Thursday, April 18, 2013

The Irony of the Supreme Court’s Decision in Kiobel v. Royal Dutch Petroleum

Susan_bisomrapp_webFriend of the blog and comparative and international LEL expert, Susan Bisom-Rapp (Thomas Jefferson) has kindly provided the following guest post. It is an excellent analysis of this week's Supreme Court decision in Kiobel v. Royal Dutch Peltroleum. In it, she explains the labor and employment law ramifications of this important decision:

The Irony of the Supreme Court’s Decision in Kiobel v. Royal Dutch Petroleum

Susan Bisom-Rapp (Thomas Jefferson School of Law)

Although not a case involving workers’ rights, the April 17th decision in Kiobel v. Royal Dutch Petroleum was long-awaited by those interested in whether transnational corporations (TNCs) can be sued in U.S. courts under the Alien Tort Statute (ATS) for human rights violations perpetrated against foreign workers laboring abroad.  Rather than answer the question initially directed to the Court – Does the ATS confer jurisdiction over corporations? – the Supreme Court addressed a different question: Whether and under what circumstances may U.S. courts recognize an ATS cause of action for violations occurring within another sovereign territory?  In a fractured and somewhat muddy decision, the Court limited ATS cases, at least where the defendants are foreign corporations, the wrongdoing occurs outside the U.S., and the claims do not touch or concern the territory of the United States.  Even so, the Court left open enough questions that on the day the decision issued, workers’ rights advocates confidently opined that there is still a subset of viable ATS cases that may be brought against TNCs.

Kiobel was brought by Nigerian nationals against Dutch, British, and Nigerian corporations, which the plaintiffs argued aided and abetted the Nigerian government in committing human rights abuses as the latter sought to suppress environmental protests related to corporate oil exploration.  All nine justices agreed that the case should be dismissed but the four justices of the Court’s liberal wing (Justices Breyer, Ginsburg, Sotomayor, and Kagan) disagreed with the reasoning of the majority (Justices Roberts, Scalia, Kennedy, Thomas, and Alito).  A liberal wing concurrence was consequently written.  Complicating matters, Justices Kennedy and Alito each filed a separate concurrence, and Justice Thomas joined Justice Alito’s concurrence.

No matter how you slice it, the Supreme Court’s decision in Kiobel is a win for TNCs.  The Kiobel case will not proceed, and the Court announced new limitations on ATS claims.  Ironically, however, and despite the limitations imposed by the Kiobel majority, it is the majority opinion, written by Chief Justice Roberts, which leaves the courthouse door open a bit and will likely be used by workers’ rights advocates in subsequent litigation.  Before explaining why, some background on ATS claims on behalf of workers is necessary.

The ATS, legislation enacted in 1789 and signed into law by George Washington, confers federal 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.”  It was not until 1996, however, that suit was brought against a corporate defendant. That case involved the oil company Unocal, which was sued for allegedly aiding and abetting abuses by the Myanmar military, including the use of forced labor, committed in connection with the construction of a natural gas pipeline.  Although that case settled, subsequent ATS cases brought on behalf of workers include suits against: Bridgestone-Firestone on behalf of children and adults who work on Firestone’s rubber plantation in Liberia; Chiquita by the families of pro-union workers murdered by Colombian paramilitaries; Coca-Cola for the murder and torture of Colombian union leaders; Nestle, Archer Daniels Midland, and Cargill relating to the trafficking of Malian children into Cote d’Ivoire for work on cocoa plantations; and mining company Drummond, regarding its subsidiary’s alleged involvement with the torture and murder of Colombian trade union leaders.

In 2007, that last case, Romero v. Drummond Co., Inc., became the first ATS case against a corporation to reach trial.  Although the jury ruled against the plaintiffs, many TNCs and their advocates viewed the case as making real what had until then been a theoretical threat of corporate ATS liability.  The status of corporate ATS liability, however, is contested.  There is a split in the circuits that the Supreme Court had a chance to resolve in Kiobel.  Rather than do that directly, the Court addressed a different issue – the extra-territorial reach of the ATS in suits brought against any person, natural or juridical.

For the Kiobel majority, this is a simple case resolved by the presumption against extraterritorial application of a statute.  That well-known presumption provides that where Congress has not plainly expressed its intent that legislation apply beyond U.S. borders, the statute does not apply extraterritorially. Since the spare text of the ATS does not address the reach of the grant of federal jurisdiction for tort claims brought by aliens, the presumption, by barring claims such as those in Kiobel, precludes U.S. courts from creating conflicts with other nations and interfering with foreign policy.  That the tort claims mentioned in the ATS are those “committed in violation of the law of nations” does not, argued the majority, imply reach beyond our borders since violations of international law norms can occur on U.S. soil.  Indeed, two embarrassing incidents involving foreign ambassadors to the U.S. occurred just prior to passage of the ATS.  At the time, U.S. officials were concerned there might not be a sufficient forum for hearing those claims.

