DISAGGREGATING CORPORATE LIABILITY: JAPANESE MULTINATIONALS AND WORLD WAR II.

• Author: Webster, Timothy

1. Forced Labor in World War II: China, Japan, Korea 182 A. Forced Labor in Korea 183 B. Forced Labor in China 184 C. After World War II 186 D. After the Cold War: An Overview of Transnational War Reparations Litigation 187 II. Corporate Civil Liability for World War II Human Rights Abuses, 190 A. Negligence Liability 195 1. Duty of Health and Safety 197 2. Cases against the Japanese Government 198 3. Cases against Japanese Corporations 199 B. Joint Liability: Connecting the Corporation and State 202 C. Tort Liability 204 1. Kim Sun-Gil v. Mitsubishi Heavy Industry 205 2. Pak Chang-hwan v. Mitsubishi Heavy Industry 206 D. Damages Awards 209 III. Exporting Japanese Corporate Civil Liability 212 A. Defining Corporate Civil Liability 212 B. Corporate Liability for World War II 215 INTRODUCTION

   Who is responsible for World War II? Who should pay for it? In weighing the war's legacy on its seventy-fifth anniversary, we must account for recent developments about war responsibility. In 2019, the United States Department of State doubled reparations, to $400,000, for Holocaust survivors deported on French trains to death camps in Eastern Europe. (1) Meanwhile, Poland passed its own "death camp" law in 2018, criminalizing public attribution of World War II crimes to the Polish state. (2) At the other end of Eurasia, relations between South Korea and Japan hit their lowest point in half a century, after the South Korean Supreme Court ordered two Japanese corporations to compensate Korean forced laborers for their wartime service/ In 2016, another Japanese company, Mitsubishi Materials, established a fund to compensate Chinese citizens who performed forced laborers during the war. (4)

   Mitsubishi also issued a fulsome apology to former forced laborers--a rare form of redress in Asia's war responsibility debate. (5)

   Of particular salience in these discussions is the extent to which corporations are held accountable. Many multinational corporations in both Europe and Asia used forced labor on an industrial scale during World War II. But only rarely do they acknowledge their role, admit legal liability, or pay compensation. (6) These questions of redress reflect a broader discussion about the whether corporations owe obligations to society, and whether they incur legal liability when they do not fulfill those obligations. At the international level, the United Nations has launched several initiatives to prod companies to shoulder greater social responsibilities. (7) These efforts culminated in the UN Human Rights Council's Framework on Business and Human Rights, also known as the "Ruggie Report," in recognition of Professor John Ruggie, who led the initiative. (8) Yet the Ruggie Report ultimately refrained from imposing legal liability on corporations, insisting instead that they "do no harm." (9)

   At the national level, courts in numerous jurisdictions question whether corporations can incur legal responsibility for violating international human rights law. In the United States, the Alien Tort Statute (ATS) has provided courts ample opportunity to attach legal liability to multinational corporations engaged in human rights abuses. (10) Scholars and lawyers have posited various theories of corporate liability under the ATS. (11) But while the commentary has piled up, few judicial opinions actually attach legal liability to corporations; in just one reported decision has a federal court found a corporation liable. (12) Moreover, recent decisions by the U.S. Supreme Court, including Jesner v. Arab Bank (2018), (13) augur a muted role for the ATS in further developing norms of corporate liability. Civil litigation in Canada, England, Germany and the Netherlands has also shielded corporations from liability for a number of reasons. (14)

   What about Asia? A discussion of corporate civil liability that excludes the largest continent ignores most of humanity; it also overlooks the location of widespread abuses, in the past and the present. (15) Yet that is precisely what the Ruggic Report does. (16) This Article fills in a piece of that continental gap by examining the judicial construction of corporate legal liability in contemporary Japan. Specifically, it reviews some two dozen lawsuits, brought by Korean and Chinese plaintiffs, against Japanese corporations that used forced labor during World War II. (17) The claims vary from case to case, but most plaintiffs demand monetary damages (unpaid wages, tort liability) for forced labor they performed in Japan, while a few accuse the corporation of forcible abduction as well. (18)

