Tuesday, October 2, 2012
The Supreme Court heard oral arguments Monday in Kiobel v. Royal Dutch Petroleum Co., the case testing whether the Alien Tort Statute applies to a foreign corporation's human rights violations overseas. The Court ordered reargument after it first heard the case last Term, on the question whether the ATS applies to corporations. The new question, argued Monday, is whether the ATS applies at all to actions that have no direct connection to the U.S. (We previously posted on the case, along with the Torture Victim Protection Act case from last Term, Mohamad v. Palestinian Authority, here.)
The case arose out of Nigerians' claims that defendant corporations committed human rights abuses against them in Nigeria (aiding the Nigerian government). The plaintiffs sought and gained asylum in the U.S., so sued in U.S. courts, under the ATS.
Chief Justice Roberts and Justices Scalia, Kennedy, and Alito all expressed skepticism that the ATS should apply to overseas abuses by non-U.S. corporations. Chief Justice Roberts and Justice Alito both asked whether U.K. or Dutch courts might be a better forum for the case, given that the defendants are U.K. and Dutch companies (with some connection to those jurisdictions). Justices Scalia and Kennedy both worried early in the arguments that the plaintiffs' position could mean that U.S. corporations could face suits anywhere in the world, under another country's assertion of universal jurisdiction--thus, for example, allowing a foreign court to determine whether a U.S. corporation violated international law in the U.S. The Justices also worried about the extraterritorial application of U.S. law--and whether the ATS wouldn't improperly insert U.S. law into other jurisdictions in violation of the presumtion against extraterritorial application.
Paul Hoffman, counsel for the plaintiffs had an answer to these concerns: the law of personal jurisdiction, forum non conveniens, and political question would act as a backstop to ATS-based universal jurisdiction in U.S. courts, when the case didn't belong there. He also seemed to concede that some kind of exhaustion requirement (in which plaintiffs would have to exhaust available foreign remedies before proceeding in U.S. courts) or a rule that U.S. courts could take jurisdiction only when foreign courts couldn't offer fair justice could be reasonable checks on jurisdiction in the U.S. courts.
Justices Ginsburg, Sotomayor, and Kagan seemed to search more for a practical, less categorical solution, by exploring defenses of personal jurisdiction and exhaustion, for example--the back-end fixes that Hoffman seemed to accept. Justice Breyer seemed most entrenched in favor of ATS jurisdiction, even at one point illustrating his view of the statute's reach by comparing Hitler's atrocities to the early acts of piracy that the ATS was designed to remedy.
There was one particular sticking point: Sosa v. Alvarez-Machain, the Court's 2004 foray into the ATS, where a Mexican sued other Mexicans for events that occured in Mexico, although there was a key U.S. connection: the DEA set the whole affair in motion. The Court in that case held that the plaintiff could not recover damages under the ATS, but it also suggested that the ATS could reach a case like Kiobel. Thus the question: Must the Court overturn Sosa in order to rule for the defendant? Kathleen Kennedy, counsel for the defendants, argued no: Sosa is distinguishable, and the Court said only that there were no sufficiently universal and specific international norms to support an ATS claim. But Justice Kagan argued yes, noting that Sosa put its stamp of approval on the reasoning in Filartiga, the pathbreaking case in which the Second Circuit applied the ATS against an alien for acts outside the U.S. (Complicating things yet further, Congress later enacted the Torture Victim Protection Act, authorizing just the kind of suit in Filartiga. The defendants argued here that the TVPA means that the Court doesn't need to address Filartiga, because "Filartiga is taken care of entirely by the proper body, which is Congress.")
The Justices also explored ways to consider the government's interest in foreign affairs--a point pressed by SG Verrilli, but only narrowly: The government's position is "that there shouldn't be a cause of action to address the extraterritorial conduct of a foreign corporation that is alleged to have aided and abetted the acts of a foreign sovereign."
In all, the case doesn't look good for the plaintiffs. Even if the Court rules that the ATS can apply to an alien acting in a foreign country--that is, even if it doesn't adopt a categorical rule barring an ATS claim in that situation--it seems likely to rule that U.S. courts should punt until the plaintiff exhausts all reasonable and effective foreign remedies first, or that the government's foreign affairs interests trump the plaintiff's claims, or both. The Court could also send the case back for a (re)consideration of personal jurisdiction. Any one of these could doom the plaintiffs' case. (It's not clear exactly how exhaustion and personal jurisdiction would play out: it doesn't seem that those issues have been seriously litigated with respect to all defendants.) Moreover, the Court could rule that the ATS doesn't apply to corporations. That, too, would doom the plaintiff's case.