The Supreme Court Weighs the Right to Sue

The Court took care in three cases to ask where the power to file lawsuits came from.

A side from its immigration ruling in Blanche v. Lau, the Supreme Court this morning decided four cases. Three of them, all decided on 6–3 ideological lines, involved questions of who could sue whom for civil damages. The Court ruled in favor of suits against arms of the Cuban government but restricted suits against companies that do business with China and suits against state prison officials accused of violating prisoners’ religious liberties. In the fourth case, the Court unanimously rejected a long-shot effort to limit state seizures of property to collect taxes. I’ll deal with the three 6–3 cases here.

Cuba Libre

Earlier this term, the Court’s decision in Havana Docks Corporation v. Royal Caribbean Cruises, Ltd., tightened the screws of the U.S. embargo on Cuba by making it easier to sue cruise lines that use docks originally built by American companies, from whom the docks were seized. Today’s decision in Exxon Mobil Corp. v. Corporación Cimex, S.A. continues the winning streak for Cuba sanctions.

Under the Foreign Sovereign Immunities Act of 1976 (FSIA), a complex set of statutory requirements govern when civil lawsuits can be filed against foreign states, their officials, and their subdivisions and instrumentalities (which include majority state-owned companies). Typically, suing one of these sovereign defendants requires proving that one of the FSIA’s statutory exceptions applies: for example, that the foreign sovereign has waived immunity, expropriated property in violation of international law, or is being sued over commercial activity within the United States.

The 1996 Helms–Burton Act aimed to create a new path for American victims of Cuban expropriation to sue Cuban instrumentalities that use or traffic in expropriated property. Today’s decision asked whether suits under Helms–Burton also have to prove that one of the FSIA’s exceptions applies. Justice Brett Kavanaugh’s opinion for the Court concluded that the later statute was designed to provide an additional remedy that went beyond what was allowed under the earlier statute. As Kavanaugh quipped, “Time did not stop in 1976.”

The Helms–Burton weapon has been dormant for a long time, because the president can suspend it; Bill Clinton did so immediately, and all of his successors of both parties continued that policy until Donald Trump ended the suspension in 2019. Exxon filed this lawsuit immediately, as did other victims of Cuban expropriations.

As the Court noted, Helms–Burton’s remedies go further than the FSIA expropriation and commercial activity exceptions, both of which limit suits to those targeting foreign sovereign behavior with “direct effects” in the United States. The law also uses a different basis for jurisdiction than the FSIA’s jurisdictional statute, because the suits arise under federal law (the FSIA doesn’t actually create causes of action, so suits can arise under state or foreign law; in my time in practice, I had FSIA cases that involved extensive disputes over what law applied, involving dueling experts in Belgian and Korean law). And it adds a service-of-process provision that would be superfluous if the FSIA’s special rules for service of papers on foreign sovereigns must be complied with. Finally, the fact that Helms–Burton lawsuit authority can be suspended by the president was cited by the Court as additional support for thinking it an expansive remedy that is designed to give significant leverage to the president. Justice Elena Kagan’s dissent for the three liberals argued that immunity under the FSIA can only be abrogated if a subsequent statute explicitly repeals it, which Helms–Burton’s text did not. But as Kavanaugh rejoined, “it is not as if Congress, when enacting the Helms–Burton Act, somehow forgot that the FSIA and [its jurisdictional provision] existed.”

The Line Holds Again

Exxon Mobil v. Corporación Cimex came out the way it did because the right to sue under Helms–Burton was explicit and the whole point of the law. By contrast, in Cisco Systems v. Doe, the Court held the same line it enforced earlier this term in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd. against allowing lawsuits that Congress never authorized in so many words. Once again, as in FS Credit, the opinion was written by Justice Amy Coney Barrett.

The question was whether aiding and abetting lawsuits can be filed under either the Torture Victim Protection Act (TVPA) or the Alien Tort Statute (ATS) against parties who could not be sued directly for wrongs under either statute, but who aided and abetted the wrongdoers. The case saw Cisco hauled into American courts over Chinese abuses of the Falun Gong movement inside China — which was done in part with American technology provided by Cisco.

