On April 18, the U.S. Supreme Court unanimously affirmed a Second Circuit decision dismissing the tort claims of Nigerian nationals against international oil companies for alleged complicity with the Nigerian Government in committing human rights abuses during the 1990s. The majority decision in Kiobel v. Royal Dutch Petroleum Company, et al. applied the presumption against extraterritorial application to the Alien Tort Statute (“ATS”) to bar claims seeking relief for alleged violations of international law occurring outside the United States, but left crucial questions regarding corporate liability unresolved.
The Court reached its decision without addressing the question on which review was initially granted: whether corporations may be held liable under the ATS for violations of international law. The Court instead focused on the issue of whether the ATS allows U.S. courts to recognize claims for international law violations alleged to have occurred solely in foreign sovereign nations. While unanimous in its holding that the action must be dismissed, the Court split 5-4 regarding the rationale for its decision. Writing for a five-justice majority, Chief Justice Roberts stated that the presumption against territorial application is applicable to claims under the ATS, and that nothing in the statute rebuts that presumption. Thus, because the conduct in question occurred entirely outside of the United States, plaintiffs’ claims were barred.
In a concurring opinion, Justice Breyer (writing on behalf of the remaining four justices) disagreed that the presumption against extraterritoriality should be invoked with respect to the ATS, instead asserting that the ATS should provide jurisdiction for claims arising from alleged international law violations occurring solely on foreign soil when (a) the defendant is an American national or (b) the defendant’s conduct “substantially and adversely affects an important American national interest.” Justice Kennedy, who joined the Chief Justice’s majority opinion, also wrote a separate concurrence noting that the Court was “careful to leave open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute.”
Background of the ATS
Passed in 1789, the ATS provides: “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.” After being invoked on only a few occasions for nearly the first two centuries after its passage, the ATS was revived following the Second Circuit’s 1980 decision in Filártiga v. Peña-Irala, 630 F.2d 876 (2d Cir. 1980), with the ensuing decades seeing a wave of suits under the ATS seeking damages for alleged international law violations occurring abroad, including many against multinational corporations. The Supreme Court did not address the scope of the ATS until 2004 when it decided Sosa v. Alvarez-Machain, 542 U.S. 692 (2004). In Sosa, the Court unanimously ruled that the ATS did not create a cause of action for violations of international law, but instead was intended only to give federal courts jurisdiction over a limited range of violations that were specifically defined and universally recognized. The Court held that “federal courts should not recognize private claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms familiar when [the ATS] was enacted,” which included violation of safe conducts, infringement of the rights of ambassadors, and piracy.
History of the Kiobel Case
The plaintiffs in Kiobel were Nigerian nationals living in the United States who filed suit in New York federal court under the ATS against Royal Dutch Petroleum Company, Shell Transport and Trading Company p.l.c., and their joint Nigerian subsidiary, alleging that the defendants enlisted and provided assistance to the Nigerian Government to violently suppress protests regarding the defendants’ local oil exploration and production activities. After the District Court dismissed several of the claims, finding that the violations alleged did not satisfy the standards set forth in Sosa, the Second Circuit dismissed the entire complaint on the basis that customary international law did not recognize corporate liability. The Supreme Court granted certiorari on that issue, but then, after oral argument, ordered the parties to file supplemental briefing to address the issue of “whether and under what circumstances the [ATS] allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”
The Court’s (Differences of) Opinion
Chief Justice Roberts’ majority opinion relied on the presumption against extraterritoriality and noted that a statute must evince a “clear indication” that it was intended to have extraterritorial reach in order to overcome the presumption. Examining the text, history, and original purposes of the ATS, the Chief Justice’s opinion found that there is no such “clear indication” that the ATS was intended to apply to conduct that occurred outside of the United States. As explained in Sosa, the “three principal offenses against the law of nations” recognized at the time the ATS was passed were violation of safe conducts, infringement of the rights of ambassadors, and piracy. The Chief Justice determined that the first two have “no necessary extraterritorial application,” and that “[a]pplying U. S. law to pirates, however, does not typically impose the sovereign will of the United States onto conduct occurring within the territorial jurisdiction of another sovereign.” In addition, the Chief Justice noted that “there is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms.” While not squarely addressing the issue of corporate liability, the majority opinion stated that “[c]orporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices” absent specific direction from Congress.
