Alien Tort Lawsuits Seen as Growing Problem for Developing Nations, U.S. Policy and Companies

Wednesday, 25 June 2003

Reinsch made his comments at a seminar today sponsored by Competitive Enterprise Institute and The Federalist Society at the U.S. Chamber of Commerce in Washington, D.C.

"The Alien Tort lawsuits are an inappropriate attempt to stretch U.S. law to penalize U.S. corporations for the behavior of foreign governments," said Reinsch. "Plaintiff groups have used 'vicarious liability' to allege that U.S. firms are liable for the human and labor rights violations of foreign governments if they did business in, paid taxes to, and otherwise complied with the laws of the countries in which the violations occurred. It's another case of trial lawyers going after deep pockets."

During the panel discussion, Reinsch pointed to the current ATA cases against corporations operating in South Africa during the apartheid era as perhaps the most troubling. He cited the U.S. government's encouragement for companies to maintain investment levels in South Africa, while at the same time disobeying apartheid laws. As a result, many of these companies committed to promote higher percentages of black workers to management positions, to provide equal pay for equal work, and to desegregate facilities. Many of these same 'Sullivan Principles' companies are now subject to ATA-related legal action.

"If these lawsuits are allowed to continue, companies could become so burdened by legal actions that they close facilities in targeted countries, forego certain destinations for expansion, or withdraw from existing contracts," Reinsch stated. "U.S. foreign investment and trade promote standards of living in the developing world. The disinvestment prompted by ATA lawsuits would ultimately hurt workers in developing countries more than anyone else."

USA*ENGAGE is a coalition of over 670 small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. For more information on USA*ENGAGE and the harmful effects of unilateral trade sanctions, visit the USA*ENGAGE web site at