by Wayne Jordash, Scott Martin and David Martini
On 17 April 2013, the Supreme Court of the United States (“Supreme Court” or “Court”) issued its long awaited Kiobel opinion. In a 9-0 ruling, the Alien Tort Statute, 28 U.S.C. § 1350 (“ATS”) was narrowly construed to limit the extraterritorial reach of US federal courts. Human rights activists fear the decision closes the door on a variety of cases that could have relied upon the ATS to access US federal courts in obtaining civil remedies against multinational corporations operating overseas.
However, this opinion needs to be carefully scrutinised before gloomy predications about the future might be allowed full vent. Whilst the Court was clear that the presumption against extraterritorial application applies to the ATS, the decision still “leave[s] open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute”. According to the reasoning of Court, there may still be room for human rights litigation if the interests “touch and concern” the US with “sufficient force”. Justice Breyer’s concurring opinion, although only persuasive, reinforced this potential, noting that the ATS may apply where American interests are “substantially and adversely affected”.
Kiobel v. Royal Dutch Petroleum Co. was a class action lawsuit brought by Esther Kiobel, a Nigerian national, and other Nigerian nationals residing in the US (“Petitioners”) against Royal Dutch Petroleum, a foreign corporation, and its subsidiaries (“Respondents”) for alleged violations in Nigeria under the ATS. The Petitioners were claiming health, environmental and other human rights violations within Nigeria arising from the Respondents’ oil exploration activities. The Petitioners accepted that the Federal Republic of Nigeria (“Nigerian Government”) was responsible for the exploration and development rights, but alleged that the Respondents colluded with the Nigerian Government in the use of military force upon protesters, including beating, raping, arresting and killing residents and destroying or looting their property. Accordingly, it was alleged that the Respondents aided and abetted the Nigerian Government, particularly its military, in violation of the Petitioners’ human rights, including through the commission of crimes against humanity: extrajudicial killings; torture and cruel treatment; arbitrary arrest and detention; violations of the rights to life, liberty, security and association; forced exile; and the destruction of property.
Oral arguments before the Supreme Court were initially held on 28 February 2012. At that time, the principle issue before the Court was whether the jurisdiction of the ATS extended to civil actions brought against corporations under the “law of nations”. In summary, the issue focused on whether corporations could be appropriately characterised as a “person” under the ATS and thereby subject to civil action under the Statute. This question should have involved reconciling the conflicting holdings in the Citizens United v. Federal Election Commission and the 2nd Circuit holding in the Kiobel case. In the former case, the Court had characterised corporations as “persons” with regard to the right to freedom of speech under the First Amendment, whereas in the latter, the 2nd Circuit held that corporations were not “persons” under the ATS.
However, after this hearing, the Court ordered the parties to file supplemental briefs regarding “[w]hether 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”. On 1 October 2012, the Court heard further arguments on this supplemental issue relating to the prospective extraterritorial application of the ATS.
In issuing its opinion, it was anticipated that the Court would address matters arising from both the initial hearing – the mainstay of the case before the district court and the court of appeals – as well as the supplemental question. However, in a remarkable volte-face, the Court skirted the issue of corporate liability, and instead focused on the extraterritorial question. The majority ruled that a strict presumption against extraterritoriality applied in interpreting the subject-matter jurisdiction of the Statute. The wider, much anticipated issue, had been expressly ducked – discretion, for now at least, was the better part of the Court’s opinion.
The Presumption Against Extraterritoriality
The majority’s opinion reaffirmed the long-standing principle against the extraterritorial application of the laws of the United States. This presumption, affirmed in Supreme Court cases such as Morrison v. National Australia Bank Ltd., is a canon of statutory construction employed to interpret congressional intent when none is expressly apparent; it presumes US statutes only apply within the territorial jurisdiction of the United States. The application of the presumption is a corollary of the principle of territorial sovereignty – national laws govern the conduct of people within its own border and not the rest of the world.
