Kiobel v. Royal Dutch Petroleum Co.:
Corporate Liability and Extraterritoriality
Under the Alien Tort Statute
Richard M. Thompson II
Legislative Attorney
January 17, 2013
Congressional Research Service
7-5700
www.crs.gov
R42925
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Corporate Liability and Extraterritoriality Under the ATS
Summary
The First Congress enacted the Alien Tort Statute (ATS) against a backdrop of concern about the
ability of the United States to carry out its international obligations. Now codified at 28 U.S.C. §
1350, the ATS grants federal district courts jurisdiction over “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.” The meaning
of this terse provision has confounded judges and scholars for over 200 years, and has prompted
three seemingly simple, yet elusive questions: what conduct comes within its ambit; who may be
held liable; and where does it apply?
These questions are the focal point of Kiobel v. Royal Dutch Petroleum Co., a case pending
before the United States Supreme Court. There, a group of Nigerians sued two foreign oil
corporations, the Royal Dutch Petroleum Company (Royal Dutch) and the Shell Petroleum
Development Company of Nigeria, Ltd. (Shell), for allegedly aiding and abetting the Nigerian
government in committing widespread human rights abuses against Nigerian residents. The U.S.
Court of Appeals for the Second Circuit was asked whether corporations could be held
accountable for human rights violations under the ATS, a question long fermenting in the federal
courts. The court ruled that there was not a sufficient norm of customary international law that
would permit such liability. The Seventh, Ninth, Eleventh, and District of Columbia Courts of
Appeals have each reached the opposite conclusion, although each with differing rationales.
In 2011, the Supreme Court granted the Nigerian plaintiffs’ request for review on this question of
corporate liability. At oral argument on February 28, 2011, the Justices’ questions went beyond
mere corporate liability to a more fundamental question: whether the ATS could ever be applied
extraterritorially to cover acts committed by a foreign defendant against a foreign plaintiff on
foreign soil. The parties re-briefed the Court on this issue, and oral arguments were held on
October 1, 2012.
The outcome of the Supreme Court’s ruling in Kiobel on both the issue of corporate liability and
the extraterritorial application of the ATS will have many significant consequences for corporate
strategy, human rights litigation, and U.S. foreign policy. Sensing the potential importance of this
upcoming decision, some of the largest U.S. corporations filed briefs in support of the corporate
defendants. Likewise, human rights groups and plaintiffs’ lawyers have submitted briefs backing
the Nigerian plaintiffs. The Department of Justice has also weighed in due to its concern with the
foreign policy impact of suing foreign entities in U.S. courts for acts committed in the territory of
a sovereign nation.
Whatever the outcome, Congress could clarify the scope and content of the ATS⎯including
whether it covers corporations and whether it applies extraterritorially.
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Corporate Liability and Extraterritoriality Under the ATS
Contents
Introduction ...................................................................................................................................... 1
Background on the Alien Tort Statute .............................................................................................. 2
Kiobel v. Royal Dutch Petroleum Co. ............................................................................................. 4
Corporate Liability ........................................................................................................................... 7
Romero v. Drummond Co. (11th Circuit) ................................................................................... 8
Doe v. Exxon Mobil Corp. (D.C. Circuit) ................................................................................. 9
Flomo v. Firestone National Rubber Co. (7th Circuit) ............................................................. 11
Sarei v. Rio Tinto, PLC (9th Circuit) ........................................................................................ 11
Various Approaches ................................................................................................................. 12
Extraterritoriality ........................................................................................................................... 13
Congressional Action ..................................................................................................................... 16
Contacts
Author Contact Information........................................................................................................... 17
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Corporate Liability and Extraterritoriality Under the ATS
Introduction
The First Congress enacted the Alien Tort Statute (ATS) against a backdrop of concern about the
ability of the United States to carry out its international obligations.1 In its present form, the
statute provides that the federal district courts “shall have original 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 This statute lay dormant for almost 200 years, until a federal court in the 1980s
permitted a human rights abuse case to go forward based on the ATS. This led human rights
advocates and plaintiffs lawyers to attempt to use the ATS as a vehicle for remedying human
rights violations across the globe. In 2004, the U.S. Supreme Court addressed ATS’s enigmatic
language in Sosa v. Alvarez-Machain, ruling that any new cause of action recognized under the
ATS for a violation of the law of nations must be a norm of near universal acceptance among the
international community.3 Although Sosa answered what norms of customary international law
were cognizable under the ATS, questions still remained whether ATS provides jurisdiction over
tort actions brought against corporations and the extent to which it applies to activities occurring
within the territory of a foreign sovereign.
In Kiobel v. Royal Dutch Petroleum Co., a case filed by Nigerian residents against several foreign
oil companies for alleged human rights abuses occurring in Nigeria, the U.S. Court of Appeals for
the Second Circuit dismissed the claims against the companies, concluding that corporate liability
for torts in violation of the law of nations had not reached the level of universality as required
under Sosa.4 The Seventh,5 Ninth,6 Eleventh,7 and District of Columbia8 Courts of Appeals have
each reached the opposite conclusion, although each with differing rationales. The Supreme Court
accepted review of this question of corporate liability, and subsequently requested re-briefing by
the parties as to whether the ATS can apply to torts committed on foreign soil.
Both multi-national corporations and human rights advocates have much at stake with Supreme
Court’s Kiobel ruling. Some argue that a ruling denying corporate liability could derail one of the
primary vehicles used by victims to seek restitution for past human rights abuses. There does not
appear to be a similar statute in any other legal system in the world. Others suggest that a win for
the Nigerian plaintiffs, on the other hand, might cause corporations to rethink their approach to
operating in developing nations where they run a higher risk of working with regimes which
perpetrate human rights abuses, thus increasing their chances of being subject to large civil
damage awards.
1 Act of Sept. 24, 1789, ch. 20, § 9, 1 Stat. 77 (codified at 28 U.S.C. § 1350). For a thorough treatment of the legislative
history and background of the ATS, see CRS Report RL32118, The Alien Tort Statute: Legislative History and
Executive Branch Views, by Jennifer K. Elsea.
2 28 U.S.C. § 1350.
3 Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).
4 Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 120 (2d Cir. 2010).
5 Flomo v. Firestone Nat. Rubber Co., LLC, 643 F.3d 1019 (2011).
6 Sarei v. Rio Tinto, 671 F.3d 736, 744 (9th Cir. 2011).
7 Romero v. Drummond Co., Inc., 552 F.3d 1303, 1309 (11th Cir. 2008).
8 Doe v. Exxon Mobil Corp., 654 F.3d 11, 57 (D.C. Cir. 2011).
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This report will briefly survey the background of the Alien Tort Statute. It will then look at the
Second Circuit decision in Kiobel and its rationale for denying ATS jurisdiction over tort actions
against corporations under the law of nations. Next, it will survey rulings from the Seventh,
Ninth, Eleventh, and D.C. Circuits which have reached the opposite conclusion. It will then
survey the arguments for and against permitting extraterritorial application of the ATS. Finally,
this report will survey possible congressional responses to both the corporate liability and
extraterritoriality question.
