SCOTUS Narrows Alien Tort Act Claims

© 2013 The Texas Lawbook.

By Angela Zambrano and Margaret Allen of Weil Gotshal & Manges
Special Contributors to The Texas Lawbook

The Supreme Court’s recent decision in Kiobel v. Royal Dutch Petroleum Co., et al. addresses a little-known jurisdictional statute, called the Alien Tort Statute, 28 U.S.C. § 1350 (the “Alien Tort Statute”).

The decision can been seen as part of the larger trend of the Supreme Court to constrict federal courts’ jurisdiction to decide disputes that occur outside of the United States. The decision has far-reaching implications, both for home and abroad, given the increasingly global business economy, ever growing concerns over America’s role as world-wide enforcer of justice, and the continued threat of terrorist acts on American soil.

The Recent Crescendo of Lawsuits under the Alien Tort Statute
Passed as part of the Judiciary Act of 1789, the ATS provides, in full, that “[t]he 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.” The ATS is a jurisdictional statute that creates no particular causes of action, but has been interpreted by the Supreme Court “as having been enacted on the understanding that the common law would provide a cause of action for [a] modest number of international law violations.” Sosa v. Alvarez-Machain, 542 U.S. 692, 724 (2004).

The statute’s short length contrasts with the large number of lawsuits that have been brought under it in recent times. Over the last few decades, the statute has been increasingly used by foreign plaintiffs who have been victims of violations of international law in their home countries, such as genocide, extrajudicial killing, or torture. The defendants in earlier cases typically were individual perpetrators, such as Ferdinand Marcos, the exiled despot of the Philippines. More recently, cases under the ATS have targeted corporations for aiding and abetting violations of international law. For example, IBM, General Motors, and dozens of other corporations were sued for allegedly aiding and abetting the South African government’s Apartheid regime by a putative class of all black South African victims.

Kiobel’s Winding Road to the Supreme Court
The Kiobel plaintiffs were residents of Nigeria who claimed that Dutch, British, and Nigerian corporations engaged in oil exploration and production aided and abetted the Nigerian government in committing violations of the law of nations. Specifically, the complaint alleged that after concerned Nigerian residents protested the environmental effects of the corporations’ oil exploration and production efforts, the corporations enlisted the Nigerian military and police forces to attack villages, beat, rape, kill, and arrest residents, and destroy and loot property.

The plaintiffs filed suit under the ATS, so their suit could proceed only if the court found that the ATS provided jurisdiction over the action. The Second Circuit held that federal courts lacked jurisdiction under the ATS for claims against corporations because corporate liability is not recognized under the customary international law of human rights. The Second Circuit’s decision was a shock because the issue of whether a corporation could be liable for violations of international law under the ATS was not considered by the district court, and no other court had previously come to this conclusion.

Then, about ten months later, both the Seventh Circuit and the D.C. Circuit Courts of Appeals held that corporations could be held liable under the ATS, in direct opposition to the Second Circuit’s opinion. The split in the Circuit Courts of Appeals made it a near certainty that the Supreme Court would grant the petition for certiorari.

Summary of the Supreme Court’s Kiobel Decision
In October 2011, about three months after the Circuit split materialized, the Supreme Court granted the Kiobel plaintiffs’ petition for certiorari. After briefing and oral argument on the issue of whether the corporations can be held liable under the ATS, the Supreme Court ordered supplemental briefing and another oral argument on whether and under what circumstances courts may recognize a cause of action under the ATS for violations of the law of nations occurring within a territory of a sovereign other than the United States.

Ultimately, the Supreme Court was unanimous in its decision to affirm the Second Circuit, but did so on completely different grounds and was divided in its reasoning. Five of the Justices took part in the main opinion written by Chief Justice Roberts, with the other Justices filing or joining in three different concurring opinions.

In determining whether the ATS applies when the actions occurred outside of the United States, Justice Roberts looked to a canon of statutory construction called the presumption against extraterritorial application. The presumption provides that “[w]hen a statute gives no clear indication of an extraterritorial application, it has none.” Kiobel at *4 (citing Morrison v. National Australia Bank Ltd., 130 S.Ct. 2869, 2878 (2010)).