Furthermore, the presumption respects the constitutionally delegated power of the political branches – foremost the President and members of Congress – to conduct foreign affairs on behalf of the United States, rather than the through the judicial branch. If the US could enforce its laws through the judicial system against non-US defendants for conduct outside its own territorial jurisdiction, the judiciary would be drawn inexorably into the foreign policy arena with profound constitutional and external implications. Accordingly, this presumption is designed “to protect against unintended clashes” or unintentional interference within the “delicate field of international relations.”
The Text, History and Purpose of the ATS
The Supreme Court stated that to successfully rebut this presumption, the Petitioners had to demonstrate that the statute evinced a “clear indication of extraterritoriality”. The Court however rejected the Petitioners’ arguments that the text, legislative history or the underlying object and purpose of the ATS manifested the required indication of extraterritoriality.
Concerning the interpretation of the ATS, the Petitioners advanced two principal arguments, both of which failed to persuade the majority. The first contended that words in the statute such as “any” in “any civil action” apply to extraterritorial torts and therefore suggest enforcement. The Court, noting that it was well-established law that this type of generic term was insufficient to rebut the presumption, dismissed the first argument. The second argument relied on the common law and argued that two cases, Mostyn v. Fabrigas and Dennick v. Railroad Co., permitted enforcement actions against the tortfeasor wherever he or she may be found. The court in Mostyn held, “[A]ll actions of a transitory nature that arise abroad may be laid as happening in an English county”. The Dennick Court held, “Wherever, by either the common law or the statute law of a State, a right of action has become fixed and a legal liability incurred, that liability may be enforced and the right of action pursued in any court which has jurisdiction of such matters and can obtain jurisdiction of the parties”. The policy underpinning these rulings is that a tortfeasor should not be allowed to escape enforcement of a tort action by absconding the jurisdiction. The Court rejected the Petitioners’ argument. Relying upon Sosa v. Alvarez-Machain, the Court sidestepped the argument, concluding that the question is not whether “a federal court has jurisdiction to entertain a cause of action provided by foreign or even international law…[but] whether the court has authority to recognize a cause of action under U.S. law to enforce a norm of international law”.
Concerning the legislative history of the ATS, the Court purported to examine the context in which the legislation arose, referring to Sosa, recalling that “three principal offenses against the law of nations” were generally accepted at the time the ATS was enacted in 1789. These offenses included the violation of safe conduct, infringement of the rights of ambassadors, and piracy. Plainly, the first two do not involve an issue of extraterritoriality. Piracy, on the other hand, takes place on the high seas and ordinarily outside the jurisdiction of the US; ipso facto, the Petitioners argued, Congress must have intended the ATS to encompass extraterritorial action. However, the majority also found this argument wanting, concluding that the difference between the Petitioners’ claim and a piracy claim is that a civil action against piracy “does not typically impose the sovereign will of the United States onto conduct occurring within the territorial jurisdiction of another sovereign”. Conversely, pirates on the high seas are “fair game” because they do not “necessarily” fall within any specific jurisdiction.
The manner in which the majority interpreted the legislative history to avoid displacing the presumption comes as no surprise to those following the Court. Characterised as “originalists” or “strict constructionists” and led by Justice Antonin Scalia, conservative justices insist that the judicial branch does not have discretion when interpreting a statute to construe a statute’s meaning at any time other than at the time of its enactment. This timidity contrasts with a more purposive approach, such as that taken by Justice Breyer (see below), whose creative reading of the legislative intent underpinning the ATS would allow the torturers of today to be considered as “modern day pirates”.
Finally, the Court commented that there was no evidence to suggest that the ATS was passed “to make the US a uniquely hospitable forum for the enforcement of international norms”. Here, the Court referenced Justice Story from 1822, who noted that “[n]o nation has ever yet pretended to be the custos morum of the whole world.” Consistent with its approach to the presumption, the Court explained that the purpose of the ATS was to alleviate diplomatic strife, not to encourage it.
As the Court had already explained in Sosa, “the potential [foreign policy] implications . . . of recognizing . . . causes [under the ATS] should make courts particularly wary of impinging on the discretion of the Legislative and Executive Branches in managing foreign affairs”. As noted in the Judgement, “[T]he danger of unwarranted judicial interference in the conduct of foreign policy is magnified … [because] the question is not what Congress has done but instead what courts may do.”
The ATS May be Used to Enforce Actions Regarding Human Rights Violations
While the reasoning of the majority decisively limited the applicability of the ATS to extraterritorial causes of action, the Court did not close the door entirely, as a caveat of sorts was introduced into the analysis. Should a court in the future find that alleged conduct “touch and concern” the US with “sufficient force”, i.e. —“foreign squared”— cases in which the defendant is a US national or the conduct takes place on US soil, the presumption might be displaced.
In his concurring opinion, Justice Kennedy expressed his satisfaction with this nod to the future, emphasising that “the Court is careful to leave open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute”. Kennedy allowed for the possibility of other serious violations of law to arise that are neither covered by U.S. legislation nor by the Kiobel ruling, which could require “further elaboration and explanation”. Justice Alito also agreed in his separate concurring opinion saying, “when [ATS] ‘claims touch and concern the territory of the US, they must do so with sufficient force to displace the presumption.’” These concurring opinions, whilst not binding, do provide some insight into the indecision at the core of the overall opinion, as well as, perhaps, some room for a little less gloom.
Justice Breyer’s Concurring Opinion – a More Enlightened Voice?
The definitiveness of the Court’s approach to the presumption against extraterritoriality was further questioned by Justice Breyer’s concurring opinion – joined by Justices Ginsburg, Sotomayor and Kagan. Contrary to the majority’s reliance on the presumption, the “Breyer reasoning” eschewed that approach and took the law down a middle ground – somewhere between non-extraterritorial and universal jurisdiction. Justice Breyer agreed with the majority’s conclusion but demurred from all aspects of its reasoning. Referring to the Restatement (Third) of Foreign Relations Law §§402 and 404, he “would find jurisdiction under this statute where (1) the alleged tort occur[red] on American soil; (2) the defendant [was] an American national; or (3) the defendant’s conduct substantially and adversely affect[ed] an important American national interest, and that include[d] a distinct interest in preventing the United States from becoming a safe harbour…for a torturer or other common enemy of mankind”.
Justice Breyer, referring to Filartiga v. Pena-Irala, and In re Estate of Marcos, clarified that the jurisdiction in those cases were correctly invoked under the ATS because the alleged conduct of the defendants violated a well-established international law norm, and the suit vindicated the US interest in not providing a safe haven, free of damages claims, for those who committed such crimes. Both cases dealt with conduct occurring abroad by nationals of another state, who before being sued had either resided in the United States for more than nine months (Filartiga) or had fled to it (Marcos).
According to Justice Breyer, preventing the United States from becoming a safe haven for violators of the most fundamental international norms is an important jurisdiction-related interest that warranted the applicability of the ATS. Breyer considers the purpose of the ATS is to compensate victims of “modern [day] pirates”, that is, latter day torturers and perpetrators of genocide. Contrary to those who might argue that this view necessarily opens the litigation floodgates, a fear arguably at the forefront of the majority’s anxious ruminations, Justice Breyer’s approach involves limiting this application of the ATS through sound legal principles like comity, exhaustion of local remedies and even more practical concerns such as forum non conveniens. Justice Breyer’s reading of the ATS therefore provides crucial guidance to the courts to entertain only the most serious violations of international law, respecting, kind of, the sovereignty of foreign states.
Despite this more amenable reading, Justice Breyer found that, in the circumstances of the case at hand, the Respondents’ conduct and connection to the US prevented jurisdiction arising under the ATS. Justice Breyer concluded that the Respondents’ only relevant contact within the US was an office in New York City that was used to explain its business to potential investors. Accordingly he concluded, albeit implicitly, that this minimal contact within the US and lack of direct participation in the alleged conduct ruled out the potential US federal court’s jurisdiction in this instance.
Corporate Liability Under the ATS
The Court omitted to directly address whether corporations are subject to civil action under the ATS. As previously noted, this was the primary issue under consideration in the first round of oral arguments in February 2012 and was highly anticipated to be the focus of the Court’s opinion.
As is the case with many Supreme Court opinions, one is forced to speculate on the reason the Court refrained from addressing the key issue, in this case – whether corporations might be subject to civil action under the ATS. There are several reasons why the Court may have ducked the question.
Firstly, it is possible that the Court, having decided the case on a specific basis, declined to examine the wider legal issues or ramifications. In short, having resolved the case on specified procedural grounds, it regarded itself as constitutionally bound to leave the substantive arguments for another day.
Secondly, it is possible that the Court, as is commonly the case, preferred the issue to continue to work itself out in the lower federal courts. While the 2nd Circuit concluded that corporations were not subject to suit, there perhaps remains insufficient circuit dispute at this time to necessitate any intervention to harmonise the federal laws of the US. (Only the 2nd, 4th, 7th, 9th, 11th and DC Circuits have entertained ATS claims against corporate defendants to date. Moreover, until the 2nd Circuit’s ruling in Kiobel, none of the circuits have ruled corporations incapable of being defendants under the ATS. Since the 2nd Circuit’s decision in Kiobel, only the DC Circuit has expressly rejected the notion of corporate immunity).
Whatever the specific reason, the Court must have had in mind the economic and judicial ramifications implicit in the question. The creation of corporate liability under the ATS would inevitably give rise to a plethora of lawsuits in the US federal court system. Providing that the claims were meritorious (of which there can be no guarantee in the loquaciously, litigious courts of the US), massive civil liability for corporations could result, causing unforeseen ripple effects to the sluggish US economy. The US Constitution (and Supreme Court jurisprudence interpreting the Constitution) mandates that, regarding the interpretation of statutes that do not unduly infringe upon rights enshrined in the Constitution, it should play a more passive role. Whilst the omitted Kiobel question could have undoubtedly had an effect on the economy, as well as on foreign relations and policy, it did not unduly implicate principles protected by the Constitution. Accordingly, the Court had no reason to intervene.
Finally, the Court may have faced a jurisprudential conundrum of its own making that had less to do with discretion or valour and more to do with its own prior rulings (and motivations) concerning whether corporations qualify as legal “persons”. One may recall Mitt Romney, during the past presidential election cycle, rebuking a protestor with the glib retort that “corporations are people, my friend”. He was of course correct, on one view, referring to the well-known holdings in the Citizens United case, where the Court found that corporations could be considered legal “persons” with respect to the First Amendment, thereby permitting them to make virtually limitless donations in support of political campaigns. Arguably, hence, this decision left the conservative, pro-business majority of the Supreme Court in an intellectual bind, as corporate personhood for First Amendment protections is a bedrock principle underlying its jurisprudential philosophy. Consistency on this issue therefore meant that corporations should be considered as persons in Kiobel.
This left the right-of-centre majority with two unattractive options – offend fundamental conservative principles which support a free market free of financial impediments or too much accountability (such as that arising from civil lawsuits) or confront an unedifying contradiction in Citizens United and Kiobel. Put more simply, the Court may have avoided the discomfort of conflicting findings: that corporations are legal persons (allowing the perpetuation of a system of unfettered campaign contributions), and the converse (avoiding the risk of harm to a corporation’s bottom line).
As is often the case with Supreme Court opinions, Kiobel left many unanswered questions. However, what is not in question is whether this opinion will greatly limit the future impact of the ATS – by limiting the extraterritorial application of the Act, it will significantly reduce the number of lawsuits filed against all persons subject to liability under the law.
It remains to be decided whether US corporations may still be subject to civil liability under the ATS. Both corporations and human rights activists must wait to see whether corporations are persons under the ATS until the Supreme Court finally decides to answer the question. This answer could come sooner rather than later, as certiorari was recently granted in the case of Daimler Chrysler AG v. Bauman. How the Supreme Court resolves (or avoids) this question remains anyone’s guess.
 Kennedy’s Concurring Opinion, at 1.
 Judgement, at 14; see Alito’s Concurring Opinion, at 1; See also Kennedy’s Concurring Opinion, at 1.
 Breyer’s Concurring Opinion, at 1-2.
 Citizens United v. Federal Election Comm’n, 558 US 310, 310 (2010).
 Kiobel, et al., v. Royal Dutch Petroleum, 621 F.3d 111 (2d Cir. 2010). The 2nd Circuit is one of thirteen court of appeals in the US federal system.