While joining in the majority opinion, Justice Kennedy authored a brief concurring opinion noting that “a number of significant questions regarding the reach and interpretation of the Alien Tort Statute” were left open by the Court’s opinion, and that “further elaboration and explanation” may be required in future cases to determine how the presumption against extraterritorial application will be implemented with respect to the ATS.
Though also joining the majority opinion, Justice Alito (joined by Justice Thomas) wrote separately to express the view that the bar on extraterritorial application of the ATS should be broader than that set forth by the Chief Justice. Under Justice Alito’s interpretation, an ATS-related claim should be barred by the presumption against extraterritoriality unless the conduct constituting a violation of international law actually occurred in the United States.
Justice Breyer’s opinion differed from the majority with respect to applying the presumption against extraterritoriality to the ATS. The ATS, Justice Breyer stated, was “enacted with ‘foreign matters’ in mind.” Attacking the majority opinion’s view that extending jurisdiction to claims of piracy did not indicate that the ATS was intended to apply to conduct abroad, he stated that acts of piracy generally occur not on the high seas, but on ships (over which the country of registry has jurisdiction). Justice Breyer, referencing Sosa, reasoned that the Court should look to international jurisdictional norms to determine the ATS’s reach. Under international law, he asserted, there is no limitation that a nation must restrict the application of its laws to conduct occurring in its territory. Likening torturers and perpetrators of genocide to the “pirates of old,” Justice Breyer opined that such “common enemies of all mankind” are “fair game” wherever they are found. He also stated that the United States has “a distinct interest” in not “becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind,” and that jurisdiction under the ATS should be extended where “a defendant’s conduct substantially and adversely affects [such] an important American national interest.”
Implications of Kiobel for Pending and Future ATS Cases
Though Kiobel rejects application of the ATS to address claims by foreign plaintiffs against foreign defendants concerning international law violations occurring in foreign nations, the Court’s opinion leaves open the possibility that the ATS may remain available to provide jurisdiction in cases where either the plaintiff or defendant is a U.S. national or where at least a portion of the harm occurred in the United States.
In the final paragraph of his decision, Chief Justice Roberts suggested that some claims may “touch and concern the territory of the United States…with sufficient force to displace the presumption against extraterritorial application.” Further, while stating that “mere corporate presence” is insufficient to overcome the presumption against extraterritorial application, the Chief Justice’s opinion does not foreclose the possibility that corporations with more than “mere presence” may be subject to liability. Justice Kennedy’s concurring opinion seems to confirm that extraterritoriality alone will not bar future ATS cases, stating that “the proper implementation of the presumption against extraterritorial application may require some further elaboration and explanation.” Similarly, Justice Alito’s concurring opinion would not have been necessary had the majority opinion barred all cases in which the alleged violations of international law occurred outside of the United States.
Thus, the Kiobel decision likely does not represent a death knell for claims of alleged violations of international law that occurred outside the U.S. While pending ATS cases against foreign corporate defendants that, like the Shell entities in Kiobel, are not alleged to have directly participated in human rights violations are likely to be dismissed based on extraterritoriality, the Court has left ajar the possibility that claims against U.S. companies, particularly if they are alleged to be directly responsible rather than merely complicit, may be allowed to proceed even where the relevant conduct took place abroad. The next round of ATS-related litigation will likely focus on establishing the degree to which parties and conduct must “touch and concern” the United States to overcome the presumption against extraterritoriality declared in Kiobel.