The presumption is rooted in the “common sense notion that Congress generally legislates with domestic concerns in mind.” Smith v. United States, 507 U.S. 197, 204, n.5 (1993). It further “serves to protect against unintended clashes between our laws and those of other nations which could result in international discord,” Kiobel at *4 (citing E.E.O.C. v. Arabian American Oil Co., 499 U.S. 244, 248 (1991)), and embodies the idea that “United States law governs domestically but does not rule the world.” Kiobel at *4 (citing Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 454 (2007)).

Justice Roberts noted that nothing in the text of the statute suggests that Congress intended causes of action recognized under it to have extraterritorial reach. Even though the ATS covers actions by aliens for violations of the law of nations, that does not imply extraterritorial reach because such violations affecting aliens can occur inside the United States.

The majority then dug deep into the history of the ATS to determine whether Congress intended it to rectify wrongs that occurred in foreign countries. When Congress passed the ATS in 1789, only three principal offenses against the law of nations were identified in treatises at the time: (1) violation of safe conducts, (2) infringement of the rights of ambassadors, and (3) piracy. Justice Roberts explained that the first two offenses do not necessarily involve actions on foreign soil. Indeed, the statute was passed in the wake of embarrassing kerfuffles caused when U.S. laws did not clearly provide judicial relief to foreign officials injured in the U.S. The ATS would have ensured that the US could provide a forum for handling such incidents, and the two cases in which the ATS was involved shortly after it passed likewise concerned conduct that occurred in the United States.

Justice Roberts then explained that the ATS’ application to piracy did not support applying the ATS to claims occurring in other countries, because piracy typically occurs on the high seas, beyond the jurisdiction of any country. In that instance, the foreign policy consequences are almost entirely alleviated, because applying U.S. law would not typically impose the will of the U.S. onto conduct occurring within the territorial jurisdiction of another country.
Justice Roberts stressed that “[p]irates were fair game whenever found, by any nation, because they generally did not operate within any jurisdiction.” Justice Roberts further dismissed any concern that the existence of a cause of action against pirates was a sufficient basis for concluding that other causes of action under the ATS reach conduct that does occur within the territory of another sovereign because “pirates may well be a category unto themselves.”

Justice Roberts concluded that there was no indication that Congress passed the ATS to make the U.S. a uniquely hospitable forum for the enforcement of international norms, and that if Congress wanted to allow district courts to address wrongs that occurred outside the United States, a statute more specific than the ATS would be required. But he left the door open for future claims under the ATS involving wrongs that occurred in other jurisdictions, so long as such claims “touch and concern the territory of the United States,” and do so “with sufficient force to displace the presumption against extraterritorial application.”

Justice Kennedy’s concurrence noted that future cases would need to determine how far Justice Roberts left open the door with respect to actions that occur on foreign soil. Justice Breyer, joined by three other Justices, reasoned that he would not invoke the presumption against extraterritoriality, but rather based on principles of foreign relations law, would find jurisdiction proper under the ATS where: (1) the alleged tort occurs on American soil, (2) the defendant is an American national, or (3) the defendant’s conduct substantially and adversely affects an important American national interest and that includes a distinct interest in preventing the United States from becoming a safe harbor for a torturer or other common enemy of mankind.

Future litigants and courts will likely look to Justice Breyer’s test to help illuminate the contours of Justice Roberts’ decision, because it is more specific.

Conclusion
The Supreme Court’s Kiobel decision narrows the availability of U.S. courts to aliens hurt on US soil, leaving the future murky for claims by aliens hurt outside of the U.S. The decision epitomizes the current Supreme Court’s hesitation to have U.S. law interfere in foreign affairs.

Indeed, the canon of statutory construction known as the presumption against extraterritorial application relied upon by the majority in Kiobel was barely mentioned by the Supreme Court until the 1990s. Since that time, the Supreme Court has limited the reach of U.S. statutes using that presumption at least seven times, curbing the reach of Title VII protections, the availability of fraud claims under the Securities and Exchange Act of 1934, and range of a host of other statutes.

Despite the Supreme Court’s decision, the tide of claims under the ATS is not likely to evaporate. In the current geopolitical climate, with cross-border economies dependent on multinational corporations, and the U.S. having established itself as an attractive forum for the redress of violations of international law by virtue of its role as a protector of justice worldwide, the contours of Kiobel’s limitation on the reach of the Alien Tort Statute will no doubt be tested and defined in the coming years.

Angela Zambrano is a partner in the Litigation Practice at Weil, Gotshal & Manges in Dallas. Margaret Allen is a Litigation Associate with Weil in Dallas.

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