The Jurisdictional Vacuum: Transnational Corporate Human Rights Claims in Common Law Home States

Abstract

Private MNCs that operate in developing host states through overseas subsidiaries are regularly accused of human rights and environmental violations. Host state plaintiffs who then seek redress in home states where a corporate parent is domiciled face a number of doctrinal limitations. Focusing on the United States, the United Kingdom, and Canada, this Article outlines the current state of common law doctrines that consistently inhibit host state plaintiffs from advancing transnational home state claims. Cumulatively, the doctrines create a ‘jurisdictional vacuum,’ illustrating that domestic legal principles have not kept pace with commerce that spans across state borders. As international business has been able to structure itself to avoid the adjudicative reach of home state courts, harmed host state plaintiffs are unable to utilize domestic common laws to exact civil liability and obtain compensation. Comprised mainly of transnational claims that originate in commercial activities in the extractive and manufacturing industries, the vacuum’s doctrinal limitations fall within two broad categories. In the first category, home state courts have parochially interpreted corporate legal personality. Adhering to the corporate veil, they have disaggregated otherwise integrated transnational business operations in accordance with the entity theory of liability. They have also disaggregated MNC liability from government and individual liability by, respectively, holding onto ‘statist’ notions of international law and restrictively construing corporate personhood. In the second category, home state courts have taken restrained approaches to transnational corporate claims that implicate foreign relations or trade and investment or, otherwise, impinge on a host state’s judicial system. They have routinely invoked deferential and prudential doctrines, namely forum non conveniens and act of state, and restrictively interpreted the presumption against extraterritoriality. And when they have eschewed restraint in boomerang litigation, the end result has equally thwarted the ability of host state plaintiffs to procure compensatory remedies.