Background on the Alien Tort Statute
From the moment the American colonies declared independence from Britain⎯thus, bringing this
new nation onto the world stage⎯it was “bound to receive the law of nations.... ”9 The Founders
sought to guarantee to the world that this fledgling nation could uphold this international
obligation, but the relatively weak Articles of Confederation hamstrung its ability to act.10 This
was one of the concerns raised by the Framers at the Constitutional Convention. There, Edmund
Randolph expressed concern that the Articles of Confederation did not permit the Continental
Congress to create punishments for violations of the law of nations, and that only a few states had
adequate remedies for attacks on ambassadors.11 He worried these infractions could plunge the
country into war.12 Powerless, Congress passed a resolution in 1781 imploring the states to
provide a remedy.13 These recommendations closely paralleled William Blackstone’s three
prototypical violations of the law of nations: “1. Violation of safe conducts; 2. Infringement of the
rights of embassadors; and 3. Piracy.”14 It appears, however, that only one state (Connecticut)
heeded this call. 15
The Continental Congress’s impotence was brought into sharp relief three years later with an
assault on the French representative to America by a “French adventurer.”16 On May 17, 1784, a
French citizen Chevalier De Longchamps, known by some to be an “obscure and worthless
9 Ware v. Hylton, 3 Dall. 199, 281 (1796) (Wilson, J.).
10 Sosa, 542 U.S. at 715-16.
11 1 RECORDS OF THE FEDERAL CONVENTION OF 1787 24-25 (Farrand. ed., 1966).
12 Id.
13 21 JOURNALS OF THE CONTINENTAL CONGRESS 1136-37 (1781). Congress resolved:
That it be recommended to the legislatures of the several states to provide expeditious, exemplary
and adequate punishment:
First. For the violation of safe conducts or passports, expressly granted under the authority of
Congress to the subjects of a foreign power in time of war:
Secondly. For the commission of acts of hostility against such as are in amity, league or truce with
the United States, or who are within the same, under a general implied safe conduct:
Thirdly. For the infractions of immunities of ambassadors and other public ministers, authorised
and received as such by the United States ...: and,
Fourthly. For infractions of treaties and conventions to which the United States are a party.
14 4 WILLIAM BLACKSTONE, COMMENTARIES ON THE LAWS OF ENGLAND 68 (1769).
Id.
15 William S. Dodge, The Historical Origins of the Alien Tort Statute: A Response to the “Originalists,” 19 HASTINGS
INT’L & COMP. L. REV. 221, 228-29 (1996).
16 Wiiliam R. Casto, The Federal Courts’ Protective Jurisdiction Over Torts Committed in Violation of the Law of
Nations, 18 CONN. L. REV. 467, 491 (1986).
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character,”17 threatened the head of the French legation, Frances Barbe Marbois.18 Two days later
Longchamps attacked Marbois on a public street in Philadelphia.19 The international community
was outraged by this attack and called upon the Continental Congress to create a civil remedy for
future violations of the law of nations.20 Congress, however, was still powerless to act. It noted
that in a federal union, the states remain “distinct and sovereign” and Congress could only play an
advisory role.21
But soon thereafter, the Constitution, ratified in 1789, vested the U.S. Congress with broad
powers to legislate in the realm of international law.22 The First Congress wasted little time,
enacting the ATS as part of the Judiciary Act of 1789.23 Currently codified at 28 U.S.C. § 1350,
the ATS provides, in full: “The district courts shall have original 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.”24
For almost two centuries the ATS went virtually unused. Only two federal district courts invoked
their jurisdiction,25 until the 1980s when the Second Circuit Court of Appeals in Filartiga v.
Pena-Irala held that torture under color of official authority violated accepted norms of
international law and thus permitted a claim by a Paraguayan citizen, against a Paraguayan police
official, for torture committed in Paraguay to go forward under the ATS.26 The Supreme Court
later referred to Filartiga as “the birth of the modern line” of ATS cases.27
In its only case interpreting the ATS, the Supreme Court in Sosa v. Alvarez-Machain probed what
laws of nation violations were actionable under the ATS.28 There, Sosa and other Mexican
17 Id. (citing Letter from Thomas Jefferson to James Madison (May 25, 1784)).
18 Respublica v. De Longchamps, 1 U.S. 111, 111 (1784).
19 Id.
20 Casto, supra note 16, at 492.
21 28 JOURNALS OF THE CONSTITUTIONAL CONVENTION 314 (1785).
22 See, e.g., U.S. Const. art. I, § 8, cl. 10 (“The Congress shall have Power to ... define and punish Piracies and Felonies
committed on the high seas, and Offences against the Law of Nations.... ”).
23 Act of Sept. 24, 1789, ch. 20, § 9, 1 Stat. 77.
24 28 U.S.C. § 1350.
25 Adra v. Clift, 195 F.Supp. 857 (D. Md. 1961); Bolchos v. Darrel, 3 F. Cas. 810 (D.S.C. 1795).
26 Filartiga v. Pena-Irala, 630 F.2d 876, 878-89 (2d Cir. 1980).
27 Sosa v. Alvarez-Machain, 542 U.S. 692, 724-25 (2004).
28 Id. at 692. Although the case dealt with conduct that occurred in Mexico, the Court does not seem to have considered
the question of the extraterritoriality of the ATS, as it now faces in Kiobel. Supporting this proposition are the questions
presented to the Court in Sosa:
1. Whether the ATA [Alien Tort Act], is simply a grant of jurisdiction, or whether, in addition to
granting jurisdiction, it provides a cause of action upon which aliens may sue for torts in violation
of nations or treaties of the United States.
2. If the ATA provides a cause of action, whether the actions it authorizes are limited to suits for
violations of jus cogens norms of international law.
3. Whether a detention that last less than 24 hours, results in no physical harm to the detainee, and
is undertaken by a private individual under instructions from senior law enforcement officials,
constitutes a tort in violation of the law of nations actionable under the ATA.
Questions Presented, Sosa, 542 U.S. 692, available at http://www.supremecourt.gov/qp/03-00339qp.pdf.
None of these three questions pertain to the locus of the alleged violation, but only to the conduct that is
actionable under the ATS—that is, what violations of international law norms will be recognized through
(continued...)
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nationals were allegedly directed by the Drug Enforcement Agency (DEA) to abduct Alvarez-
Machain from Mexico and bring him to the United States to stand trial for the death of a DEA
agent. Alvarez-Machain sued Sosa under the ATS for arbitrary arrest and detention. The Court
observed that the ATS was a jurisdictional statute, meaning it only provided federal courts the
authority to hear a case, and did not confer an express right to sue for international law violations.
However, the Court concluded that “the jurisdictional grant is best read as having been enacted on
the understanding that common law would provide a cause of action for the modest number of
international law violations with a potential for personal liability at the time[]” the ATS became
law.29 Writing for the Court, Justice Souter cautioned that “federal courts should not recognize
private claims under federal common law for violations of any international law norm with less
definite content and acceptance among civilized nations than the historical paradigms familiar
when § 1350 was enacted”—piracy, attacks on ambassadors, and violation of safe conducts.30 At
bottom, any new claims under the ATS must be of a norm that is “specific, universal, and
obligatory” under customary international law.31
Although Sosa provides a test for determining what conduct is actionable under the ATS, it
neither delineates who may be sued (e.g., natural persons or corporations) nor where the conduct
may occur (e.g., domestically or extraterritorially). These questions have been raised in Kiobel v.
