How concerned should we be? The conundrum of Kiobel's touch and concern test and corporate liability under the Alien Tort Statute.

Author:Carey, Matthew J.
 
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"American law--the law made by the people's democratically elected representatives--does not recognize a category of activity that is so universally disapproved by other nations that it is automatically unlawful here, and automatically gives rise to a private action for money damages in federal court." (1)

  1. INTRODUCTION

    The interpretation and application of the Alien Tort Statute (ATS) has challenged federal courts for the last two decades in the twentieth century. (2) The ATS, a single sentence within the Judiciary Act of 1789, provides United States federal courts with original jurisdiction over "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." (3) Following a lengthy dormant period, federal courts resurrected the ATS in the 1980s to grant federal jurisdiction over international human rights claims where both the plaintiff and defendant are of foreign origin. (4) In the late twentieth and early twenty-first centuries, however, courts have struggled to find a consistent approach to adjudicating claims brought against multinational corporate defendants. (5) As ATS jurisprudence has evolved, courts have largely narrowed its application, reducing foreign plaintiffs' abilities to have their claims adjudicated in American federal courts. (6)

    Scholars generally refer to the various periods of modern ATS interpretation as "generations." (7) The first generation of ATS claims in the modern era began with the Second Circuit's liberal interpretation of ATS boundaries in Filartiga v. Pena-Irala. (8) Plaintiffs predominantly brought these cases against state actors, who they alleged violated international law. (9) Following these initial suits, questions regarding their efficacy persisted. (10) A second generation of litigation ensued in the mid-1990s, consisting primarily of allegations against multinational corporations. (11) During this time, claims against multinational corporations proliferated, and the United States Supreme Court issued its first decision on the ATS in Sosa. (12) While the Sosa opinion focused the ATS application only to a narrow class of international norms, the Court left it up to lower federal courts to flesh out a meaningful test, resulting in conflicting ATS interpretations. (13)

    Courts appear to have entered a third generation of ATS jurisprudence following the Supreme Court's 2013 decision in Kiobel. (14) Within the Kiobel decision, the Court decreed that the presumption against extraterritoriality should be applied to all ATS claims, holding that "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." (15) Since the Kiobel decision, two general lines of interpretation have emerged among the lower federal courts. (16) While some courts have heeded the Court's caution against an overactive judiciary interfering with the domains of Congress and the executive branch, others have strived to retain the spirit of Filartiga and, as a result, have created an increasingly complex line of interpretation. (17)

    This Note will trace the history of the modern use of the ATS with a focus towards the development of its use against multinational corporations. (18) It will discuss the difficulty courts have faced in limiting the ATS to specific torts, as well as the difficulties courts have faced in applying the ATS in response to the restrictive territorial test outlined in Kiobel. (19) This Note will also argue that a broad and inclusive "touch-and-concern" test to displace the presumption against extraterritoriality creates more problems than it solves. (20) Instead, this Note suggests that such boundaries are best determined by new legislation aimed specifically at the modern day, multinational corporations. (21)

  2. HISTORY

    The ATS is a unique statute not only in the United States, but also across the global community. (22) Justice Breyer, in his concurring opinion in Kiobel, aptly distilled what some would assume is the modern primary purpose of the ATS: "to provide compensation for those injured by today's pirates." (23) The proliferation of its use against multinational corporations, however, has created novel challenges. (24) Courts assessing these challenges in a post-Kiobel generation of litigation have applied varying approaches to determine the role of the federal judiciary in hearing these unique claims. (25) At the same time, Congress has not taken legislative action to clarify when the ATS holds multinational corporations liable. (26)

