Supreme Court Orders Reargument in Alien Tort Statute Case

The U.S. Supreme Court on Monday ordered reargument in a major challenge involving lawsuits against corporations for human rights violations under the Alien Tort Statute.

Kiobel v. Royal Dutch Petroleum originally asked the justices whether corporations could be sued under the 1798 federal law. That question was argued on Feb. 28. In Monday’s order, the justices directed the parties to file supplemental briefs on whether the statute allows federal courts to hear lawsuits alleging international law violations that occur outside of the territory of the United States.

The Alien Tort Statute (ATS) authorizes federal district courts to hear civil actions by aliens for torts committed in violation of the law of nations or a treaty of the United States.

The extraterritoriality issue was not considered by the U.S. Court of Appeals for the 2nd Circuit in the Kiobel case. The federal appellate court held that corporations could not be sued under the statute.

But the extraterritoriality question did figure prominently in questions during the Supreme Court arguments, questions primarily by justices Anthony Kennedy and Samuel Alito Jr. Noting the foreign plaintiffs, the foreign defendants and the foreign conduct in Kiobel, Alito asked, “What business does a case like that have in the courts of the United States?”

“It’s clear [the justices] had concerns about the extraterritorial application of the ATS, but it was also clear everyone seemed to think it wasn’t briefed,” said human rights scholar John Knox of Wake Forest School of Law. “It’s not surprising they would ask for additional briefing if they decided to focus on that issue. It is a little surprising only in that you would expect them to pass on the issue that was before them, which is a pretty important issue: whether corporations are subject at all.”

The stakes for human rights groups and litigators are “pretty high” regardless of which question the justices answer, he added.

“If Kiobel as briefed was decided in favor of the 2nd Circuit, that would have massive ramifications in that you could never bring an action against a corporation,” Knox explained. “If they say the ATS doesn’t apply at all to actions taking place under the jurisdiction of another government, that obviously would have ramifications for all kinds of cases, not just against corporations but even individuals who clearly would be covered under existing ATS jurisprudence, individuals accused of committing war crimes or genocide. It would cast doubt on fundamental precedents of the ATS.”

The Court’s order sets out a briefing schedule for the parties that runs to June 29. The Kiobel plaintiffs—12 Nigerians—are represented by Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman and Harrison in Venice, Calif. Royal Dutch Petroleum and two other oil companies are represented by Kathleen Sullivan of New York’s Quinn Emanuel Urquhart & Sullivan.

Comments

[Melvin Hagerman]

Seems to me that the Alien Tort Statute is allowing what in the U.S. Is "forum-shopping"; here, Nigerians are suing a Dutch company, for actions in Nigeria.....in a United States court. We have seen this here where persons in area "A" sue a company(s) or person(s) for actions in area "B", but the court is in friendly (usually to plaintiffs) court in area "C", hundreds of miles away. That trend has seemed to be slowing over the last few years and it might--MIGHT--be time to see the same thing in cases involving the ATS specifically.

[John Minderhout]

If the Court holds that the ATS does not apply to violations of international law outside the U.S., then they will have to abrogate Filartiga v. Pena-Irala (2d Cir. 1980), but Sosa v. Alvarez-Machain (2004) will still stand.

It won't matter much because all the big cases involve activities in developing countries, where a multi-national extracting firm hires the national military to provide security for their operations and bad things happen to the local, often indigenous, population. Rape, torture, arbitrary arrest, and extra-judicial killing are not as likely to occur within the borders of the U.S.

Oral arguments for Kiobel would probably have been different if the defendant/respondent had been a U.S. company. Then an argument for the defendant would have been that a holding against them would put U.S. companies at a competitive disadvantage by holding them to a higher standard than their foreign competitors. Economic concerns were voiced in the briefs for Kiobel, especially the 15 or so briefs submitted by various groups of corporations. They were answered critically by a brief by the Nobel laureate economist Joseph Stiglitz, who adduced arguments by Judge Posner in a Seventh Circuit decision (Flomo v. Goodyear), which affirmed dismissal of the case on other grounds.

By reframing the Kiobel case as the Court is doing, it will not have adduce prudential economic concerns in holding against the plaintiff/petitioners.

[Avon]

This new issue can serve as a fulcrum upon which to move the Court a bit closer to ruling against corporations.

As the article notes, the ATS would be grossly undermined after 30 years of accepted reign, leaving in doubt the idea that the US can exercise sovereign power where there is lawlessness (such as the high seas in the Barbary Pirates era, or dictatorships or anarchy that allow torture or genocide).

Reaffirming the validity of the ATS' underlying concept would remove the distraction evident last week, when Royal Dutch's lawyers could point at, or hint at, other unfair factors in the case than merely treating corporations like people.

Without that distraction, Royal Dutch will rise or fall based solely on establishing that corporations are different ... not so easy to do post-Citizens United, and not necessarily what corporations usually want.