This week the U.S. Supreme Court issued its much-awaited decision
in Kiobel v. Royal Dutch Petroleum Co., which addressed the
question of whether a federal court may recognize a cause of action
under the Alien Tort Statute ("ATS") for violations of the "laws of
nations" occurring within the territory of a sovereign nation other
than the United States.1 The
Supreme Court ruled that a court's power to recognize ATS causes of
action is limited by the presumption against extraterritorial
application, and rejected the claim in Kiobel on that
basis. While failing to address other significant issues such
as corporate liability and whether ATS actions may be brought under
an aiding and abetting theory, the Court's opinion is a landmark
victory for corporations, which, over the past 30 years, have been
subject to an increasing number of U.S. lawsuits for their
activities in foreign countries.
The ATS is a
jurisdictional statute, which the Supreme Court held in Sosa v.
Alvarez-Machain provides U.S. courts jurisdiction to consider
an alien's federal common-law claim for violations of
well-established and well-defined international law norms.
The ATS claims in Kiobel were brought by 12
Nigerian nationals, now living in the United States, against certain
Dutch, British, and Nigerian oil companies. According to the
complaint, these foreign corporations enlisted the help of the
Nigerian government to violently suppress local residents' protests
of the subsidiary�s oil exploration and production activities in
Nigeria. The plaintiffs asserted claims of aiding and abetting
Nigeria's alleged human rights abuses committed in violation of
international law.
The Second Circuit had dismissed the
plaintiffs' claims on the ground that corporations, unlike
individuals, could not be held liable for violations of
international law. Although the Supreme Court originally
granted certiorari on this issue, it later asked for
additional briefing and oral argument on whether the ATS provides
jurisdiction over extraterritorial conduct. The Supreme
Court's decision, based on this broader issue, affirmed the Second
Circuit's dismissal of the claims.
In a majority opinion
authored by Chief Justice Roberts (joined by Justices Scalia,
Kennedy, Thomas, and Alito), the Supreme Court held that the
presumption against extraterritoriality applies to the ATS and that
the presumption is not rebutted by the ATS's text, history, and
purpose. Accordingly, the Court held that the presumption
"constrains courts from exercising their [federal-common law] powers
under the ATS." The Court explained that nothing from the
ATS's history suggests that Congress "intended federal common law
under the ATS to provide a cause of action for conduct occurring in
the territory of another sovereign." The Court then applied
its holding and ruled that "petitioners' case seeking relief for
violations of the law of nations occurring outside the United States
is barred." In so holding, the Court noted that all of the
alleged conduct at issue occurred abroad.
In addition to
fully joining the majority, Justice Kennedy and Justice Alito
(joined by Justice Thomas) wrote separate concurring opinions.
Justice Kennedy noted that many human rights abuse victims can seek
redress through the Torture Victim Protection Act ("TVPA"). He
left open the possibility that there may be cases "covered neither
by the TVPA nor by the reasoning and holding of today's case," and
that in such cases, proper implementation of the presumption against
extraterritoriality "may require some further elaboration and
explanation." Justice Alito added that no ATS claim can
overcome the presumption "unless the domestic conduct is sufficient
to violate" the limited class of international law norms recognized
in Sosa.
In a separate opinion, concurring only in
the judgment, Justice Breyer (joined by Justices Ginsburg,
Sotomayor, and Kagan) agreed that the ATS does not provide
jurisdiction under the facts in this case. The minority,
however, rejected the presumption-against-extraterritoriality
approach, finding that ATS jurisdiction attaches "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."
The Court's ruling presents a sea change in ATS
litigation by fully embracing the same type of strong presumption
against extraterritorial application that is applied to other
federal statutes. Further, in expressly stating that there was
no evidence that Congress "intended federal common law under the ATS
to provide a cause of action for conduct occurring in the territory
of another sovereign," the Court did not appear to limit its
reasoning to the situation presented in Kiobel, where both
the plaintiffs and defendants were foreign and the tortious conduct
all occurred abroad. Exactly how far the rationale will extend
to other circumstances-such as where the defendant is a U.S.
corporation and/or some of the underlying conduct occurred in the
United States-remains an open question. Further, the Court did not
address the availability of aiding and abetting liability or resolve
the conflict over the issue whether a corporation, as opposed to an
individual, may be sued under the ATS. Thus, although
Kiobel is a true game changer and certainly provides a
strong pro-defendant signal to the lower courts, there are open
issues that will undoubtedly continue to be litigated in U.S.
courts.
[1] The ATS provides: "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." 28 U.S.C. �1350.
Please click here
to read more about the case and contact Bob
Loeb, Laurie
Strauch Weiss or James
Stengel for more information or inquiries regarding any ATS
issues that your company is facing.
Our
Team
The litigators at Orrick have significant
experience with ATS cases. For example, Appellate partner Bob
Loeb, while at the U.S. Department of Justice, was involved in most
of the major ATS litigation in the last decade, including
Kiobel, Doe v. Unocal, Alvarez-Machain v.
Sosa (arguing to the Ninth Circuit sitting en banc),
In re Apartheid Litigation, and Sarei v. Rio Tinto
(arguing to the Ninth Circuit sitting en banc).
Laurie Strauch Weiss, head of Orrick�s Mass Torts and Product
Liability (MTPL) practice, and James Stengel, a partner in the MTPL
practice, have extensive experience with ATS litigation. In In
re Agent Orange Product Liability Litigation, Laurie and Jim
helped to secure a historic and complete win for The Dow Chemical
Company in actions brought under the ATS alleging personal injuries
from exposure to the herbicide Agent Orange during the Vietnam War.
Their other significant and recent ATS matters include Abagninin
v. Amvac Chemical Corp. and Viera v. Eli
Lilly.
If you are interested in learning more about
recent ATS case developments or more generally the application of
U.S. law abroad, contact us for a free subscription to The World in
U.S. Courts: Orrick's Quarterly Review of Decisions Applying U.S.
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