Alien Tort Statute: Litigation

Reflections on Kiobel

By John Bellinger
Monday, April 22, 2013, 8:52 PM

A few Lawfare readers have wondered why, given the past attention we have paid on this blog to the Alien Tort Statute, none of us have had anything to say about last week’s landmark decision in Kiobel.  The blogosphere has been filled with commentary (Opinio Juris had an excellent “Kiobel Insta-Symposium” last week), so there is little left to say, but I will offer the following comments on the presumption against extraterritoriality; the exception for claims that “touch and concern” the United States; corporate liability; and the Court’s cert grant in Bauman:

1.         Naturally, I am pleased that the majority adopted the main arguments that Paul Clement and I laid out in our two amicus briefs, namely that the ATS should not be applied to conduct that occurs in the territory of other nations; that the presumption against extraterritorial application of U.S. statutes applies to the ATS; and that ATS litigation has caused the very diplomatic tensions it was intended by the drafters of the First Judiciary Act to prevent.  To my knowledge, our brief was the only brief to make these arguments in the first briefing round of Kiobel and may have contributed to the Court’s refocusing its attention from the corporate liability issue to the more important extraterritoriality issue, which is the source of the diplomatic tensions.

 2.         Our two amicus briefs reiterated many of the arguments we had made in briefs we filed in ATS cases while we served in the Bush Administration.  Although the Supreme Court did not issue its Morrison decision until 2010, we had previously argued in our 2008 brief urging the Court to grant cert in the Ntsebeza case that the presumption against extraterritoriality should apply to the ATS, citing the 1991 Aramco case.  (In that brief, we also attached diplomatic protests the State Department had received about ATS lawsuits, as we did in our Kiobel brief.)   And, while these briefs obviously were signed by political appointees, they also reflected (in my view) the advice we had received from career lawyers at State and Justice regarding the best reading of the ATS.

3.         “Touch and Concern.”  Much has already been written at Opinio Juris and elsewhere about the extent to which the majority’s opinion will permit future ATS litigation.  In short, the door to ATS lawsuits, which the Court in Sosa left “ajar, subject to vigilant doorkeeping,” has now been closed, but left unlocked.  In the penultimate paragraph of the opinion, Chief Justice Roberts suggests that the presumption against extraterritorial application can be overcome “where the claims touch and concern the territory of the United States,” provided that “they do so with sufficient force to displace the presumption….”  He then goes on to say that “mere corporate presence” will not suffice.  Some observers have suggested that this implies that corporate domicile (in contrast to corporate presence) might suffice, and thus that U.S. corporations remain at risk as targets of ATS litigation.  But allowing ATS cases against U.S. corporations based on domicile alone would give insufficient weight to Roberts’ statement that the claims themselves must “touch and concern the territory of the United States,” which would seem to suggest that some element of the conduct must occur in the United States.  In their concurring opinion, Justices Alito and Thomas go farther, stating that a claim under the ATS would be barred unless the domestic conduct itself constitutes a violation of customary international law satisfying the requirements of Sosa.  Personally, I am surprised that, after two rounds of briefing and argument and with the knowledge that several ATS cases remain on hold in Second, Ninth, and DC Circuits, the Court did not give clearer guidance to the lower courts and may have left the door to future ATS litigation easily opened.  It remains to be seen how the lower courts interpret the phrase “touch and concern.”

4.         Corporate Liability.  The Court also chose not to decide squarely the issue of corporate liability on which it originally granted certiorari.  (I say “squarely” because the majority’s reference to “corporate presence” not being sufficient could be read to imply that corporations in fact may be subject to liability.)  This leaves the issue in a rather confused state.  In the Second Circuit, the Circuit’s 2010 decision in Kiobel -- that corporations are not subject to liability under the ATS -- will remain the law of the circuit.  So corporations may no longer be sued in the Second Circuit, and the existing suits against corporations should be dismissed.  (Corporate officers and directors could still be sued in the Second Circuit, but plaintiffs would have to allege with specificity that the officers/directors engaged in bad acts inside the United States.)  But in the other Circuits, corporations may still be subject to suit, and the DC, Seventh, and Ninth Circuits have specifically concluded that corporations may be held liable under the ATS.  Of course, ATS claims against corporations in those Circuits would have to touch and concern the territory of the United States in order to displace the presumption against extraterritoriality.

5.         Bauman.   This morning the Supreme Court granted cert in DaimlerChrysler AG v Bauman, an ATS suit against Daimler.  In this case, as I have previously explained, a Ninth Circuit panel held in May 2011 that Daimler AG, a German parent company with no operations or employees in the United States, could be sued under the ATS and TVPA by a group of Argentine nationals for human rights abuses allegedly committed by an Argentine subsidiary in collaborating with the Argentine government during the “Dirty War” in the 1970s, solely on the basis that a different U.S. subsidiary now distributes Mercedes Benz vehicles in the United States.  Applying an agency theory, the panel concluded, over the objections of the German government, that Daimler AG had sufficient contacts with the state of California by virtue of the actions of its subsidiary Mercedes Benz USA to give California personal jurisdiction over the German parent , even though Mercedes Benz USA had no involvement with the alleged facts in Argentina.  Given that this suit should now be easily dismissed under the new Kiobel rationale (as in Kiobel, all of the relevant conduct in Bauman took place outside the United States), the Court’s cert grant would seem to suggest that they plan to reverse the Ninth Circuit on the personal jurisdiction issues.  It may be that the more liberal justices supported the cert grant in order to show that ATS cases can and should be dismissed under other jurisdictional doctrines.