Introduction
On February 28, 2012, the United States Supreme Court heard oral argument in an important case interpreting the Alien Tort Statute (ATS), Kiobel v. Royal Dutch Petroleum Co.1 At issue in this case is whether corporations can be held liable under the ATS, which permits aliens to file lawsuits in US federal courts for violations of customary international law. The Second Circuit Court of Appeals held below that corporate liability does not exist under the ATS because, under US Supreme Court jurisprudence, corporate liability is not a "specific, universal, and obligatory" norm of international law.2 Since then, the Seventh Circuit, Ninth Circuit, and DC Circuit have each issued decisions finding that corporations are proper defendants under the ATS.3
The Supreme Court's resolution of this circuit split is significant for multinational companies, which have been named as defendants in more than 180 ATS cases. More than 35 amicus curiae briefs were filed with the Court in Kiobel by corporations, governments, academics, trade associations, and human rights advocates. Amici did not confine their arguments to the issues decided by the Second Circuit. They also addressed whether US courts may properly exercise extraterritorial jurisdiction in ATS cases lacking a factual nexus to the United States, whether aiding and abetting liability exists under the ATS, and other issues. At oral argument, Justice Kennedy, often considered the "swing" vote on the Court, immediately expressed concern with the extraterritorial application of the ATS. In fact, several Justices focused their questioning during oral argument on extraterritoriality, and the Court has since instructed the parties to submit an additional round of briefing on this issue later this spring.
Background on the ATS
The ATS was enacted by the First Congress in 1789. It permits foreign plaintiffs to file civil tort actions in US federal courts for violations of the "law of nations or a treaty of the United States."4 The ATS was rarely used to bring human rights-related claims before 1980, when Paraguayan citizens successfully used the statute to bring a claim in New York against a Paraguayan police official for torture and murder committed in Paraguay.5 Since then, plaintiffs have increasingly used the ATS as a vehicle for asserting claims against foreign officials and multinational companies for alleged human rights violations, with cases producing damage awards in some instances exceeding $100 million.6
The Supreme Court had previously interpreted the ATS in Sosa v. Alvarez-Machain, where it limited ATS claims to a narrow set of violations of international law norms that are "specific, universal, and obligatory."7 Sosa instructed the lower courts to recognize new federal common law causes of action under the ATS only for violations of international law norms that are accepted universally and "defined with a specificity" that is comparable to the offenses the ATS was designed to redress at the time it was enacted, specifically piracy, violations of safe passage, and assaults on ambassadors.8 In addition, Sosa instructed courts to consider the "practical consequences" of allowing the cause of action to be litigated in federal court.9
In a footnote, the Court in Sosa raised but did not specifically address the issue of corporate liability. It stated that "[a] related consideration is whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual."10 Kiobel marks the first time the issue of corporate liability under the ATS is squarely before the Court.
Overview of Arguments in Kiobel
Kiobel was filed in 2002 in the US District Court for the Southern District of New York by Nigerian citizens from the Ogoni region of Nigeria against Dutch and British holding companies that were operating in the region through their Nigerian subsidiary.11 The petitioners alleged that the respondents aided and abetted human rights abuses committed by the Nigerian government, including torture, crimes against humanity, and arbitrary arrest and detention. The District Court granted in part and denied in part the respondents' motion to dismiss the petitioners' claims, and certified an order on its own initiative for interlocutory appeal to the Second Circuit.12
A divided Second Circuit issued its opinion on September 17, 2010. The Second Circuit panel did not decide the issues certified by the District Court but rather held as an issue of subject matter jurisdiction that no corporate liability exists under the ATS.13
In their brief, the petitioners argued that the Second Circuit erred by treating corporate liability as an issue of subject matter jurisdiction, rather than a merits question, and by immunizing corporations from liability under the ATS. In support of this position, the petitioners argued that nothing in the "text, history or purpose" of the ATS suggests that the First Congress meant to exclude corporate liability; that Sosa does not require a customary international law norm of corporate liability, and in fact holds that causes of action under the ATS derive from federal common law; that international law leaves the means by which international law norms are implemented to domestic legal systems; and that general principles of law accepted in all legal systems recognize corporate tort liability.14
The respondents countered that the ATS does not extend liability to corporations because the question of which perpetrators are liable is a matter of international law, and the petitioners did not meet their burden of showing that there is a treaty or norm of international law holding corporations responsible for the human rights violations alleged. Even if such a norm existed, respondents continued, the Court should not recognize corporate ATS liability as a matter of federal common law under Sosa due to the practical consequences of imposing corporate liability, including potential diplomatic friction and frivolous lawsuits. Apart from the matter of corporate liability, the respondents advanced two alternative grounds for affirming the Second Circuit decision: first, that aiding and abetting liability is not available under the ATS; and, second, that federal statutes cannot be applied extraterritoriality without a clear statement by Congress.15