Royal Dutch Petroleum Co.
Kiobel v. Royal Dutch Petroleum Co.
In Kiobel v. Royal Dutch Petroleum Co., 12 Nigerian plaintiffs brought suit on behalf of
themselves and a putative class against Shell and Royal Dutch in 2002 under the ATS for alleged
human rights violations.32 The Second Circuit ultimately ruled that the ATS does not provide
jurisdiction over tort actions against corporations in violation of the law of nations.33 This creates
a split in the circuit courts as the Seventh, Ninth, Eleventh, and D.C. Circuit Courts of Appeals
have imposed liability against corporations under the ATS.
In 1958, Shell began oil explorations in Nigeria.34 The native Ogoni people protested the
environmental effects of these operations, forming the “Movement for Survival of Ogoni People.”
The Kiobel plaintiffs allege that in an effort to suppress this movement, the Nigerian military
tortured, detained, and killed many Ogoni people.35 The federal district court dismissed the
plaintiffs’ claims for “aiding and abetting property destruction; forced exile; extrajudicial killings;
and violations of the rights to life, liberty, and security, and association” as not meeting Sosa’s
(...continued)
federal common law causes of action.
29 Sosa, 542 U.S. at 724.
30 Id. at 732.
31 Id. at 733 (quoting In re Estate of Marcos Human Rights Litigation, 25 F.3d 1467, 1475 (9th Cir. 1994)).
32 Kiobel v. Royal Dutch Petroleum Co., 456 F. Supp. 2d 457 (S.D.N.Y. 2006).
33 Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 120 (2d Cir. 2010).
34 These facts derive from the Second Circuit Court of Appeals opinion in Kiobel v. Royal Dutch Petroleum Co., 621
F.3d 111, 123 (2d Cir. 2010). The panel accepted as true the facts as alleged by the plaintiffs as required by the
procedural posture of the case—a motion to dismiss under F.R.C.P. 12(b)(6). This report will base its brief recounting
of the facts on this account, as this is the factual record presented to the Supreme Court.
35 Kiobel, 621 F.3d at 123.
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particularity requirement.36 The district court, however, allowed the claims for “aiding and
abetting arbitrary arrest and detention; crimes against humanity; and torture or cruel, inhuman,
and degrading treatment” to go forward.37
On appeal, the Second Circuit Court of Appeals raised the question of corporate liability under
the ATS sua sponte as a jurisdictional question. It ruled that the plaintiffs’ remaining claims must
be dismissed because “customary international law of human rights has not to date recognized
liability for corporations that violate its norms.”38
The Second Circuit majority opinion put forth a two-step analytical approach to decide if
corporate civil tort liability may lie under the ATS.39 At the first step, the court examined which
law should govern: domestic law or international law. Judge Cabranes, writing for the majority,
first noted that the “substantive law that determines our jurisdiction under the ATS is neither the
domestic law of the United States nor the domestic law of any other country.”40 Instead, “the ATS
requires federal courts to look beyond rules of domestic law⎯however well-established they may
be⎯to examine the specific and universally accepted rules that the nations of the world treat as
binding in their dealings with one another.”41 In other words, international law is determinative.
This was based on two rationales. First, the court looked to past examples of international
tribunals to determine which body of law each applied. The court observed that the most
prominent international tribunal, the International Military Tribunal at Nuremburg, had applied
rules of international law, not the domestic law of any particular country. Second, the majority
interpreted an ambiguous (and highly contentious) footnote from the Supreme Court’s decision in
Sosa as requiring application of international law to determine corporate liability.42 In Sosa, the
Supreme Court observed that in addition to determining “whether a norm is sufficiently definite
to support a cause of action,” that courts should also consider “whether international law extends
the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant
is a private actor such as a corporation or individual.”43 The majority interpreted this phrasing as
requiring “international law to determine our jurisdiction over ATS claims against a particular
class of defendant, such as corporations.”44 International law had been applied by the Second
Circuit in prior cases to determine whether state actors,45 private individuals,46 and aiders and
abettors47 fell within ATS’s ambit. Using this approach to determine whether corporate actors
could be held similarly liable was, in the court’s eyes, a simple extension of this principle.
36 Id. at 124.
37 Id.
38 Id. at 124-25.
39 Id. at 125.
40 Id. at 118.
41 Id.
42 Id. at 127.
43 Id. at 127 (quoting Sosa v. Alvarez-Machain, 542 U.S. 692, 732 n.20 (2004) (emphasis added in Kiobel)).
44 Id.
45 Filartiga v. Pena-Irala, 630 F.2d 876, 880 (2d Cir. 1980).
46 Kadic v. Karadzic, 70 F.3d 232, 239-41 (2d. Cir. 1995).
47 Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244, 258-59 (2d 2009).
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Next, the court surveyed sources of international law to determine if corporate liability could be
imposed. The Second Circuit first turned to the Nuremburg tribunals.48 At the end of WWII, the
Allied Powers established the Charter of the International Military Tribunal (commonly known as
the “London Charter”) to prosecute Nazi war criminals for the atrocities and crimes committed
during the war.49 Article 6 of the London Charter declared that the tribunal was established to
punish persons “whether as individuals or as members of organizations.... ”50 The Kiobel majority
offered this as proof that the “single most important source of modern customary international
law concerning liability for violations of fundamental human rights” did not permit corporate
liability, but was singly focused on the culpability of individual perpetrators.51 Additionally, at
Nuremburg, 24 executives of I.G. Farben, the German chemical concern that facilitated the
German war machine, including by supplying the Nazis with the chemical compound used to kill
millions in the gas chambers at Auschwitz, were charged as individuals. The corporate entity was
neither charged nor indicted. The Kiobel court observed that “in declining to impose corporate
liability under international law in the case of the most nefarious corporate enterprise known to
the civilized world, while prosecuting the men who led I.G. Farben, the military tribunals ...
expressly defined liability under the law of nations as liability that could not be divorced from
individual moral responsibility.”52 The court also offered more recent examples such as the
International Criminal Tribunal for the former Yugoslavia and the International Criminal Tribunal
for Rwanda, which confined jurisdiction to natural, not juridical, persons.53
After reviewing other sources of law, including international treaties, the Kiobel court concluded
that corporate liability under the ATS was not permissible:
No corporation has ever been subject to any form of liability (whether civil, criminal, or
otherwise) under the customary international law of human rights. Rather, sources of
customary international law have, on several occasions, explicitly rejected the idea of
corporate liability. Thus, corporate liability has not attained a discernible, much less
universal, acceptance among nations of the world in their relations, inter se, and it cannot not
[sic], as a result, form the basis of a suit under the ATS.54
The Supreme Court granted review on this issue of corporate liability and heard oral arguments
on February 28, 2011.55 There, the questions went beyond mere corporate liability to whether the
48 Kiobel, 621 F.3d at 132.
49 See Agreement for the Prosecution and Punishment of the Major War Criminals of the European Axis, Aug. 8, 1945,
59 Stat. 1544.
50 59 Stat. at 1547.
