Over the last two weeks two federal appellate courts have upheld different subpoenas to the Mazars USA accounting firm for accounting records relating to Donald J. Trump.
D.C. Circuit Court of Appeals
As discussed in a prior post, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit on October 11, 2019, upheld (2-1) in an opinion by Judge David S. Tatel a subpoena by an U.S. House of Representatives committee to Mazars, USA for certain accounting records of Donald J. Trump.
A month later, on November 13, that court denied, 8-3, Trump’s motion for the full (en banc) court to review that decision of the three-judge panel.[1] As is typical, there was no opinion by the eight judges denying the motion. However, two of the three dissenting judges, wrote opinions.
Judge Gregory Katsas joined by Judge Karen Henderson, said, “this case presents exceptionally important questions regarding the separation of powers among Congress, the Executive Branch, and the Judiciary. For the second time in American history, an Article III court has undertaken to enforce a congressional subpoena for the records of a sitting President. The first time this was attempted with then President Nixon, this court refused to enforce the subpoena, stressing “the availability of impeachment foreclosed any conclusion that the records at issue were ‘demonstrably critical to the responsible fulfillment’ of Congress’s legislative prerogatives, even when Congress was investigating significant allegations of presidential misconduct. Senate Select Comm. on Presidential Campaign Activities v. Nixon, 498 F.2d 725, 731–33 (D.C. Cir. 1974) (en banc).”
The other dissenting opinion, by Judge Neomi Rao, who also was joined by Judge Henderson, emphasized that this subpoena was not really justifiable by the congressional power to enact new laws. It was really a subpoena looking for impeachable offenses, which is not part of the legislative power.
Afterwards an attorney for Trump said that he would now petition the U.S. Supreme Court to review the case.
Second Circuit Court of Appeals
Such a petition would join a similar one by Trump from a November 4 unanimous decision by Chief Judge Robert Katzmann for a three-judge panel of the U.S. Court of Appeals for the Second Circuit in New York City upholding a subpoena by the District Attorney of the County of New York in Manhattan for similar accounting records from the Mazars accounting firm.[2] During the oral argument of this case, one of the judges asked the Trump attorney if local authorities could investigate President Trump if he shot someone on Fifth Avenue in New York City, and the attorney said the authorities could not so investigate.
After that decision, Jay Sekulow, an attorney for Trump, said that Trump would ask the U.S. Supreme Court to review the case because, he claimed, ““The issue raised in this case goes to the heart of our republic. The constitutional issues are significant.”
Conclusion
Now the parties to these cases will be joined by all of us in the U.S. and elsewhere for the briefing on whether the Supreme Court should grant such review, the Court’s decision on these petitions and, if review is granted, the briefing and oral arguments in that court and its ultimate decision (in the midst of the 2020 presidential campaign).
As previously noted, last year the U.S. District Court in New Haven, Connecticut dismissed a complaint against former Mexican President Ernesto Zedillo that had been brought under the U.S. Alien Tort Statute and the Torture Victims Protection Act based upon the alleged 1997 massacre in the Mexican village of Acteal.[1]
On appeal, the plaintiffs conceded that the district court properly had dismissed their complaint. Instead, the plaintiffs argued that the district court had erred in not permitting them to amend their complaint, for which the appellate court could reverse only if the district court had abused its discretion and if any amendment would not be futile.
The Second Circuit Court of Appeals held that any amendment would be futile since the U.S. Government had submitted a suggestion of immunity for Mr. Zedillo and since that suggestion is dispositive.
Therefore, the Second Circuit affirmed the dismissal in a short Summary Order on February 18th. (Doe v. Zedillo, No. 13-3122 (2d Cir. Feb. 18, 2014).)
[1] Seven prior posts have discussed the Zedillo case in the district court.
On October 1, 2012, the U.S. Supreme Court heard re-arguments in an important human rights case, Kiobel v. Royal Dutch PetroleumCo. (Sup. Ct. No. 10-1491).[1]
This case involves claims by a putative class of Nigerians against Netherlands/United Kingdom corporations (Royal Dutch Petroleum Co. and Shell Transport and Trading Company PLC (Shell)) for allegedly assisting in certain human rights violations in Nigeria in 1993-1995.
