The U.S. Supreme Court started its new term on Monday with a holdover from the last term. The case of Kiobel v. Royal Dutch Petroleum was once again before the Court, this time with arguments focused on the question of whether the Alien Tort Statute ("ATS") provides federal jurisdiction for tortious actions committed outside the territory of the United States by corporations.

The Arguments in February

When the case was originally argued in February, the questions before the Court included whether and how corporations could face civil tort liability under the ATS for acts of torture and extrajudicial killing, and whether corporations were immune from liability under the ATS because they were not natural persons. To the great surprise of the parties and those following the case, the justices, led by Justice Kennedy, shelled counsel with questions about whether the ATS could even be applied at all to extraterritorial conduct. Not long after argument, the Court asked the parties to brief this very question, and scheduled the case for re-argument for this term.

The Positions of the Parties

At re-argument, Plaintiffs’ counsel, Paul Hoffman, affirmed Plaintiffs’ stance that corporations were not immune under the ATS and that the ATS could be applied to extraterritorial conduct, including aiding and abetting, In so doing, he emphasized that this position was consistent with the history context of the ATS and Court precedent such as Sosa.

Corporate Defendants’ counsel, Kathleen Sullivan, argued forcefully that not only were corporations immune from liability under the ATS, the ATS also could never be applied to any extraterritorial conduct because Congress had not made the extraterritorial application explicit.

The Government's Arguments

The Government’s arguments in support of the corporate Defendants were more nuanced, as Solicitor General Donald Verrilli had to explain the change in its position from February until now. In February, it had sided with the plaintiffs that corporations can be held liable under the ATS for extraterritorial acts, but for re-argument, the Government changed tactics and argued that extraterritorial application was inappropriate here. Offering a potential compromise, the Solicitor General argued that there should be no jurisdiction in the Kiobel case because both the plaintiffs and the corporations were foreign, but retained the possibility that there could be jurisdiction under different facts where there were some nexus with the United States.

The Concerns of the Court

Given the focused and arguably heated questioning during the February arguments, many expected that the justices would be equally aggressive this week, leaving little room for extraterritorial application. Instead, several justices appeared to want to flesh out a compromise, pressing counsel on how one might craft jurisdictional requirements such as a territorial nexus that could allow for extraterritorial application without opening U.S. courts to wholesale universal jurisdiction. Indeed, a majority of the justices expressed direct concerns about how a complete prohibition of extraterritorial ATS jurisdiction, even against even natural persons, could be reconciled with the Supreme Court’s past ATS decisions in cases such as Sosa v. Alvarez-Machain and Filartiga v. Peña-Irala, as well as how zero tolerance on extraterritorial application, even for tortious acts that occurred on the high seas, could be reconciled with the historical context of the ATS and nearly universal prohibitions on piracy.

Exhaustion as a Possible Jurisdictional Limit

In seeming pursuit of reasonable jurisdictional limits, several justices, including Justices Sotomayor, Ginsburg, Kagan, and Alito, pressed Attorney Hoffman on whether there was a need to exhaust local remedies before bringing a tort suit in the United States, for if remedies were available elsewhere, why should the United States even hear the suit. In the course of these exchanges, Justice Sotomayor highlighted that the European Commission seemed to offer a “very simple rule” on jurisdiction, under which requiring the exhaustion of remedies might offer a compromise between absolute universal jurisdiction and never permitting suits for extraterritorial conduct. Specifically, she noted that European jurisdictions seemed to call for a territorial nexus through residency or acts in the territory, but were willing to consider exhaustion or the perceived impossibility of justice, and she challenged Attorney Hoffman to explain what was wrong with a rule.

In response, Attorney Hoffman argued that even if there were some obligation to exhaust, under international standards it would have been futile to do so in the local jurisdiction in this case (Nigeria). When pressed as to whether litigation in either the United Kingdom or the Netherlands would be adequate and should have been pursued to exhaustion, he asserted that whether an exhaustion standard would have been satisfied here with regards to these jurisdictions would have to be determined and would depend on precisely how the Court chose to articulate the standard.

The Importance of Precedent

A majority of the justices, including Chief Justice Roberts and Justices Kagan, Breyer, Kennedy, and Sotomayor, expressed serious concern that the Defendants were asking the Court to overturn precedent by prohibiting all extraterritorial application. The Sosa case was raised repeatedly by both the justices and the Parties, with the Chief Justice asking Attorney Sullivan directly whether she was asking for the Court to overturn it and its predecessor, Filartiga. In response, Attorney Sullivan argued that Sosa could be preserved because it did not involve extraterritorial conduct, but Justice Kagan quickly pointed to the Court’s own words in Sosa that explicitly endorsed Filartiga – a case in which the Court specifically accepted that the ATS permitted suits where the underlying tortious acts occurred outside the United States.

Applying the ATS to Extraterritorial Acts on the High Seas

Some of Attorney Sullivan’s most uncomfortable moments came in the discussions of piracy. Standing firm in her argument that the ATS should never be applied to conduct that takes place outside of the physical territory of the United States, Attorney Sullivan argued that despite the Court’s references to the universal illegality of piracy in previous cases such as Sosa, the ATS should not be applied to acts of piracy that take place on the high seas and therefore outside of the territory of the United States. The justices pressed her hard on this point, with Chief Justice Roberts jumping in to say, “I thought that [piracy] was the most clear violation of an international norm.” Attorney Sullivan eventually showed a willingness to soften her argument to hammer home defendants’ position that the ATS should not be applied to other foreign acts, stating that even if one were to apply the ATS to acts on the high seas, where no sovereign rules, that is very different than allowing it be applied to conduct that takes place on “within a foreign sovereign’s borders.”

Noting that when it was passed, the Alien Tort Statute applied to universally abhorrent acts such as piracy, Justice Breyer drew a comparison to the universally abhorrent human rights violators of today, offering perhaps the most quotable moment of the morning by questioning who are today’s pirates, for “if Hitler isn’t a pirate, who is?” He also underscored that concerns over universal jurisdiction were misplaced, as there are already international conventions, including the Convention Against Torture, that provide for universal jurisdiction amongst the State-parties (subject to party reservations).

Concluding Impressions

Several commenters have concluded that Solicitor General Verrilli took the most heat from the justices in great part because of the Government’s change of position between February and now, but, in person, the tone of the questioning seemed most pointed against Attorney Sullivan absolute stance on extraterritoriality. Attorney Hoffman was also challenged, and a majority of the justices appeared ready to reject universal jurisdiction under the ATS, and Justice Breyer seemed to be alone in unwaivering support for extraterritorial application of the ATS. This said, a quorum of justices seemed willing to at least consider leaving the door slightly open to suit against corporations and/or corporate officers for extraterritorial conduct – as narrow of an opening as it might be.

The Court is not expected to issue a ruling in this case until 2013. A preliminary transcript of the oral arguments is available here (.pdf).