort Claims Act.''

Are such fears warranted? In the Unocal case, the federal appeals court found that a company is not responsible unless it actually ''aided and abetted'' specific human rights violations, which it defined as ''knowing practical assistance or encouragement that has a substantial effect on the perpetration of the crime.'' (The court added that ''a reasonable factfinder could conclude that Unocal's conduct had met that standard.'') ''The plaintiff needs to show much, much more than simply that the multinational enterprise has chosen to invest in a troublesome country,'' says Harold Hongju Koh, professor of international law at Yale and former secretary of state for democracy, human rights, and labor in the Clinton administration.

Although some might argue the United States has no business protecting people beyond our borders, it's clear that the framers wanted American courts to do just that - at least in extreme instances. In the alien tort cases, lawyers aren't merely trying to export our economic standards abroad by, say, suing companies who don't pay a minimum wage. Rather, claims typically involve corporations allegedly conspiring with foreign governments in specific situations to knowingly enslave, torture, and even murder people who get in the way of their ability to turn a profit.

Ultimately, it is up to the courts to winnow out the frivolous claims. Courts might balance such factors as whether the case would be better brought in the victims' home country, whether the claims are too old, and whether the case would disrupt foreign relations, national sovereignty, or peace negotiations. ''The courts need to proceed carefully case by case,'' says Slaughter.

Those who claim the sky is falling aren't content with that solution, though. Hufbauer and Mitrokostas, for example, want Congress to amend the law to make it far harder for victims to sue. Others want Congress to repeal the law altogether. The Justice Department is seeking effectively the same thing.

Yale's Koh, however, suggests the United States sponsor an international treaty to clarify exactly which actions corporations can be held to account for. If they were meeting the treaty's standards, the alien tort cases would be dismissed. At stake is whether American corporations will drive the global standard of conduct up or down. Says Koh, ''The day is over when American companies can say we ought to be free to meet the lowest common denominator.''

Daphne Eviatar is a Brooklyn-based writer and lawyer and a contributing editor at The American Lawyer.

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