SCOTUS Ends Human Rights Lawsuits Over Atrocities Abroad

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1:17Big League reliability for any business. That's Genius. This is Bloomberg Law with June Grosso from Bloomberg Radio. This term, the Supreme Court has already decided more cases split down ideological lines than in the entire previous term. And on Tuesday, the court handed down five decisions. Four were by six to three votes, with the conservative Republican appointees in the majority and the liberal Democratic appointees in dissent. These included rulings that basically went against the religious rights of inmates, against the rights of green card holders re-entering the country, against suits for violations of human rights, but in favor of corporations bringing property claims in Cuba.

2:11Focusing now on one of those decisions, the court's conservatives put new limits on lawsuits alleging human rights violations against corporations over atrocities abroad, effectively putting an end to these suits over human rights abuses. In a 6-3 vote, the court granted tech giant Cisco's bid to shut down a lawsuit alleging that the company worked closely with China to create the country's Golden Shield surveillance system, which allowed officials to identify, apprehend, and torture members of the Falun Gong spiritual movement in China. Cisco has denied allegations of wrongdoing. My guest is an expert in international law, Curtis Bradley, a professor at the University of Chicago Law School.

3:00Tell us about this lawsuit by 12 Chinese nationals and one U.S. citizen suing Cisco. So the Cisco case was a suit brought by the Falun Gong religious group from China, at least a number of members of that organization. They were suing not China in this case, but Cisco Systems, the computer company in the United States. And their argument was that Cisco had aided and abetted persecution of the Falun Gong in China by supplying Chinese government with surveillance technology, basically. And the lower court had allowed this case to go forward. And the Supreme Court said that it could not go forward.

3:40And they issued a pretty important ruling about this type of human rights litigation, which has been pretty active for the last 30 years. And the court's decision in Cisco, I think, largely is going to put an end to these human rights cases brought against corporations. Was the issue whether the alien tort statute creates liability for corporations that aid and abet human rights abuse? Yeah, the case is based on this old statute called the alien tort statute. It's actually been on the books for, you know, since the beginning of the country, 1789. But it has just been used for human rights litigation really during the last 30 or 40 years.

4:20And what the court held in the Cisco case was effectively cannot be used for human rights claims. It's one way to translate the decision. They basically said the statute doesn't have enough indication in it that Congress has wanted these human rights cases to go forward. So unless Congress amends the statute, the court is really putting an end to those cases. It did say that the statute could be used for a few personal injury type claims that would have been around in the 1780s, but they're not ones that we ever see today anymore. So this Cisco case basically says Congress will have to provide a new statute if plaintiffs are going to be able to sue for human rights abuses occurring in various countries.

5:05And that's an important ruling because there have been many cases for human rights abuses brought for atrocities from around the world, and they've been brought into U.S. courts under this old alien tort statute. And the Supreme Court had imposed a variety of restrictions on that litigation really in the last 15 years or so. But this is a more dramatic limit because it effectively just ends any more alien tort statute litigation, I think. So the alien tort statute is only 33 words. I'm going to read it. The district court 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.

5:47So if this is a court, you know, that's reading the statute and ruling according to the words, why doesn't that cover what's happening here? Well, a couple of thoughts. One thing the court notes is that until the 1980s, no one thought the statute provided a cause of action, a claim for human rights abuses. And the words that you just read are not really written in terms of a claim statute. All they say is that the courts have jurisdiction. That is, that they're available to hear certain kinds of tort cases, but they don't really provide what we today would call a cause of action. That is a right to seek damages or other relief.

6:27And at least in the modern era, courts wait until Congress provides an actual claim statute before it starts giving people the right to sue for damages. But in the alien tort statute cases, courts had been allowing suits for damages, even though I don't think the statute really addresses that. The other thing the court mentions is that suits for these torts around the world inherently raise foreign policy issues. Sometimes they might promote some good in terms of human rights improvement, but they also sometimes create lots of conflicts with other countries. And the court thought that if Congress really wants that type of litigation, it needs to address those foreign policy issues more specifically.

7:13And just citing a statute from 1789 doesn't really show Congress has addressed all the foreign policy tradeoffs that human rights cases pose today. And so effectively, the court's just pushing this over to Congress. The three liberals were in dissent. Justice Sotomayor said, The court's decision today is yet another notch in its belt, unabashedly remaking the law in its preferred image. And the majority jettisons two decades of settled precedent and breathes new life into two decades of rejected legal theories. I mean, only 20 years ago, the Supreme Court held the opposite of what the court's holding here.