The claims in this case were asserted under the Alien Tort Statute (ATS) that provides that U.S. federal district courts have “jurisdiction of 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.”[2]
The order for rehearing asked the parties to address the following issue:
Whether and under what circumstances the [ATS] . . . 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 issue was addressed in the Petitioners’ Supplemental Opening Brief; the Supplemental Brief for Respondents; the Supplemental Reply Brief for Petitioners; 31 amici curiae briefs supporting the petitioners; 14 amici curiae briefs supporting respondents; and 7 amici curiae briefs supporting neither party. One of those not supporting either party was the U.S. Government.[3]
During the hour-long hearing the Court heard from lawyers representing the plaintiffs-petitioners, the defendants-respondents and the U.S. Government. They all were actively questioned by eight of the Justices with only Justice Thomas not participating. Those eight Justices all seemed to be searching for a way to limit the reach of the ATS, especially when such cases adversely affected U.S. foreign policy.[4]
I will not attempt to predict how the Court will resolve the case. Instead I will set forth how I think the Court should do so.
First, Corporations are not immune from lawsuits under the ATS.
Second, As the Court held in Sosa v. Alverez-Machain in 2004, the ATS is a jurisdictional statute.[5] The Court’s presumption against extraterritorial application of U.S. statutes (unless Congress specifically states otherwise), applies to statutes that impose substantive U.S. regulatory measures, not to jurisdictional statutes.[6] Therefore, there is no issue of extraterritoriality with respect to the ATS.
Third, there are various existing legal doctrines and jurisprudence that federal courts have used and should use, in appropriate cases, to dismiss ATS cases at the outset upon a motion by the defendant asserting such affirmative defenses. They include the following:
The court lacks personal jurisdiction over the defendant because it does not have sufficient contacts with the forum to make litigation consistent with U.S. notions of fair play and substantial justice as guaranteed by the Fifth and Fourteenth Amendments’ due process clauses.[7]
The case is not brought within 10 years after the acts in question under the statute of limitations borrowed from the Torture Victims Protection Act unless under established principles of equity the statute of limitations should be tolled or stayed.[8]
The plaintiff has failed to exhaust remedies in the country where the acts occurred unless those remedies are unavailable or futile.[9]
A foreign court is the more appropriate and convenient forum than an U.S. courts under the established principles of forum non conveniens.[10]
An individual defendant is entitled to official immunity according to the U.S. Department of State.[11]
A non-individual defendant is entitled to immunity under the Foreign Sovereign Immunities Act.[12]
The “act of state” doctrine protects the conduct in question.[13]
The case presents a “political question” that is inappropriate for judicial resolution.[14]
The case should be rejected because of concerns about its impact on U.S. foreign relations or because of “international comity.”[15]
The case presents an issue of U.S. state secrets that prevent adjudication of the case.[16]
Fourth, the affirmative defenses just mentioned were not raised by the defendants-respondents in their appeal to the U.S. Court of Appeals for the Second Circuit and, therefore, are not before the Supreme Court for decision.
Fifth, the Second Circuit is reversed, and the case is remanded to the District Court for further proceedings in accordance with this opinion.
Within the next four months the Court should issue its opinion(s) in this case.
[1] Prior posts reviewed the procedural background of this case, the Second Circuit decision rejecting such liability, the initial Supreme Court argument in this case regarding whether corporations could be held liable under the ATS, and the Supreme Court’s order for rehearing in this case.
[3] All of the briefs in Kiobel are available on the website of the Center for Justice and Accountability, a human rights organization, along with its summary of 18 of the 52 amici curiae briefs.
[4] The transcript of that hearing is available online. Reports about the hearing are available in the New York Times, the Washington Post, the Wall Street Journaland the widely followed U.S. Supreme Court blog. In an editorial the New York Times supported sustaining the ATS in this case; the Wall Street Journal did not.