As for what it would take to displace the presumption, Chief Justice Roberts notes that all ATS claims must “touch and concern” U.S. territory with “sufficient force.”  Somewhat tantalizing, he opines that  “[c]orporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices.”  Picking up on all that the majority opinion leaves unanswered, Justice Kennedy’s one paragraph concurrence notes that “the Court is careful to leave open a number of significant questions regarding the reach and interpretation of the [ATS].”

Rather than embrace the presumption against extraterritorial application, the liberal wing’s concurrence is driven by the principles of foreign relations law from which it draws international jurisdictional norms to determine when it is appropriate to apply U.S. law outside of U.S. territory. To that end, Justice Breyer, who wrote the concurrence, relies on the Restatement (Third) of Foreign Relations Law.  The liberal concurrence argues that the statute provides federal district courts with jurisdiction not only when the torts occur in the U.S. but also when “the defendant is an American national” or “the defendant’s conduct substantially and adversely affects an important American national interest.”

While providing some useful language for workers’ rights advocates, there are two reasons I believe the liberal concurrence may be less helpful to them than the majority opinion coupled with Justice Kennedy’s concurrence.  First, there may be a tendency among American judges to shy away from foreign relations law and the Restatement Third when they might easily make use of a presumption rooted in domestic law, and, I might add, that presumption is embedded in a majority opinion.  Strategically, it may make sense for workers’ rights advocates to craft arguments using language that is familiar to American judges. 

Second, Justice Breyer's example of “an important American national interest” does not track the fact patterns of the ATS corporate cases very well.  His example is ensuring our country does not become a safe harbor for modern day pirates – those who commit heinous violations of international norms elsewhere and then seek safety on our shores.  In the corporate ATS cases, the actual commission of human rights violations is rarely performed by the TNC in question.  Gross human rights abuses in those cases usually have a direct connection to a foreign government.  The corporate liability, if it were to lie, is vicarious.  In short, the ill-fit of Justice Breyer’s example may limit the utility of the liberal concurrence leading to the irony that the more conservative majority opinion may ultimately be of greater use to workers’ rights advocates.  The Kiobel decision was a disappointment for workers’ rights advocates but it was not as bad a decision as it could have been.  The battle over corporate ATS liability continues, at least for now.

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Human rights litigation will now take place in state courts like Calif and NJ, combining traditional torts like battery with human rights claims. This is where the Unocal Burma forced labor cases started. Corporate defendants will now be unable to remove to federal court where they normally prefer to be. ATS was only ever a statute that created federal jurisdiction. It never solved problems of cause of action, venue, personal jurisdiction, scope of liability etc. Who needs it?

Posted by: Alan Hyde | Apr 20, 2013 6:58:49 AM

Good point and yet another way that the majority opinion ironically assists workers' rights advocates; ie. Kiobel makes removal to fed court more difficult for defendants, certainly in cases where there is a foreign defendant, all conduct occurs abroad, and the actions involved do not touch or concern the US. We'll see what happens where there's greater connection with the US....Stay tuned.

Posted by: Susan Bisom-Rapp | Apr 20, 2013 9:25:37 PM

What am I missing here? How will ATS be decided at the state level now? The statute says they are the jurisdiction of the federal courts.

Posted by: Andrew | Apr 26, 2013 4:41:32 PM

Sorry, I should have been more clear. What I meant was not that ATS claims will be decided by state courts. Rather, I was thinking of the two tracks that the "Unocal Burma forced labor case" ran on. There were state claims filed before a California state court. And there was an ATS claim filed in federal court. Unocal, at one point in the litigation, argued that the federal court should assert jurisdiction over the state law claims. To the extent Kiobel makes two tracks unlikely because it is more difficult to file a workers' rights ATS claim in federal court, that kind of argument becomes moot. There will be no federal ATS claim and the state law claims will be litigated in state court. Of course, the problem is making the state law claims stick. I know it is a federal, rather than a state case, but Doe I. v. Wal-Mart Stores, Inc., 572 F.3d 677 (2009), which contained, inter alia, state tort and contract claims, is not great precedent for plaintiffs.

Posted by: Susan Bisom-Rapp | May 7, 2013 3:36:23 PM