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On April 17, 2013, the United States Supreme Court held that the Alien Tort Statute ("ATS") does not have extraterritorial jurisdiction in a 9-0 decision in Kiobel v. Royal Dutch Petroleum Co. [lexis.com subscribers can view the enhanced opinion and the briefs in this case.]
The ATS provides that "[t]he district courts shall have original jurisdiction over 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. Although the ATS was originally thought to cover only violations such as the law of safe passage, infringement of the rights of ambassadors, and piracy, federal courts have recently seen an increase in the number of ATS cases. Plaintiffs in those cases have asserted claims against multinational corporations under the theory that the corporations aided and abetted human rights violations through their cooperation with governments alleged to have engaged in such violations.
One such case, Kiobel v. Royal Dutch Petroleum Co., alleged that defendant corporations who engaged in oil exploration and production in Nigeria, aided and abetted the Nigerian government in committing human rights violations directed towards plaintiffs. The United States District Court for the Southern District of New York, dismissed some of plaintiffs' claims but allowed the claims alleging aiding and abetting arbitrary arrest and detention, crimes against humanity, and torture to go forward. On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court's dismissal, but reversed the portion of the opinion allowing claims against the corporate defendants, holding that jurisdiction under the ATS does not extend to civil actions brought against corporations. The Second Circuit denied en banc reconsideration of that decision, and it was appealed to the United States Supreme Court. After the initial argument on the issue of corporate liability in February 2012, the Supreme Court took the unusual step of ordering supplemental briefing and argument on the issue of whether and under what circumstances courts may recognize an ATS claim for violations of the law of nations occurring outside of the United States.
The Kiobel majority opinion, authored by Chief Justice Roberts and joined by Justices Scalia, Kennedy, Thomas and Alito, held that the presumption against extraterritorial application of a statute was not overcome by either the text of the statute itself or the historical background against which the ATS was enacted. The court further held that there was no indication that the ATS was passed to make the United States a "uniquely hospitable forum for the enforcement of international norms." Because the violations of international law alleged took place outside of the United States, the Court held that petitioners' claims were barred. The Court noted 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. Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices." This may leave open the question of whether a district court may consider a case against a company whose connection to the United States is more than mere corporate presence. It also leaves companies operating in the United States, as well as US companies, potentially liable for ATS claims. The Court did not reach the issue of corporate liability under the ATS. Concurring opinions were filed by Justices Kennedy, Alito (joined by Justice Thomas), and Breyer (joined by Justices Ginsburg, Sotomayor and Kagan).
This article was prepared by Judith Archer (email@example.com or 212 318 3342) and Sarah O'Connell (firstname.lastname@example.org or 212 318 3093) from Fulbright's Litigation Practice.
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