[7] In one of the most recent Supreme Court cases on personal jurisdiction in another context, the Court unanimously determined, in an opinion by Justice Ginsburg, that the South Carolina courts did not have personal jurisdiction over three corporations that were organized and operating in France, Luxembourg and Turkey, but were not registered to do business in South Carolina, had no place of business, employees or bank accounts in the state, did not design, manufacture or advertise its products in the state and did not solicit business in the state or sell or ship products to customers in the state. (Goodyear Dunlop Tires Operations, S.A. v. Brown, No. 10-76 (Sup. Ct. June 27, 2011). This defense has ended ATS cases for some foreign corporate defendants. (E.g., Doe v. Unocal Corp., 248 F.3d 915, 930-31 (9th Cir. 2001) (French corporation).) However, Shell and the other defendants in the Kiobel case did not raise this defense and thereby waived it under Fed. R. Civ. Pro. 12 (h)(1); another defendant (a Nigerian subsidiary) was dismissed from this case on this ground.
[8]E.g.,Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 462 (D.N.J. 1999); Doe v. Saravia, 348 F. Supp. 2d 1112, 1146-48 (E.D.. Cal. 2005)(10-year period tolled or stayed because plaintiff could not have obtained justice due to legitimate fear of being killed for making a claim).
[9] This defense was suggested by the Supreme Court in Sosa, 542 U.S. at 733 n.21, and the lower courts are split as to whether it is appropriate in ATS cases. (E.g., Lizarbe v. Rondon, 642 F. Supp. 2d 473 (D. Md. 2009)(civil remedy in Peru inadequate because it is contingent on conclusion of criminal charges that can take years and because civil damages are ineffective).)
[10] Here are two examples of dismissal of ATS cases on the forum non conveniens ground. (Aldana v. Del Monte Fresh Produce N.A., 578 F.3d 1283 (11th Cir. 2009), cert.denied, 549 U.S. 1032 (2010) (litigation in Guatemala, but with the proviso that the motion would be reconsidered if plaintiffs had to return to Guatemala where they feared for their safety); Turedi v. Coca-Cola Co., 343 Fed. Appx. 623 (2d Cir. 2009) (litigation in Turkey).) But such a dismissal was rejected in Licea v. Curacao Drydock Co., 537 F. Supp. 2d 1270, 1274 (S.D. Fla. 2008) (Cuban plaintiffs would be in danger if forced to litigate in Curaco where they had been subjected to slavery-like conditions). In Kiobel, Shell did not assert the forum non conveniens defense and, therefore, waived it. Shell did do so in a parallel case, but the court rejected the defense. (Wiwa v. Royal Dutch Pet. Co., 226 F.3d 88, 108 (2d Cir. 2000), cert. denied, 532 U.S. 941 (2001).)
[11] For example, the issue of official immunity for former government officials of Somalia and Mexico has been examined in prior posts.
[12] A prior post looked at some of the basic provisions of the Foreign Sovereign Immunities Act while another post discussed the Supreme Court case that decided that his statute did not protect former foreign government officials.
[13] This defense was suggested by the Supreme Court in Sosa, 542 U.S. at 733 n.21, and it has been used in ATS cases. E.g., Doe v. Israel, 400 F. Supp. 2d 86, 114 (D.D.C. 2005) (acts of Israeli government).
[14] This defense was suggested by the Supreme Court in Sosa, 542 U.S. at 733 n.21, and it has been used in ATS cases. E.g., Corrie v. Caterpiller, 503 f. 3d 974 (9th Cir. 2007) (dismissal of ATS claim for selling bulldozers to Israeli Defense Force); Schneider v. Kissinger, 412 F.3d 190 (D.C. Cir. 2005), cert. denied, 547 U.S. 1069 (2006) (dismissal on political question ground of ATS case against former U.S. National Security Advisor over killing of Chilean general in 1970 coup d’etat).
[15]E.g., Ungaro-Benages v. Dresdner Bank AG, 379 F. 3d 1227, 1237-39 (11th Cir. 2004).