7:51That is sort of true. There's a 2004 decision. It's called Sosa versus Alvarez-Machain. And Sotomayor's dissent certainly understandably emphasizes that decision because the court there did allow at least some cases to continue proceeding under the alien tort statute. Now, it was a pretty limited holding in Sosa, and the court said there should never be a particularly robust set of cases, and it suggested a variety of limits the court should consider. And since that 2004 decision, the Supreme Court has never found a case to satisfy those limits from that 2004 case. And so the majority in the Cisco case says we should just be clear that we're just not going to find a case that satisfies those strict limitations and just let everyone know so they don't waste time litigating because repeatedly the court has found reasons to reject those claims.

8:52And now it's just doing so more categorically. But I think the dissent makes a reasonable point that the court's not really giving precedential effect to that 2004 case. My own view, by the way, you know, people disagree about this, is that the 2004 case was probably wrongly decided. And I think the majority believes that to be the case as well. But nevertheless, there's an argument that it was entitled to some precedential weight that the court is not giving. And I mean, the court has been narrowing the alien. The Roberts court has been narrowing the alien tort statute over the years. And I remember the 2021 decision where a lawsuit accused Cargill and a Nestle subsidiary of knowingly perpetuating slavery of children on the Ivory Coast.

9:38And the court said there's no cause of action there either. If there's no cause of action, then, I mean, these people have no place else to sue, right? Or do they? That is, you know, one of the concerns about some of these restrictive decisions. But the Nestle case you mentioned and some others like it, what the court had been saying was that it would not allow the alien tort statute to be used for events that are entirely taking place in other countries that aren't really connected to the U.S. What that produced was a lot of litigation fighting over whether there was some kind of minimal connection to, say, planning or other activities in the U.S.

10:15And that is just generating a lot of litigation, most of which did not result in wins for the plaintiffs. But nevertheless, you know, the court thought was kind of costly for the system. And I think the court in Cisco thought it'd be better just to make a more categorical rule that we shouldn't keep litigating that. Now, as you mentioned, you know, the counter argument to all of this is there are serious atrocities being committed in various countries. Most of the time, there aren't really any available remedies for the victims. They can't typically sue in the place of the human rights abuse. Most other nations don't allow cases like we had been allowing under the alien tort statute.

10:57There aren't really international tribunals suited for the task. So some of the courts who like the alien tort statute litigation had said at least it's some possibility of redress, vindication of their human rights. And that's actually a main reason some of the lower courts had been allowing these cases. But as the majority said in Cisco, that might be a noble goal. It's just not clear that Congress has endorsed that particular goal. And normally, at least today, if we're going to allow those kinds of important claims, somebody in the political branches, Congress particularly, should actually decide whether that makes sense.

11:36Maybe put some limits in the statute. One problem with the alien tort statute, since it was never really written as a claim statute, it doesn't actually have any of the things we would normally find in terms of limits, like, I don't know, statute of limitations, period, definitions of the claims you can bring. None of that's in the statute, because I don't think it was really passed as a claim statute when it was first enacted. And so, you know, the argument of the majority is if it's really important to vindicate these rights, then people should lobby Congress to try to get another human rights statute.

12:09They got one, by the way, in the 1990s. It's called the Torture Victim Protection Act. They lobbied Congress. Congress passed a law that you can bring claims under that statute for torture and extrajudicial killing. And the court has not stopped those cases, although it did limit that statute a little bit in the Cisco case. So that's the argument of the majority, at least, is that if there's a good argument for vindicating these human rights, that's a decision that ought to be made by Congress and the executive branch. In an 8-to-1 decision, the majority said that the Torture Victims Protection Act of 1991, which you just talked about, doesn't allow aiding and abetting liability claims.

12:50Well, why not, if that's the go-to statute now? Yeah. Now, almost all the justices agreed on that holding, except for Justice Sotomayor. And the reason is that the court had already said in a number of other cases, not ones that involve human rights, but just other kind of corporate activity cases, that aiding and abetting liability raises a sufficient number of policy questions that we normally require Congress to be expressed when it wants to extend the reach of a statute, not just to those who did something wrong, but those who might have helped it do something wrong. And so there's already just case law that's pretty strong, a case called Central Bank of Denver or some other cases.

