The Alien Tort Statute and Corporate Liability: Rebutting the Extraterritorial Presumption Post-kiobel

• Publication year: 2016

The Alien Tort Statute and Corporate Liability: Rebutting the Extraterritorial Presumption Post-Kiobel

Maxwell R. Jones

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THE ALIEN TORT STATUTE AND CORPORATE LIABILITY: REBUTTING THE EXTRATERRITORIAL PRESUMPTION POST-KIOBEL

Maxwell R. Jones^*

introduction

On April 11, 2001, the United Self-Defense Forces of Columbia (AUC), a right wing paramilitary group, went on a killing spree throughout the Naya region in western Columbia, using guns, machetes, and chainsaws to kill thirty-two people.¹ Evidence of such brutal violence, coupled with funding from regional drug cartels, led the U.S. State Department to classify the AUC as a terrorist organization in 2005.² However, drug money was not the AUC's only source of revenue. In 2007, Chiquita Brands International, best known for their bananas, admitted to paying out nearly $2 million directly to the AUC in areas near Chiquita owned banana plantations where the AUC exercised control.³ As a result, Chiquita paid fines totaling $25 million dollars and served five years of corporate probation because of payment to the AUC.⁴ When Columbian citizens sought damages from Chiquita in 2012, related to AUC violence in the early 2000s, they sought damages in the Southern District of Florida under a statute dating back to 1789: the Alien Tort Statute.⁵

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This Note focuses on corporate liability for companies with U.S. citizenship under the Alien Tort Statute (ATS). Part I discusses the history of the ATS through its revitalization in Filartiga v. Pena-Irala⁶ in 1980.⁷ Part II discusses the rise of litigation under the ATS from 1980 until the reach of the ATS was restricted by the United States Supreme Court in Sosa v. Alvarez-Machain⁸ and Kiobel v. Royal Dutch Petroleum⁹ in 2013.¹⁰ Part III outlines how circuit courts have dealt with corporate liability under the ATS since 2013's Kiobel decision.¹¹ Part IV offers a proposal for interpreting the language of Kiobel and offers a concise set of factors for district courts to use in determining when to properly exercise jurisdiction over a claim brought by aliens against U.S. corporations for allegations of torts committed abroad.¹²

I. Background

The Judiciary Act of 1789 enacted the ATS to prevent a U.S. citizen's tort from implicating the U.S. as a sovereign nation in an international conflict.¹³ In the late eighteenth century, a country that failed to redress a citizen's tort was held responsible for the citizen's tort.¹⁴ The ATS provides in its entirety, "The district courts shall

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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."¹⁵ Although the Statute is only thirty-five words, much judicial and academic ink has come from its interpretation.¹⁶ The ATS was largely dormant from its enactment in 1789 until Filartiga v. Pena-Irala in 1980.¹⁷ Filartiga involved a suit in the Eastern District of New York between aliens for events that took place entirely in Paraguay.¹⁸ The grant of jurisdiction to hear the case in Filartiga paved the way for the ATS as a vehicle for aliens to bring lawsuits in U.S. district courts. Typically, these suits alleged human rights violations in the developing world, which violated the "law of nations."¹⁹

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Although litigation under the ATS began in the 1980s, the U.S. Supreme Court did not hear an ATS case until Sosa v. Alvarez-Machain in 2004.²⁰ Sosa involved a Mexican national's suit against Drug Enforcement Administration (DEA) officials and a Mexican national who aided the DEA in bringing the plaintiff to Texas, against his will, for a criminal trial.²¹ In Sosa, the Court clarified that the ATS was not only a jurisdictional statute, but also provided a cause of action based on violations of international norms that are "specific, universal, and obligatory."²² The Court also instructed lower courts to account for practical considerations when exercising jurisdiction over international claims because of the potential for disputes with other nations and conflicts of law, considerations often

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left to the other branches of government under the political question doctrine.²³ Thus, in order to state a claim post-Sosa, a plaintiff must state a violation of an international norm that is "specific, universal, and obligatory," and do so in a way that does not violate the political question doctrine.²⁴

In light of this fact-driven inquiry, lower courts struggled to determine what actions violated a "specific, universal, and obligatory" international norm, and comported with the practical considerations outlined in Sosa.²⁵ Furthermore, the Court in Sosa failed to clarify the scope of corporate liability, if any, under the ATS.²⁶ Following Sosa, the Seventh, Ninth, and Eleventh circuits all held that corporations could be held liable under the ATS.²⁷ However, the Second and D.C. circuits held that corporations were not liable under the ATS because the "law of nations"²⁸ is applicable only to states and men, not juridical persons such as corporations.²⁹