51 Kiobel, 621 F.3d at 132-33.
52 Id. at 135 (emphasis in original).
53 Id. at 136.
54 Id. at 148-49.
55 A threshold issue also briefed by the parties was whether the question of corporate civil tort liability was a merits
question or a question of subject matter jurisdiction under the ATS. In its briefs, the Nigerian plaintiffs argue that
ATS’s applicability is a merits issue, as it addresses the substantive reach of the statute. Brief for Petitioner at 14,
Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (Dec. 14, 2011). They assert that the Second Circuit improperly
raised the issue of corporate liability on its own motion, although it had never been raised by the defendants in over a
decade of litigation. Id. The plaintiffs chiefly cite Morrison v. Nat’l Austl. Bank Ltd., for support. Morrison v. Nat’l
Austl. Bank Ltd., 130 S. Ct. 2869 (2010). In Morrison, the primary issue was the whether § 10(b) of the Securities and
Exchange Act could be applied to acts by foreign defendants against foreign plaintiffs committed on foreign stock
exchanges. The Court observed that “to ask what conduct § 10(b) reaches is to ask what conduct § 10(b) prohibits,
which is a merits question. Subject-matter jurisdiction, by contrast, refers to a tribunal’s power to hear a case. ... It
(continued...)
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ATS could ever be applied extraterritorially to cover acts committed by a foreign defendant,
against a foreign plaintiff, for acts committed on foreign soil. The Court ordered re-briefing on
this issue of extraterritoriality and heard oral arguments on October 1, 2012.
Corporate Liability
The issue of corporate liability has created much variance in ATS jurisprudence and prompted
scores of analyses from the legal community.56 Unlike the Second Circuit ruling in Kiobel, which
seems to have closed the door to ATS-based cases against corporations for torts committed in
violation of the law of nations, the Seventh, Ninth, Eleventh, and District of Columbia Circuit
Courts of Appeals have either held or assumed that corporations could be culpable under the ATS
(though, within these circuits there is significant divergence in approaches). The principal
difference between the Second Circuit ruling and that of the majority of the other circuit courts is
a debate on choice of law⎯whether domestic law or international law is determinative.
Additionally, these rulings vary considerably in their interpretation of an important footnote in the
Supreme Court’s Sosa ruling.
Before the federal courts were confronted with corporate civil tort liability under the ATS, they
first addressed whether private actors (as opposed to state actors) could be held liable under the
ATS. In Filartiga, the Second Circuit Court of Appeals held that persons acting under color of
official authority could be held liable under the ATS. However, the court did not address whether
non-state actors could be culpable. Several years after Filartiga, Judge Edwards, in his oft-cited
concurrence in Tel-Oren v. Libyan Arab Republic, opined that although many law of nations
violations might require state action, there “were a handful of crimes to which the law of nations
attributes individual responsibility.”57
(...continued)
presents an issue quite separate from the question whether the allegations the plaintiff makes entitle him to relief.” Id.
at 2877. The plaintiffs argue that under Morrison, the determination whether a statute prohibits an actor’s conduct is a
substantive, rather than jurisdictional, question. The plaintiffs further point to Arbaugh v. Y. & H. Corp, which states
that when a “statute does not rank a statutory limitation as jurisdictional, courts should treat the restriction as
nonjurisdictional.” Arbaugh v. Y. & H. Corp., 543 U.S. 516, 500 (2006). Shell and Royal Dutch counter by pointing out
that Sosa stated that the ATS “is jurisdictional in the sense of addressing the power of the courts to entertain cases
concerned with a certain subject.” Brief for Respondents at 12, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491
(Jan, 27, 2012). The defendants assert that because the question of what conduct is actionable under the ATS subsumes
the question of who may violate the law, this converts the question of corporate liability to one of subject matter
jurisdiction. Id. at 13. Assuming this question is nonjurisdictional, Shell and Royal posit that the Second Circuit’s
decision to raise it sua sponte was nonetheless within its discretion.
56 See, e.g., Julian G. Ku, The Curious Case of Corporate Liability Under the Alien Tort Statute: A Flawed System of
Judicial Lawmaking, 51 VA. J. INT’L L. 353, 355 (2011) (“Customary, as opposed to treaty-based, international law has
never recognized the imposition of direct duties on private corporations. Even if some treaties impose direct liability on
corporations in some instances ... such treaties do not support a general, across-the-board rule of imposing direct
liability on private corporations for any or all violations of customary international law.”); Joel Slawotsky, The
Conundrum of Corporate Liability Under the Alien Tort Statute, 40 GA. J. INT’L & COMP. L. 175, 218 (2011)
(“Substantial support exists for the view that corporations should be liable under the ATS. These reasons include: the
dearth of proof that corporate defendants were excluded by the statute’s drafters; the Kiobel court’s misplaced reliance
on the Sosa footnote; the lack of an enforcement mandate in international law; that corporations are subject to civil law
and criminal law; and the blurring of the once sharp public-private distinction.”); Susan Farbstein et al., The Alien Tort
Statute and Corporate Liability, 160 U. PA. L. REV. PENNUMBRA 99 (2011) (“[T]he Supreme Court should reverse the
Second Circuit’s conclusion that corporate liability does not obtain under the Alien Tort Statute (ATS).”).
57 Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 795 (D.C. Cir. 1984) (Edwards, J., concurring).
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Kardic v. Karadzic, another landmark ATS case, confronted this issue of individual liability
versus state action.58 In Kardic, Croat and Muslim citizens of the internationally recognized
nation of Bosnia-Herzegovina alleged that Radovan Karadzic, President of the self-proclaimed
Bosnia-Serb republic, commanded military forces to commit gross human rights violations,
including torture, war crimes, genocide, and summary executions. The two groups of plaintiffs
brought claims under, inter alia, the Alien Tort Statute. The District Court for the Southern
District of New York dismissed the claims, holding that “acts committed by non-state actors do
not violate the law of nations.”59 Because the court did not considered the Bosnia-Serb military
faction a “recognized state,” the alleged human rights abuses could not be remedied under the
ATS.60 The Second Circuit reversed, holding that under the ATS the law of nations does not
confine its reach to state action, but that “certain forms of conduct violate the law of nations
whether undertaken by those acting under the auspices of a state or only as private individuals.”61
The Second Circuit observed that acts such as genocide and war crimes do not require a state
actor for ATS liability. Although the court resolved the issue whether the ATS could reach both
state and non-state actors, it still did not address the question of corporate liability.