The easier part of the case was the TVPA, which allows suits against a defendant who “subjects” the plaintiff to torture. A federal criminal statute, 18 U.S.C. §2, allows aiders and abettors to be criminally prosecuted under every federal criminal statute for providing substantial assistance to a crime and knowingly participating in doing so. For years, before the Court got serious about textualism, courts analogized to this to allow aiding and abetting suits in civil cases under federal law, but 18 U.S.C. §2 deals only with crimes. In a 1994 securities-law case, Central Bank of Denver, N. A. v. First Interstate Bank of Denver, the Court laid down the rule that aiding-and-abetting suits in civil cases require some explicit authority from Congress — and because there is no general civil counterpart to 18 U.S.C. §2, that means that civil aiding and abetting exists only where a statute includes it. “The TVPA nowhere mentions aiding-and-abetting liability, and that silence is enough to settle the issue. . . . Plaintiffs counter that ‘subjects’ is broad enough to include aiding-and-abetting liability. It is not. To ‘subject’ another to torture means ‘to cause to undergo or submit to.’ Webster’s Third New International Dictionary.” This part of the decision was enough of a slam dunk that Kagan and Justice Ketanji Brown Jackson joined it.

The ATS is trickier, because — like the FSIA — it is designed as a jurisdictional statute rather than one that actually creates rights to sue. It creates federal court jurisdiction over “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.” It was enacted as part of the Judiciary Act of 1789 but was scarcely used until a 1980 decision by the Second Circuit ruled that lawsuits under international law could be brought in American courts under the ATS. A flood of foreign human-rights litigation followed.

Recognizing the hornets’ nest of novel legal questions that this created, the Court has been trying to provide some ground rules for ATS suits ever since. In Kiobel v. Royal Dutch Petroleum Co. (2013), the Court ruled that the statute does apply extraterritorially, given the general presumption (a strong one in 1789) that laws did not apply outside the sovereign’s borders. In Jesner v. Arab Bank, PLC (2018), the same presumption was applied to rule that the ATS doesn’t allow suits against foreign corporations. And in Nestlé USA, Inc. v. Doe (2021), the Court ducked the aiding-and-abetting question in a lawsuit against American subsidiaries of foreign corporations by ruling that a case arising from child slavery on Ivory Coast cocoa plantations was also barred by Kiobel.

All along, there’s been an open question raised in Justice David Souter’s opinion in Sosa v. Alvarez-Machain (2004): Does the ATS allow courts to recognize causes of action for violations of “international norms,” or only to allow suits where some source of law creates one? Sosa rejected the creation of a cause of action for arbitrary detention but left open the possibility that the Court might recognize some norms as giving rise to suits in the future.

It will surprise nobody who is familiar with Barrett that this was the result: “Today, we close the door that Sosa cracked and hold that courts may not create new causes of action for violations of international norms.” As Barrett observed, when Sosa described the ATS as jurisdictional, “Justice Scalia would have stopped there.” Today, Scalia’s view won. Barrett cited two reasons. One is a practical concern that implicates the Court’s institutional competence and the proper role of the political branches:

ATS cases by their nature implicate foreign policy. . . . The danger of unwarranted judicial interference in the conduct of foreign policy is magnified in this context. . . . After all, the point of a new ATS cause of action is to vindicate a norm of international character. . . . It is thus difficult to think of a case in which a court might safely conclude that a new ATS cause of action would not have detrimental foreign policy consequences. [Quotations and citations omitted.]

The second problem is even more fundamental:

The power to create causes of action belongs to Congress. . . . For this reason, Sosa cautioned that the “decision to create a private right of action is one better left to legislative judgment in the great majority of cases.” . . .

This understates the point. While our cases at one time permitted courts to provide redress if Congress remained silent, . . . we have since rejected the practice of fashioning rights of action as we see fit. . . . Home-grown causes of action are difficult to reconcile with the Constitution’s separation of legislative and judicial power. . . . Congress is better positioned than courts to evaluate the policy tradeoffs of creating liability. . . . This is especially true in an area like this one, where the Constitution expressly delegates authority to Congress [to] “define and punish . . . Offences against the Law of Nations.” For that reason, creating any cause of action is an extraordinary act that places great stress on the separation of powers. . . .