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In 2013, the U.S. Supreme Court again addressed the ATS in Kiobel v. Royal Dutch Petroleum, but still did not address corporate liability under the statute.³⁰ Kiobel involved a claim by Nigerian nationals against a Dutch corporation for events that took place in Africa.³¹ With the concern for potential conflicts of law in mind, the Court limited the reach of the ATS, holding that "[t]he presumption against extraterritoriality applies to claims under the ATS . . . ."³² In other words, the ATS presumably does not apply to events that take place outside of U.S. territory. Plaintiffs can overcome this presumption, however, when "claims touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application."³³ What constitutes "sufficient force" to rebut the extraterritorial presumption is still unclear.³⁴ Concerning corporations, the Court stated, "[c]orporations are often present in many countries, and it would reach too far to say that [a] mere corporate presence suffices" to displace the presumption against extraterritorial application.³⁵ Although the Court

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narrowed the ATS in Kiobel, it did not clarify what factors, in addition to corporate presence, constitute sufficient force to rebut the presumption against extraterritorial application and hear the case.³⁶

Since the Kiobel decision in April of 2013, circuit courts look to different factors to analyze what is sufficient force to displace the presumption against extraterritoriality for corporations.³⁷ Only three months after Kiobel, the Second Circuit held that where plaintiffs fail to allege that any relevant conduct takes place in the U.S., Kiobel categorically bars all claims under the ATS.³⁸ If the conduct occurs abroad, foreign plaintiffs can never sufficiently overcome the presumption against extraterritoriality, even if the defendant is an American citizen or corporation.³⁹

The Eleventh Circuit further limited the ATS in July of 2014, holding that even when the defendant is a U.S. corporation, and part of the relevant conduct alleged by aliens took place in the U.S.,

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jurisdiction under the ATS is still improper.⁴⁰ In Cardona v. Chiquita Brands International, the Eleventh Circuit noted that because the complaint did not state that any torture occurred on U.S. territory, the presumption against extraterritoriality barred an ATS claim.⁴¹ However, the plaintiffs in Cardona also alleged that Chiquita corporate officers oversaw and financed the alleged conduct from their corporate headquarters, in the U.S., for the purpose of carrying out the conduct abroad.⁴² In a lengthy dissent, Judge Beverly Martin noted that in stark contrast to Kiobel, the plaintiffs in Cardona were not seeking to hold the defendant vicariously liable for actions of its agents or subsidiaries, nor were the plaintiffs alleging tortious conduct that took place exclusively on foreign soil.⁴³ Judge Martin reasoned that because of these two important factual distinctions, the claims here were properly stated under the ATS.⁴⁴ In addressing Judge Martin's dissent, the majority reasoned that because there were no allegations that torture occurred on U.S. territory, the claims were barred under Kiobel.⁴⁵

The Fourth Circuit took a more liberal view of jurisdiction in Al Shimari v. CACI Premier Technology.⁴⁶ In Al Shimari, four Iraqi

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citizens brought a claim for torture, in violation of international law, against a U.S. defense contractor stemming from the Abu Ghraib prison scandal.⁴⁷ The defendants in Al Shimari made the exact same argument as the Eleventh Circuit majority in Cardona: the plaintiffs alleged only conduct that occurred outside of U.S. territory, so their claims should be dismissed under Kiobel.⁴⁸ The Fourth Circuit disagreed, reasoning that a "more nuanced analysis" of all factors is required, rather than a bright-line rule.⁴⁹ The Fourth Circuit found jurisdiction by broadly interpreting whether "the 'relevant conduct' alleged in the claims 'touch[es] and concern[s] the territory of the United States with sufficient force to displace the presumption . . . .'"⁵⁰ Unlike the relevant conduct in Kiobel, which only touched the U.S. with "mere corporate presence," the plaintiffs here alleged substantial ties with the U.S., including the performance of a contract with the federal government.⁵¹ The Fourth Circuit explicitly rejected a bright-line rule that conduct, which occurs exclusively abroad, bars an ATS claim per se.⁵² The Fourth Circuit cited four important factors in rebutting the extraterritorial presumption: (1) the U.S. citizenship of the corporate defendant, (2) the U.S. citizenship of the corporation's employees involved in the conduct, and (3) a contract between the defendant and the U.S. government.⁵³ The Fourth Circuit's approach to an ATS claim, and in...