It appears that the first case dealing with corporate liability under the ATS was Doe v. Unocal
Corp.62 In that case, villagers from Myanmar, Burma sued Unocal, an United States energy
corporation, under the ATS for alleged human rights abuses that occurred while Unocal helped
construct a gas pipeline through the Tenasserim region of Myanmar.63 One of the threshold
questions before the court was whether the alleged torts required Unocal to engage in state
action.64 Relying on Judge Edward’s concurrence in Tel-Oren and the holding in Kardic, the
Ninth Circuit held that crimes such as slave trading, genocide, and war crimes do not require state
action to find an individual liable.65 Although the panel held that Unocal, a corporation, could be
held liable under the ATS, the court did not explicitly articulate its rationale. Rather, after the
court found that both individuals and government entities could be held liable for certain crimes,
it assumed sub silentio that corporations fell within this umbrella of individual liability.66
Ultimately, this case ended in settlement.67
Romero v. Drummond Co. (11th Circuit)
The Eleventh Circuit in Romero v. Drummond Co., Inc. became the first court to explicitly hold
that corporations could be held civilly liable for torts in violation of the law of nations.68 This
case arose out of allegations that executives of an American coal mining company, Drummond
58 Kadic v. Karadzic, 70 F.3d 232, 237 (2d. Cir. 1995).
59 Doe v. Kardazic, 866 F. Supp. 734, 740 (S.D.N.Y. 1995).
60 Kardazic, 866 F. Supp. at 740-41.
61 Kardazic, 70 F.3d at 239.
62 Doe v. Unocal Corp., 395 F.3d 932 (9th Cir. 2002).
63 Id. at 936.
64 Id. at 945.
65 Id. at 945-46.
66 Id. at 946.
67 See Historic Advance for Universal Human Rights: Unocal to Compensate Burmese Villagers, Center for Const.
Rights (last visited Jan. 11, 2012), http://ccrjustice.org/newsroom/press-releases/historic-advance-universal-human-
rights%3A-unocal-compensate-burmese-villagers.
68 Romero v. Drummond Co., Inc., 552 F.3d 1303, 1309 (11th Cir. 2008).
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Ltd., had paid paramilitary operatives to torture and assassinate leaders of a trade union in
Columbia. Drummond contended that the court lacked subject matter jurisdiction because the
ATS did not permit suits against corporations.69 The court rejected this argument on two grounds.
First, the court relied on a prior case from the Eleventh Circuit, Aldana v. Del Monte Fresh
Produce, Inc., which held that the plaintiff’s had stated a claim against a corporate defendant
under the ATS.70 It must be noted, however, that the Aldana decision did not directly address the
corporate liability question, but was resolved on other grounds. Second, the Romero ruling relied
on the text of the ATS, which, the panel noted, “provides no express exception for
corporations.”71 So, although the Eleventh Circuit permitted a case against a corporation to go
forward under the ATS, it failed to expound on its rationale and relied on circuit precedent that
did not directly address this issue.
Doe v. Exxon Mobil Corp. (D.C. Circuit)
In Doe v. Exxon Mobil Corp., the District of Columbia Circuit Court of Appeals indicated that
corporations could be held liable under ATS for torts in violation of the law of nations, basing its
decision on federal common law, rather than international law.72 In that case, Indonesian villagers
sued Exxon Mobil, an American energy corporation, under, inter alia, the Alien Tort Statute for
alleged murder, torture, and other crimes committed while protecting an oil facility in Indonesia.73
The D.C. Circuit first reviewed Sosa, highlighting that that decision only decided “which
conduct-governing norms” may give rise to liability under the ATS, and not whether corporations
may be held liable for those offenses.74 Because the law of nations, the court observed, creates
neither civil remedies nor private rights of action, “federal courts must determine the nature of
any remedy in lawsuits alleging violations of the law of nations by reference to federal common
law rather than customary international law.”75 Determining that domestic law should control
only began the inquiry; the court had to determine if that body of law permitted corporate
liability.
Because the text and legislative history provided little guidance on this question, the court
surveyed the history surrounding the passage of the ATS. Reviewing the concerns harbored by the
Founders in the early Continental Congress, including America’s perceived inability to uphold its
international obligations and the risk of a single citizen abroad embroiling the country in a foreign
conflict, the court concluded that the historical record “suggests no reason to conclude that the
First Congress was supremely concerned with the risk that natural persons would cause the
United States to be drawn into foreign entanglements, but was content to allow formal legal
associations , i.e., corporations, to do so.”76
Beyond the ATS, the court reviewed the theory of corporate liability extant in 1789, and
concluded that “the notion that corporations could be held liable for their torts, therefore, would
69 Id. at 1315.
70 Id. at 1315 (citing Aldana v. Del Monte Fresh Produce, Inc., 416 F.3d 1242, 1242 (11th Cir. 2005)).
71 Id. at 1315.
72 Doe v. Exxon Mobil Corp., 654 F.3d 11 (D.C. Cir. 2011).
73 Id. at 14-15.
74 Id. at 41.
75 Id. at 41-42.
76 Id. at 47.
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not have been surprising to the First Congress that enacted the ATS. 77 For instance, as early as
1774, English common law held that corporations were subject to liability in tort.78 Likewise,
state court decisions from this period also supported corporate liability.79 During this same period,
the Supreme Court held in Trustees of Dartmouth College v. Woodward that “an aggregate
corporation, at common law, is a collection of individuals, united into one collective body, under
a special name ... [that] possesses the capacity ... to sue or be sued.”80 The D.C. Circuit concluded
that “it appears that the law in 1789 on corporate liability was the same as it is today: ‘The
general rule of substantive law is that corporations, like individuals, are liable for their torts.”81
Additionally, the D.C. Circuit took to task Exxon’s reliance on a footnote from the Supreme Court
decision in Sosa to prove that individuals and corporations should be treated differently under the
ATS. In Sosa, when discussing “whether a norm is sufficiently definite to support a cause of
action” under the ATS, the Supreme Court observed in footnote 20 that “a related consideration is
whether international law extends the scope of liability for a violation of a given norm to the
perpetrator being sued, if the defendant is a private actor such as a corporation or individual.”82
This footnote has created some consternation in the courts. The D.C. Circuit asserted that
footnote 20 was describing whether “certain forms of conduct were violations of international law
only when done by a state actor” rather than a private actor, and was not intended to create a
dichotomy between natural persons and corporations.83 It must be remembered that some acts,
such as torture, can only be committed by state actors, whereas other acts, such as genocide,
permit private liability. Footnote 20, in the D.C. Circuit’s view, was merely demonstrating the
distinction between state and private actors, rather than between natural and juridical persons.84
Ultimately, the court permitted the case against Exxon Mobil to go forward.85
77 Id. at 47-48.
78 Mayor of Lynn v. Turner, (1774) 98 Eng. Rep. 980 (K.B.) (holding corporation liable for failing to keep repaired a
stream which ultimately injured a person).
79 Chestnut Hill & Springhouse Turnpike Co. v. Rutter, 4 Serg. & Rawle 6 (Pa. 1818) (upholding trespass action
against corporation); Riddle v. Proprietors of Merrimack River Locks & Canals, 7 Mass. 169, 186 (1810) (upholding
tort action against proprietor of a canal, a corporation, for failing to maintain a canal which resulted in damage to a
vessel).
80 Trustees of Dartmouth College v. Woodward, 17 U.S. 518, 667 (1819).
81 Doe v. Exxon Mobil Corp., 654 F.3d 11, 49 (D.C. Cir. 2011) (quoting White v. Cent. Dispensary & Emergency
Hosp., 99 F.2d 355, 358 (D.C. Cir. 1938)).