[16] Foreigners sued an U.S. corporation under the ATS and TVPA for allegedly aiding and abetting the CIA’s extraordinary rendition of five foreign nationals to other countries for torture and interrogation when the corporation provided flight training and logistical and support services to the aircraft and crew. Before the defendant answered the complaint, the U.S. Government intervened and moved to dismiss the complaint under the state secrets doctrine. The district court granted the motion, which the Ninth Circuit, en banc, ultimately affirmed, 6 to 5. The court held that the state secret privilege established by United States v. Reynolds, 348 U.S. 1 (1953), required dismissal because “there is no feasible way to litigate [the defendant’s] alleged liability without creating un unjustifiable risk of divulging state secrets.” (Mohamed v. Jeppesen Dataplan, Inc., 614 F.3d 1070 (9th Cir. 2010) (en banc).)
In order to give context to subsequent posts about U.S. federal court decisions regarding immunity for former foreign government officials, this post will sketch some of the provisions and issues in the U.S. Foreign Sovereign Immunities Act (FSIA) of 1976.[1]
Congress in FSIA found that under “international law, states are not immune from the jurisdiction of foreign courts insofar as their commercial activities are concerned and their commercial property may be levied upon for the satisfaction of judgments rendered against them in connection with their commercial activities.” Congress also found in FSIA that “the determination by United States courts of the claims of foreign states to immunity from the jurisdiction of such courts would serve the interests of justice and would protect the rights of both foreign states and litigants in United States courts.” (28 U.S.C. § 1602.)
As a result, FSIA grants to U.S. district courts “original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title [Title 28] as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement.” (28 U.S.C. § 1330(a).)[2]
Under the statute a foreign state is presumptively immune unless one of the statutory exceptions applies. (28 U.S.C. § 1604.)
Some of the important exceptions to sovereign immunity are waiver (28 U.S.C. § 1605(a)(1)), commercial activity (28 U.S.C. § 1605(a)(2)), noncommercial tort (28 U.S.C. § 1605(a)(5)) and state-sponsored terrorism (28 U.S.C. § 1605(a)(7).[3]
For the purposes of this statute, a “foreign state” is defined to include “a political subdivision of a foreign state or an agency or instrumentality of a foreign state.” (28 U.S.C. § 1603(a).) The term “agency or instrumentality of a foreign state” in turn is defined in section 1603(b) as “any entity–
(1) which is a separate legal person, corporate or otherwise; and
(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
(3) which is neither a citizen of a State of the United States as defined in section 1332 (c )and (d) of this title [Title 28], nor created under the laws of any third country.”
[1] See generally David Weissbrodt, Fionnuala Ní Aoláin, Joan Fitzpatrick, and Frank Newman, International Human Rights: Law, Policy and Process, at 1001-14 (4th ed. 2009); Wikipedia, Foreign Sovereign Immunities Act.
[2] Prior to FSIA, questions of such immunity were determined primarily by the Executive Branch, which were generally followed without question by the courts.
[3] An earlier post looked at a U.S. Court of Appeals for the Second Circuit case regarding the exception for noncommercial tort.
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 corporationthat 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.’”
Conclusion
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 Kiobeleven 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.
On February 28th the U.S. Supreme Court heard arguments in Kiobel v. Royal Dutch Petroleum (Sup. Ct. No. 10-1491). The transcript of that hearing is available online.
This case involved claims by a putative class of Nigerians against a corporation (Royal Dutch Petroleum Co. (Shell)) for allegedly assisting in certain human rights violations in Nigeria in 1993-95. Prior posts reviewed the procedural background of this case and the Second Circuit decision rejecting such liability.
The claims in this case were asserted under the U.S. Alien Tort Statute (ATS) that provides that U.S. federal district courts have “jurisdiction of 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.” (Earlier posts have reviewed the history of the ATS for the periods 1789-1979, 1980, 1980-2004, the U.S. Supreme Court decision in 2004 and 2004-present.)
Merits Issue: Are Corporations Liable Under the ATS?
A review of the transcript of the hearing reveals that the entire hour was devoted to only one of thetwo issues previously identified by the Court as being raised by this case:
Whether corporations are immune from tort liability for violations of the law of nations such as torture, extrajudicial executions or genocide, as the court of appeals decisions provides, or if corporations may be sued in the same manner as any other private party defendant under the ATS for such egregious violations, as the [U.S.] Eleventh Circuit [Court of Appeals] has explicitly held.
