The Final Breaths of the Alien Tort Statute

by Littler
Contact

On April 17, 2013, the Supreme Court decided Kiobel v. Royal Dutch Petroleum.  For all intents and purposes, the decision eliminates use of the federal Alien Tort Statute ("ATS") as an employment law weapon to be used against multinational companies for employment practices overseas.

History of the Alien Tort Statute

The ATS (also known as the Alien Tort Claims Act) – a creature of the first United States Congress and passed in 1789 – is all of one sentence long.  It reads in full:  "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."

The ATS received little attention for over 180 years. Then, in 1980, a Paraguayan woman living in Washington, D.C. on a visitor's visa learned that a former official of the Paraguayan government (also a Paraguayan citizen), who had allegedly participated in the torture death of her 17-year-old brother, was living in Brooklyn, New York.  She sued the official under the ATS.  In Filartiga v. Pena- Irala,1 the Second Circuit Court of Appeals held that the ATS permits aliens to file tort claims against violators of what is variably known as “the law of nations," or "customary international law," including war crimes and crimes against humanity.

Over the past 25 years, a limited number of federal courts have permitted foreign victims to sue under the ATS for violations of international law, such as summary executions, genocide, war crimes, crimes against humanity, and cruel, inhuman, or degrading treatment.2

Some of those lawsuits were brought against U.S.-headquartered multinational corporations for their alleged involvement with improper and abusive labor practices in developing countries that were said to constitute human rights violations.

Historically, there has been a split among federal appellate courts as to whether ATS cases may be successfully prosecuted against private corporations.  In 2010, a federal district court and a federal appellate court held that corporate liability was unavailable under the ATS.  In one such case,3 a federal district court dismissed claims that a company was complicit in the forced labor and torture of Malian field workers located in the Ivory Coast, finding insufficient support under international law to hold corporate entities accountable under the ATCA. 

Similarly, in Kiobel v. Royal Dutch Petroleum4 – the case which ultimately wound its way to the U.S. Supreme Court – the Second Circuit Court of Appeals held that the ATS does not provide a basis for corporate liability for alleged violations of international law. 

In many cases, however, lower courts have recognized an "aiding and abetting" theory of corporate liability.  Under this theory, a corporation that assists or supports governments in conduct that violates human rights can be held liable in the United States.5 The aiding and abetting theory of corporate liability was one of the theories asserted by the plaintiffs in Kiobel.

Procedural History and Decision

Kiobel involved a group of Nigerian villagers who filed a federal court lawsuit in the Southern District of New York, claiming that several corporate entities aided and abetted the extrajudicial killing, rape and other human rights abuses committed by Nigerian military forces in connection with the corporations' oil exploration in Nigeria. During the early 1990's, the villagers were attacked by the Nigerian military and police forces. 

The plaintiffs claimed that the corporate defendants aided and abetted the atrocities committed by providing the Nigerian military and police forces with food, transportation, and compensation.  They also alleged that the corporate defendants permitted the Nigerian forces to use defendants' property as a staging ground to attack the Nigerian villagers.  At the time the complaint was filed, the United States had granted political asylum to the villagers, all of whom were residing in the United States as legal residents. 

The case found its way to the Second Circuit Court of Appeals where, in October 2010, a divided court determined that international law does not support claims for corporate liability under the ATS.  The Kiobel majority held that international law (rather than domestic law) should determine whether the ATS should extend to corporations.  The majority concluded that international law does not warrant the extension of ATS liability to corporate actors.  In sum, the Second Circuit reasoned that customary international law has rejected the notion of corporate liability for international crimes, and no international tribunal has ever held a corporation liable for a violation of the laws of nations.

The villagers appealed to the United States Supreme Court, which agreed to hear the case.  Initially, the Court was asked to determine (1) whether the issue of corporate liability under the ATS is a merits or jurisdictional question; and (2) whether corporate liability can be assessed under the ATS.  Less than one week after oral argument, however, the Court issued an order requesting supplemental briefing on the additional issue of whether, and under what circumstances, the ATS can be used to address violations of the law of nations occurring outside the United States.6

The Opinion

On April 17, 2013, Chief Justice Roberts delivered the opinion of the Court, which unanimously upheld the Second Circuit's dismissal of the claims.  While the outcome was unanimous, the Court did not unanimously agree on the rationale.  The majority approach concluded that "the presumption against extraterritoriality applies to claims under the ATS, and that nothing in the statute rebuts that presumption." The Court addressed only the question of the extraterritorial application of the ATS, not the question of corporate liability.

The Court made it clear that it will not act as "the Supreme Court of the World."  The fear expressed in the opinion was that if the ATS applied extraterritorially without express permission from Congress, the Court would run the risk of adopting an interpretation of the law that carried "foreign policy consequences not clearly intended by the political branches."7 The Court stated that the ATS is a "strictly jurisdictional" statute and does not provide for an independent cause of action.  Rather, the ATS "allows federal courts to recognize certain causes of action based on sufficiently definite norms of international law.”

The Court was not willing, however, to completely relinquish power over conduct occurring on foreign soil.  The opinion concludes:

"On these facts, all the relevant conduct took place outside the United States.  And 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....  Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices.  If Congress were to determine otherwise, a statute more specific than the ATS would be required."  (internal citations omitted) (emphasis added)

The Court therefore suggested that with the right set of facts that "touch and concern the territory of the United States," the ATS may be the vehicle for aliens to prosecute conduct that occurred on foreign soil in U.S. courts.  Justices Alito and Thomas, writing separately in their concurrence, noted that this "formulation obviously leaves much unanswered."8  Although the majority rather dramatically narrowed the scope of the ATS, future courts will undoubtedly grapple with the extent to which plaintiffs might be able to assert a viable claim under the ATS. 

