The Alien Tort Claim Act (ATCA) has been a source of controversy over the past years. Originally, it was used as a way to govern relations between nations, but now it is being utilized by human rights activists in order to hold corporations responsible for acts performed by their subsidiaries which infringe upon the rights of people in foreign nations in which the company resides.  The Act reads: “The district courts shall have original jurisdiction of 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.” 
This article will discuss the history of corporate liability under the ATCA. It will then follow by spotlighting a case that almost set precedent in terms of corporate liability under the ATCA. It will conclude with a discussion of the effects of utilizing the agency theory in corporate ATCA claims.
Corporate Liability Under the ATCA
In the past, the ATCA was developed in order to create laws that give aliens access to the federal court system in order to protect foreign merchants who are willing to do business with the U.S.  Another concern of the Act was to show to foreign nations that the United States would be considered a nation of laws that would not allow for torts to be avoided simply because the tortfeasors were not citizens of the United States.  Throughout the years, the ATCA has been increasingly used in cases against corporations in which they are accused of violations of international law in their associations with countries that are known for their violation of the human rights of employees and other third parties. 
So far, no corporations have been held liable under the ATCA. However, there have been corporations that have settled out of court with the plaintiffs for one reason or another. For example, Royal Dutch Shell settled with the family of Ken Saro-Wiwa, a critic of Shell who was hanged by the country’s military regime in response to his protest against the company’s environmental practices, and other plaintiffs, but denied any wrongdoing. The company stated that it “will provide funding for the trust and a compassionate payment to the plaintiffs and the estates they represent in recognition of the tragic turn of events in Ogoni land, even though Shell had no part in the violence that took place.” 
The first case that held promise that corporation might be held liable under the ATCA was Doe v Unocal, but this corporation also settled with the plaintiffs before it could be heard before the full en banc court that was requested by judges in the Ninth Circuit. It was also settled before the case could be heard by a jury at the state level. For these reasons, the decision that was found by the prior ruling cannot be held as precedent.
Doe v Unocal
In Doe v Unocal, a group of Burmese farmers from the Tenasserim region brought a claim against Unocal for atrocities that were enacted by the State Law and Order Restoration Council (SLORC), a military junta in control of Burma.  These atrocities occurred while carrying out the expansion of the Yadana gas pipeline in which Unocal was involved in a joint venture with the Myanmar Oil and Gas Enterprise on the Yadana pipeline project. 
In the District Court for the Central District of California, Judge Richard Paez found that the United States did have proper jurisdiction over this case and that this case could properly be brought against Unocal.  This decision opened the door for corporations to be named as defendants under ATCA violations.  However, Unocal was granted summary judgment on appeal because the appellate court Judge found that there was no genuine issue of material fact and the claims were dismissed.  The plaintiffs then appealed at the federal level and re-filed the claims at the state level. 
At the federal level, the judgment was overturned by a three-judge panel and it was found that the plaintiffs did have sufficient evidence to proceed with their case against Unocal and sent it to a jury trial  This decision was accompanied by a concurring opinion by Judge Steven Reinhardt in support of utilizing the agency theory which will be discussed later in this article.  Before this case could be heard before the jury, a majority of the non-recused judges found that the case should be heard en banc by the entire bench. 
At the state level, there was also discussion of the liability when the case survived Unocal’s motion for summary judgment.  Initially, the court held that Unocal did not control this subsidiary.  However, in the second phase of the case, the court held that a principal can be held liable for the torts committed by its agent performed in the scope of the agency, even if the agent is a distinct corporation.  Thus, the ruling in the first phase does not preclude a claim under the agency theory from being sought. 
Shortly thereafter, Unocal decided to settle the case out of court which would end both the federal and state cases against Unocal with undisclosed terms of the agreement.  This settlement was reached before the case could be heard en banc or before it went to jury trial at the state level. Since the Ninth Circuit ordered that the case be heard en banc, the order of the three-judge panel is vacated and can no longer be cited as precedent.  This case almost set precedent for corporations being held liable under the ATCA. 
As stated in the concurring opinion by Judge Reinhardt, this case may have claims under the agency theory  In Judge Reinhardt’s concurring opinion, he points to the fact that the Restatement of Agency has been looked to when developing the federal common law.  Under the principles of the federal common law of agency, this relationship may be express, implied or it can be found by a jury that apparent authority exists.  Restatement (Third) of Agency states that, “A principal who conducts an activity through an agent is subject to liability for harm to a third party caused by the agent's conduct if the harm was caused by the principal's negligence in selecting, training, retaining, supervising, or otherwise controlling the agent.”  Reinhardt states that in order to establish plaintiff liability, it is not necessary that a contractual relationship exists if we utilize the agency theory suggested by Judge Reinhardt.  Should courts follows the reasoning of Justice Reinhardt and allow corporations to be held liable for its agent’s behavior?