13:31The Supreme Court has just said, we don't imply normally aiding and abetting liability. We don't assume Congress does that lightly. And there's nothing in the Torture Victim Protection Act from 1991 that says anything about being able to sue not just the perpetrators, but also those who might aid and abet them. And And it is a big extension of a statute to start applying it to others who might in some ways be connected to the perpetrators. It's not that it's a bad idea. Sometimes we want to go after aiders and abettors. And so eight of the nine justices thought this was pretty clear under their case law that you do have to wait for Congress to make that decision expressly.

14:12Just broadly speaking, the Roberts court has been very pro-business. I mean, in most of these human rights lawsuits that came up to the court, the plaintiffs are suing businesses. Is that part of this? Well, it's complicated for the human rights cases, I would say. It is true that once they started getting the human rights cases against corporations, they consistently held in the corporate side of this. I agree with that. However, that litigation started as suits against individual foreign officials and others back in the 80s and 90s. It eventually expanded into suits against corporations. But I don't think the Supreme Court was ever fully on board even before it became a vehicle for corporate litigation.

14:57So I think the court's concerns transcend the fact that it's being used against corporations. It's really the plaintiffs have decided in the alien tort statute, they decided that corporations were just a better defendant because they have assets, often assets in the United States. They are sometimes willing to settle these cases for large amounts of money. So it wasn't that the Supreme Court had particularly focused on the corporations. It's just that increasingly those human rights cases became corporate type lawsuits. And I think the court's concerns about it extended beyond the fact that it was about corporations.

15:35But it's absolutely true. One thing that happened in that alien tort statute litigation, which I think did hurt the plaintiff's cause, is when they started increasingly suing corporations, they were suing a lot of European corporations in the 90s and 2000s. that prompted European governments to start complaining to the Supreme Court about what this litigation had been doing. They thought the U.S. was being too aggressive in its courts going after their companies. And that set of protests from the European Union and others, I think, did have some influence on the court's view of this litigation.

16:10Not so much that they wanted to protect corporations, but it was clear that litigation was producing conflict with other countries because U.S. courts were allowing cases against, say, Dutch oil companies and others. So I wouldn't just view this as just purely kind of a sympathy for corporations. It was also just a worry about, was this harming U.S. foreign relations? And the executive branch, at least in some of the administrations, had that same concern, that the litigation was creating undue conflicts with allies and others abroad. So I think it transcends the corporate part of it. Coming up next on the Bloomberg Law Show, I'll continue this conversation with Professor Curtis Bradley of the University of Chicago Law School.

16:55The Supreme Court revived a$1 billion suit by Exxon against a Cuban conglomerate for operating oil and gas assets seized in 1960. You're listening to Bloomberg. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand, but by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM.

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19:35Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for Business. Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank N.A., member FDIC. I've been talking to Professor Curtis Bradley of the University of Chicago Law School. Kirk, while the conservatives are not allowing human rights lawsuits against corporations over atrocities abroad, they are allowing a$1 billion suit by Exxon against a Cuban conglomerate for operating oil and gas assets seized in 1960 in Cuba following the country's communist revolution.

20:20And that was also by a 6-3 vote down ideological lines. Quite a contrast there. Yes, absolutely. In some ways, they look like decisions that are a bit in conflict in that the Cisco case shuts down international type claims because they're worried about the foreign policy implications. The ExxonMobil case allows pretty aggressive international claims against at least Cuban entities and others. And so how do you reconcile those? Well, one way possibly of reconciling, I think the court in the Exxon case had the view that Congress and the executive really did support aggressive legal claims against Cuba and companies transacting with Cuba.

21:08And that's probably to some extent true. You know, the statute in the Exxon case is, you know, relatively recent one compared to the alien tort statute. It was enacted in the 90s. It's called the Helms-Burton Act. And it has aggressive provisions allowing suits against anyone who traffics in property, you know, confiscated by the Castro Cuban government. And it does have language allowing suit against even against government entities that transact in that confiscated property. So at least the court in the Exxon case has stronger and clear statutory language, I think, to work with in allowing the claims.

