Kiobel, et al. v. Royal Dutch Petroleum (Reargument)

Case Updates

Held: The presumption against extraterritoriality applies to claims under the ATS, and nothing in the statute rebuts that presumption. Passed as part of the Judiciary Act of 1789, the ATS is a jurisdictional statute that creates no causes of action. It permits federal courts to “recognize private claims [for a modest number of international law violations] under federal common law." The presumption is not rebutted by the text, history, or purposes of the ATS. Nothing in the ATS’s text evinces a clear indication of extraterritorial reach.

The National Chamber Litigation Center (NCLC) filed an amicus brief with the U.S. Supreme Court to argue that the Alien Tort Statute (ATS) does not apply to conduct outside the U.S.

The Chamber’s brief explains that the ATS was passed in 1789 at a time when the country lacked any authority to remedy violations of international law on its own soil. That posed colossal diplomatic problems: at least twice in the 1780s, foreign diplomats suffered invasions of their customary rights on U.S. soil. These events endangered U.S. foreign relations. Congress passed the ATS in 1789 as a means to ensure foreigners would have a remedy for violations of international law that occurred on U.S. soil.

Yet in the past few years, the ATS has morphed from its original purpose into a tool to sue businesses operating abroad. These lawsuits, based on conduct occurring in more than 60 countries, have maligned routine business activities alleged “violations of international law” actionable in U.S. courts. By purporting to hold companies liable for workaday transactions half a world away, these ATS suits have not only had a pernicious effect on businesses—both at home and abroad—but also on U.S. foreign policy, which often encourages American companies to do business abroad.

The Chamber argues that Congress never intended the ATS to reach across national borders, to bestow on U.S. judges the power to hear lawsuits arising within other nations, or to invite the sorts of foreign disputes the framers who passed the ATS were keen to avoid. On the question of whether the ATS applies to conduct that occurs outside the U.S., the Chamber's amicus brief argues that the ATS provides no clear indication of extraterritorial application. The ATS therefore does not apply to causes of action arising within the sovereign territory of other nations. Because the lawsuit in this case involves alleged torts occurring in Nigeria, the suit has no place in U.S. courts.

The Chamber’s amicus brief addresses the U.S. Solicitor General’s (S.G.) about-face in its own amicus brief on the question of whether the ATS categorically lacks extraterritorial application. Contrary to the government's longheld view that the ATS does not apply extraterritorially, the S.G. now argues for a complicated, multi-factored case-by-case approach that would expose U.S. companies, and not their foreign counterparts, to ATS litigation.

If the S.G.’s flawed approach were adopted, it would discourage U.S. companies from investing in developing nations. This would hurt the developing companies, and the U.S. companies. The S.G’s approach would also create perverse incentives for U.S. companies to move jobs offshore in order to avoid costly litigation that, no matter how frivolous, could harm a business's reputation merely by the filing of the lawsuit. And it would put American companies at a substantial disadvantage relative to their foreign competitors, who could not be dragged into U.S. courts based on meritless allegations.

The Chamber’s brief reiterates that the Chamber unequivocally condemns violations of human rights. But, the question here is not whether such wrongs occurred, but rather, whether Congress intended the ATS as a remedy.