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Supreme Court in Kiobel Requires that Claims Under ATS "Touch and Concern" the U.S.

Tue, 05/21/2013 - 17:37 -- admin

By Terry Collingsworth, Executive Director

Most of our work at IRAdvocates is related to international human rights litigation, often using the Alien Tort Statute (ATS), 28 U.S.C. § 1350. Thus, it was with great anticipation that we awaited the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum Co., issued on April 17, 2013. The Court held that the plaintiffs in Kiobel did not displace the normal presumption that U.S. statutes do not apply extraterritorially in their effort to bring claims under the ATS.

The Plaintiffs were Nigerian nationals who were subjected to numerous human rights violations by Nigerian military and police officers in Nigeria who were aided and abetted by Royal Dutch Petroleum (Shell), which was seeking to protect its oil interests in Nigeria from alleged protest activity. The case was dismissed by the Court of Appeals for the Second Circuit on the grounds that the ATS does not apply to corporations, an outlier decision that conflicted with four other Courts of Appeals.

The Supreme Court granted certiorari on the question of whether the ATS provides jurisdiction for suits against corporations but, at the original oral argument on February 28, 2012, the discussion shifted to whether the ATS can extend to extraterritorial conduct. The Court ordered new briefing on this question and held a second oral argument on the first day of this term, October 1, 2012.

The Court’s opinion decides two issues with certainty. First, based on repeated references that the mere fact that Shell, the corporation, has an office in the U.S. is not a sufficient basis to create a significant U.S. interest in the case, the Court clearly did not agree that corporations are beyond the reach of the ATS. Instead, the Court solely assessed whether the facts of the case displaced a rebuttable presumption that U.S. statutes do not apply extraterritorially, noting that the sole connection to the U.S. was that Shell had an office in New York that was actually owned by a separate company. 

Despite what has been at times a simplistic description of the case by press favorable to the corporate position, the majority opinion by Justice Roberts was very nuanced and concluded only that based on the specific facts of the case the Kiobel plaintiffs did not displace the presumption against extraterritoriality with respect to the ATS. The key to the decision is that this was absolutely not an across-the-board holding that the ATS never applies extraterritorially. Justice Roberts concluded saying, "petitioners’ case seeking relief for violations of the law of nations occurring outside the United States is barred."  But then the opinion goes on to say, "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."

Justice Kennedy concurred, saying that the court "is careful to leave open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute," and that other cases that aren't covered by the TVPA or by the reasoning of the Kiobel decision may "require some further elaboration and explanation."

Justices Alito and Thomas also concurred, concluding that "a putative ATS cause of action will fall within the scope of the presumption against extraterritoriality—and will therefore be barred—unless the domestic conduct is sufficient to violate an international law norm that satisfies Sosa’s requirements of definiteness and acceptance among civilized nations." (emphasis added).

The four justice liberal block of Breyer, Ginsburg, Sotomayor and Kagan concurrred in the judgment but disagreed with the majority's reasoning, agreeing that the Kiobel plaintiffs had not demonstrated a sufficient U.S. nexus, and offering a three-part test to determine an adequate U.S. connection: “(1) the alleged conduct 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” (emphasis added).

As usual with the Supreme Court, we are left with a result that has already required further litigation to allow the lower courts to sort out the practical impact. The ATS cases that we support, which are being litigated in U.S. courts by Conrad & Scherer, mostly involve U.S. companies that engaged in substantial conduct here in the U.S., and implicates important U.S. interests, in sharp contrast with the facts of Kiobel. For example, the case against Chiquita Brands International, pending in federal court in Florida, involves decisions by a U.S. company, made in the U.S. by U.S. officers of the company, to fund a terrorist paramilitary group in Colombia that murdered innocent civilians, whose family members brought suit. Chiquita pled guilty in a U.S. federal court to the crime of providing material assistance to a foreign terrorist organization.  Moreover, the U.S. expressly designated this paramilitary group a terrorist organization and it is illegal for corporations to fund or support such groups in anyway. It’s hard to imagine that this case does not meet the Supreme Court’s test for acts that “touch and concern” the U.S.  The majority opinion and the Kennedy opinion imply -- and the Alito and Thomas opinion explicitly hold -- that cases where there is sufficient domestic "conduct" are still actionable. Likewise, our Drummond cases involve a U.S. company, and we have evidence that the CEO, Garry Drummond, made the decision to fund the AUC and to assassinate the Colombian leaders of the Drummond union in Alabama. These cases should go forward under the new Kiobel formulation.