21:45I think that it would certainly say that if it were going to distinguish it from the Cisco case. I actually think it's kind of a pretty close call, in my view, about the statutory language in the Exxon case. So I thought the dissenting justices there, Justice Kagan wrote the dissent. I thought they had some reasonable counter arguments about the statute. But I think if you were going to reconcile the two cases, I think the court's view is, yes, Suits Against Cuba and other companies doing business with Cuba raise foreign policy concerns. But it looks like Congress and the executive are willing to implicate those concerns, whereas they were not sure that was the case for the human rights cases.

22:23Explain why the liberal justices dissented. Yeah, so Justice Kagan's dissent focuses primarily on statutory language. And the United States has had a very comprehensive law that gives immunity to foreign governments and government-owned companies and entities. They've had this law since 1976, and it broadly gives immunity to foreign governments and their entities unless one of a set of specified exceptions in the statute are met. And it wasn't clear any of those exceptions would work here in this Exxon case. And so Kagan's argument in dissent is, you know, there's a statute here, it says there's immunity, and no one has shown that you've met any of the exceptions.

23:12And she pointed out that the Helms-Burton Act, which gives this claim for suing entities that traffic in confiscated property, doesn't have anything in it about immunity. It doesn't say there's an exception to immunity. It doesn't reference the foreign sovereign immunity statute. So Kagan's argument of dissent is we can reconcile these statutes by saying, yes, you have a cause of action under the Helms-Burton law, but if you're suing a government-owned entity as they were in this Exxon case, you have to work through the immunity statute, and maybe you're not going to be able to do that in this case.

23:46That strikes me, by the way, as a pretty reasonable and plausible way of reconciling two statutes. Obviously, the majority was not persuaded. Justice Kavanaugh said that he thought there was enough evidence that Congress implicitly, in giving the cause of action in the Helms-Burton law, it implicitly was taking away immunity of Cuban government entities that traffic in this property. But it's all by implication. And I certainly thought it was a debatable issue of statutory interpretation. Cuba's going through its worst economic and energy crisis in decades. Practically speaking, does Exxon expect to recover money here?

24:30Well, that's a general issue in these Helms-Burton Act cases. You know, it's a pretty recent issue because Congress passed that law in the 90s. But then it also has a provision that says presidents can stop the operation of the statute for six months at a time. And every president had done that. So it had avoided this question, in part, maybe out of the hope that the U.S. would develop better relations with Cuba at some point. And if you had a bunch of judgments out there, it might make it harder to kind of work out a new relationship with Cuba. But Trump, in his first term, was the first president to stop the suspension of the claims and has allowed them to go forward.

25:09So it is the case that now there are these suits, not just against Cuban government entities, but other private companies as well. And the private companies, presumably, if they're found liable, they can pay those judgments. But it's a big question about whether and how this poor Cuban government is going to satisfy judgments that relate to the government. And it might complicate any effort to kind of have more normal relationships with Cuba if that becomes an option going forward. That concern is a reason that before Trump, at least, presidents were concerned about some of this private litigation, that it might complicate a normalization effort if that became possible with Cuba.

25:56And I think that's probably true. And generally, the executive is just disfavored private foreign affairs kinds of lawsuits like this because it makes a diplomacy sometimes more challenging. But Trump, you know, has a different perspective on that. And I presume if there are judgments out there against Cuban government entities, they would have to be addressed at some level in some kind of a settlement if the U.S. tried to have a new relationship with Cuba. So finally, I mean, do you think that this will open, you know, the floodgates to more suits against Cuba? I'm not sure this case by itself will do that.

26:36You know, Trump, by authorizing the use of the statute, has sort of opened up not necessarily FUD gigs, but a number of cases against. And by the way, not just Cuban government entities. That's the kind of unusual part of this case. And the court therefore had to do with the immunity question. The broader element of the Helms-Burton Act is just being able to sue any private actor that happens to so-called traffic in property originally confiscated by Cuba. That basically means you could potentially sue a lot of companies that do business with Cuba. So, you know, European and other countries have expressed concerns about this Helms-Burton Act because it really looks like an effort by the United States to force a boycott onto other countries and their companies.

27:24And that is happening. There are a number of cases pending against these other private actors relating to Cuba. And so I think it won't be this decision per se, although this might open up somewhat more litigation than we had had before. Thanks so much, Kurt, for a very interesting conversation. That's Professor Curtis Bradley of the University of Chicago Law School. I'm June Grosso, and you're listening to Bloomberg. Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge.