Thursday, August 8, 2013

Are the Rumors of the Demise of the Alien Tort Claims Statute Greatly Exaggerated in the Wake of Kiobel?

 
 Photo Courtesy of rottentomatoes.com / Monty Python & The Holy Grail



I.                 Introduction

On April 17, 2013, the Supreme Court handed down its decision in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659, 185 L. Ed. 2d 671 (U.S. 2013), finding that the federal court did not have subject matter jurisdiction over the matter, as the Alien Tort Statute (the “ATS”) under which the human rights claims were brought possesses a presumption against extraterritoriality, and all of the relevant events in the case occurred in Nigeria.  Some have opined that the Court’s decision is the “last breath” of the Alien Tort Statute.  This article will summarize the various opinions in Kiobel, subsequent developments, and then address whether litigation under the ATS is or is not now futile. 

II.              The Alien Tort Statute

The first Congress of the United States, sitting in Philadelphia, passed the Judiciary Act of 1789 which contained, in section 9, a single sentence that constitutes the ATS.  That single sentence reads as follows: “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.” 28 U.S.C § 1350 (2011).  

For decades and decades thereafter, there was virtually no litigation under this statute.  Then, thirty three years ago, the Second Circuit issued an opinion in Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980), which breathed life into the somnambulant statute.  Thereafter, a spate of ATS cases were filed, most of them involving torture or genocide committed overseas, with the claims being filed in federal district courts by aliens who had sought refuge in the United States from a nation-state allegedly engaged in violations of customary international law.  

In 2004, in Sosa v. Alvarez-Machain, the Supreme Court addressed the statute, holding that such claims could not proceed if the customary law norm under which the claim was brought had “less definite content and acceptance among civilized nations than the historical paradigms familiar when [the ATS] was enacted.” 542 U.S. 692, 732 (U.S. 2004).  

III.            The Kiobel Litigation

Between 1992 and 1995, several Nigerian nationals granted asylum in the United States sued, among other defendants, a Dutch corporation, Royal Dutch Petroleum, alleging that it had aided and abetted violations by the Nigerian government of customary international law, to wit, torture of individuals protesting environmental damage by the oil companies in the Niger River delta. Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 117 (2d Cir. 2010). Eventually, the Kiobel litigation resulted in a Second Circuit opinion, holding that, under customary international law, a corporation may not be sued for violations of international norms. Id. at 145. Thereafter, the Supreme Court granted certiorari to review that question. 132 S. Ct. 472 (U.S. 2011).

IV.            Kiobel I

After extensive briefing, including 37 amicus briefs, the Court heard oral argument on the corporate responsibility issue in the 2011-2012 term. See Kiobel v. Royal Dutch Petroleum, SCOTUSBlog, http://www.scotusblog.com/case-files/cases/kiobel-v-royal-dutch-petroleum/ (last visited July 23, 2013). A week after oral argument, the Court issued an order directing that the parties brief whether the statute could be applied extraterritorially to conduct occurring exclusively outside the United States. Id.; 132 S. Ct. 1738 (U.S. 2012). The Court set the case for reargument during the October 2012 term. 132 S. Ct. at 1738.  

V.              Kiobel II

Again, after extensive briefing, including some seventy amicus briefs, and after oral argument, the Court issued a unanimous holding that the federal district court lacked subject matter jurisdiction over the controversy. Kiobel, 133 S. Ct. at 1663. The Chief Justice issued an opinion for five Justices (Scalia, Thomas, Kennedy, and Alito joined) in which he stated that while the presumption against the extraterritorial application of the statute had not been overcome in this case, that the presumption could be overcome if the facts sufficiently “touch[ed] and concern[ed] the territory of the United States”. Id. at 1669. Justices Thomas and Alito filed a concurrence in which they questioned whether the Chief Justice’s “touch and concern” standard satisfied the “definiteness and acceptance among civilized nations” requirement articulated in Sosa. Id. at 1670 (Alito, J., concurring). 

Justices Breyer, Ginsburg, Kagan, and Sotomayor issued a concurring opinion in which the articulated at least three circumstances under which conduct occurring outside the United States might still be actionable in federal court: “(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, and that includes a distinct interest in preventing the United States from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind.Id. at 1671 (Breyer, J., concurring). 

Justice Kennedy also issued a one-paragraph concurrence, in which he praised the majority for its cautious approach in declining to answer the myriad questions arising out of the application of the ATS. Id. at 1669 (Kennedy, J., concurring). Indeed, the Kiobel opinion leaves unanswered many important questions in international human rights litigation, and raises new ones, including: What is the significance of the Court’s use of the phrase “displace the presumption,” rather than the usual “rebut the presumption?” Is corporate liability permitted under the ATS? If so, does the presumption against extraterritoriality apply even if the corporation operates in, is domiciled in, and is headquartered in the U.S.? 

VI.            Commentary

a.      The “Touch and Concern” Framework 

In the wake of Kiobel, several commentators and bloggers have opined that Kiobel represents the demise of ATS litigation involving conduct occurring outside the United States. See, e.g., Phil Berkowitz et al., The Final Breaths of the Alien Tort Statute, Littler Mendelson P.C., Apr. 19, 2013, http://www.littler.com/publication-press/publication/final-breaths-alien-tort-statute (last visited July 23, 2013); James E. Berger & Charlene Sun, International Litigation Update: Developments Concerning the Alien Tort Statute and Personal Jurisdiction King & Spalding Client Alert, May 16, 2013, http://www.kslaw.com/imageserver/KSPublic/library/publication/ca051613.pdf (last visited July 23, 2013). Their principal argument has been that the majority’s strong presumption against extraterritoriality means that ATS plaintiffs, traditionally foreign nationals bringing cases against U.S. corporations for human rights violations overseas, face a nearly insurmountable hurdle in establishing that the entity that allegedly caused their injuries sufficiently touches and concerns the territory of the United States. Kiobel demonstrates that it is insufficient to merely show that a corporation, such as Shell, has some operations in the United States. These commentators believe that many ATS plaintiffs will be unable to show sufficient contacts with the U.S. in post-Kiobel litigation, and their claims will accordingly fail.

Other commentators believe that Kiobel does not represent the “final breath” of that ATS. Chief Justice Roberts’ touch and concern language, according to one commentator, “has provided fodder for another decade or more of litigation and created more business for litigators, [as] [c]ompanies and victims’ advocates will battle over when claims touch and concern the U.S. with sufficient force.” Katie Redford, Door Still Open for Human Rights Claims After Kiobel, SCOTUSBlog (Apr. 17, 2013 6:48 p.m.), http://www.scotusblog.com/2013/04/commentary-door-still-open-for-human-rights-claims-after-kiobel/ (last visited July 23, 2013). Another scholar explained that ATS suits like Doe v. Exxon – brought by fifteen Indonesian villagers tortured by Indonesian soldiers allegedly hired by Exxon – could possibly survive under this post-Kiobel framework, as Exxon has extensive operations in the United States, employs tens of thousands of Americans, is headquartered in the U.S., and sends many thousands of barrels of oil from Indonesia to the U.S. every year. Oona Hathaway, The Door Remains Open to “Foreign Squared” Cases, SCOTUSBlog (Apr. 18, 2013 4:27 p.m.), http://www.scotusblog.com/?p=162617 (last visited July 23, 2013). 

b.      DaimlerChrysler Corp. v. Bauman 

In fact, the question of whether ATS claims sufficiently “touch and concern the territory of the United States” could be further articulated next term, when the Supreme Court hears DaimlerChrysler Corp. v. Bauman. See 133 S.Ct. 1995, 185 L. Ed. 2d 865 (U.S., 2013). In Bauman, twenty-two Argentinian nationals sued Daimler in California federal court for human rights violations allegedly undertaken by the company’s Argentinian subsidiary in collaboration with the government during Argentina’s “Dirty War” in the 1970s and 80s. See Bauman v. DaimlerChrysler AG, No. 04-00194, 2007 U.S. Dist. LEXIS 13116 (N.D. Cal. Feb. 12, 2007). In 2011, the Ninth Circuit held that Daimler had sufficient contacts with the state to justify the exercise of personal jurisdiction. See Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 911 (9th Cir. 2011). Applying a two-pronged agency theory, the court reasoned that MBUSA, Daimler’s U.S. subsidiary, was Daimler’s agent because MBUSA was distributing vehicles in California, a “critical aspect” of Daimler business, and because Daimler controlled “nearly all aspects” of MBUSA’s operations. Id. at 922-24. 