Breyer Concurrence

Justice Breyer, together with Justices Ginsburg, Sotomayor and Kagan, joined in the Court’s conclusion to dismiss the Kiobel claims, but did not adopt the majority's reasoning.  The Breyer concurrence operates on the basis that the ATS "was enacted with 'foreign matters' in mind,"9 and that jurisdiction under the ATS is appropriate 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...."10 Justice Breyer referred to  previous ATS cases in which the alleged ATS violators were residing in the United States, and suggested that this could be one example where a "distinct" and "important" American interest might overcome the strong presumption against extraterritorial application.

Justice Breyer did not ignore the majority's concern that the extraterritorial application of the ATS would infringe on the sovereignty of other nations.  He simply did not put as much stock in this fear.  Justice Breyer highlighted in his concurrence the safeguards that are already available, such as exhaustion of remedies, forum non conveniens, and comity. 

The Implications

Kiobel establishes that in an unstable world, multinational enterprises may not be held responsible under the ATS in U.S. courts for foreign government or other third party atrocities that may occur overseas and over which they have no control.  Of course, notwithstanding this decision, multinational enterprises must remain concerned about overseas business practices.  Global companies cannot ignore allegedly unfair employment practices, regardless of where they occur, particularly in today's world of instantaneous communication.  The elimination of the ATS as a weapon against global enterprises does not diminish the importance of addressing legitimate complaints, regardless of where they originate.

It is also uncertain how the Court's strong reluctance against imposing domestic law extraterritorially will apply in other contexts.  For example, the Kiobel decision reinforces the Court's reluctance in an earlier decision11 to apply domestic law extraterritorially, which may lend further clarity to the possible extraterritorial application of Section 806 of the Sarbanes-Oxley Act of 2002.  

In addition, the Court's ruling could affect the viability of other claims brought under U.S. law that arise from overseas conduct.  For example, a recent trend has developed in which plaintiffs have sought to hold U.S.-based multinational enterprises liable for violations of local labor laws committed by their suppliers who disregard the companies' codes of conduct.  For example, the Ninth Circuit Court of Appeals has held12 that a U.S. company's good faith requirement, contained in its code of conduct, that foreign suppliers follow ethical labor standards did not allow a supplier's employees to sue the U.S. company when their employer failed to follow the standards.  It will be interesting to see what effect, if any, the Kiobel decision will have on this trend.


1 630 F.2d 876 (2d Cir. 1980).

2 See e.g. Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013, 1017 (7th Cir. 2011); Romero v. Drummond Co., 552 F.3d 1303, 1315 (11th Cir. 2008); Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009); Herero People’s Reparations Corp. v. Deutsche Bank, A.G., 370 F.2d 1192 (D.C. Cir. 2004); Wiwa v. Royal Dutch Petroleum, 226 F.3d 88 (2d Cir. 2000); Sarei v. Rio Tinto, PLC, 550 F.3d 822 (9th Cir. 2008).

3 Doe v. Nestle, S.A.,  _______, 2010 U.S. Dist. LEXIS 98991 (C.D. Cal. Sept. 8, 2010).

4 Kiobel v. Royal Dutch Petroleum, 621 F.3d 111 (2d Cir. 2010).

5 See, e.g., Almog v. Arab Bank., 471 F. Supp. 2d 257 (E.D.N.Y. 2007).

6 The Kiobel case drew wide interest from a variety of domestic and international parties, attracting approximately 70 amicus briefs.  http://www.scotusblog.com/case-files/cases/kiobel-v-royal-dutch-petroleum/

7 EEOC v. Arabian American Oil Co., 499 U.S. 244, 248 (1991). 

8 Justices Alito and Thomas also reinforced the principles of Sosa v. Alvarez Machain, 542 U.S. 692 (2004), that any further ATS claim that theoretically falls within the confines of the majority’s holding must nonetheless satisfy "Sosa’s requirements of definiteness and acceptance among civilized nations."

9 Morrison v. National Australia Bank Ltd., 561 U.S. ___, ____ (2010) (slip op., at 5-6), 130 S. Ct. 2869, 2884 (2010). 

10 See Restatement (Third) of Foreign Relations Law § 402.

11 Morrison, 561 U.S. ____, 130 S. Ct. 2869 (2010).

12 Doe v. Wal-Mart Stores, Inc., 572 F.3d 677 (9th Cir. 2009).

Philip Berkowitz is a Shareholder in Littler Mendelson’s New York office and U.S. Co-Chair of Littler’s International Employment Law Practice Group; Michael Congiu is a Shareholder in the Chicago office; John Kloosterman is a Shareholder in the San Francisco office; Eric Savage is a Shareholder in the New York and Newark offices; and Morgan Matson is an Associate in the Pittsburgh office.  If you would like further information, please contact your Littler attorney at 1.888.Littler, info@littler.com, or Mr. Berkowitz at pberkowitz@littler.com, Mr. Congiu at mcongiu@littler.com, Mr. Kloosterman at jkloosterman@littler.com, Mr. Savage at savage@littler.com, or Ms. Matson at mmatson@littler.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Littler | Attorney Advertising

Written by:

Littler
Contact
more
less

Littler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.