U.S. Supreme Court Holds that a Foreign Corporation Cannot Be Sued in U.S. Courts for Strictly Foreign Conduct under the Alien Tort Statute

The World in U.S. Courts: Spring 2013 - Alien Tort Statute

Kiobel v. Royal Dutch Petroleum Co. (U.S. Supreme Court, Apr. 17, 2013)

In this much-awaited decision, the U.S. Supreme Court considered whether a federal court may recognize a cause of action under the Alien Tort Statute (“ATS”) for violations of the “laws of nations” occurring outside of the United States. 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 Kiobel plaintiff’s claims 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 enables U.S. courts to consider a non-citizen’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 use violence to 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 U.S. Court of Appeals in New York 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 review to consider this issue, it later asked for additional briefing and oral argument on whether the ATS provides jurisdiction over extraterritorial conduct to begin with.


In a 5-to-4 opinion, 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.

Two justices joining the majority also wrote concurring opinions. One noted that many human rights abuse victims can seek redress through the Torture Victim Protection Act (“TVPA”) and left open the possibility that there may be cases “covered neither by the TVPA nor by the reasoning and holding of today’s case,” in which situation the applicability of the presumption against extraterritoriality “may require some further elaboration and explanation.” A second concurrence added that no ATS claim can overcome the presumption against extraterritoriality “unless the domestic conduct is sufficient to violate” the limited class of international law norms recognized in previous decisions.

In a separate opinion concurring only in the judgment, four justices 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 provides a strong pro-defendant signal, there are open issues that will undoubtedly continue to be litigated in U.S. courts.

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