The Supreme Court recently held in Kiobel v. Royal Dutch Petroleum that the presumption against the extraterritorial application of U.S. law applies to claims by plaintiffs brought under the Alien Tort Statute (“ATS”). The Court was unanimous in holding that the plaintiffs before it had not established a sufficient connection to the United States for the ATS to provide them relief. The decision thus substantially narrows the liability potentially faced by corporations for conduct occurring abroad without a significant connection to the United States, although the concurring opinions attempted to preserve some flexibility for determining precisely the quality and extent of a connection required to establish jurisdiction.
Although the Court did not directly address the issue of corporate liability under the law of nations,the Court held that “mere corporate presence” of a corporation in the United States is not sufficient to establish jurisdiction, and plaintiffs seeking relief for violations of the law of the nations occurring outside the United States must allege facts that “touch and concern” the United States with “sufficient force” to displace the presumption against extraterritoriality set forth in Morrison v. National Australia Bank Ltd.,561 U. S. ___, ___ (2010).1 This decision will undoubtedly limit ATS liability in cases which lack a sufficient nexus with the United States. In particular, “aiding and abetting” liability for corporations cooperating with governments outside the United States will likely be severely curtailed.
Going forward, something more than “mere corporate presence” will be required to overcome the presumption against extraterritoriality, although it is unclear exactly what that might be. The Court left unanswered fundamental questions about the extent of ATS jurisdiction, and left the door open for potential ATS liability in cases in which there is a more significant relationship with the United States. Indeed, foreign corporations may still expose themselves to ATS liability if they conduct business in the United States, or if their conduct “substantially and adversely” affects an important American interest. And corporate officers and directors in the United States may still be liable for extraterritorial human rights violations if their role in such conduct is sufficiently connected to the United States.
What’s more, Kiobel does not affect the potential for liability under Torture Victim Protection Act of 1991 (TVPA), Pub. L. 102-256, Mar. 12, 1992, 106 Stat. 73. The TVPA provides for civil liability for those who, acting under actual or apparent authority or color of law of any foreign nation, commit torture or extrajudicial killing. Because the TVPA has no jurisdictional requirement, those who commit these human rights violations cannot escape liability even if they have no connection to the United States.
The Alien Tort Statute
The ATS was adopted in 1789 as part of the Judiciary Act. It provides only 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. Its legislative history and origin is unknown, and the statute remained largely dormant until the 1980s. In the last 30 years, the ATS has been used by plaintiffs seeking redress for violations of the law of nations that occurred both in the United States and abroad. Claims have ranged from suits against war criminals like Radovan Karadzic2 to claims against corporations like Exxon3
In Kiobel, Nigerian plaintiffs residing in the United States (Esther Kiobel, individually and on behalf of her late husband, Dr. Barinem Kiobel and others) filed suit in the United States District Court for the Southern District of New York under the ATS, requesting relief under customary international law. The plaintiffs alleged that a joint subsidiary of the defendants incorporated in Nigeria (Royal Dutch Petroleum Company and Shell Transport and Trading Company, p.l.c., incorporated in the Netherlands and England) aided and abetted the Nigerian Government in committing human rights violations in Nigeria.4
The District Court denied the defendants’ motion to dismiss with respect to some of the claims and certified its order for interlocutory appeal.5 On appeal, the Second Circuit dismissed the entire complaint, reasoning that the law of nations does not recognize corporate liability.6
The Supreme Court granted certiorari to consider whether the law of nations recognizes corporate liability. The Court heard oral argument on this issue, but then asked the parties to brief the question of whether and under what circumstances courts may recognize a cause of action under the ATS for violations of the law of nations occurring within the territory of a sovereign other than the United States. Following further briefing and oral argument, the answer to this second question on extraterritoriality formed the basis of the Court's opinion.7
The Supreme Court’s Decision
The Supreme Court ruled that the ATS was not available to the plaintiffs under the facts alleged because “all the relevant conduct took place outside the United States.” 8 The majority opinion, written by Chief Justice John G. Roberts and joined by Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito, Jr., agreed with respondents that this was due to the fact that the “presumption against extraterritoriality” in the application of U.S. law applied to the ATS, and thus, claims under the ATS do not reach conduct occurring in the territory of a foreign sovereign. Citing to Morrison v. National Australia Bank Ltd., 561 U. S. ___, ___ (2010), the majority explained that the presumption against extraterritoriality provides that “when a statute does not give clear indication of an extraterritorial application, it has none.”9 The purpose of the presumption, the majority explained, is to prevent “international discord” by avoiding “unintended clashes” between our laws and those of other nations.10 Furthermore, because foreign policy concerns are often heightened in the ATS context, courts need to be particularly wary of impinging on the foreign policy powers of the Executive and of Congress by presuming extraterritoriality where none has been made explicit by the political branches.11 The majority went on to reject the petitioners’ contention that, even if the presumption of extraterritoriality were to apply, the text, history, and purpose of the ATS would rebut the presumption.
The majority explained further that “even where the claims touch and concern the territory of the United States” such minimal contact would not have “sufficient force to displace the presumption against extraterritorial application.”12 In this connection the majority mentioned corporations’ potential liability only in passing, observing that “[c]orporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices” to displace the presumption against extraterritorial application.13
The Concurring Opinions
Because the majority declined to define the scope of ATS jurisdiction, the concurring opinions—in particular, Justice Breyer’s— leave open the door to ATS liability in cases with a more substantial connection to the United States.
Justice Breyer, joined by Justice Ginsberg, Justice Sotomayor, and Justice Kagan, concurred with the majority’s holding but not its reasoning. Justice Breyer took issue with the majority’s application of the presumption against extraterritoriality, noting that the ATS was explicitly “enacted with ‘foreign matters’ in mind” and thus differs crucially from other legislation to which the presumption ordinarily applies.14 Relying instead on “principles and practices of foreign relations law,” Justice Breyer proposed limiting the jurisdictional scope of the ATS to situations in which (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.15 “Important national American interests,” according to Justice Breyer, include preventing the country from becoming a safe haven for transgressors of international law.16 Under this alternative approach, Justice Breyer agreed with the majority’s conclusion that the parties and relevant conduct “lack sufficient ties to the United States for the ATS to provide jurisdiction,” noting that defendants’ “only presence in the United States” consisted of a New York City office (“actually owned by a separate but affiliated company”) and, “like . . . many foreign corporations,” the fact that their shares are traded on the New York Stock Exchange.17
Justice Alito, joined by Justice Thomas, concurred with both the holding and the reasoning of the majority, but wrote separately to emphasize the “broader standard” from Morrison that a cause of action falls outside the scope of the presumption against extraterritoriality only if “the ‘focus’ of congressional concern” in the relevant statute takes place in the United States.18 Because the “focus” of the ATS is to regulate torts of sufficient definiteness and international acceptance, (see Sosa v. Alvarez-Machain, 542 U.S. 692, 723-24 (2004)), Justice Alito reasoned that “a putative ATS cause of action will fall within the scope of the presumption against extraterritoriality—and will therefore be barred—unless the domestic conduct is sufficient to violate an international law norm that satisfies Sosa’s requirements of definiteness and acceptance among civilized nations.”19
Finally, Justice Kennedy issued a brief concurring opinion, noting that it was proper for the Court to “leave open a number of significant questions regarding the reach and interpretation of the ATS,” because “[o]ther cases may arise with allegations of serious violations of international law principles protecting persons, cases covered neither by the TVPA nor by the reasoning and holding of today’s case” which would require courts to “further elaborat[e] and explan[e]” the “proper implementation of the presumption against extraterritorial application.”