82 Sosa v. Alvarez-Machain, 542 U.S. 692, 732 n.20 (2004).
83 Doe v. Exxon Mobil Corp., 654 F.3d 11, 50 (D.C. Cir. 2011).
84 Concurring in Kiobel, Judge Deval wrote in support of this interpretation of footnote 20 from Sosa:
Far from implying that natural persons and corporations are treated differently for purposes of civil
liability under ATS, the intended inference of the footnote is that they are treated identically. If the
violated norm is one that international law applies only against States, then “a private actor, such
as a corporation or an individual,” who acts independently of a State, can have no liability for
violation of the law of nations because there has been no violation of the law of nations. On the
other hand, if the conduct is of the type classified as a violation of the norms of international law
regardless of whether done by a State or a private actor, then “a private actor, such as a
corporation or an individual,” has violated the law of nations and is subject to liability in a suit
under the ATS. The majority’s partial quotation out of context, interpreting the Supreme Court as
distinguishing between individuals and corporations, misunderstands the meaning of the passage.
Kiobel, 621 F.3d at 165 (Leval, J., concurring) (emphasis in original).
85 Exxon Mobil Corp., 654 F.3d at 57.
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Flomo v. Firestone National Rubber Co. (7th Circuit)
One week after Exxon Mobil Corp. was handed down, the Seventh Circuit Court of Appeals
joined the majority of courts taking up this issue, holding that corporate liability was possible
under the ATS. In Flomo v. Firestone National Rubber Co., twenty-three Liberian children sued
Firestone Natural Rubber Company under the ATS for utilizing hazardous child labor on its
rubber plantation in Liberia.86 As in Exxon Mobil Corp., the Seventh Circuit held that domestic
law is determinative of corporate liability. “International law imposes substantive obligations,”
Judge Posner wrote for the Court, “and the individual nations decide how to enforce them.”87 The
Seventh Circuit acknowledged that in Kiobel, the Second Circuit held that corporations cannot be
held liable under the ATS because corporations have never been held civilly responsible under
customary international law. However, the Seventh Circuit argued that this “factual premise of the
majority opinion in the Kiobel case is incorrect.”88 The court noted that after WWII, German
corporations such as I.G. Farben were dissolved due to their complicity in the gross human rights
atrocities committed by the Nazis. If the corporations could be punished for violating customary
international law, as the German corporations had been following WWII, “then a fortiori if the
board of directors of a corporation directs the corporation’s managers to commit war crimes,
engage in piracy, abuse ambassadors, or use slave labor, the corporation can be civilly liable.”89
Although the Seventh Circuit held that corporate liability was possible, it dismissed the plaintiffs’
claims because the claims of child labor violations did not rise to the level of a violation of
customary international law as required under Sosa.90
Sarei v. Rio Tinto, PLC (9th Circuit)
The most recent appellate court decision regarding corporate liability comes from the Ninth
Circuit in Sarei v. Rio Tinto, PLC.91 This case arose out of an uprising on the island of
Bougainville in Papua New Guinea against operations of the Rio Tinto mining group that resulted
in the use of military force and many deaths. Current and former residents of Bougainville sued
Rio Tinto under the ATS. Ultimately holding that corporations could be held liable for torts under
customary international law, the Ninth Circuit employed an approach to corporate liability not
used by any previous court.
First, the court questioned whether there was a statutory bar to corporate liability under the ATS.92
Unlike the Torture Victim Protection Act in which Congress expressly limited liability to
individuals, the panel pointed out that “the ATS contains no such language and has no such
legislative history to suggest that corporate liability was excluded and that only liability of natural
persons was intended.”93 Further, the court observed that “Congress then could hardly have
fathomed the array of international institutions that impose liability on states and non-state actors
alike in modern times. That an international tribunal has not yet held a corporation criminally
86 Flomo v. Firestone Nat. Rubber Co., LLC, 643 F.3d 1013 (2011).
87 Id. at 1020.
88 Id. at 1017.
89 Id. at 1019.
90 Id. at 1024.
91 Sarei v. Rio Tinto, 671 F.3d 736, 742 (9th Cir. 2011).
92 Id. at 747.
93 Id. at 748.
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liable does not mean that an international tribunal could not or would not hold a corporation
criminally liable under customary international law.” Based on this, it concluded that “there was
no basis for a statutory limitation.” 94
The Ninth Circuit then focused on footnote 20 from the Supreme Court’s decision in Sosa:
“Sosa expressly frames the relevant international-law inquiry to be the scope of liability of private
actors for a violation of the ‘given norm,’ i.e. an international-law inquiry specific to each cause
of action asserted.” This approach is unique among the circuits addressing this issue, and
somewhat more nuanced. In Kiobel, the Second Circuit held that corporate liability had not
reached universal acceptance under customary international law as required under Sosa.95 The
District of Columbia and Seventh Circuits would permit corporate liability for any human right
violation so long as the norm itself had met Sosa’s universality test.96 The Ninth Circuit in Sarei,
however, does not apply this all-or-nothing threshold question, but instead probed each cause of
action individually to determine which actors (e.g., juridical or natural) may violate it.97
The court then moved to this second step of the analysis to look at whether the plaintiffs’ claims
for genocide and war crimes⎯the two claims actionable as a tort in violation of the law of
nations⎯could be committed by corporations. As to genocide, the panel observed that Art. IX of
the Genocide Convention permits contracting parties to submit disputes to the International Court
of Justice relating to allegations of genocide. The ICJ holds that a state may be held responsible
for “genocide committed by groups or persons whose actions are attributable to states.”98 Based
on this, the court concluded that “[t]his clarity about collective responsibility implies that
organizational actors such as corporations or paramilitary groups may commit genocide.”99 Next,
the court probed potential corporate liability for war crimes. It observed that international sources
of law, in particular, Common Article III of the 1949 Geneva Conventions, focus on the specific
identity of the victims of the crime, but not the identity of the perpetrator.100 Additionally, the
court noted that “[t]he universal, obligatory, and specific nature of the jus cogens prohibition on
war crimes is analogous to the jus cogens norm prohibiting genocide in its inclusion of states,
individuals, and groups within its prohibition.”101 From this, the court concluded that corporations
could be held liable under the ATS for war crimes. Thus, under the Ninth Circuit’s approach,
liability for both genocide and war crimes could be imposed against corporations.
Various Approaches
Not only are the federal circuit courts split on the issue of corporate civil tort liability under the
ATS, but they are also divided in their rationales. The Second Circuit held in Kiobel that there
was not a sufficient norm of customary international law that would permit such liability. This
94 Id.
95 Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 148-49 (2d Cir. 2010).
96 Flomo v. Firestone Nat. Rubber Co., LLC, 643 F.3d 1013, 1019 (7th Cir. 2011); Doe v. Exxon Mobil Corp., 654 F.3d
11, 49 (D.C. Cir. 2011).
97 Sarei, 671 F.3d at 784.
98 Sarei, 671 F.3d at 759 (citing Bosnia and Herzegovina v. Serbia, 2007 I.C.J. 91, ¶ 167 (Feb. 26)).
99 Id. at 759-60 (“[The implication that an actor may avoid liability merely by incorporating is inconsistent with the
universal and absolute nature of the prohibition against genocide.”).