   Given the political sensitivities about underlying issue of war responsibility, one might expect a fair degree of norm contestation among the courts. But with minor exceptions, Japanese judges hew to a relatively uniform script regarding contested facts, violations of law, potential compensation, and affirmative defenses. The occasional judge refuses to find facts, or fails to hold a corporation under a particular legal theory. (19) But over time, judges coalesced around a set configuration of law and facts. After the Supreme Court of Japan dismissed multiple war reparations lawsuits in 2007, Japanese lower courts could no longer attach legal liability. (20) In the wake of these rulings, Japanese courts have maintained that postwar treaties--between Japan and China, and between Japan and South Korea--extinguished plaintiffs' claims, and precluded the award of monetary damages. (21) But courts also made detailed factual findings, devised theories of tort liability, and allocated liability between state and corporate actors. The suits may not be representative in the sense that they capture the full breadth of corporate liability issues in contemporary Japan, or East Asia. (22) Instead, their importance lies in their coherent contributions to discussions about World War II accountability and corporate legal liability.

   More specifically, this Article advances descriptive and prescriptive claims about corporate legal liability in Japanese war reparations lawsuits. The descriptive claim discerns the three dominant modes by which Japanese courts formulate corporate legal liability for the use of wartime forced labor. These include negligence, joint liability, and tort liability, as well as the possibility of compensatory damages. These formulations in turn give rise to two prescriptive claims about the significance of the decisions. First, taken as a whole, the lawsuits provide qualified support for a norm of corporate legal liability. Second, the failure to hold corporations legally liable does not completely vindicate them. Japanese judges carefully depict the role of Japanese corporations in each phase of the forced labor apparatus: their initial requests for forced labor from the Japanese Cabinet, their recruitment and trafficking Korean and Chinese forced laborers, the brutal treatment to which they subjected forced laborers, and the postwar denials some corporations have made about their participation in the forced labor program. These findings bear reputational, moral, financial, and political consequences, even if legal liability does not attach.

   This Article makes three contributions to the literature. First, it informs ongoing debates about corporate civil liability, mining uncharted jurisprudence to extend the discussion beyond its Anglophone and common law borders. Few of the decisions herein discussed have attracted scholarly discussion in English, (21) even as they have generated heated debates in Japan, China, and to a lesser extent, Korea. This Artiele not only fully accounts for Japan's forced labor litigation, it provides theoretical frames to inform the discussion of corporate legal liability.

   Second, it situates theories of corporate legal liability within Japanese law and comparative law. As elsewhere in war reparations litigation, indirect theories of liability appeal to Japanese judges. (24) This may reflect a cultural preference for indirection or mediated solutions to politically sensitive problems. But it also responds to prescription periods (statutes of limitation) under Japanese civil procedure. Nevertheless legal theories, such as the duty of care, were well received by Japanese judges, (25) and may provide a theory of corporate liability in other jurisdictions. Forced labor and human trafficking are widespread at the present moment. (26) Even if the ATS fades into obscurity, Japanese case law provides a consistent theory of corporate liability for forced labor. (27)

   Third, this Article provides a revealing counterpoint to transatlantic solutions that the United States negotiated with its European allies. (28) The 1990s witnessed a resurgence of World War Il-related litigation in the West. (29) On their own, those lawsuits did not solve the underlying problems of forced labor, spoliated bank accounts, and looted art. Instead, executive branch actors from the United States and various European governments stepped in to broker bilateral agreements. One can question the extent to which any of these mechanisms achieved its reparative goals. (30) But one cannot deny the fact that the United States deployed far greater resources to resolve lingering World War II issues in Europe than it has to similar issues in Asia. (31) At a time when Japan and South Korea--America's two most important Asian allies--are fighting a diplomatic battle over World War II reparations, a more assertive American approach may be warranted.

   Part I provides historical background on Japanese forced labor during World War II, as well as contemporary efforts to remedy forced labor. Part II analyzes the issue of corporate civil liability as discussed in a series of lawsuits, brought by Chinese and Korean forced laborers, against Japanese corporations that used forced labor during World War II. It provides a framework to understand the various motivations behind these lawsuits, as well as a typology of...