As discussed in a prior post, on February 28th the U.S. Supreme Court heard oral arguments in Kiobel v. Royal Dutch Petroleum (Shell) (Sup. Ct. No. 10-1491) on the issue of whether or not corporations could be held liable under the U.S. Alien Tort Statute (ATS), and a decision in the case was expected by the end of this June.
The Kiobel Rehearing Order
Less than a week later (on March 5th) all of that changed when the Court ordered new briefs and a rehearing this Fall on a different issue that previously had not been considered in this case by the U.S. Court of Appeals for the Second Circuit or by the Supreme Court itself. That new issue of extraterritorial application of the ATS was expressed by the Supreme Court as follows:
- Whether and under what circumstances the Alien Tort Statute, 28 U.S.C. §1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”
This surprising development appears to have been triggered by that very issue having been raised in another ATS case in a pending petition for a writ of certiorari to the Supreme Court in Rio Tinto vs. Saari (Sup. Ct. No. 11-649) brought by a corporation that had lost an ATS case in the U.S. Court of Appeals for the Ninth Circuit in San Francisco, California. The Rio Tinto cert. petition was considered by the Court at its private conference on Friday, March 2nd, and the order for rehearing in Kiobel was issued the following Monday (March 5th) without any announced action on the Rio Tinto cert. petition.
This apparent connection between the two cases calls for seeing what additional light may be shed on this new issue in Kiobel by examining that same issue in the Rio Tinto case. Rio Tinto, by the way, submitted an amicus curiae brief in Kiobel, but that brief did not discuss the extraterritoriality issue presumably because it was not germane to the two issues previously specified by the Supreme Court for the first Kiobel argument.
The Rio Tinto Case
This case under the ATS was brought by current or former residents of an island (Bougainville) in Papua New Guinea in the South Pacific Ocean. In the late 1980’s many residents of the island protested the mining activities on the island by Rio Tinto PLC and Rio Tinto Ltd., and the country’s military stopped the protests by killing many of the protesters. Their ATS case alleged that the military’s human rights violations were aided and abetted by Rio Tinto PLC, a public company headquartered in the U.K., and Riot Tinto Ltd., an affiliated public company headquartered in Australia.
The case started before 2002 and has a long complicated history.
The decision leading to the pending petition for a writ of certiorari in the Supreme Court was the October 25, 2011, en banc decision of the Ninth Circuit issued more than a year after the oral arguments. That decision partially sustained an ATS complaint against the two corporations and remanded the case to the federal district court in California for further proceedings. This decision by the 11 judges of the Ninth Circuit consisted of seven opinions spanning 170 pages covering many issues with different splits on different issues.
On the issue of extraterritoriality of the ATS, seven of the judges held that the statute had such application while the other four judges disagreed.
1. Majority opinion on extraterritoriality
The author of the 49-page majority opinion that sustained the ATS complaint was Chief Judge Mary Schroeder, who was joined on the issue of extraterritoriality by Judges Silverman, Berzon, Reinhardt, Pregerson, Rawlinson and McKeon. This section of the majority opinion is found on pages 19334-39 of the slip opinion.
The majority opinion first noted that the Ninth Circuit itself previously had decided that the ATS had extraterritorial application in In re Estate of Ferdinand Marcos, Human Rights Litig. (Marcos I), 978 F.2d 493, 499-501 (9th Cir. 1992), which involved torture that took place in the Philippines. In categorically rejecting the argument that the ATS applies only to torts committed in the U.S., the court had stated, “we are constrained by what [the ATS] . . . shows on its face: no limitations as to the citizenship of the defendant, or the locus of the injury.” (Id. at 500.) By implication, as a matter of stare decisis, the Ninth Circuit should reach the same conclusion in the current case. The majority opinion buttressed this point by citing cases in other circuits that had reached the same conclusion.
The majority opinion then observed that the U.S. Supreme Court’s only opinion on the ATS in the Sosa case in 2004 had recognized that the First Congress in 1789 had overseas conduct in mind when the Court in Sosa explained that in 1789, piracy was one of the paradigmatic classes of cases recognized under the ATS.
Next in the majority opinion was its analysis of the dissenting opinion’s principal authority, Morrison v. National Australian Bank Ltd., 130 S. Ct. 2869, 2877 (2010), which held that section 10(b) of the U.S. Securities Exchange Act of 1934 did not apply to securities transactions conducted in other nations. In so doing, the Ninth Circuit’s majority opinion correctly acknowledged that the Supreme Court in Morrison employed a “presumption against extraterritoriality” and stated that “[w]hen a statute gives no clear indication of an extraterritorial application, it has none.” (130 S. Ct. at 2878.)
The Ninth Circuit’s majority opinion said, however, there was no indication in Morrison or elsewhere, that a “presumption against extraterritoriality” existed and could have been invoked by Congress in 1789. Moreover, according to the majority opinion, Morrison “did not require that Congress use the precise word ‘extraterritorial’ in a statute to establish such applicability. It [Morrison] required only that there be a ‘clear indication,’ stating that such an indication may come from either the text or the context of the statute. Id. at 2883.”