All of the Justices (except Justice Thomas) actively participated in this argument with comments and questions that make it difficult to make any prediction of the ultimate decision in the case, except that it probably will be a decision by a divided Court. Here are samples of some of the comments and questions.
Justice Samuel Alito asked, “What business does a case like [this alleging human rights violations in Nigeria] have in the courts of the United States? There’s no connection to the United States whatsoever.”
Justice Ruth Bader Ginsburg tried to focus the discussion on the precise issue raised by the case, whether it is only individual defendants [who are liable under ATS] or are corporate defendants also liable?”
Justice Stephen Breyer apparently had difficulty with the Second Circuit’s categorical rule in this case that corporations could never be liable under the ATS. He said he could think of instances where that should not be the case. One he cited was “Pirates Incorporated.”
Justice Elena Kagan also expressed skepticism about an assertion by the attorney for the defendant-respondent that international human rights treaties excluded corporations from liability. Justice Kagan said she thought “the international sources are simply silent as to this question [of corporate liability].” She also observed that such treaties were silent on this issue “mostly because all of these are written to prohibit certain acts,” rather than focusing on who commits such acts.
Justice Anthony Kennedy, who often is seen as the swing vote when the Court is divided, asked the first question almost before the attorney for the plaintiffs-petitioners could open his mouth. Justice Kennedy said, “For me, the case turns in large part on this,” (quoting from the defendant-respondent’s brief), ‘International law does not recognize corporate responsibility for the alleged offenses here.’ Justice Kennedy immediately followed with this quotation from an amicus brief by Chevron Corporation, which is a defendant in another ATS case, “No other nation in the world permits its courts to exercise universal civil jurisdiction over alleged extraterritorial human rights abuses to which the nation has no connection.”
Justice Anthony Kennedy also noted that international criminal law made a distinction between individuals and corporations with only the former being subject to criminal sanctions. Yet later he mentioned the legal principle of respondeat superior (that a corporation or other principal is legally responsible for the wrongs of its employee or agent under certain conditions) and said that it was a very simple proposition of U.S. law and perhaps implicitly suggested it was applicable in this case.
Subject Matter Jurisdiction Issue
The second issue raised by this case was not discussed at the February 28th hearing. It was the following: Whether the issue of corporate civil tort liability under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, is a merits question, as it has been treated by all courts prior to the decision below, or an issue of subject matter jurisdiction, as the court of appeals held for the first time.
The Second Circuit in an opinion by Judge Cabranes held, without much discussion, that the ATS incorporates any limitation arising from customary international law on whom may properly be sued as a defendant under the statute and that this was a requirement for subject-matter jurisdiction of the federal courts that was not met in this case.
In my opinion, the Second Circuit was clearly wrong on this conclusion on subject-matter jurisdiction. The ATS states that federal courts have “jurisdiction of 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.” Thus, to establish subject-matter jurisdiction, (i) the plaintiff must be an “alien” (a non-citizen of the U.S.); (ii) the lawsuit must be for a tort; and (iii) the tort must allegedly be set forth in “the law of nations” (customary international law) or a treaty of the U.S. All of these requirements are met in this case. It then becomes an issue on the merits as to whether the alleged conduct in fact violates the “law of nations” or a treaty of the U.S.
Moreover, the ATS does not specify as to whom the defendant must be, unlike the Torture Victims Protection Act (TVPA) which states the defendant has to be an “individual.” If the ATS did specify in some fashion what kind of defendant was permissible, then that would make the nature of the defendant an issue for subject-matter jurisdiction. (Whether the word “individual” in the TVPA includes corporations was the issue presented in the other case heard by the Supreme Court on February 28th.)
The procedural posture of this case makes my opinion, if it is correct, an important one for The Supreme Court’s disposition of this case. Federal courts are courts of limited jurisdiction requiring such courts always to determine if they have such jurisdiction and prohibiting the litigating parties from conferring such jurisdiction on the courts by not themselves raising problems over such jurisdiction. This basic principle enabled Judge Cabranes in the Second Circuit to raise, discuss and decide the issue of corporate liability under the ATS in this case even though that issue had not been briefed or argued by the parties themselves.