    1. Modern Interpretation of the ATS: From Filartiga to Sosa

      The Second Circuit's decision in Filartiga marked the beginning of the first generation of modern ATS application and redefining the statute as an effective weapon for international human rights standards. (27) In Filartiga, the plaintiffs--a Paraguayan doctor and his daughter who was then living in the United States--sued the former inspector general of police of Ascuncion, Paraguay (Americo Norberto Pena-Irala) for wrongful death and violating international law of human rights and the law of nations. (28) The Second Circuit held that international law undeniably condemns state-sponsored torture and that the ATS provided subject matter jurisdiction for the plaintiffs' alleged claims. (29) In reaching its conclusion, the court reasoned it should employ contemporary standards to determine and interpret customary international law norms, and that international law standards concern the relationship between a nation and its citizens. (30) The court rooted the constitutionality of the ATS in Article III of the U.S. Constitution. (31) The court reasoned that it was clear "in this modern age[,] a state's treatment of its own citizens is a matter of international concern." (32) The Filartiga decision thus became the basis for nearly two decades of human rights claims in the federal courts. (33)

      The principles Filartiga established enabled many foreign plaintiffs to bring federal lawsuits alleging human rights abuses. (34) Tel-Oren v. Libyan Arab Republic (35) was the first major case to grapple with Filartiga's precedent, and its three divergent concurring opinions highlighted the complexity of the conflicting analysis of the ATS as of 1984. (36) The cases following Tel-Oren struggled to agree upon the scope and depth of the ATS. (37) Courts also predictably faced choice of law issues, specifically whether the law of the place of injury, federal common law, or international law, provided the cause of action. (38) As ATS analysis evolved, courts eventually came to recognize that courts may utilize the ATS to hold private individuals, in addition to state actors, liable for certain crimes. (39)

      The Second Circuit again blazed a new trail in ATS jurisprudence with its holding in Kadic v. Karadzic. (40) The court in Kadic established that modern human rights violations (such as torture; genocide; and cruel, inhuman, and degrading treatment) could be prosecuted under the ATS against private individuals, thus opening the door for claims against multinational corporations. (41) The post-Kadic claims against multinational corporations under the ATS followed a fact formulaic pattern of plaintiffs--often from developing countries--alleging that a private individual or corporation conspired with or aided local governments or regimes in human rights violations. (42)

      In particular, Doe v. Unocal (43) is one example of a post-Kadic case where the court permitted plaintiffs' claims alleging human rights violations under the ATS against a multinational corporation. (44) In Unocal, the plaintiffs alleged that the Myanmar military committed forced labor, rape, torture, and murder while providing security for an oil pipeline project in rural Myanmar that was partially owned and managed by Unocal; the plaintiffs sued under the ATS to hold Unocal liable for these international law violations. (45) As the Unocal case progressed, some commentators expected the result would produce the first significant decision holding a corporate entity liable for human rights violations. (46)

      Ultimately, Unocal settled out of court in 2004, and while lauded as a victory for human rights advocates, the settlement left significant questions unanswered regarding the applicability of international law. (47) Moreover, despite the victory in Unocal, litigation against other corporations has largely been unsuccessful. (48) Such lack of success led to further questioning and hypothesizing as to future corporate liability under the ATS. (49) The desire for clarity on this issue far preceded the Supreme Court's first review of the ATS in 2004. (50)

    2. Test Developments by the Supreme Court

      The Supreme Court weighed in on the modern application of the ATS for the first time in 2004 in Sosa and while the opinion validated the Second Circuit's approach in Filartiga, the Court stopped short of addressing allegations involving corporate defendants. (51) In Sosa, plaintiff Alvarez-Machain brought claims under the ATS against Sosa, who assisted Drug Enforcement Administration officials in his abduction. (52) Justice Souter, writing for the majority, sought to reign in the ATS application by heavily basing the opinion on the statute framer's original intent. (53)

      1. Sosa and the Attempt to Limit the ATS to Specific Classes of Torts

        The majority opinion in Sosa drew two inferences from the history of the ATS, which were that the first Congress expected the ATS to be effective and useful immediately upon its drafting, and for the ATS to be effective only for a small number of claims. (54) The majority limited those claims to torts falling within Blackstone's three primary offenses: safe conduct violation, infringements upon ambassadors' rights, and piracy. (55) Furthermore, while the Court found that no development since the ATS's drafting "categorically...

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