Although the case primarily concerns the standard for establishing personal jurisdiction, some have noted that the Bauman case could provide an opportunity for the Court to either cite Kiobel in dismissing the case, or expand upon its reasoning in Kiobel by requiring a certain level of contact between the U.S. and the corporate defendant. John Bellinger, Reflections on Kiobel, Lawfare (Apr. 22, 2013 8:52 p.m.), http://www.lawfareblog.com/2013/04/reflections-on-kiobel/ (last visited July 23, 2013); Xander Meise Bay, The ATS’s Second Act: The Supreme Court Looks to Address the Unanswered Questions of Kiobel, Corporate Responsibility and the Law, (Apr. 23, 2013), http://www.csrandthelaw.com/2013/04/the-atss-second-act-the-supreme-court-looks-to-address-the-unanswered-questions-of-kiobel/ (last visited July 23, 2013).     
   
c.      The Future of Non-ATS Human Rights Litigation

Regarding the future of non-ATS human rights cases, one commentator remarked that, “[w]hen U.S. federal courthouse doors close, other doors open for the litigation of transnational cases.” Donald Childress, An ATS Answer with Many Questions (and the Possibility of a Brave New World of Transnational Litigation), SCOTUSBlog (Apr. 18, 2013 5:03 p.m.), http://www.scotusblog.com/?p=162624 (last visited July 23, 2013). Some human rights cases now precluded by the Kiobel decision could move to foreign courts, while others may move to U.S. state courts. Suing U.S. corporations in courts in the nations where the violations took place could prove ineffective, however, as the judiciaries of countries such as Nigeria lack the safeguards, objectivity, and robust enforcement capabilities that U.S. courts possess. 

As for state courts, assuming plaintiffs can effectively “plead around” removal to federal court, where Kiobel and forum non conveniens defenses could prove insurmountable, they may be able to bring cases under state law in state courts. Donald E. Childress III, The Alien Tort Statute, Federalism, and the Next Wave of International Law Litigation, 100 Geo. L.J. 709, 741 (2012), available at http://ssrn.com/abstract=1815413 (last visited July 23, 2013). As Rich Samp noted, “States are largely free to craft their tort law without interference from the federal government, so plaintiffs’ lawyers barred from raising overseas human rights claims in federal court under the ATS may well decide to file their lawsuits in state courts instead.” Rich Samp, Supreme Court Observation: Kiobel v. Royal Dutch Petroleum & the Future of Alien Tort Litigation, Forbes (Apr. 18, 2013 10:51 a.m.), http://www.forbes.com/sites/wlf/2013/04/18/supreme-court-observations-kiobel-v-royal-dutch-petroleum-the-future-of-alien-tort-litigation/ (last visited July 23, 2013). Although there are few, if any, current examples of this state law-state court approach, such cases will undoubtedly arise in the next few years.

VII.          Conclusion

In short, Kiobel unquestionably limited the possibilities for plaintiffs’ lawyers seeking to bring international human rights claims against American corporations. But Kiobel did not close down all avenues of potential litigation, and we can anticipate that creative lawyers will construct ways to pursue such cases in both federal and state courts, as well as in hospitable fora overseas, in the near future. 

Left lingering, meanwhile, is the question of what Congress will do with the now-limited extraterritorial application of the ATS. In his concurrence, Justice Kennedy noted that Congress eased the judiciary’s task when, in 1991, it expressly defined the extraterritorial application of the Torture Victims Protection Act. Kiobel, 133 S. Ct. at 1669. Surely Congress can do the same here. Human rights advocates and multinational corporations will no doubt be advocating for and against such a change in the coming months.


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