The failure of the defendant Shell to raise the merits issue of corporate liability at the trial court and at the Second Circuit should mean that it is deemed to have waived the issue.
Under this analysis the Supreme Court should reverse the Second Circuit on procedural grounds and not reach the substantive issue of corporate liability.
Conclusion
A Supreme Court decision in this case is expected by the end of June. I reiterate that this is a case of statutory interpretation and the Court’s development of federal common law, and at any time the Congress with a presidential signature could amend the statute to make corporate liability express or to exclude such liability explicitly.
Under the infamous Citizens United decision the Court treats corporations as individual human beings for purposes of the Free Speech clause of the First Amendment to the U.S. Constitution and the right to make unlimited political contributions. If the Court were to decide that corporations, unlike individual human beings, are not liable under the ATS, this would and should present the Court with at least a public relations problem.
In September 2010 the U.S. Court of Appeals for the Second Circuit in Kiobel v. Royal Dutch Pet. Co., 621 F.3d 111 (2d Cir. 2010), rejected corporate liability in a civil case for money damages under the U.S. Alien Tort Statute (ATS), 28 U.S.C. § 1350. As mentioned in a prior post, this issue in this case will be the subject of a hearing before the U.S. Supreme Court on February 28th.
Subject-matter Jurisdiction
The Second Circuit in an opinion by Judge Cabranes in Kiobel first held, without much discussion, that the ATS incorporates any limitation arising from customary international law on whom may properly be sued as a defendant under the statute and that this was a requirement for subject-matter jurisdiction of the federal courts. No other circuit court, however, has come to this conclusion about such jurisdiction.
This was an important conclusion because federal courts are courts of limited jurisdiction requiring such courts always to determine if they have such jurisdiction and prohibiting the litigating parties from conferring such jurisdiction on the courts by not themselves raising problems over such jurisdiction. This conclusion enabled Judge Cabranes to raise, discuss and decide the issue of corporate liability under the ATS in this case even though it had not been briefed or argued by the parties themselves.
As mentioned in a prior post, the Supreme Court will be examining the correctness of this conclusion by the Second Circuit in this case.
Corporate Liability under ATS
Most of the lengthy opinion by Judge Cabranes held (a) that international law was the relevant law for determining whether corporations (or other legal entities) could be held liable under ATS for alleged violations of the law of nations; and (b) that customary international law and hence ATS did not recognize or allow corporate direct or accessory civil liability for human rights violations. The court, therefore, ruled that the complaint against a corporation had to be dismissed.
Important for the latter conclusion was the court’s view that international criminal tribunals starting with the Nuremberg Tribunal after World War II only imposed criminal sanctions on individuals for violating international legal norms. Other such tribunals, said the Second Circuit, were the International Criminal Tribunal for the Former Yugoslavia, the International Criminal Tribunal for Rwanda and the International Criminal Court (ICC).
The Second Circuit stressed the ICC’s Rome Statute’s limitation of jurisdiction in Article 25(1) to “natural persons.” Equally important for the Second Circuit was the Rome Conference’s development of the ICC’s Rome Statute and the Conference’s rejection of a French proposal to include corporations and other “juridical” persons in the ICC’s jurisdiction because, according to commentators, corporate criminal liability was rejected by many national legal systems and thus such inclusion in the Rome Statute would eliminate the possibility of national systems’ preempting ICC jurisdiction under the principle of complementarity.
One of the judges in the three-judge panel in Kiobel, Judge Leval, submitted an even lengthier concurring opinion. He agreed that the complaint in its entirety had to be dismissed because it did not allege that the corporate defendants had purposefully aided and abetted the Nigerian government’s alleged violations of human rights. (The important issue of the proper legal requirements for aiding and abetting liability will not be before the Supreme Court in this case on February 28th.)
Judge Leval, however, concluded that international law left to domestic law the issue of whether corporations were civilly liable for aiding and abetting violations of international law and that U.S. law allowed for such liability.
