U.S. Supreme Court Holds That Presumption Against Extraterritoriality Applies to the Alien Tort Statute

April 18, 2013

On April 17, 2013, the Supreme Court issued its decision in Kiobel v. Royal Dutch Petroleum Co., __ U.S. __ (2013), addressing the scope of the Alien Tort Statute, 28 U.S.C. § 1350 ("ATS").  In Kiobel, the Court sharply limited the availability of U.S. courts to hear claims brought by foreign nationals against other foreign nationals for human rights violations committed outside the United States.  Although the decision was unanimous, the Justices’ reasoning divided.  Chief Justice Roberts, writing for the Court, concluded that the presumption against extraterritoriality applies to claims under the ATS and that nothing in the ATS itself rebuts that presumption.  The Chief Justice’s opinion, joined by Justices Alito, Kennedy, Scalia, and Thomas, casts doubt on the viability of ATS claims arising from foreign acts, but leaves open the possibility that the presumption against extraterritoriality might be rebutted if claims "touch and concern the territory of the United States" with "sufficient force to displace" that presumption.  A foreign defendant’s "[m]ere corporate presence" in the United States, however, does not suffice.  Justice Breyer, joined by Justices Ginsburg, Sotomayor and Kagan, filed a concurrence in the judgment rejecting the application of the presumption against extraterritoriality and instead proposing that claims for violations of international law can be recognized under the ATS even for violations committed abroad either where the defendant is an American national or where the case sufficiently implicates a U.S. interest. 

The Court’s analysis in Kiobel will likely have far-reaching repercussions for foreign nationals alleging that they have been the victims of human rights abuses outside the United States, for corporations potentially subject to expensive and difficult-to-predict ATS suits, and for foreign countries whose policies and actions might become the subject of ATS suits. 

Background on Kiobel v. Royal Dutch Petroleum

Kiobel concerns a one-sentence statute passed by the first Congress in 1789.  The Alien Tort Statute grants district courts the authority to hear lawsuits filed by non-U.S. citizens who allege violations of the law of nations or U.S. treaties.  28 U.S.C. § 1350 ("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").  The law lay more or less dormant until 1980, when the Second Circuit allowed the ATS to serve as the basis for a lawsuit filed by a Paraguayan citizen claiming to have been tortured in Paraguay by another Paraguayan citizen who was, at the time the suit was filed, living in the United States.  Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980).  Since Filartiga, foreign plaintiffs have used the ATS in increasing numbers to address alleged human rights violations committed abroad.  In its first case addressing the ATS, the Supreme Court held in 2004 that the statute authorizes federal courts to recognize causes of action for certain types of sufficiently particularized "violation[s] of the law of nations," determined according to customary international law.  Sosa v. Alvarez Machain, 542 U.S. 692, 724–25 (2004) (noting as paradigm cases "violation of safe conducts, infringement of the rights of ambassadors, and piracy"). 

In Kiobel, the Supreme Court addressed only its second ATS case.  As it came to the Court, the case initially centered on a question mentioned but left unaddressed in Sosa:  Whether a corporation–as opposed to an individual–could be sued under the ATS for allegedly committing human rights violations abroad or aiding and abetting their commission.  In Kiobel, Nigerian citizens alleged that foreign oil companies aided the Nigerian government in violently suppressing resistance to the oil companies’ drilling operations in the 1990’s.  Affirming the District Court’s grant of the defendants’ motion to dismiss, a divided panel of the Second Circuit held that corporations could not be sued under the ATS for human rights violations.  The majority opinion reasoned that the Supreme Court’s decision in Sosa indicated that the question whether corporations could be liable for violations of the law of nations could only be answered, just like the substantive definition of a violation, by customary international law itself.  Because the majority concluded that customary intentional law did not impose liability on corporations for human rights violations, it concluded corporations could not be sued under the ATS for such violations.  See Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 127–144 (2d Cir. 2010).  Judge Leval concurred in the result on narrow grounds but objected forcefully to the majority’s holding that corporate liability is not a norm recognized by international law.  According to Judge Leval, customary international law determines the content of an asserted violation, but leaves to each nation the question who–corporate or individual defendant–can be liable for the violation.  Id. at 149–154 (Leval, J., concurring in the judgment).

The Supreme Court initially granted certiorari to address "[w]hether corporations are excluded from tort liability for violations of the law of nations . . . under the ATS."  After argument, however, the Supreme Court ordered supplemental briefing and reargument on a broader and more fundamental question:  "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." 

Analysis of the Holding in Kiobel v. Royal Dutch Petroleum

Instead of ruling on the initial, narrower, question of corporate liability under the ATS, the Supreme Court’s Kiobel opinion addresses whether and when the ATS applies extraterritorially.  While it leaves some ground open, the opinion forecloses the typical ATS claim based entirely or largely on events abroad.

