In a unanimous 9-0 decision on Wednesday, the United States Supreme Court ruled against the plaintiffs in Kiobel v. Royal Dutch Petroleum Co. et al., finding that the presumption against extraterritoriality applies to claims under the Alien Tort Statute (ATS). The plaintiffs in Kiobel, a group of residents of Ogoniland, a 250 square mile area in the Niger delta area of Nigeria, brought the action in 2002 against Royal Dutch Petroleum Co. claiming that in the early 1990s the company aided and abetted the Nigerian government to beat, rape, kill and arrest residents of Ogoni villages who protested against the environmental effects of oil exploration in the region.
The ATS, a statute dating back to 1789, grants U.S. federal courts jurisdiction over civil suits brought by non-U.S. citizens for torts committed in violation of “the law of nations.” Before the Supreme Court was the question of whether the statute “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.”
A majority of the court, led by Chief Justice John Roberts, held that a canon of statutory interpretation known as the presumption against extraterritoriality applied to ATS cases, effectively barring the plaintiff’s suit. “The question here is not whether petitioners have stated a proper claim under the ATS, but whether a claim may reach conduct occurring in the territory of a foreign sovereign[,]” wrote Roberts.
In analyzing the language, history and intent behind the statute, Roberts found no evidence to rebut the presumption that the ATS does not apply extraterritorially. Of major concern for the court were the foreign policy implications of allowing foreign plaintiffs to bring suits under the ATS where no action occurred in the United States: “there is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms…The presumption against extraterritoriality guards against our courts triggering such serious foreign policy consequences,” said Roberts. Applying the facts of the Kiobel case, the court found that the mere fact that Royal Dutch Shell has a corporate presence in the United States did not suffice to rebut the presumption.
What is still not clear, however, is whether today’s decision is an effective categorical bar of all ATS cases where the tort takes place in a foreign location, or whether it only bars cases where the foreign activity is not sufficiently tied to American national interests. In a separate concurring opinion written by Justice Alito and joined by Justice Thomas, Alito stressed that an ATS case would only fall outside the scope of the presumption if the violation of human rights giving rise to the claim were to take place directly within the United States.
In a separate concurring opinion written by Justice Breyer and joined by Justice Ginsburg, Justice Sotomayor and Justice Kagan, however, the four justices took a different approach. Eschewing the presumption of extraterritoriality altogether, Justice Breyer wrote that the court should rely on more general international jurisdictional norms to determine the statute’s jurisdictional reach, considering such doctrines as comity, exhaustion of other resources, and forum non conveniens and “paying particular attention to the views of the Executive Branch[.]” Under this view, human rights violations occurring outside of the United States could be subject to the ATS where “the defendant’s conduct substantially and adversely affects an important American national interest….” By way of example, Breyer specifically mentions a situation where the United States provides safe harbor to “a torturter or other common enemy of mankind” as properly falling under the ATS.
Other unanswered questions include whether corporations can be subject to the ATS. Wednesday’s decision comes exactly 2 years and 7 months after a two-judge majority of the United States Second Circuit Court of Appeal first decided in Kiobel that corporations – as a preliminary matter – cannot be found liable under the Alien Tort Statute because they are not subject to norms of international law. But in a separate decision by the Seventh Circuit Court of Appeals in Flomo v. Firestone Natural Rubber Co. LLC., the court there held that “corporate liability is possible under the Alien Tort Statute[.]“ The Supreme Court heard oral arguments on this issue last February, but today’s decision did not directly touch on this question. Some commentators, however, have said that the decision implies that corporations can be liable under the Act. In a separate concurring opinion, Justice Kennedy writes: “The opinion for the Court is careful to leave open a number of significant questions regarding the reach and interpretation of the Alien tort Statute[,]” and that “some further elaboration and explanation” may be required.
As might be expected, today’s ruling has generated mixed reactions from business and human rights advocacy groups. The United States Council for International Business (USCIB) issued a statement that“[a]fter many years of sounding the alarm against abuse of the ATS, we are extremely gratified that the court has handed down such a clear and well reasoned ruling.” Human Rights First, on the other hand, said that today’s decision “will undermine the United States’ status as a leader on human rights…[and] cuts a hole into the web of accountability.” This sentiment was echoed by the Center for Constitutional Rights, which wrote that it is “deeply troubled by the Supreme Court’s decision to undercut 30 years of jurisprudence to limit U.S. courts’ ability to hear cases on human rights violations committed outside the United States.”
Despite many unanswered questions, the ruling is expected to drastically cut down the number of cases brought against corporations under the Alien Tort Statute. For many in business, that comes as very welcome news. In a statement released on Wednesday on the U.S. Chamber of Commerce’s website, Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce said that “[t]he U.S. Supreme Court’s decision today ensures that trial lawyers cannot continue to use the American judicial system to expose global businesses to frivolous and costly lawsuits.”