The recent decision by the U.S. Supreme Court in Kiobel v. Royal Dutch Petroleum Co., 569 U.S. __ (April 17, 2013), appears to have closed the door to future actions under the Alien Tort Statute (ATS) based on conduct occurring overseas.
The plaintiffs in Kiobel were Nigerian nationals who were purportedly the victims of violence and intimidation carried out by other Nigerians, but which plaintiffs alleged was aided and abetted by the defendants. The plaintiffs alleged the violence they suffered was carried out as retribution for their protests against the defendants’ oil exploration and production activities in Nigeria. The defendants were foreign corporations with only limited contacts to the United States. The case thus presented a matter of purely international associations, with alien plaintiffs suing alien defendants based upon events that occurred entirely on alien soil.
The plaintiffs alleged federal jurisdiction over their claims under the ATS, which provides that federal “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. This peculiar statute, though enacted as part of the Judiciary Act of 1789, was invoked in only a handful of cases before 1980. However, matters changed in 1980 with the Second Circuit Court of Appeals’ decision in Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980). Filartiga allowed two Paraguayan citizens to proceed with a claim under the ATS against a former Paraguayan law enforcement official, who they alleged had tortured and killed a member of their family.
Since Filartiga, federal courts have invoked the ATS in numerous cases as a basis for jurisdiction over claims for wrongs suffered by non-citizens outside the United States. Over time, the focus of claims under the ATS shifted from individuals to corporate defendants. In such suits, the plaintiffs commonly allege that a corporate defendant aided and abetted human rights violations carried out by officials of a foreign government. Although a subject of considerable controversy, several circuits have held that corporations are subject to vicarious liability for claims under the ATS. Flomo v. Firestone National Rubber Co., LLC, 643 F.3d 1013 (7th Cir. 2011); Sarei v. Rio Tinto, PLC, 671 F.3d 736 (9th Cir. 2011); and Doe v. Exxon Mobil Corp., 654 F.3d 11 (D.C. Cir. 2011).
The expansion of the ATS has been widely criticized. Detractors point to the presumption of a U.S. court deciding a foreign dispute involving foreign nationals and oftentimes casting judgment on the actions of foreign government officials. Other nations have objected to ATS jurisdiction as an intrusion into their sovereignty.
The Kiobel decision would appear to greatly narrow the scope of potential claims for which ATS jurisdiction is available. In its majority opinion, the court reasoned, as a matter of statutory interpretation, that Acts of Congress are presumed not to have extraterritorial application. While Congress certainly has the authority to regulate activities outside the United States, the intention to exercise that authority must be clear before courts may apply a statute to conduct occurring in a country’s territory.
After examining the text and historical background of the ATS, the majority court concluded no evidence existed that the Congress of 1789, in enacting the ATS, intended to regulate foreign conduct, with the possible exception of providing federal jurisdiction over claims arising from piracy on the high seas. However, the court declined to infer a broader extraterritorial reach for the ATS, concluding that regulating piracy on the high seas, a right claimed by every nation, “carries less direct foreign policy consequences” than an attempt to regulate conduct inside the territories of other nations.
Ultimately, the court concluded that jurisdiction under the ATS only exists in where a claim has a substantial territorial connection to the United States. The plaintiffs often argue, as a basis for jurisdiction, that extraterritorial activities have produced effects inside the United States, or are associated with planning activities or other conduct that took place here. Anticipating such arguments, the court emphasized that “even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.” In this regard, the court was careful to point out that mere presence of a corporation within the United States is an insufficient connection to support ATS jurisdiction. In the end, Kiobel shifts the focus of the test for jurisdiction under the ATS to the location of the conduct, rather than the citizenship or presence of the defendant. The presumption it creates would appear to effectively foreclose future ATS claims based on overseas conduct.