The Court began by reaffirming the presumption against extraterritoriality, emphasized several terms ago in Morrison v. National Australia Bank, Ltd., __ U.S. __, 130 S. Ct. 2869 (2010), according to which laws are presumed to apply solely within the United States and its territory.  Although the ATS itself is "strictly jurisdictional," Sosa, 542 U.S., at 713, the Court nonetheless applied the presumption.  This is because the ATS "allows federal courts to recognize certain causes of action," and therefore canons of interpretation like the presumption against extraterritoriality "constrain courts [in] considering the causes of action that may be brought under" that statute.   Kiobel, __ U.S. __ (slip op. at 5).  The Court then held that nothing in the ATS’s text or history evinces the "clear indication of extraterritoriality," id. at 6–7 (quoting Morrison, 130 S. Ct. at 2883), necessary to overcome the presumption. Among other reasons, the Court noted that, although the ATS permits "aliens" to sue for violations of "the law of nations," such violations need not occur abroad.  As for the fact that the ATS has traditionally been thought to apply to piracy, the Court considered that "pirates might well be a category unto themselves" because they operate on the high seas rather than in any country’s territory, so that application of U.S. law "carries less direct foreign policy consequences."  Id. at 10–11.  Finally, the Court reasoned that there was no indication the ATS was designed to make the United States a "uniquely hospitable forum for the enforcement of international norms."  Id. at 12.  Instead, its goal was to avoid friction with other nations by providing a forum for their citizens to sue for certain torts committed in U.S. territory. 

Despite the apparent breadth of Kiobel‘s rejection of extraterritorial application of the ATS, the last paragraph of the opinion may leave the door ajar.  The Court might have simply held that, because "all the relevant conduct" at issue had occurred in Nigeria, there was no ATS claim.  Instead, the Court went on, noting that, "even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application."  Id. at 14.  In Kiobel, the only link to the U.S. was the fact that the defendant foreign corporations apparently had some presence in this country, which the Court held was not sufficient.  But a possible implication of Kiobel‘s concluding paragraph is that even if the conduct constituting the ATS claim occurred abroad, the claim might be cognizable if there were some other connection to the United States sufficient to "displace the presumption against extraterritorial application."  The meaning of this amorphous proviso is left to future development. 

Justice Kennedy and Justice Alito each filed short, and somewhat countervailing, concurring opinions.  Justice Kennedy’s opinion approvingly notes that the Court’s opinion left some wiggle room in its future application of the ATS.  By contrast, Justice Alito’s opinion, joined by Justice Thomas, argues that the majority should have gone further, asserting that the ATS can only apply if the alleged violation of international law norms occurred in the United States.

Justice Breyer, joined by Justices Ginsburg, Kagan and Sotomayor, concurred in the judgment, rejecting the Court’s application of the presumption against extraterritoriality.  Instead, Justice Breyer’s concurrence argues that the ATS was specifically enacted with "foreign matters in mind" for the specific purpose of addressing violations of international law some of which, such as piracy, take place abroad.  Looking to foreign relations law, Justice Breyer’s concurrence argues that ATS cases should be allowed where either 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" (including an interest in preventing the United States from becoming a safe harbor "for a torturer or other common enemy of mankind").  Principles of forum non conveniens, exhaustion, comity, and deference to Executive Branch diplomacy, the concurrence goes on, would minimize any potential international friction arising from U.S. courts exercising ATS jurisdiction over a foreign defendant’s alleged actions in a foreign country.  Even under this more relaxed approach, however, Justice Breyer concluded that the minimal corporate presence in the United States at issue in Kiobel itself is insufficient to confer jurisdiction.

Impact of Kiobel v. Royal Dutch Petroleum

Kiobel suggests that the scope of ATS litigation will be significantly reduced in the future.  Despite the Court’s proviso at the end of the opinion, the typical ATS case alleging misconduct abroad by foreign corporations will be difficult to maintain.  As for American corporate defendants, it is unclear why U.S. citizenship would justify application of the ATS if corporate presence by a foreign defendant does not, since the focus of presumption against extraterritoriality is the underlying merits of the case.  Moreover, all nine Justices found the minimal and indirect connection to United States at issue in this particular case–a foreign corporation’s presence in the United States–does not suffice to justify application of the ATS.  In short, the Kiobel Court’s modest view of the role of U.S. Courts as forum to adjudicate extraterritorial violations of international law will likely narrow the landscape of ATS litigation, making it easier to avoid expensive, potentially transnational litigation.  

Gibson, Dunn & Crutcher LLP  

Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have about this development.  If you have any questions about Kiobel or would like to talk with one of our lawyers about a transnational law issue, please contact the Gibson Dunn lawyer with whom you work or any of the following lawyers:

Theodore J. Boutrous, Jr. – Los Angeles (213-229-7000, [email protected])
William E. Thomson – Los Angeles (213-229-7891, [email protected])
Daniel M. Sullivan – New York (212-351-3814, [email protected])
Christopher M. Francis – Los Angeles (213-229-7473, [email protected])

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