Judge Leval acknowledged that the ICC’s jurisdiction was limited to “natural persons” and that the Rome Conference had rejected the idea of extending the ICC’s jurisdiction to corporations and other legal entities. This structure, said Judge Leval, was due to a belief that a corporation could not act with the requisite criminal intent and the inefficacy of criminal punishment for such entities. On the other hand, Judge Leval quoted the Chairman of the Rome Statute’s Drafting Committee as saying that despite the diversity of views about corporate criminal liability, “all positions now accept in some form or another the principle that a legal entity, private or public, can, through its policies or actions, transgress a norm for which the law, whether national or international, provides, at the very least damages.”
Conclusion
As was noted by the Supreme Court itself in stating the second of the two issues to be argued on February 28th, the U.S. Court of Appeals for the 11th Circuit has disagreed with the Second Circuit on the issue of corporate liability under the ATS. Moreover, three other circuit courts–the 7th, the 9th and the District of Columbia Circuits–also have decided that corporations may be held liable under the ATS.[1]
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[1] An earlier version of this paper appeared in the blog of the American Non-Governmental Organizations Coalition for the International Criminal Court (AMICC).
On February 28th, the U.S. Supreme Court will hear oral arguments on the following two issues in a case from the U.S. Court of Appeals for the Second Circuit, Kiobel v. Royal Dutch Petroleum (Sup. Ct. No. 10-1491):
Whether the issue of corporate civil tort liability under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, is a merits question, as it has been treated by all courts prior to the decision below, or an issue of subject matter jurisdiction, as the court of appeals held for the first time.
Whether corporations are immune from tort liability for violations of the law of nations such as torture, extrajudicial executions or genocide, as the court of appeals decisions provides, or if corporations may be sued in the same manner as any other private party defendant under the ATS for such egregious violations, as the [U.S.] Eleventh Circuit [Court of Appeals] has explicitly held.
The Supreme Court’s resolution of these issues is expected by the end of the current term at the end of June 2012.
The ATS provides that U.S. federal district courts have “jurisdiction of 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.” (Earlier posts have reviewed the history of the ATS for the periods 1789-1979, 1980, 1980-2004, the U.S. Supreme Court decision in 2004 and 2004-present.)
This post will provide the procedural background for the Kiobel case. Subsequent posts will examine the substantive issues in the Second Circuit and before the Supreme Court.
The facts giving rise to the lawsuit took place in Nigeria in 1993-1995, when the Movement for the Survival of the Ogoni People and other Ogoni groups demanded an end to oil development in their region and were met with a violent military crackdown. Shell allegedly aided and abetted the crackdown.
Thereafter representatives of the Ogoni people, including Dr. Barinem Kiobel, commenced a putative class action against Shell under the ATS for allegedly aiding and abetting various human rights violations by the Nigerian government.
The case was brought in the federal court in New York City (the U.S. District Court for the Southern District of New York). After various pretrial motions and other proceedings, that court in September 2006 denied Shell’s motion to dismiss the claims with respect to alleged aiding and abetting crimes against humanity, torture and arbitrary arrest and detention. (Other claims were dismissed.)
The case then went up on appeal to the Second Circuit in New York City. Nearly four years later, September 2010, a three-judge panel of that court reversed the district court’s denial of the dismissal motion on the ground (2 to 1) that corporations could not be held liable under the ATS. (621 F.3d 111 (2d Cir. 2010).)
In February 2011, the Second Circuit’s original three-judge panel denied, 2 to 1, the plaintiffs’ petition for rehearing, and the entire Second Circuit denied, 6 to 4, the petition for rehearing en banc.
In October 2011, the Supreme Court granted the plaintiffs’ petition for a writ of certiorari to review the Second Circuit’s decision. The following briefing then took place:
In December 2011 the plaintiffs-petitioners submitted their brief supported by 19 amici curiae (friends of the court) briefs, including the U.S. Government, the U.N. High Commissioner for Human Rights, Joseph Stieglitz (Nobel Prize economist), law professors, human rights centers and plaintiffs in similar cases.
