Kiobel commentary: Answers … and more questions

SCOTUSblog is pleased to have reactions from supporters of both sides to yesterday’s decision in Kiobel v. Royal Dutch Petroleum.  This post is written by Kristin Myles and James Rutten, who served as counsel on an amicus brief in support of the respondents in this case.

Yesterday the Court rendered its long-awaited decision in Kiobel v. Royal Dutch Petroleum Co., a case presenting the question of whether federal courts may recognize a cause of action under the Alien Tort Statute (ATS) for violations of the law of nations occurring within the territory of a foreign sovereign.  The Court’s five-to-four majority opinion (Roberts, C.J., joined by Scalia, Kennedy, Thomas, and Alito, JJ.) answered that question with an all but categorical “no,” with the remaining Justices concurring in the judgment on the basis that federal courts may not recognize a cause of action under the facts of the case.

Plaintiffs were a group of Nigerian nationals who alleged that the Nigerian military committed human rights violations against them in the 1990s in response to local protests concerning oil exploration and production by a subsidiary of the defendants (Royal Dutch Petroleum Company and Shell Transport and Trading Company, two holding companies incorporated in the Netherlands).  After the plaintiffs obtained political asylum in the United States, they sued in federal court, alleging that the defendants had aided and abetted the atrocities by providing food, transportation, and compensation to the Nigerian military, and allowing it to use their property as a staging area for the attacks.  The plaintiffs premised jurisdiction on the ATS, an obscure jurisdictional provision that was enacted by the First Congress in 1789 and that once was described by Judge Friendly as a “legal Lohengrin” in that “no one seems to know whence it came.”  The statute provides in full: “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 Second Circuit, on an interlocutory appeal from a partial dismissal, dismissed the entire complaint on the ground that the law of nations does not recognize corporate liability.  The Supreme Court granted certiorari to consider that question, but subsequently asked for briefing and argument on the threshold question of whether the ATS permits federal courts to entertain a cause of action at all where the conduct occurred exclusively within the territory of a foreign sovereign.  The Court had not previously addressed this question, even though prior ATS cases, such as the Court’s 2004 decision in Sosa v. Alvarez-Machain, had involved conduct occurring largely, and in some cases entirely, within foreign nations.

The Court held that the ATS does not confer federal court jurisdiction in such circumstances.  The Court grounded its decision primarily in the presumption against extraterritorial application of statutes recognized most recently in Morrison v. National Australia Bank Ltd. – a presumption that “serves to protect against unintended clashes between our laws and those of other nations which could result in international discord.”  The Court recognized that the presumption does not map neatly onto the ATS, because the presumption typically applies when there is a question about whether a federal statute affirmatively regulating conduct applies abroad, whereas the ATS does not regulate conduct at all, but simply creates jurisdiction over federal common law causes of action for violations of certain well-settled norms of international law.  The Court concluded, however, that that only heightened the policy concerns from which the presumption springs: “[T]he danger of unwarranted judicial interference in the conduct of foreign policy is magnified in the context of the ATS, because the question is not what Congress has done but instead what courts may do.”

The Court’s decision will have immediate consequences and leaves open a number of questions.  Most palpably, its decision is sure to result in the dismissal of several ATS cases now pending in the lower courts.  The ATS was a largely neglected jurisdictional statute until the Second Circuit’s decision in 1980 in Filartiga v. Peńa-Irala, but since then, increasingly has been used to target deep-pocket corporate defendants with allegations that they aided and abetted human rights violations by foreign governments.  The Court’s decision is likely to put a stop to these cases, particularly where, as in Kiobel, neither the events at issue nor the parties to the case have any connection to the United States.

The Court’s opinion also leaves open many questions.  It did not address, for example, whether corporate liability is permitted under the ATS (the question on which the Court initially granted certiorari); whether aiding-and-abetting liability is permitted; or whether, as argued by some amici, applying the ATS extraterritorially would itself violate international law because it effectively would entail United States courts regulating what happens in foreign countries. 

The Court’s opinion also contains language suggesting that the categorical rule it announced is something less than that.  As Justice Kennedy stated in a one-paragraph concurrence that did not expound on what he had in mind: “Other cases may arise with allegations of serious violations of international law principles protecting persons, cases [not] covered . . . by the reasoning and holding of today’s case; and in those disputes the proper implementation of the presumption against extraterritorial application may require some further elaboration and explanation.”

Significantly, the Court did not address whether, if corporate liability is permitted, a cause of action under the ATS that otherwise would be barred by the presumption against extraterritoriality can be viable if a corporate defendant is domiciled, headquartered, or has operations in, the United States.  The Court did indicate that a cause of action that otherwise would be barred is not viable merely by virtue of being brought against a multinational corporation with a presence in the United States: “Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices.”  Based on the Court’s use of the vague term “presence,” we can expect ATS plaintiffs to argue that corporations that are domiciled or headquartered in the United States remain fair game in ATS suits, even if those suits challenge purely extraterritorial conduct by the corporations or their subsidiaries.  Such an argument would seem to contravene the Court’s basic holding that the ATS does not apply to conduct occurring exclusively within foreign nations.

Also, the Court left open the question of whether the ATS could confer jurisdiction over a cause of action arising from events in a foreign nation where some degree of conduct took place in the United States, and if so, how significant the domestic conduct would have to be.  The Court was careful to note that “[o]n the[] facts [presented], all the relevant conduct took place outside the United States,” and suggested that jurisdiction could exist if “claims touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application.”  What the Court meant by “displace” is not at all clear.  It did not appear to mean that a connection to the United States could “rebut” the presumption; a statute either applies extraterritorially or it does not, and the Court’s decision elsewhere makes clear that “to rebut the presumption, the ATS would need to evince a clear indication of extraterritoriality” (emphasis added).  The Court approached that question of statutory construction as such, engaging in an ordinary analysis of the “text, history, and purposes of the ATS.”  Notably, neither the Court’s opinion nor any of the separate opinions endorsed the approach the United States had urged in its amicus brief, namely, a case-by-case, all-the-facts-and-circumstances approach to extraterritoriality that includes deference to the views of the Department of State when it comes to whether the ATS should apply extraterritorially in a given situation.

Rather, when the Court said “displace,” it seemed to mean that if conduct violating the law of nations takes place in the United States, the presumption against extraterritoriality is irrelevant because the conduct would not be extraterritorial in the first place.  If that is what the Court meant, it would be consistent with Justice Alito’s concurring opinion, which articulated a test by which “a putative ATS cause of action will fall within the scope of the presumption against extraterritoriality–and therefore will be barred–unless the domestic conduct is sufficient to violate an international law norm that satisfies [prior case law’s] requirements of definiteness and acceptance among civilized nations.”

Interestingly, the Court seemed to invite Congress to soften the impact of its ruling – which, as noted, will shut down numerous pending human rights cases – by enacting a statute that expressly applies extraterritorially (as Congress did in 1992 when it passed the Torture Victim Protection Act).  The Court, in suggesting that mere corporate presence in the United States would not suffice, added: “If Congress were to determine otherwise, a statute more specific than the ATS would be required.”  In light of yesterday’s decision, we can expect human rights advocates to urge Congress to address the issues legislatively by authorizing federal courts to project federal common law incorporating international norms onto foreign soil.