Effects of Utilizing Agency Theory in ATCA Claims
As stated in an article by University of Illinois Professor Cynthia Williams and University of North Carolina Professor John Conley, corporate boards now have a duty to consider human rights violations in regards to protecting the best interest of its shareholders.  With the threat that they may be subject to litigation under the ATCA, corporations are more liable now to be cautious of violations of human rights for fear that they might harm the interests of the shareholders by having to litigate or settle claims brought under the ATCA  This was in response to the Sosa litigation which did not follow business lobbying groups’ suggestion to relinquish the power to hear human rights claims against global corporations.  Applying the agency theory of liability would also further this same goal.
This would also have an effect on the business judgment rule that may be used as a defense against such claims under the ATCA.  The business judgment rule offers corporate directors the ability to make decisions without being able to rebut such decisions using a simple negligence standard.  In dealing with the ATCA, the business judgment rule would subject directors to a higher standard when seeking to act in the “best interest” of the shareholders.  They would not only have to consider the profit interests of its shareholders, but other stakeholders such as employees and the community in which the business thrives.  This approach to the business judgment rule would be highly beneficial in protecting the rights of third parties from corporate ignorance of human rights violations.
By applying the agency theory of liability, corporate firms would be more liable to its shareholders because it has to keep in mind the best interest of the shareholder when making business decisions. In turn, this would require that companies take into account all aspects of the decision that could affect the interests of the shareholders. This would include possible litigation that could be brought as a result of the decisions of the company. Successful claims under the ATCA also deny income to regimes known for violation of human rights in conducting business.  Furthermore, it requires businesses to take responsibility to practicing in such regimes. 
The ATCA has come a long way in its interpretation and now it could possibly hold corporations liable for the actions of its subsidiaries in committing tortious acts in the course of its business relations with its parent company. By using the agency theory discussed in Judge Reinhardt’s decision, we hold the corporation to a much higher standard that would require greater transparency in their business relationships and greater scrutiny of its business decisions in areas associated with political turmoil and human rights violations. This method would increase the responsibilities that corporations have in regards to its shareholders. It would also have a few drawbacks for corporations, but those could be avoided by greater supervision over the business activities in other countries and higher scrutiny in selecting what subsidiaries to involve itself with.
 News Release, Washington Legal Foundation, Court Urged to Dismiss Alien Tort Suit Against Unocal (Doe v Unocal) (Apr. 24, 2003) available at http://www.wlf.org/upload/4-03UNOCAL.pdf.
 28. U.S.C. §1305 (2009).
 Thomas M. Pohl, From Blackbeard to Bin Laden: The Re-Emergence of the Alien Tort Claims Act of 1789 and Its Potential Impact on the Global War on Terrorism, 34 J. Legis. 77 (2008).
 Jad Mouawad, Shell to Pay $15.5 Million to Settle Nigerian Case, N.Y. Times, June 8, 2009, available at http://www.nytimes.com/2009/06/09/business/global/09shell.html?_r=2
 Doe v Unocal Corp., 963 F. Supp. 880 (C.D. Cal. 1997).
 Armin Rosencranz and David Louk, Doe V. Unocal: Holding Corporations Liable for Human Rights Abuses on their Watch, 8 Chap. L. Rev. 135 (2005).
 Doe v. Unocal Corp., 110 F. Supp. 2d 1294, 1295 (C.D. Cal. 2000).
 Rosencranz and Louk, supra note 10
 John Doe I v Unocal Corp., 395 F.3d 932 (9th Cir. 2002)
 Rosencranz and Louk, supra note 10
 Rachel Chambers, The Unocal Settlement: Implications for the Developing Law on Corporate Complicity in Human Rights Cases, Human Rights Brief, 2005, available at http://www.wcl.american.edu/hrbrief/13/unocal.pdf?rd=1
 Unocal, 395 F.3d 932 at 972
 Restatement (Third) of Agency §7.05 (2006).
 Unocal, 395 F.3d 932 at 972.
 Cynthia Williams and John Conley, Corporate Social Responsibility in the International Context: Is there an Emerging Fiduciary Duty to Consider Human Rights?, 74 U. Cin. L. Rev. 75 (2005).
 Lucien J. Dhooge, Due Diligence as a Defense to Corporate Liability Pursuant to the Alien Tort Statute, 22 Emory Int'l L. Rev. 455 (2008).
 Gregory Scott Crespi, Should the Business Judgment Rule Apply to Corporate Officers, and Does it Matter?, 31 Okla. City U.L. Rev. 237 (2006).
 Dhooge, supra note 31
 Morton Winston, John Doe v. Unocal—Burmese citizens attempt to legally stop the gas pipeline plans that Unocal Corp has with the country's repressive military government, Whole Earth, 1999, available at http://findarticles.com/p/articles/mi_m0GER/is_1999_Summer/ai_55127414/.