Adhikari v. Daoud & Partners, No. 4:09-CV-1237 (S.D. Tex. Mar. 24, 2015) [click for opinion]

This dispute stems from allegations that a U.S.-based government contractor and its Jordan-based subcontractor engaged in a scheme to traffic Plaintiffs from Nepal to Iraq to serve as labor at a U.S. military facility serviced by the U.S.-based Defendant. In the process of the Jordan-based Defendant transporting Plaintiffs from Jordan to Iraq, twelve Plaintiffs were abducted by an insurgent group in Iraq and ultimately killed. The thirteenth Plaintiff, traveling separately, arrived at the U.S. military facility in Iraq, where he claimed he was forced to work against his will for approximately 15 months under the supervision of the U.S.-based Defendant.

The surviving Plaintiff and the family members of the deceased Plaintiffs brought suit against Defendants for claims under the Alien Tort Statute, 28 U.S.C. § 1350 (“ATS”) and the Trafficking Victims Protection Reauthorization Act, 22 U.S.C. §§ 7101, et seq. (“TVPRA”) in United States District Court in Houston, Texas.  In separate orders, the district court granted summary judgment for Defendants on Plaintiffs’ ATS and TVPRA claims. 

In its order granting summary judgment on the ATS claim, the court found that the U.S.-based Defendant’s corporate presence in the U.S. and its domestic conduct was insufficient to rebut the presumption against extraterritorial application of the ATS. The court concluded that Defendants were entitled to summary judgment on the ATS claim because all relevant conduct by Defendants occurred outside of the U.S. In a subsequent order, the court also found that the TVPRA had no extraterritorial application at the time of the alleged events. The court noted that Congress amended the TVPRA in 2008 to provide for extraterritorial application, but the relevant provision could not be applied retroactively to Defendants’ alleged conduct, all of which occurred prior to 2008.

Following entry of those orders, Plaintiffs moved the court for a rehearing and for leave to amend their complaint. With regard to their ATS claims, Plaintiffs argued that the district court misconstrued the presumption against extraterritoriality explained by the Supreme Court in Kiobel v. Royal Dutch Petroleum Company. Plaintiffs claimed that the district court had imposed a bright-line rule that would prohibit the extraterritorial application of the ATS in all cases. Plaintiffs emphasized the conclusion of Kiobel, which indicated that ATS claims could displace the “presumption against extraterritorial application” if the claims “touch and concern the territory of the United States . . . with sufficient force.”

In denying Plaintiffs’ motion, the district court clarified that it did not embrace a bright-line rule, as alleged by Plaintiffs. Instead, the court stated that it followed the Supreme Court’s instruction that lower courts consider whether the alleged domestic conduct coincides with the focus of congressional concern. For the ATS, the focus of congressional concern is the alleged tort committed in violation of the law of nations or a treaty of the United States. In this case, the alleged tort at issue is human trafficking. The court found that all of the “relevant” conduct related to Plaintiffs’ allegations of human trafficking occurred outside the territory of the U.S. and that, therefore, Plaintiffs could not bring suit under the ATS.

The court explained that, contrary to Plaintiffs’ arguments, the U.S.-based Defendant’s U.S. citizenship did not obviate the extraterritorial analysis. The court further elaborated that the U.S.-based Defendant’s contract with the U.S. government was not sufficient to show a relevant connection to the territory of the U.S., that Plaintiffs’ emphasis on conduct that occurred at a U.S. military facility in Iraq exaggerated the purpose of the facility because it was not at the heart of their case, and that the court was not empowered to use the political branches’ condemnation of human trafficking to ignore territorial limits on enacted legislation. The court concluded that its original findings, that Defendants’ alleged relevant conduct occurred outside of the territory of the United States, had not been disturbed.

In reexamining its TVPRA order, the court also affirmed its ruling that Congress’ 2008 amendment providing for extraterritorial application of the TVPRA cannot be applied retroactively. The court explained that a nominally jurisdictional statute, such as the TVPRA, that necessarily affects the substantive rights of parties, cannot be categorized as mere procedure. Instead, it represents a substantive change in operative law and triggers a presumption against retroactive application.

Jonathan Rosamond of the Dallas office contributed to this summary.