What Sosa made difficult, subsequent legal developments have made impossible. Since Sosa was decided, we have firmly committed to the view that judicially created causes of action offend the separation of powers in almost every circumstance. As a result, we have virtually eliminated the practice of fashioning them. [Quotations and citations omitted.]

Given that conclusion, the Court declined to recognize an aiding-and-abetting claim under the ATS. Justice Sonia Sotomayor, writing for the three liberals, groused that the Court “overrules Sosa, without even acknowledg­ing that it is doing so. Today’s decision marks yet another low point in this Court’s esteem for its precedents.” But, of course, the Sosa Court rejected a judicially implied cause of action, so what the Court abandoned today was a portion of its reasoning, not its holding.

Not a Party

Landor v. Louisiana Department of Corrections and Public Safety involved an abuse of religious liberty closer to home than the Falun Gong in China: a Rastafarian inmate in Louisiana who wrongfully had his dreadlocks shaved by prison officials. As the case came to the Court, there was no dispute that this violated his religious liberty. There were two questions. One is whether the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) allows suits for money damages when it authorizes suits for “appropriate relief” when state prison systems place “substantial burden[s] on the religious exercise[s]” of state prisoners without a qualifying justification. The other is whether RLUIPA suits can be brought against individual prison officials rather than against the prison system. Justice Neil Gorsuch’s opinion for the majority concluded that individuals cannot be sued and so did not resolve what kinds of relief can be pursued.

The key point in Landor is that RLUIPA was enacted under the spending clause. Rather than exercise one of its direct powers, Congress required states, as a condition of receiving federal funding, to consent to being sued when the religious liberties protected under RLUIPA are violated. That creates some knotty questions of how far Congress can go in using federal money to create leverage for things it may not be able to do directly. This was a big question that the Court failed to resolve two years ago in Moyle v. United States, when the Biden administration tried to use the Emergency Medical Treatment and Active Labor Act (EMTALA), which imposes requirements on emergency rooms that accept federal funding, to override state criminal laws against abortion.

As the Court has read laws enacted under the spending clause, they should be treated like federal-state contracts, which “must clearly and unambiguously alert a grant recipi­ent to any condition on federal funds.” But a contract only binds the parties. The Louisiana Department of Corrections, which receives federal funds, is a party and can be sued under RLUIPA. But the people who work for it are not, and cannot: “Mr. Landor does not allege that any of those individuals has entered any agreement with the federal government, let alone that any of them has voluntarily and knowingly consented to answer private suits under RLUIPA. . . . Because they never agreed to answer suits like this one, Mr. Landor’s case cannot proceed against them any more than a breach of contract action might proceed against a defendant who never formed a contract.”

As Gorsuch observed of the three dissenters (in a dissent by Jackson), their theories of why the necessary and proper clause allows Congress to go further and convert conditions it attaches to federal spending into rules binding on people who never agreed to take the money:

Congress could require coaches at universities that receive federal funds to permit transgender athletes to play women’s sports—or face personal liability in suits for damages. Likewise, Congress could bar doctors at medical practices that accept federal funds from administering certain vaccines to children—again on pain of damages. . . . None of that fits with our system of limited and enumerated federal powers where all others are reserved to the States and the people. . . .

With even a modest federal expenditure somewhere nearby, Congress could then proceed to regulate directly the conduct of countless nonconsenting individuals—not just the individual officers here, but also others like the coaches and physicians we discussed above. . . . Congress could regulate directly, too, in innumerable spheres, including ones traditionally reserved to the States. Really, under Mr. Landor’s and the dissent’s logic, we would be hard pressed to posit any activity that Congress would be without power to regulate. . . . And as inconsistent as all that is with both principles of state sovereignty and a federal government of limited and enumerated regulatory powers, it hardly represents a proper means for carrying into execution Congress’s spending power. . . . Under the Spending Clause, Congress’s power to spend money does not include the power to regulate.

That’s a conclusion that points to the right answer to the question that was left unaddressed in Moyle, too.