The United States supported the petitioners with an amicus curiae brief signed onto by both the US Department of State and US Department of Commerce. The United States urged the Court to focus on the narrow question of whether a corporation can be held liable under the ATS, arguing that international law leaves the means of enforcement to domestic legal systems and that corporate liability exists under the ATS as a matter of federal common law.16 A number of other amicus briefs, including one filed by the Governments of the United Kingdom and the Netherlands, urged the Court to address the "broader and more fundamental" issue of US courts' assertion of extraterritorial jurisdiction in ATS cases like Kiobel that lack a sufficient factual nexus to the United States.17
At oral argument, the Supreme Court Justices focused much of their questioning on the extraterritorial application of the ATS. Justice Kennedy opened questioning by quoting an amicus brief that stated, "no other nation in the world permits its court to exercise universal civil jurisdiction over alleged extraterritorial human rights abuses to which the nation has no connection."18 Justice Alito pointedly asked, "[W]hat business does a case like that have in the courts of the United States?"19 Petitioners' counsel suggested that the issue of extraterritoriality "ought to be briefed on its own."20
As a result, it is not entirely surprising—even if unusual—that six days later, on March 5, the Supreme Court restored Kiobel to its calendar for re-argument to address "[w]hether and under what circumstances the [ATS] allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States."21 The parties' supplemental briefing on this issue is to be completed by the end of June, 2012. A ruling limiting the extraterritorial reach of the ATS could narrow the statute's application even in cases against non-corporate defendants, and could potentially have implications beyond the ATS.
Companion Case
On the same day the Supreme Court heard oral argument in Kiobel, the Court also heard oral argument in Mohamad v. Palestinian Authority,22 in which it considered a similar issue: whether torture victims can sue private entities under the Torture Victims Protection Act (TVPA). The TVPA, enacted in 1992 as a note to the ATS, states in part that "[a]n individual who . . . subjects an individual to torture [or] extrajudicial killing" while under "actual or apparent authority, or color of law, of any foreign nation" shall be liable under the statute.23 At issue in Mohamad is whether the word "individual" is confined to natural persons only. If so, entities such as corporations would not face liability under the TVPA.
The respondents in Kiobel pointed to the TVPA as additional evidence that an international norm of corporate liability does not exist under the ATS for the human rights offenses alleged in Kiobel. First, they argued, those alleged offenses arise from conventions that deal with individual and not corporate liability.24 Second, when Congress implemented those conventions in the TVPA, Congress explicitly limited TVPA liability to "individuals."25
When the Kiobel respondents asserted during oral argument that the TVPA limits liability to natural persons, Chief Justice Roberts, alluding to Mohamad, quipped that "[w]e haven't decided that question just yet."26 Justice Ginsberg also noted that, unlike the TVPA, the ATS does not use the words "individual" or "person."27 Both Justices Kagan and Sotomayor stated that the TVPA was meant to supplement, and not supplant, the ATS, although Justice Sotomayor also noted the incongruity in allowing aliens to bring suits against corporations under the ATS but disallowing American citizens to bring suits against corporations under the TVPA.28 This "anomaly" was pointed out in several briefs in Kiobel29 and appeared to gain some traction during oral argument in Mohamad.30
Although the United States filed an amicus brief in Kiobel supporting the petitioners in finding corporate liability under the ATS, the United States submitted an amicus brief in Mohamad supporting the lower court's decision that the word "individuals" as used in the TVPA limits the applicability of that statute to natural persons. Hence, under the United States' interpretation, corporations could not be found liable under the TVPA. In its amicus brief in Mohamad, however, the United States argued that, due to the "critical differences" between the TVPA and the ATS, "corporations can be held liable in a suit based on the ATS."31
Implications
Because the ATS has been a significant avenue for plaintiffs asserting human rights-related claims against multinational companies over the last fifteen years, the decision in Kiobel will draw intense interest. Regardless of the outcome, however, corporate human rights-related litigation will likely continue in various forms. As respondents' counsel stated at oral argument in Kiobel, individual corporate officers would remain liable under the ATS, and corporate defendants would remain subject to suit under state laws in the United States and under various domestic enactments of international human rights law around the world. It is unlikely, therefore, that the outcome in Kiobel will significantly dissipate pressures on corporations from consumers, personnel, investors, and other stakeholders to operate ethically and ensure respect for human rights throughout their operations.