100 Id. at 764-65.
101 Id. at 765.
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decision is somewhat unique in the level of abstraction at which it looked at customary
international law. It not only held that international law was determinative as to this question, but
also focused on whether customary international law permitted corporate liability specifically for
human rights cases. Finding no support for corporate liability in either international tribunals,
such as the Nuremberg Tribunals, or international treaties, it concluded that none could exist.
Likewise, the Ninth Circuit concluded that international law is determinative, but posited that
each alleged violation of international law must be tested for whether corporate actors may
violate it.102 By contrast, the Seventh and D.C. Circuits both concluded that because domestic law
provides the remedy in an ATS action and U.S. law recognizes the concept of corporate liability,
that the ATS permits tort suits against corporations for violation of the law of nations.103
If the Supreme Court decides that federal common law is determinative of this issue, there is
ample support for corporate liability in American jurisprudence. On the other hand, if it holds that
international law is determinative, the question then becomes what level of generalization to
focus on the question. If the Court takes a broader view of corporate civil tort liability throughout
the world, it will find ample examples, as most of world’s legal systems impose some form of
liability on corporations. However, if it takes a more narrow view, as did the Second Circuit, and
requires universal acceptance of corporate liability in specific sources of international law, such
as international tribunals or treaties, the imposition of corporate liability seems significantly less
probable.
Extraterritoriality
Because the Second Circuit in Kiobel dismissed the plaintiffs’ claims on the corporate liability
question, it declined to address whether the ATS allows courts to recognize a cause of action for
violations of the law of nations that occur in the territory of a foreign sovereign. However, after
accepting review of this case, the bulk of the questions from the Supreme Court justices at oral
argument centered on the extraterritorial application of the ATS. Justice Samuel Alito criticized
the case as having “no connection to the United States whatsoever,” and Chief Justice John
Roberts asked whether allowing the suit might contravene international law.104 Six days later, the
Court issued an order for the parties to re-brief the Court on “whether and under what
circumstances the Alien Tort Statute, 28 U.S.C. § 1350, allows a court 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.”105 Re-argument was held on October 1, 2012.
Focusing on the nexus with the United States, the Nigerian plaintiffs emphasize that the plaintiffs
received political asylum in the United States and were living here when the case was filed, and
argued that the oil companies had sufficient contacts with the United States. They next argue that
that the text, history, and purpose of the ATS support its extraterritorial reach. They point out that
the text of the ATS applies to “any civil action” by “an alien,” and contains no express territorial
limits. Indeed, piracy—a paradigmatic law of nations claim—can occur outside of the United
102 Sarei v. Rio Tinto, 671 F.3d 736, 748 (9th Cir. 2011).
103 Flomo v. Firestone Nat. Rubber Co., LLC, 643 F.3d 1020 (7th Cir. 2011); Doe v. Exxon Mobil Corp., 654 F.3d 11,
41-42 (D.C. Cir. 2011).
104 Id. at 8, 12.
105 Docket, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491 (Mar. 5, 2012), available at
http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/10-1491.htm
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States, and attacks on ambassadors and violations of safe conducts, the other two Blackstone
paradigms, need not occur on U.S soil.106 Additionally, the plaintiffs proffer an oft-cited 1795
opinion of Attorney General William Bradford that contemplated the application of the ATS to a
French attack, aided by U.S. citizens, in the territory of Sierra Leone as evidencing a longstanding
recognition of the ATS’s extraterritorial reach.107
Moreover, the plaintiffs assert that every circuit court to have addressed the issue has rejected the
argument that ATS does not apply extraterritorially. In Doe v. Exxon Mobil Corp., although the
issue was apparently not directly before the court, the D.C. Circuit Court of Appeals observed that
piracy, one of the paradigmatic law of nation violations, necessarily occurs beyond American
borders: “For it appears beyond debate that piracy is contemplated by the ATS, and piracy can
occur outside of the territorial bounds of the United States, and, the Supreme Court has held, also
within the territorial waters of another nation[.]”108 Further, the court noted that during
consideration of the Torture Victims Protection Act,109 the Senate Committee on the Judiciary
expressed approval of the Filartiga case, in which the Second Circuit applied the ATS to acts
occurring in Paraguay committed by Paraguayan citizens.110 Similarly, the Seventh Circuit in
Flomo v. Firestone Nat. Rubber Co., LLC, rejected an argument that the ATS has no
extraterritorial application:
Courts have been applying the statute extraterritorially (and not just to violations at sea)
since the beginning; no court to our knowledge has ever held that it doesn't apply
extraterritorially; and Sosa was a case of nonmaritime extraterritorial conduct yet no Justice
suggested that therefore it couldn't be maintained. Deny extraterritorial application, and the
statute would be superfluous, given the ample tort and criminal remedies against, for
example, the use of child labor (let alone its worst forms) in this country.111
Likewise, the Ninth Circuit in Sarei v. Rio Tinto held that the ATS contained no extraterritorial
bar.112 First, citing Ninth Circuit precedent, the panel noted that the text of the ATS contains no
express limitation as to the citizenship of the defendant or where the act may occur.113 Second, the
court noted that one of the primary concerns in 1789 was piracy, an act that can occur outside the
boundary of the United States.114 Third, it observed that the context of the ATS⎯that it was meant
106 Supplemental Brief for Petitioners at 8, Kiobel v. Royal Dutch Petroleum Co., No. 10-491 (June 6, 2012).
107 Id. at 31.
108 Doe v. Exxon Mobil Corp., 654 F.3d 11, 21 (D.C. Cir. 2011) (internal citations and quotation marks omitted).
109 The Torture Victims Protection Act of 1991, P.L. 102-256, § 2(a), 106 Stat. 73, 73 (codified as amended at 28
U.S.C. § 1350 note), permits claims by individuals (or their legal representative) who have been subjected to torture or
extrajudicial killings by an individual acting under color of authority of any foreign nation.
110 Exxon Mobil Corp., 654 F.3d at 24 (quoting S. Rep. 102-249, at 4 (1991) (“The TVPA would establish an
unambiguous basis for a cause of action that has been successfully maintained under an existing law, section 1350 of
Title 28 of the U.S. Code, derived from the Judiciary Act of 1789 (the Alien Tort Claims Act) which permits Federal
district courts to hear claims by aliens for torts committed ‘in violation of the law of nations.’ (28 U.S.C. 1350). Section
1350 has other important uses and should not be replaced.... ”)).
111 Flomo v. Firestone Nat. Rubber Co., LLC, 643 F.3d 1013, 1025 (7th Cir. 2011).
112 Sarei v. Rio Tinto, 671 F.3d 736, 746 (9th Cir. 2011).
113 Id. at 745 (quoting In re Estate of Ferdinand Marcos, Human Rights Litig. , 978 F.2d 493, 500(9th Cir.1992) (“[W]e
are constrained by what § 1350 shows on its face: no limitations as to the citizenship of the defendant, or the locus of
the injury.”).