 Microsoft Corp. v. AT&T Corp., 550 U. S. 437, 454 (2007).
 Judgement, at 6-7.
 Judgement, at 8.
 See Mostyn v. Fabrigas, 1 Cowp. 161, 177, 98 Eng. Rep. 1021, 1030 (1774) (Mansfield, L.); Dennick v. Railroad Co., 103 U. S. 11, 18 (1881).
 Sosa v. Alvarez-Machain, 542 U. S. 692, 692 (2004).
 Judgement, at 8 (emphasis added).
 Sosa, at 723-4; see 4 W. Blackstone, Commentaries on the Laws of England 68 (1769).
 Judgement, at 10.
 Judgement, at 12.
 Judgement, at 12 (quoting United States v. The La Jeune Eugenie, 26 F. Cas. 832, 847 (No. 15,551) (CC. Mass. 1822)).
 Judgement, at 13.
 Sosa, at 727.
 Judgement, at 5.
 Kennedy’s Concurring Opinion, at 1.
 For example, Torture Victim Protection Act of 1991 (TVPA), 106 Stat. 73, note following 28 U. S. C. §1350.
 Kennedy’s Concurring Opinion, at 1.
 Alito’s Concurring Opinion, at 1 (citing the Judgement, at 14).
 Breyer’s Concurring Opinion, at 1.
 Breyer’s Concurring Opinion, at 1-2.
 Filartiga v. Pena-Irala, 630 F.2d 876 (CA2 1980).
 In re Estate of Marcos, Human Rights Litigation, 25 F. 3d 1467, 1475 (CA9 1994)).
 Breyer’s Concurring Opinion, at 7-8.
 See Sosa, at 732 (“ ‘[F]or purposes of civil liability, the torturer has become—like the pirate and slave trader before him—hostis humani generis, an enemy of all mankind.’” (quoting Filartiga, at 890).
 Breyer’s Concurring Opinion, at 5, 14.
 Breyer’s Concurring Opinion, at. 2 (citing Sosa (BREYER, J., concurring in part and concurring in judgment), at 733).
 Breyer’s Concurring Opinion, at. 2 (citing Sosa, at 733).
 Breyer’s Concurring Opinion, at. 7.
 Breyer’s Concurring Opinion, at 14.
 Breyer’s Concurring Opinion, at 14.
 Aziz v. Alcolac Inc., No. 10-1908, 2011 WL 4349356, at *5 n.6 (4th Cir. Sept. 19, 2011) (declining to reach question of corporate liability and dismissing on alternative grounds).
 Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013, 1017 (7th Cir. 2011).
 Sarei v. Rio Tinto, PLC, Nos. 02–56256, 02–56390, 09–56381, 2011 WL 5041927, at *20 (9th Cir. Oct. 25, 2011) (en banc)(Certiorari granted – Judgment Vacated on 22 April 2013 and case Remanded for further consideration in light of Kiobel v. Royal Dutch Petroleum Co., 569 U. S. ___ (2013)); Bauman v. Daimler Chrysler Corp., 644 F.3d 909 (9th Cir. 2011)( Certiorari granted on issues of personal jurisdiction of a corporation); Carijano v. Occidental Petroleum Corp., 643 F.3d 1216 (9th Cir. 2011)(Certiorari denied – The Supreme Court declined to grant certiorari to Occidental regarding whether the adding of a US plaintiff for the purposes of defeating a forum non conveniens).
 Aldana v. Del Monte Fresh Produce N.A., 416 F.3d 1242 (11th Cir. 2005)(Issue dismissed for lack of stating an actionable claim, not corporate liability); Romero v. Drummond Co., 552 F.3d 1303, 1315 (11th Cir. 2008); Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009)(Case dismissed for lack of subject matter jurisdiction).
 Doe v. Exxon Mobil Corp., 654 F.3d 11, 40-41 (D.C. Cir. 2011) (DC Circuit expressly disagreed with 2nd Circuit Kiobel’s decision saying that corporations are proper defendants).
 See Doe v. Exxon Mobil Corp.