Last week, the U.S. Supreme Court issued its decision in Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 pertaining to the reach of the Alien Tort Statute (“ATS”). This decision states that the ATS does not apply to conduct entirely outside of the United States.1

The Kiobel case was brought by a group of Nigerian nationals residing in the United States against certain Dutch, British, and Nigerian corporations alleged to have assisted the Nigerian government in committing atrocities against Nigerian citizens who protested against the companies’ oil exploration and development. The plaintiffs filed suit in the United States against the foreign oil companies alleging jurisdiction under the ATS, which provides that “[t]he 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. The district court dismissed certain claims on the basis that they did not give rise to a violation of the law of nations. The Second Circuit subsequently dismissed the entire complaint based on the determination that the law of nations does not recognize corporate liability, the issue on which the Supreme Court initially granted certiorari. After oral argument last Term, however, the Supreme Court asked the parties to submit supplemental briefing on an additional question: “whether and under what circumstances courts may recognize a cause of action under the Alien Tort Statute, for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

After a second oral argument, the Supreme Court affirmed the Second Circuit’s dismissal of the case and held that the ATS does not grant U.S. courts jurisdiction over actions occurring abroad. Based on the history of the ATS, Chief Justice Roberts writing for the Court in an opinion joined by Justices Scalia, Kennedy, Thomas, and Alito, held that the presumption against extraterritoriality (i.e., application of a statute outside of the U.S.) applied to claims under the ATS and concluded that “petitioners’ case seeking relief for violations of the law of nations occurring outside of the United States is barred.” Kiobel, Slip. Op. at 14. The Court noted that “all of the relevant conduct took place outside of the United States” and found that the plaintiffs could not rely on the ATS to confer jurisdiction on U.S. courts.2 Id.

This decision is important for non-U.S. companies facing claims for alleged conduct that occurred outside of the United States. Going forward, U.S. courts will no longer have jurisdiction over such cases under the ATS, and plaintiffs wishing to sue foreign entities in the United States will be required to establish jurisdiction based on conduct within the United States. The Court did not fully explain, however, the standard for what domestic conduct the ATS would encompass, stating 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...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.” Id. Thus, the standard for such a showing will likely be the subject of further litigation.3