The following contribution to our Kiobel v. Royal Dutch Petroleum symposium is written by Trey Childress, Associate Professor of Law at the Pepperdine University School of Law and a Visiting Associate Professor of Law at the Washington & Lee University School of Law during the 2012-2013 academic year. Professor Childress teaches transnational law, civil procedure, conflict of laws, and comparative law. He has written extensively about transnational law and litigation in U.S. courts and the ways in which domestic substantive and procedural law respond to transnational parties, laws, and conduct. He is the American co-editor of ConflictofLaws.net. [Lyle published an introduction to the issues in Kiobel last week.]
We all know that Supreme Court decisions have impact, but they sometimes change litigation in unanticipated ways. What changes will the Court’s decision in Kiobel v. Royal Dutch Petroleum bring about in transnational human rights cases? Depending on what the Court holds, we may see a brave new world of transnational human rights litigation (1) in federal courts under state and foreign law, (2) in U.S. state courts under state and foreign law, and (3) in foreign courts under foreign law.
Understanding the impact the Kiobel decision might have requires taking a step back to see what has happened since the Court’s decision in Morrison v. National Australia Bank, which like Kiobel involved the extraterritorial application of U.S. law to foreign conduct. In that case, the Court held that Section 10(b) of the 1934 Securities Exchange Act does not provide a cause of action to foreign plaintiffs suing foreign defendants for misconduct in connection with securities traded on foreign exchanges. The Morrison decision has required courts not only to dismiss so-called “foreign cubed” cases – that is, foreign plaintiff, foreign defendant, foreign conduct – filed under the federal securities laws, but also federal securities law claims where the harm complained of occurred on foreign securities exchanges regardless of the nationality of the parties.
On some level, that was to be expected. But what was perhaps less expected is how plaintiffs responded to Morrison. Recognizing that federal courts were unlikely to sustain claims predicated on federal law, plaintiffs pursued two strategies. First, plaintiffs pled their claims under state law in federal court, a tactic not explicitly rejected by the Court in Morrison. Second, plaintiffs began looking to other fora – such as state and foreign courts – in order to pursue their claims and escape the now-limited strictures of the federal securities laws. For instance, cases under U.S. state law have been filed in federal and state courts in New York and Virginia. Cases under foreign law have been filed in Canada and in the Netherlands. In other words, the Morrison decision moved litigants away from federal law in federal courts and towards other law and other fora. When one door closes, another door opens.
Depending on the how the Court decides Kiobel, we may see a similar dynamic occur in transnational human rights litigation. Should the Court hold that the Alien Tort Statute (“ATS”) cannot be applied to conduct occurring in the territory of a foreign sovereign, that holding will not end transnational human rights litigation in the United States. Instead, plaintiffs will – as they did in responding to Morrison – seek to escape federal law by pleading state and foreign law causes of action in state and federal court and, in some cases, in foreign courts. In other words, the Court faces a secondary question in its ATS analysis: does it wish to limit just federal ATS cases or does it wish to limit transnational human rights litigation in the United States generally where there is a limited nexus with the United States? Of course, this begs another question: is it even the Court’s role to make such a decision regarding transnational human rights litigation generally?
Surprisingly, little attention has been paid to the impact that the Kiobel case may have on alternative fora, although it is of incredible practical importance. Indeed, the petitioners’ supplemental opening brief notes that “Respondents’ proposed categorical territorial limitation [of the ATS] would only frustrate Congress’s purpose by driving ATS tort cases into state courts rather than the federal forum the First Congress intended.” (emphasis added) An amicus brief for English law practitioners in support of the petitioners explains that United Kingdom courts have adjudicated a handful of cases pled under English law in ATS-like situations. Another amicus brief, filed by the Yale Law School Center for Global Legal Challenges, notes that Dutch and Italian courts have entertained ATS-like extraterritorial tort suits.
As these briefs recognize, there is reason to believe that in responding to Kiobel some plaintiffs may file ATS-like cases in state courts, alleging state common law causes of action, or in federal court under diversity, again alleging state law causes of action. Foreign law might also be pled in state and federal courts under choice of law rules. How should U.S. courts resolve these cases? Other plaintiffs will file ATS-like cases in the United Kingdom, the Netherlands, Germany, and Italy, and perhaps other yet-to-be identified fora, if they cannot avail themselves of the ATS or other law in the United States. How foreign courts will handle these cases is less than certain.
The supplemental amicus brief of the United States provides a partial answer for U.S. courts. There, the United States argues that, in certain circumstances in which a federal common law cause of action is created under the ATS for extraterritorial violations of the law of nations, doctrines like exhaustion, forum non conveniens, international comity, act of state, and related doctrines could be applied if the parties and conduct have little connection to the United States. Not only would these doctrines apply in federal cases, but they could also be employed in cases filed under state or foreign law. While the government’s brief does not specifically tie these doctrines to cases filed under non-federal law, there is nothing that necessarily limits their application to state and foreign law claims filed in federal or state courts. How will federal courts apply these doctrines? Should state courts apply these doctrines and, if so, would they apply them in the same way as federal courts?
It is important to note that ATS-like cases may still make their way into U.S. courts, even if such cases are not heard in the United States in the first instance. Should a plaintiff recover damages in a foreign forum, the judgment creditor might seek enforcement in the United States. In such cases, U.S. courts will have only limited review. It would be strange indeed to close U.S. courts to ATS-like cases and then make U.S. courts the enforcers of foreign transnational human rights judgments.
Assuming these issues are important to the Justices, the Court faces a couple of options. First, the Court could hold as a matter of federal law that the ATS does not apply extraterritorially. But, in so doing, ATS-like claims based on state and foreign law may still be filed in federal court and will continue to bedevil courts and commentators. This would resolve the ATS question but would not resolve Justice Alito’s comment at the first Kiobel oral argument that U.S. courts may have no “business” entertaining a suit filed by a foreign plaintiff where there is “no connection to the United States whatsoever.”
So, what is the Court to do? Will there be some preemptive force to the Court’s ruling given that this is an area that involves foreign relations? Will the Court signal in a footnote that various procedural and prudential doctrines should be employed by courts applying non-federal law? Will the Court remain silent, as it did in Morrison, and let the litigation process resolve these issues?
Regardless of the answer to these questions, the Court and commentators must now focus on questions beyond federal law and the appropriate role of transnational human rights litigation in U.S. courts generally. In what circumstances should state law reach transnational human rights claims? Should preemption, due process, and related doctrines constrain the ability of plaintiffs to raise such claims under state law? Should forum non conveniens be robustly applied when cases are filed under foreign law in the United States? Should courts be concerned that forcing such cases to be filed abroad may bring these cases back to the United States in later enforcement of judgment proceedings where the U.S. court has only limited review? Should Congress step in and resolve these issues? As I have explained elsewhere, these questions remain to be fully examined.
Besides the Court and commentators thinking through Kiobel’s potential limits to the ATS, some consideration should also be given to how the Court’s decision might usher in a brave new world of transnational human rights litigation.