"So long as they incorporate, businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy—all without civil liability to victims."
US Second Circuit Judge Pierre Leval
Is this some notorious decision in the manner of Dred Scott from an ugly and unenlightened past of robber barons and organized tyranny? Yes, and no.
I have not yet read a contrary or comprehensive legal interpretation of this decision, or the actual majority court opinion, and will allow that the opinion from Judge Leval could be overstated in its reach and implications. And or course the corporations might still be subject to criminal prosecution, such as that administered occasionally by the federal government, almost always settled for cursory fines without admission of guilt. (Later: here is a decent description of opinion in support of the court).
The decision in the US to grant corporations the rights of individuals does have deep roots. From the Supreme Court case of Santa Clara County v. Southern Pacific Railroad in 1886, the US Supreme Court ruled that a private corporation is a natural person under the US Constitution.
How can the courts find that judicial constructs like corporations have the protections and privileges of the Bill of Right, but become strict constructionalistic and literal in allowing that they can engage policies and actions supporting and provoking the commission of heinous crimes such as murder and torture without any collective liability? This was not the decision of some rogue sadist, but the cold and calculated corporate business decision in the pursuit of profit. Corporations implement policy decisions collectively all the time, often of a magnitude to engage the power of the entire organization, even if the actual decision to proceed rested within a small circle of decision makers. In principle they act as officers for the corporation.
And when it comes time for the prosecutions and investigations, managers from the CEO's on down don't know anything about the business, and have apparently been accepting their enormous paychecks for what seems to be benignly vacuous inertia in la dolce vita in absentia, on a pile of wiped emails and shredded documents. Someone was obviously paying attention during the last international war crimes trials.
Maybe it will be good for the business recovery. I would imagine quite a few European, South American, and Asian companies seeking to reincorporate themselves in Delaware to achieve carte blanche against civil liabilities for increasingly uncivil acts. It seems to have worked for Royal Dutch Shell. After all, quite a few credit card companies relocated key operations to western states that encouraged the practice of interstate usury. Debasement of the currency is not the only thing that the US seems to have underway and well in hand.
I wonder if the European Union will grant the same privilege to their own corporations, to advantage themselves at will on the American Public in acts of violence and torture? Would the US judiciary extend professional courtesy and acknowledge the EU's sovereign right to suspend the protections of the individual as long as the crimes were corporate?
“The principle of individual liability for violations of international law has been limited to natural persons — not ‘juridical’ persons such as corporations — because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an ‘international crime’ has rested solely with the individual men and women who have perpetrated it,” Judge Jose Cabranes wrote on behalf of the majority."The US court system has discovered that 'organizations' are incapable of committing misdeed heninous enough to rise to the level of international crimes. You know, like crimes against humanity. This does fit with a disturbing trend in the US whereby more power and wealth is being concentrated in corporations who can act with increasing advantage and anonymity vis-à-vis the individual. Barry Ritholz has framed it quite well in his piece: The Left Right Paradigm Is Over.
The decision in the US to grant corporations the rights of individuals does have deep roots. From the Supreme Court case of Santa Clara County v. Southern Pacific Railroad in 1886, the US Supreme Court ruled that a private corporation is a natural person under the US Constitution.
"The court does not wish to hear argument on the question whether the provision in the 14th Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does." US Supreme Court Chief Justice Morrison WaiteJustice William O Douglas wrote in 1949, "the Santa Clara case becomes one of the most momentous of all our decisions...Corporations were now armed with constitutional prerogatives."
How can the courts find that judicial constructs like corporations have the protections and privileges of the Bill of Right, but become strict constructionalistic and literal in allowing that they can engage policies and actions supporting and provoking the commission of heinous crimes such as murder and torture without any collective liability? This was not the decision of some rogue sadist, but the cold and calculated corporate business decision in the pursuit of profit. Corporations implement policy decisions collectively all the time, often of a magnitude to engage the power of the entire organization, even if the actual decision to proceed rested within a small circle of decision makers. In principle they act as officers for the corporation.
And when it comes time for the prosecutions and investigations, managers from the CEO's on down don't know anything about the business, and have apparently been accepting their enormous paychecks for what seems to be benignly vacuous inertia in la dolce vita in absentia, on a pile of wiped emails and shredded documents. Someone was obviously paying attention during the last international war crimes trials.
Maybe it will be good for the business recovery. I would imagine quite a few European, South American, and Asian companies seeking to reincorporate themselves in Delaware to achieve carte blanche against civil liabilities for increasingly uncivil acts. It seems to have worked for Royal Dutch Shell. After all, quite a few credit card companies relocated key operations to western states that encouraged the practice of interstate usury. Debasement of the currency is not the only thing that the US seems to have underway and well in hand.
I wonder if the European Union will grant the same privilege to their own corporations, to advantage themselves at will on the American Public in acts of violence and torture? Would the US judiciary extend professional courtesy and acknowledge the EU's sovereign right to suspend the protections of the individual as long as the crimes were corporate?
Is BP incorporated in England or the States? Perhaps Mr. Clegg has a card to play here in adopting the US precedent of corporate sovereignty as long as they are inflicting sufficiently heinous damage on foreigners. There does seem to be some historical precedent for this approach with the East India company, for example. Destroying the vitality of the Gulf of Mexico seems heinous enough so that only an individual or two could possibly be liable. And they are liable to be someone rather low on the corporate ladder, and very liable to be thrown under a bus for the corporate good. I can imagine Tony Hayward playing the hapless and barely involved imbecile effectively on the witness stand. And if the Skilling amnesia gambit fails, there is always the Kenny boy castle-to-save-the-king.
Is the United States the equivalent of a corporation? Some executives from the former and even current US administrations might wish to keep this line of defense in mind. That last sentence from Judge Leval's quote seems tailor made.
"...employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy—all without civil liability to victims."As the saying from the 1930's goes, corporatism is fascism, and fascism is great for business. But Mussolini should have incorporated, and learned to delegate more effectively.
Court Exempts Corporations from Alien Tort Law
A federal appeals court has ruled US corporations can no longer be sued for human rights violations abroad under the longstanding Alien Tort Statute. Earlier this month, the Second US Circuit Court of Appeals ruled that Alien tort claims can only be brought against individuals, not corporations. The ruling dismissed a lawsuit accusing the oil giant Royal Dutch Shell of complicity in the murder and torture of Nigerian activists including Ken Saro-Wiwa.
In a separate opinion, Second Circuit Judge Pierre Leval criticized the ruling, writing, "The majority opinion deals a substantial blow to international law and its undertaking to protect fundamental human rights… So long as they incorporate, businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy—all without civil liability to victims."
