United States: Supreme Court Holds That Plaintiffs Must Overcome Presumption Against Extraterritoriality In Alien Tort Statute Cases

Last Updated: April 22 2013
Article by Alexandra Meise

Earlier today the Supreme Court issued its long-awaited ruling in Kiobel v. Royal Dutch Petroleum, the case that was to decide whether the Alien Tort Statute ("ATS") could be applied to corporations as legal persons and whether such lawsuits could be based on actions that occurred outside of the territory of the United States. The Court did not directly address the question of corporate liability and stated that, based on the facts of the case, petitioners' claims had failed to overcome a presumption against extraterritoriality and thus affirmed the Second Circuit's dismissal.

By stating that the presumption against extraterritoriality applies in ATS cases, the Court has established a high bar for potential plaintiffs to overcome, and  many in the business community are celebrating today's opinion as a victory.  That said, the Court clearly signals that that presumption could be overcome based on a different set of facts. Rather than bring clarity to an area of the law long-mired in confusion, therefore, the Court has left current and potential plaintiffs and defendants in ATS cases with a muddled playing field of substantive and jurisdictional questions.

Notably, nine justices agreed on the judgment and concluded that, under the facts presented by the case, extraterritorial application of the ATS cannot be sustained.  This unanimity, however, belies a deep and consequential divide regarding the reasoning needed to reach the judgment.

Chief Justice Roberts delivered the opinion of the Court, joined by Justices Scalia, Kennedy, Thomas, and Alito, concluding that the "presumption against extraterritoriality" requires that court interpret statutes as not having extraterritorial application unless Congress makes clear an explicit intent to the contrary. Roberts held that no such Congressional intent can be identified in the ATS.  Based on the facts presented in Kiobel, he found that the ATS cannot therefore be applied to a case where "all of the relevant conduct took place outside the United States" and "'where the claims' do not 'touch and concern the territory of the United States ... with sufficient force to displace that presumption [against extraterritoriality].'"

Justice Kennedy and Justice Alito (joined by Justice Thomas) each filed brief concurring opinions.  Justice Kennedy's concurrence is only one paragraph long, but it is significant  for he underscores that "[t]he opinion for the Court is careful to leave open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute[.]" Kennedy notes that

Other cases may arise with allegations of serious violations of international law principles protecting persons, cases covered neither by the [Torture Victims Protection Act] nor 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.

Justice Alito uses his concurrence to restate the Court's explanation in  Morrison v. National Australia Bank that more than a kernel of domestic activity is needed to overcome the presumption against extraterritorial application of a statute. Applying Morrison, he underscores that in order for a case's territorial ties to the United States to be sufficient to sustain jurisdiction via the ATS, when 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." Recalling Sosa v. Alvarez-Machain, he then elaborates that in order for an cause of action to displace the formidable presumption, it must be grounded in domestic conduct that "is sufficient to violate an international law norm that satisfies [the] requirements of definiteness and acceptance among civilized nations" — a very high, although not impossible, bar to meet.

Joined by Justices Ginsburg, Sotomayor, and Kagan, Justice Breyer filed a separate opinion, concurring in the judgment but challenging the Court's reliance on the presumption against extraterritoriality. Rather than invoking the presumption, Breyer reaches to the "principles and practices of foreign relations law", and concludes that where a case has sufficient ties to the United States, the ATS may indeed provide jurisdiction.

Specifically, relying heavily on Sosa and the Restatement of Foreign Relations Law of the United States, Breyer argues that jurisdiction is warranted where

(1) the alleged tort 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, and that includes a distinct interest in preventing the United States from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind.

Breyer makes clear that this test has not been met in Kiobel, but he asserts that there are fact patterns under which the test will be met, especially where suit would "vindicate[] our Nation's interest in not providing a safe harbor, free of damages claims, for those defendants who commit such conduct."  To illustrate, he discusses lower court ATS decisions cited in Sosa including Filartiga v. Pena-Irala and In re Estate of Marcos, Human Rights Litigation. In citing to Filartiga and In re Estate of Marcos, Breyer notes that "in Sosa, we referred to both cases with approval, suggesting that the ATS allowed a claim in such circumstances."

Although no justice directly addresses the corporate liability question as originally presented, the Court and the concurrences do not challenge the notion that corporations may indeed be found liable under the ATS, albeit only if the corporations have more than cursory ties to the territory of the United States. For example, Roberts opines that "[c]orporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices." Similarly, Breyer notes that where "the defendants are two foreign corporations," "plaintiffs are not United States nationals but nationals of other nations," "the conduct at issue took place abroad," and the defendants are alleged to have aided-and-abetted non-Americans rather than directly perpetrated "acts of torture, genocide, or the equivalent[.]"

In finding that jurisdiction in the case  was not proper, Breyer also observed that defendants' "only presence in the United States consists of an office in New York City(actually owned by a separate but affiliated company) that helps to explain their business to potential investors", noting that defendants' shares "like those of many foreign corporations" are traded on the New York Stock Exchange.

Looking ahead, the windows to jurisdiction hinted at by Roberts and Alito, and framed by Breyer, leave foreign and domestic defendants, including corporations, exposed to potential liability for conduct outside of the United States that violates the laws of nations. In the coming months, and years, considerable time by litigants and courts will be spent defining what sets of facts, if any, are sufficient to overcome the established presumption against extraterritoriality.

To view Foley Hoag's Corporate Social Responsibility Blog please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions