Corporate liability abroad under the Alien Tort Statute.

• Author: Kanne, Alison

1. INTRODUCTION TO THE ATS AND THE KIOBEL CASE II. BACKGROUND A. Historical Background to the Alien Tort Statute 1. Congressional Intent Behind the ATS 2. Executive Branch Interpretation of the ATS B. Recent Development in Case Law 1. Filartiga and Subsequent Case Law 2. The Supreme Court's Decision in Sosa v. Alvarez-Machain Allowed a Claim for Relief Through the ATS Where Certain Conditions Are Met C. The Presumption Against Extraterritoriality D. Kiobel v. Royal Dutch Petroleum and Al Shimari v. CACI Premier Tech., Inc. III. ANALYSIS A. The Kiobel Decision Was Correct for the Wrong Reasons 1. "Who are today's pirates?" 2. International Jurisdictional Norms and Consistency with Other Nations 3. Congress Has Not Indicated That Its Intent in Enacting the A TS Was To Deprive District Courts of Jurisdiction Over Crimes Occurring Abroad 4. The Law of Nations 5. Al Shimari v. CACI Premier Technology, Inc. 6. Comparing Al Shimari with Kiobel IV. RECOMMENDATION V. CONCLUSION I. INTRODUCTION TO THE ATS AND THE KIOBEL CASE

   Modem transnational corporations hold a uniquely powerful position today. While a U.S. corporation's operations in the United States unquestionably remain subject to U.S. law, whether it can be held liable for facilitation of or complicity in violating U.S. or international law in operations abroad is less clear. A number of noteworthy Alien Tort Statute (ATS) cases against transnational corporations were filed in the past fifteen years. High profile corporations such as Caterpillar, (1) Exxon, (2) Pfizer, (3) Shell, (4) Unocal, (5) and Chiquita (6) have been sued under the ATS for their alleged complicity in human rights violations committed in foreign countries, and yet, the answer to whether corporations can be held liable for such abuses remains elusive. Recent decisions in the Supreme Court only confuse the question further. (7)

   In April 2013, the Supreme Court released a unanimous decision in Kiobel v. Royal Dutch Petroleum finding that the ATS does not apply extraterritorially. The Court, however, intentionally left open several issues, and while the decision was unanimous, Justices Breyer, Sotomayor, Kagan, and Ginsburg joined in a concurrence in which they agreed with the ultimate result but disagreed with the reasoning behind it. Several cases have wrestled with the same issues since Kiobel; most interestingly, a Fourth Circuit case --Al Shimari v. CACI--which held the ATS was not presumptively barred from extraterritorial application. (8) This Note analyzes the confusing standards set by Kiobel, Al Shimari, and other circuit court cases attempting to apply the Supreme Court's holding in Kiobel to litigation involving corporations involved in human rights abuses committed outside of U.S. territory.

   This Note argues that the Fourth Circuit correctly based its holding on the interpretation that the ATS could provide jurisdiction in certain circumstances, and that Congress expressly intended to provide aliens access to U.S. courts and to hold American citizens (and therefore corporations) accountable for acts of torture committed abroad. This Note ultimately recommends that the preferable rule would combine the Fourth Circuit's holding in Al Shimari with Justice Breyer's suggestions in his Kiobel concurrence. Such a rule would allow a U.S. court to hold a corporation liable for conduct abroad under the ATS if certain conditions were met.

2. BACKGROUND

   1. Historical Background to the Alien Tort Statute

      The U.S. Congress passed the ATS as part of the Judiciary Act of 1789. (9) The ATS provides that "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." (10) The ATS has been infrequently invoked since its inception. (11) As a result, its modern application is not well understood. A judge once described it as a "legal Lohengrin ... no one seems to know whence it came." (12)

      1. Congressional Intent Behind the ATS

         The Supreme Court in Kiobel (13) and the Fourth Circuit in Al Shimari (14) both gave significant consideration to congressional intent behind the ATS. The majority of scholars believe the inclusion of the ATS in the Judiciary Act of 1789 was an attempt by the Framers "to give the federal government supremacy over foreign affairs and avoid international conflict." (15) However, an intelligent discussion of congressional intent is particularly difficult considering that the ATS went virtually unapplied for almost 200 years after its enactment. (16) Despite the efforts of many renowned scholars to glean Congress's intent, ultimately, many have described it as an impossible task. (17) Without delving into detail, several theories explain possible congressional motivations behind the ATS, including protection of foreign diplomats, (18) denial of justice, (19) fulfillment of state responsibility, (20) and universal jurisdiction. (21)

      2. Executive Branch Interpretation of the ATS

         Each recent executive administration has interpreted the ATS differently, which further confuses the standard permitting its extraterritorial application. The Carter Administration construed the statute broadly, advocating for the Second Circuit's 1980 decision in Filartiga v. Pena-Irala (22) to apply the ATS to certain human rights abuses committed abroad. (23) The Reagan Administration took a narrow view and interpreted the statute's application as limited to cases in which the defendant was a U.S. entity, but excluding the United States itself. (24) The Reagan State Department went as far as filing an amicus brief asking a circuit court to affirm dismissal of a suit against Argentina based on Argentina's sovereign immunity. (25) The Clinton Administration took a broader view, encouraging courts to apply the ATS to particular non-state actors; however, it did not interpret the ATS as a waiver of sovereign immunity. (26) The Bush Administration moved toward a narrow view of the ATS, contending ATS jurisdiction "has been manipulated to serve as an illegitimate venue for 'aliens to bring human rights claims in U.S. courts, even when the disputes are wholly between foreign nationals ... often with no connection whatsoever with the [United States].'" (27)

         Faced with an increasing number of cases in which the defendant is not an individual but a corporation, the Obama Administration has moved for significant restrictions on the application of the ATS. In an amicus brief for Kiobel v. Royal Dutch Petroleum (28) the administration urged that the Supreme Court "should not create a cause of action that challenges the actions of a foreign sovereign in its own territory, where the defendant is a foreign corporation of a country that allegedly aided and abetted the foreign sovereign' s conduct." (29) In this same brief, however, it tempered the breadth of its argument by continuing:

         [T]he court need not decide whether a cause of action should be created in other circumstances, such as where the defendant is a U.S. national or corporation, or where the alleged conduct of a foreign sovereign occurred outside its territory, or where the conduct by others occurred within the U[nited] S[tates] or on the high seas. (30) Thus the Obama Administration left open the question of whether a defendant U.S. corporation can be held liable for conduct occurring abroad.

         Despite conceding that the defendants in Kiobel had sufficient contacts with the United States to establish personal jurisdiction, the Obama Administration went on to argue that because the defendants were not "exclusively present" in the United States, other forums such as the defendants' principal place of business or country of incorporation would "provide 'more appropriate means of redress.'" (31) Notably, the Department of State did not sign onto this brief, which was written and submitted by the Department of Justice. Instead, the Department of State signed an amicus brief filed in the same case in which the Obama Administration argued that corporations are proper defendants in ATS cases. (32)

   2. Recent Development in Case Law

      1980 marked the beginning of a trend where it became clear that the ATS could be used to assert jurisdiction in federal court. This development began with the Second Circuit's decision in Filartiga v. Pena-Irala, (33) which arguably "opened the door" for aliens using the ATS to assert jurisdiction in federal court for human rights violations. (34) The Second Circuit held that deliberate torture perpetrated under the color of official authority violates "universally accepted" norms of international law of human rights regardless of the nationality of the parties; thus, whenever an alleged torturer is found and served with process by an alien within the borders of the United States, the ATS provides federal jurisdiction. (35) Since then, human rights advocates and plaintiffs' lawyers have used the ATS to assert jurisdiction in numerous cases. (36) In 2004, the Supreme Court endorsed the same rule in Sosa v. Alvarez-Machain (37) finding the ATS could be used to hold violators responsible for violations of human rights such as genocide, slavery, and torture. While the holdings of Sosa and Filartiga give human rights advocates enthusiasm about the ATS' potential to support international human rights claims, others are skeptical, warning it could result in federal courts being overwhelmed with foreign cases and be potentially detrimental to U.S. foreign policy interests. (38) These skeptics are particularly concerned with the rise in litigation against U.S. corporations operating abroad which stand "accused of complicity in human rights abuses committed by the governments of their host countries." (39)

      1. Filartiga and Subsequent Case Law

         Filartiga was a landmark case in which the Second Circuit upheld federal jurisdiction under the ATS for the first time in many years. The court described state torture as a violation of...