Such “clear indications” of extraterritorial applicability of the ATS were found by the majority opinion in both the statute’s text and its context. The text of the ATS provides for jurisdiction “of any civil action by an alien . . . committed in violation of the law of nations or a treaty of the United States.” 28 U.S.C. § 1350. This text expressly creates jurisdiction for claims brought by persons who are not U.S. citizens. The text’s explicit reference to the “law of nations” indicates that one must look beyond U.S. law to international law in order to decide what torts fall under its jurisdictional grant. Moreover, the ATS was enacted in 1789 in the context of piracy occurring outside the U.S. as one of the paradigmatic classes of cases covered by the ATS.
Finally, according to the majority opinion, the ATS is a jurisdictional statute, and federal courts frequently exercise jurisdiction with regard to matters occurring outside the U.S., subject to the courts having personal jurisdiction over the defendants and to the principles of forum non conveniens and conflict of law principles that may call for dismissal of specific cases based upon their facts. In short, says the majority of the Ninth Circuit, the ATS provides a domestic forum for claims based on conduct that is illegal everywhere, including the place where that conduct took place. It is no infringement on the sovereign authority of other nations, therefore, to adjudicate claims cognizable under the ATS.
2. Dissenting opinion on extraterritoriality
Dissenting on this issue was a 36-page opinion by Judge Kleinfeld, which was joined by Judges Bea and Ikuta. (Slip Opinion at 19429-65.) I consider Judge Callahan to be the fourth dissenting judge on this issue by his joining the separate dissenting opinion of Judge Ikuta, which expressed agreement with the Kleinfeld opinion. (Slip. Op. at 19491 n.12.)
These dissenters’ concluded that the ATS was limited to torts in the U.S. to foreigners who were in the U.S. or who were outside any foreign state’s territory (i.e., on the high seas). There were four points or arguments advanced to support this conclusion.
First, they say, the previously discussed Morrison v. National Australian Bank Ltd. case reaffirms a long-standing canon of construction against implied extraterritoriality: “When a statute gives no clear indication of an extraterritorial application, it has none.”
Second, the ATS, they state, does not expressly authorize extraterritorial application, and its reference to the “law of nations” does not imply that it does. In addition, while the ATS does cover piracy on the high seas, that fact does not imply jurisdiction over wrongs committed within the territory of a foreign state.
Third, the dissenting opinion says the historical context of the adoption of the ATS in 1789 shows that its purpose was to afford a remedy for wrongs committed within the United States, not to enact a statute with extraterritorial effect. The dissenters say that the statute was enacted “to enable foreigners to sue for violations in America of a narrow set of norms, where failure to vindicate the wrongs might embroil our weak, new nation in diplomatic or military disputes. The wrongs were to ambassadorial officials in the United States, and piracy, sometimes by Americans.” Indeed, they say, with detailed support, “We had just signed a peace treaty with Great Britain after a War of Independence we barely won. We could ill afford diplomatic problems with the British, who bordered us on the north, the Spanish, who then bordered us on the south and west, or the French, whose support had been essential to our independence. Given our precariousness, the First Congress was concerned that American, not foreign, violations of the law of nations might ‘afford just causes of war,’ a war we likely could not win.”
Fourth, according to these dissenters, extraterritorial application of the ATS to so-called “Foreign-Cubed” tort cases (lawsuits by foreigners against foreigners over something that happened in foreign countries) would itself violate the law of nations. According to these dissenters, “The most fundamental principle of the law of nations . . . [is] ‘equality of sovereignty.’ Equality of sovereignty requires that every sovereign is to be treated as the equal of every other in its entitlement to govern persons within its own territory. ‘Under international law, a state has . . . sovereignty over its territory,’ which ‘implies a state’s lawful control over its territory generally to the exclusion of other states, authority to govern in that territory, and authority to apply law there.’”
I concur with commentators in the New York Times and Wall Street Journal that the order for rehearing is not a good sign for maintaining the ATS as a means of enforcing international human rights and for upholding corporate liability under the ATS.
Another commentator speculates that the new issue specified by the Court for rehearing in Kiobel even encompasses the serious issues of (a) defining the elements for the tort of aiding and abetting a government’s human rights violations; and (b) the constitutionality of extraterritorial application of the ATS, both of which were addressed in the previously mentioned en banc opinions in Rio Tinto.
In the meantime, the U.S. is adjudicating so-called “Foreign-Cubed” cases in other contexts. An U.S. immigration judge, after trial, has found that a former Salvadoran military officer participated in torture and extrajudicial killing of Salvadorans in El Salvador as a predicate for revocation of his U.S. legal residency and removal or deportation from the U.S. Another Salvadoran military officer, who is subject to a Spanish arrest warrant for his alleged participation in the 1989 killing in El Salvador of the six Jesuit priests (five Spanish and one Salvadoran) and their Salvadoran housekeeper and her daughter, recently has been indicted by a U.S. district court for alleged lying on U.S. immigration forms and thereby potentially leading to revocation of his U.S. legal residency status and removal or deportation from the U.S. (The latter was discussed in a Comment to a prior post.)
Finally, there is a bill in Congress with respect to other “Foreign-Cubed” matters. The bill would punish foreigners linked to foreign human rights abuses of foreigners (or presumably U.S. citizens) by denying them U.S. travel visas and freezing their financial assets in the U.S. Similar legislation has been proposed in the U.K. and eight other European countries.