Economic Analysis of Corporate Liability under ATCA/ATS

Alan O. Sykes of Stanford Law School has published a new paper.

The title: “Corporate Liability for Extraterritorial Torts Under the Alien Tort Statute and Beyond: An Economic Analysis.”

The Abstract:

Litigation against corporate defendants under the Alien Tort Statute is largely an effort to enlist multinational business interests in a laudable effort to reign in the human rights abuses of repressive regimes. The hard question is whether the costs of this now extensive litigation (and related litigation under state tort law) are worth the benefits. This essay offers number of reasons for skepticism in that regard, although I stipulate that the ultimate answer to this question turns on empirical judgments. Courts considering the difficult issues that arise in these cases should at least be mindful of the possibility that corporate liability may impose great costs on firms subject to suit in the United States while accomplishing little or nothing to improve human rights. And if the door to corporate liability is to remain open, careful attention to the standards for aiding and abetting liability, to the requirements for vicarious liability, and to the measure of damages can both cabin and calibrate corporate liability in ways that enhance its potential to afford constructive incentives.

As someone who follows these things, I wouldn’t call ATS litigation involving corporations “extensive,” at least in the grand scheme of things.  We hear a lot about “fears” that ATS suits will proliferate if SCOTUS rules that corporations can be held liable, but at the moment, it’s a bit of a stretch.  Still, it’s interesting to see someone tackle the empirical side of things, even if there aren’t yet a whole lot of numbers to crunch.


About Charles Donefer

I am an attorney in New York City.
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