As Lawfare readers know, ever since the Supreme Court’s 2013 decision in Kiobel v. Royal Dutch Petroleum, lower courts have split over how to apply the majority’s cryptic holding that the Alien Tort Statute is presumed not to apply to conduct on the territory of another country, unless the plaintiff’s claims “touch and concern” the United States with sufficient force to overcome that presumption. In particular, lower courts have wrestled with the meaning of “touch and concern” and how much domestic conduct or contact is required to rebut the presumption against extraterritoriality. Last June, the Supreme Court appeared to clarify the issue, ruling in RJR Nabisco Inc. v. European Community that, when determining whether a statute (such as the ATS) applies to conduct that took place both inside and outside the United States, courts should examine where the conduct that was the “focus” of congressional concern occurred. But last month, the Fifth Circuit issued a split opinion in Adhikari v. Kellogg Brown & Root, Inc., representing the first ATS case to be decided post-RJR Nabisco. The opinion, issued over a vigorous dissent, suggests that it may be premature to say that RJR Nabisco resolves the circuit split over the interpretation of “touch and concern.”
I. RJR Nabisco and the Morrison “Focus” Test
In Kiobel, after enunciating the “touch and concern” exception to the presumption against extraterritoriality, the majority cited to its 2010 Morrison v. National Australia Bank Ltd decision. In Morrison, the Court held that, in considering whether conduct that occurs both inside and outside the United States violates a statute without extraterritorial application, courts should determine whether the conduct that is the “focus of congressional concern” occurred in the United States. Kiobel’s citation to Morrison led some, but not all, lower courts to conclude that they should apply Morrison’s focus test to determine whether the conduct that was the focus of congressional concern in enacting the ATS had occurred in the United States. The Second and Eleventh Circuits in Mastafa v. Chevron Corp. and Doe v. Drummond respectively, for example, have held that Kiobel requires application of the focus test. The Ninth Circuit, on the other hand, concluded over a strong dissent in Doe v. Nestle that Kiobel “did not . . . adopt Morrison’s focus test” because it “chose to use the phrase touch and concern….” The Fourth Circuit also declined to adopt the focus test, determining in Al Shimari v. CACI that because Kiobel “broadly stated that the ‘claims,’ rather than the alleged tortious conduct, must touch and concern United States territory with sufficient force, . . . courts must consider all the facts that give rise to ATS claims.” In other words, the Fourth Circuit held that Kiobel distinguished conduct relevant to a plaintiff’s claim from conduct relevant to a statute’s focus, thus creating a new ATS-specific test centered on the former.
RJR Nabisco seemingly resolved the circuit split over whether to apply the Morrison test. Although RJR Nabisco involved the extraterritorial application of certain RICO provisions, the Court provided guidance regarding the extraterritorial application of domestic statutes, including the ATS. In a part of the opinion joined by all the justices, the Court explained “[to] determine whether the case involves a domestic application of the statute . . . we . . . look to the statute’s ‘focus.’ If the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application . . . but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.” Most important, the Court explained that in Kiobel, “[b]ecause ‘all the relevant conduct’ . . . ‘took place outside the United States,’ we did not need to determine, as we did in Morrison, the statute’s ‘focus.’” In other words, the Court essentially stated that the Morrison focus test applies to the ATS, but that it was unnecessary to apply the test to the facts in Kiobel.
II. The Fifth Circuit’s Adhikari Opinion
In 2004, Iraqi insurgents kidnapped and murdered “twelve Nepali men as they traveled through Iraq to a United States military base [Al Asad Air Base] to work for Daoud & Partners . . . a Jordanian corporation that had a subcontract with Defendant Kellogg Brown Root.” In 2008, family members of the men brought suit against Daoud and KBR under the ATS and the Trafficking Victims Protection Reauthorization Act (“TVPRA”), alleging the defendants had engaged in human trafficking. The district court in Texas entered summary judgment for KBR for both claims on the ground that “all relevant conduct by Daoud and KBR occurred outside of the United States.” The Fifth Circuit affirmed.
The Majority Opinion. The majority opinion, written by Judge Prado and joined by Judge Higginbotham, held that because “RJR Nabisco makes clear that Morrison’s ‘focus’ test still governs,” “[o]nly conduct relevant to the statute’s focus determines domestic application of the statute.” In so holding, the Fifth Circuit created a clear conflict with the Fourth Circuit. Applying the focus test to the facts of the case, the majority determined that the “focus” of the ATS was on torts “committed in violation of the law of nations,” and that because “the recruitment, transportation, and alleged detention” of the Nepali men all occurred overseas, the plaintiffs were seeking an extraterritorial application of the ATS.
The plaintiffs made two further arguments. First, they argued that Al Asad Air Base was under the jurisdiction and control of the United States such that “KBR’s actions on the base constitute domestic conduct.” In support, the plaintiffs cited to Rasul v. Bush. The majority rejected this argument, noting that “a U.S. military base does not constitute de facto territory where the United States has not demonstrated intent to exercise sovereignty over that base permanently,” and that unlike Guantanamo, United States control over Al Asad lasted only from 2003 to 2011. Second, the plaintiffs argued that because KBR took various domestic actions, such as payments to Daoud, this was a domestic application of the ATS. But the majority noted that the “focus” of the ATS was the “tort of human trafficking and forced labor,” and “all the conduct comprising the alleged international law violations occurred in a foreign country.”
The full panel also rejected the plaintiffs’ TVPRA claim. While the TVPRA applies extraterritorially, this was not until it was amended in 2008. Invoking a different presumption, the presumption against retroactivity, the full panel determined that because the conduct in question occurred prior to 2008, the TVPRA did not apply.
The Dissenting Opinion. The dissent by Judge Graves agreed with the majority’s disposition of the TVPRA claim. But as to the ATS claim, the dissent determined the language in RJR Nabisco regarding Kiobel merely “suggests,” but is not “determinative,” that courts “should interpret Kiobel’s ‘touch and concern’ language in light of the . . . focus inquiry derived from Morrison.” The dissent made three arguments.
First, the dissent argued that much like Kiobel, RJR Nabisco pretermitted discussion of the focus inquiry because all the relevant conduct occurred overseas, and that therefore RJR Nabisco’s discussion of Morrison and Kiobel is not “determinative” of the current case. Though not specifically using the term, Judge Graves seems to be implying that because RJR Nabisco did not actually undertake the focus test, its language about the focus test is dicta. While Judge Graves might well be right that the language in RJR Nabisco is dicta, it is hard to ignore the Supreme Court’s otherwise clear language regarding the applicability of the Morrison focus test.
Second, the dissent distinguished RJR Nabisco and Morrison on the grounds that they are not “ATS-specific precedents,” and that the ATS-specific cases Kiobel and Sosa v. Alvarez–Machain, “demonstrate that [other] factors are central to the analysis of an ATS claim.” However, even if RJR Nabisco itself involved RICO, the decision discussed how Morrison would have applied in Kiobel, thus making clear that the Court believed that it is appropriate to apply the focus test in ATS cases. Indeed, the dissent later declared that while “the ‘focus’ inquiry centers on the conduct that constitutes the alleged law of nations violation . . . surely the inquiry permits consideration of pertinent facts underlying the plaintiff’s claim, such as the identity of the defendant . . . and any significant connections the alleged violation has to the United States.” But this passage appears to be in conflict with RJR Nabisco where the unanimous Court wrote that “if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.”
Finally, the dissent argued that “human trafficking is a transnational crime that uses a global supply chain,” and that while individual “actions, in isolation, may not constitute a violation of the law of nations, they nevertheless constitute ‘relevant conduct’ for purposes of the ‘focus’ inquiry.” Here, Judge Graves appears to be making the same point that the plaintiffs unsuccessfully did, that is, the tort of human trafficking is broader than just the actual kidnapping and trafficking and therefore conduct that occurred in the United States is part of the focus of the ATS.
III. Looking Forward
Although the dissent in Adhikari stretched to conclude that RJR Nabisco does not direct lower courts to apply the Morrison focus test in ATS cases, that the Fifth Circuit could not issue a unanimous opinion even after RJR Nabisco suggests that lower courts may continue to be split in their approaches to analyzing ATS extraterritoriality. Adhikari has already had an impact on pending ATS litigation. In Doe v. Nestle, which is on remand in the Central District of California, and which John has previously discussed here and here, Judge Wilson has asked for and received supplemental briefing in light of Adhikari. As noted above, the Ninth Circuit had previously concluded that Kiobel did not adopt the Morrison focus test. Regardless of what Judge Wilson decides, given the Ninth Circuit’s apparent solicitousness to ATS suits even after Sosa and Kiobel, it is possible that a panel of the Ninth Circuit could, like Judge Graves, distinguish RJR Nabisco and allow the plaintiffs’ ATS suit in Doe to proceed even though the primary conduct at issue in the case (child slave labor) took place in the Cote d’Ivoire and not in the United States.