Footnotes1. 621 F.3d 111 (2d Cir. 2010), cert. granted, 80 U.S.L.W. 3237 (U.S. Oct. 17, 2011) (No. 10-1491).
2. Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 120–121 (2d Cir. 2010) (quoting Sosa v. Alvarez-Machain, 542 U.S. 692, 732 (2004)).
3. Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013 (7th Cir. 2011); Sarei v. Rio Tinto, PLC, 2011 WL 5041927 (9th Cir. Oct. 25, 2011) (en banc); Doe v. Exxon Mobil Corp., 654 F.3d 11 (D.C. Cir. 2011).
4. 28 U.S.C. § 1350 (2006).
5. See Filártiga v. Peña-Irala, 630 F.2d 876 (2d Cir. 1980).
6. See Mehinovic v. Vuckovic, 198 F. Supp. 2d 1322 (N.D. Ga. 2002) ($140 million); Mushikiwabo v. Barayagwiza, 1996 U.S. Dist. LEXIS 4409 (S.D.N.Y. Apr. 8, 1996) ($103 million).
7. 542 U.S. 692, 732, 748 (2004) (quoting In re Estate of Marcos Human Rights Litigation, 25 F.3d 1467, 1475 (9th Cir. 1994)).
8. 542 U.S. at 725.
9. Id. at 732.
10. Id. at 732 n.20.
11. Kiobel v. Royal Dutch Petroleum Co., No. 1:02-cv-07618 (S.D.N.Y. filed Sep. 20, 2002). The Nigerian subsidiary was dismissed from the case for lack of personal jurisdiction.
12. Kiobel v. Royal Dutch Petroleum Co., 456 F. Supp. 2d. 457 (S.D.N.Y. 2006).
13. Kiobel v. Royal Dutch Petroleum, 621 F.3d 111(2d Cir. 2010), reh'g denied, 642 F.3d 268 (2d Cir. 2011), reh'g en banc denied, 642 F.3d 379 (2d Cir. 2011).
14. See Brief for Petitioners, at 35–39, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Dec. 14, 2011).
15. See Brief for Respondents, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Jan. 27, 2012).
16. Brief for the United States as Amicus Curiae Supporting Petitioners, at 6, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Dec. 21, 2011).
17. Brief of the Governments of the United Kingdom of Great Britain and Northern Ireland and the Kingdom of the Netherlands as Amicus Curiae in Support of the Respondents, at 33, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Feb. 3, 2012); see also Amicus Curiae Briefs of the Federal Republic of Germany, of BP America, et. al.; and of Chevron Corp, et. al, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Feb. 3, 2012); Brief for Professors of International Law, Foreign Relations Law and Federal Jurisdiction as Amici Curiae in Support of Respondents, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Feb. 3, 2012).
18. Transcript of Oral Argument at 3:24–4:2, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (Feb. 28, 2012), available at "http://www.supremecourt.gov/oral_arguments/argument_transcripts.aspx" .
19. Id. at 11:22–23.
20. Id. at 9:3–4.
21. Order in Pending Case, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Mar. 5, 2012), available at "http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/10-1491.htm" .
22. 634 F.3d 604 (D.C. Cir. 2011), cert. granted, 80 U.S.L.W. 3237 (U.S. Oct. 17, 2011) (No. 11-88).
23. 28 U.S.C. § 1350 note § 2(a).
24. Transcript of Oral Argument at 28:7–29:8, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (Feb. 28, 2012), available at "http://www.supremecourt.gov/oral_arguments/argument_transcripts.aspx".
25. Id. at 29:3–29:8.
26. Id. at 29:11.
27. Id. at 29:13–29:15.
28. Id. at 47:25–48: 7; 52:9–52:15.
29. See, e.g., Brief for Respondents, at 30; Brief for Coca-Cola Company, et al., at 27, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Feb. 3, 2012); Brief for Rio Tinto Group, et al., at 21-22, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Feb. 3, 2012); Brief of KBR, Inc., at 21-22 (Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (U.S. Feb. 2, 2012).
30. Transcript of Oral Argument at 39:15–41:17, Mohamad v. Palestinian Authority et al., No. 11-88 (Feb. 28, 2012), available at http://www.supremecourt.gov/oral_arguments/argument_transcripts.aspx .
31. See Brief of the United States as Amicus Curiae Supporting Affirmance, at 30, Mohamad v. Palestinian Authority et al., No. 11-88 (U.S. Feb. 3, 2012).
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