I’ve been thinking a lot about international agreements and contracts these days. I’ve been writing about the Landor case, in which the U.S. Supreme Court found that guards at a Louisiana prison could not be held accountable under the Religious Land Use and Institutionalized Persons Act (RLUIPA). I summarized the facts in an earlier post. The relevant provisions of RLUIPA, the Court found, were enacted pursuant to Congress’s powers under the (so-called) Spending Clause. Such enactments, the Court reasoned, give rise to only contractual obligations between the federal government and the states. The prison guards, who never voluntarily and knowingly took on such obligations, cannot be held liable under RLUIPA.
My argument, which is still germinating, is that the Court’s contract analogy is faulty. I tried out some arguments in the earlier post, but the piece has moved in some different directions in the writing. Agreements between two sovereigns are different from private contracts in ways that matter for the resolution of the case, at least if we believe that the law ought to be able to provide legal remedies for legal wrongs. In private contracts, the principal can be liable for the actions of its agents. Sovereigns are protected from such liability through sovereign immunity doctrines. The Court’s contracts-based reasoning leads to a double immunity. The aggrieved party has no remedy against the state because of immunity and no remedy against the agent because of lack of privity. Given that states can only act through agents, the result frustrates congressional intent and transforms the Spending Clause’s cooperative federalism model into an uncooperative federalism based on illusory contracts. The better way to think about Spending Clause enactments, I argue, is to treat them as agreements between sovereigns; that is, like treaties. And treaties are like contracts, but not in every way.
Duncan Hollis (below), who literally wrote the book on treaty law (well, edited it), appeared as a guest in the most recent episode of the American Society of International Law’s podcast, International Law: Behind the Headlines. Professor Hollis, in conversation with podcast host Kal Raustiala explained one of differences between contracts and international agreements. Different rules govern when a preliminary agreement or memorandum of understanding (MoU) binds the parties.
The episode discusses the Fourteen-Point Islamabad Memorandum of Understanding between the United States of America and the Islamic Republic of Iran, which may already have been moribund at the time of the broadcast. Few may now recall its existence, but perhaps it will be revived or be the basis of some future peace agreement. The question addressed on the podcast was whether the MoU was a treaty. Interestingly enough, Professor Hollis thinks that the U.S. thought that the MoU was not binding, and the Iranians thought that it was. The test is contextual, following Articles 31-33 of the Vienna Convention on the Law of Treaties and state practice, but Professor Hollis hones in on specific language in the MoU that signals the parties’ intentions.
As Professor Hollis, notes, there is authority indicating that the UK view is that anything called an MoU is not binding as matter of the law of treaties. That has not been the traditional U.S. view, which led to an interesting tension between our President, during his first term, and the U.S. Trade Representative at the time. The President’s view, perhaps based on his experience with MoU’s in the context of real estate deals, is that MoU’s are not binding. However, the U.S. generally applies a contextual approach, so we had the trade representative proclaiming an MoU to be binding and the President saying that it was not. Given the President’s view, it seems likely that the U.S. did not intend this MoU to be binding. Still, international lawyers tend to look to whether the actual language of the instrument suggests binding obligations. Key words are “shall,” which is binding language, as opposed to “should” or “will,” which is not.
As Professor Hollis illustrates in a discussion of the Paris Accords, an agreement can be binding in part and non-binding in part. The question with respect to the MoU is whether any element of the MoU is binding. For example, the first paragraph of the MoU reads:
The United States of America and the Islamic Republic of Iran and their allies in the current war are signing this MOU to declare the immediate and permanent termination of military operations on all fronts, including in Lebanon, and undertake from now on not to initiate any war or any military operation against each other, and to refrain from the threat or use of force against each other, and ensuring the territorial integrity and sovereignty of Lebanon.
The language of undertaking suggests intent to be bound, not that it matters much in this instance, as by the time the podcast aired, both parties had already violated any commitments they had made.
In any case, the main takeaway for our purposes is that MoU’s can be binding or non-binding as a matter of contracts law. They can be binding or non-binding as a matter of international law, but the tests for determining whether they are binding are somewhat different. One should not assume that the outcome of a legal question will be the same whether the instrument in question is a contract or an agreement between or among sovereigns. The confusion between the U.S. and Iran arises in part from differing assumptions about when MoU’s can be binding. The Iranians likely came to the bargaining table with assumptions based on the law of treaties. It may be that the American negotiators were more familiar with the role of MoU’s in the domestic transactional context. After all, our chief negotiators, like the President, are real estate developers, not diplomats or legal experts. Professor Hollis, who worked in the office of the legal advisor to the U.S. Secretary of State, expressed doubt that members of that office were consulted in the drafting of this MoU.
I cannot say what this means for Landor. There is a lot of overlap in the ways that contracts and international agreements operate. Still, the Court in that case did not consider the law of treaties or, more precisely, the law of agreements between or among sovereigns. Without having done that work, the Court has not yet established a well-reasoned legal justification for denying Mr. Landor the relief he sought.