114 Id.
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to provide a remedy for foreign subjects and looks to foreign law to determine what torts fall
within its ambit⎯are additional evidence that it should apply beyond the United States.115
Instead of focusing on extraterritoriality, the plaintiffs posit that judicial rules such as the political
question doctrine, forum non conveniens, and exhaustion of remedies, would serve a gatekeeper
function keeping cases with no connection to the United States out of federal courts. The
Department of Justice agrees that there should not be a categorical rule excluding the
extraterritorial application of the ATS.116 Instead, it urges a case-by-case approach that looks to
the factors outlined in Sosa for creating new causes of action, including the modern conception of
federal common law; the proper role of the courts in making that law; the assumption that the
creation of private rights is better left to legislative judgment; and the potential foreign relations
interests of the United States.117 However, the federal government argues that the Nigerians’ case
should be dismissed as “the United States cannot be thought responsible in the eyes of the
international community for affording a remedy for the company’s actions, while the nations
directly concerned could.”118
Shell and Royal Dutch argue that the presumption against the exterritorial application of U.S. law
must apply here as the conduct and the injury alleged both occurred in Nigeria. The Supreme
Court recently reaffirmed a presumption against extraterritoriality in Morrison v. Nat’l Austl.
Bank Ltd., holding that “[i]t is a ‘longstanding principle of American law that legislation of
Congress, unless a contrary intent appears, is meant to apply only within the territorial
jurisdiction of the United States.’”119 The plaintiffs counter by arguing that a cause of action
under the ATS does not project U.S. law extraterritorially, but rather, rests entirely upon
international law. Shell and Royal Dutch disagree, arguing that “as Sosa recognized, in cases
under ATS jurisdiction, courts apply a civil cause of action under U.S. federal common law to
remedy a violation of an international law norm.”120
If the presumption against extraterritoriality is not triggered, the oil companies argue alternatively
that the presumption against construing U.S. law to violate international law—the “Charming
Betsy” canon—should apply.121 They argue that the Charming Betsy canon prohibits application
of U.S. law to “foreign cubed” ATS cases (that is, cases that involve a foreign defendant, foreign
plaintiff, and conduct occurring on foreign soil). The defendants argue that foreign cubed cases
would require the use of universal jurisdiction, which, Shell and Royal Dutch further argue,
foreign governments and tribunals view as a violation of international law.
Finally, Shell and Royal Dutch have made several policy pleas to the Court. They contend that
Congress, and not the judiciary, should decide when to extend U.S. human rights law to other
nations. Further, they maintain that applying the ATS to foreign conduct risks impacting U.S.
commercial interests.
115 Id.
116 Supplemental Brief for the United State as Amicus Curiae in Partial Support of Affirmance at 4, Kiobel v. Royal
Dutch Petroleum Co., No. 10-1491 (June 2012).
117 Id. at 3-4.
118 Supplemental Brief of the United States at 5, supra note 116.
119 Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869, 2877 (2010) (quoting EEOC v. Arabian American Oil Co., 499
U.S. 244, 248 (1991)).
120 Supplemental Brief for Respondents at 7, Kiobel v. Royal Dutch Petroleum Co., No. 10-491 (Aug. 1, 2012).
121 Id. This canon derives its name from Murray v. Schooner Charming Betsy, 6 U.S (2 Cranch) 64 (1804).
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Congressional Action
Congress is free to clarify, alter, or rescind the ATS as it sees appropriate, considering “it’s just a
statute.”122 Likewise, the Supreme Court explained in Sosa that it “would welcome any
congressional guidance in exercising jurisdiction with such obvious potential to affect foreign
relations.... ” Following Sosa, there appears to have been only one legislative proposal to amend
the ATS, but this measure remained in committee and was not re-filed in subsequent
Congresses.123 In light of these propositions, Congress could take several actions to clarify the
scope and content of the ATS.
As to the jurisdictional question, Congress has the power to set federal jurisdiction (within the
bounds of Article III) and to delineate the jurisdictional scope of a statute. It must be remembered
that a court’s determination of whether a statute is jurisdictional is simply an attempt to determine
whether Congress intended it to be so. As the Supreme Court remarked in Arbaugh Y. & H. Corp.,
“If the Legislature clearly states that a threshold limitation on a statute’s scope shall count as
jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with
the issue.” 124 Based on this principle, Congress may clarify whether the question as to the status
of the defendant under the ATS is intended to be a jurisdictional or a merits-based question.
Congress could also establish whether corporations are appropriate defendants under the ATS.
The statute expressly defines the appropriate class of plaintiffs—aliens—but is silent on the
appropriate class of defendants. Congress could amend the statute to reach not only natural
persons, but also entities “without a heartbeat,”125 such as corporations. Although beyond the
scope of this report, it should be noted that there has been significant debate regarding the
economic impact of permitting ATS suits against corporations.126
122 Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013, 1016 (7th Cir. 2011).
123 S. 109th Cong. (2005). See Daniel Swearingen, Alien Tort Reform: A Proposal to Revise the Alien Tort Statute, 48
HOUS. L. REV. 99, 117 (2011).
124 Arbaugh v. Y & H Corp., 546 U.S. 500, 515-16 (2006).
125 Flomo, 643 F.3d at 1017.
126 Alan O. Sykes, Corporate Liability for Extraterritorial Torts under the Alien Tort Statute and Beyond: An Economic
Analysis, 100 GEO. L. J. 2161 (2011).
In this regard, corporate liability seems particularly unlikely to curtail undesirable behavior in many
of the aiding and abetting scenarios that have been litigated under the ATS, yet liability can
nevertheless impose substantial costs on firms subject to suit in the United States. Such costs are an
economic waste if they do not induce valuable changes in corporate conduct going forward. In
extreme cases, corporate liability may simply cause the diversion of business opportunities to firms
not subject to suit in the United States or induce costly corporate restructuring to avoid U.S.
jurisdiction while accomplishing nothing to reduce misconduct abroad. It thus has the potential to
reduce economic welfare from both the national and the global perspectives and to anger foreign
sovereigns accused of primary misconduct.
Id. at 2164-65.
Chimene I. Keitner, Optimizing Liability for Extraterritorial Torts: A Response to Professor Sykes, 100 GEO. L. J. 2211
(2012).
[ATS] cases have nonetheless played, and continue to play, an important role in providing symbolic
vindication to victims, engaging U.S. courts in the process of articulating and enforcing
international norms, and—in the case of individual defendants—deterring human rights violators
from entering and remaining in the United States. Cases against corporate defendants may perform
the first two of these functions and may also provide increased opportunities for obtaining
(continued...)
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Corporate Liability and Extraterritoriality Under the ATS
Finally, unless Congress includes language to extend the reach of a certain law extraterritorially,
the Court will typically presume Congress did not intend to do so. The Supreme Court instructed
in Morrison v. Nat’l Austl. Bank Ltd. that “[r]ather than guess anew in each case, we apply the
presumption in all cases, preserving a stable background against which Congress can legislate
with predictable effects.”127 Congress could clarify the extraterritorial reach of the statute by
expressly providing whether the ATS should apply to conduct that occurs on foreign soil.
Author Contact Information
Richard M. Thompson II
Legislative Attorney
rthompson@crs.loc.gov, 7-8449
(...continued)
compensation. Although other forms of wealth transfer from corporations to the populations
adversely affected by their activities would likely be more efficient than ATS liability, the ideal
system has yet to be designed and implemented on a global scale. Tort liability should be compared
to the existing alternatives.
Id. at 2216.
127 Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869, 2881 (2010).
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