In January 2012 Shell filed its respondent’s brief supported by 16 amici curiae briefs, including the Federal Republic of Germany, the United Kingdom and the Netherlands, the U.S. Chamber of Commerce and other business organizations, other law professors, the Cato Institute and defendants in similar cases.
In early February the plaintiffs-petitioners submitted their reply brief.
This procedural background by itself illustrates the importance of this issue for the parties, for the enforcement of international human rights and for governments and businesses around the world. Nevertheless, remember that this is a case of statutory interpretation coupled with federal common law under the 2004 Sosa case, and at any time the Congress with a presidential signature could amend the statute to make corporate liability express or to exclude such liability specifically.
On November 7th, the U.S. Court of Appeals for the Second Circuit in New York City decided an important case on whether or not the Islamic State of Afghanistan was entitled to sovereign immunity in a lawsuit for money damages by the estate of a woman who was killed in the terrorist attacks on the World Trade Center on September 11, 2011. The court concluded that Afghanistan was not entitled to such immunity without discovery and determination by the trial court.[1]
The question of sovereign immunity of foreign states in U.S. courts is governed by the Foreign Sovereign Immunities Act of 1976 as amended. The general rule is that “a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States.”[2] There, however, are statutory exceptions to such immunity.[3]
The issue in this case was whether the noncommercial tort exception applied at the initial stages of the lawsuit, and the court said that it did, but that the trial court on remand would have to decide after limited discovery whether all of the conditions for the exception were established by the evidence.
This exception applies to cases that (i) are noncommercial, (ii) seek “money damages,” (iii) for “personal injury or death, or damages to or loss of property,” (iv) that occurred in the U.S. and (v) and that were “caused by the tortious act” (vi) of a defendant “foreign state or [its] employee . . . acting within the scope of his . . . employment” unless (vii) the claims were based on a discretionary act. According to the Second Circuit, there was no question that the complaint alleged that these requirements for this exception were present.[4]
The court then rejected Afghanistan’s argument that the noncommercial tort exception was further limited by the terrorism exception to sovereign immunity and that such an interpretation called for dismissal of the case because Afghanistan had not been designated by the U.S. as a state sponsor of terrorism as required by that exception.[5]
As the court acknowledged, this last ruling on the terrorism exception overruled a prior decision of the Second Circuit.[6] Ordinarily this would be forbidden because a three-judge panel of the Second Circuit (or any other circuit court of appeals) is “bound by the decisions of prior panels” [of the same multi-judge court] until such time as they are overruled by an en banc panel [all the judges] of our Court or by the Supreme Court.”[7] The three-judge panel panel in the Bin Laden case, however, circulated its opinion to the members of the other panel in the 9-11 case and all 12 active Second Circuit judges and received no objection to the Bin Laden opinion; this procedure, said the Bin Laden panel, was a so called “mini-en banc” procedure.[8]
[1] Opinion, Doe v. Bin Laden, No. 09-4958-cv (2d Cir. Nov. 7, 2011); Lichtblau, Prospects Improve for Sept. 11 Suits Against Nations, N.Y. Times (Nov. 18, 2011).
[4] 28 U.S.C. §1605(a)(5); Opinion at 4-5. There is another exclusion from this exception for certain types of claims that were not present in this case. (Opinion at 5.) See generally David Weissbrodt, Fionnuala Ní Aoláin, Joan Fitzpatrick, and Frank Newman, International Human Rights: Law, Policy and Process, at 1001-14 (4th ed. 2009).
[6]In re Terrorist Attacks on September 11, 2011, 538 F.3d 71, 89 (2d Cir. 2008)(affirmance of dismissal on ground of sovereign immunity of tort case for money damages against Saudi Arabia for alleged financial and logistical support of the 9/11 attacks).
[7]Shipping Corp. of India v. Jaldhi Overseas Pte, 585 F.3d 58, 67 & n.9 (2d Cir. 2009).
[8] Opinion at 12 n.10, Doe v. Bin Laden, surpa; cf. Fed. R. App. Pro. 35(a)(1)(majority of active circuit judges may order en banc consideration of a case “to secure or maintain uniformity of the court’s decisions”).
