Online Kiobel symposium: The Alien Tort Statute as a species of extraterritorial U.S. law
on Jul 16, 2012 at 1:50 pm
The following contribution to our symposium on Kiobel v. Royal Dutch Petroleum is written by Julian Ku, a Professor of Law at the Maurice A. Deane School of Law at Hofstra University. He is the author, with John Yoo, of Taming Globalization: International Law, the U.S. Constitution, and the New World Order (Oxford University Press 2012). [Lyle published an introduction to the issues in Kiobel last week.]
For years, the Alien Tort Statute has been hailed as the preeminent vehicle for incorporating, developing, and expanding norms of international law in the United States. Scholars like Harold Koh and Anne Marie Slaughter saluted the way that the Alien Tort Statute enabled the U.S. to demonstrate its commitment to upholding and enforcing international law norms. But what is striking about the Supreme Court’s pending decision in Kiobel v. Royal Dutch Petroleum, however, is how it has forced defenders of the ATS to rely on domestic law rather than international law to flesh out and resolve key legal questions arising in ATS cases. This has transformed the ATS into just another domestic law tort mechanism, albeit one that purports to regulate activity outside the United States and within the sovereign jurisdiction of other countries.
While early ATS cases like the seminal decision in Filartiga v. Peña -Irala sought to hold individuals accountable for human rights abuses, such cases also were valorized for demonstrating the importance and power of international law. Indeed, as very few ATS cases amounted to enforceable judgments or significant settlements, the ATS seemed a largely symbolic tool. The ATS fascinated academics, especially international law professors, but it seemed to have little practical significance. But because the ATS had little practical impact, many of the key questions about how it would be applied remained unexplored and uncertain.
That began to change in the 1990s when ATS plaintiffs began targeting multinational corporations. For the first time, ATS plaintiffs targeted defendants who had assets to satisfy judgments, but who also were willing to engage in protracted litigation to defend those assets. Corporate defendants raised numerous defenses that prevented ATS plaintiffs from reaching the merits of most of their cases. Even after the Supreme Court resolved the first main challenge to the ATS in its 2004 decision in Sosa v. Alvarez-Machain, corporate defendants had other defenses that courts had not yet explored.
Most litigants and scholars focused on the question of the proper standard for proving aiding and abetting liability in ATS cases, but the Second Circuit’s decision in Kiobel v. Royal Dutch Petroleum opened up a new legal front in the ongoing ATS wars. By holding that the ATS did not permit lawsuits against corporate entities, the Second Circuit placed the question of corporations and international law front and center.
The Second Circuit’s holding in Kiobel surprised many observers. After all, it was decided in 2010, nearly twenty years after the first major ATS lawsuits against corporations had been filed. Moreover, the corporate liability argument adopted in Kiobel had not been seriously considered, or even argued, in many of the early ATS cases. The argument seemed outlandish and, to many defendants, not even worth making. Indeed, in the Kiobel case itself, defendants Royal Dutch Petroleum did not even raise the corporate liability argument before the panel that decided the case. The Second Circuit panel in Kiobel, led by Judge Jose Cabranes, raised the corporate liability sua sponte.
The Kiobel court’s holding also forced a curious reversal in the arguments made by ATS plaintiffs. Because the statute states that it only grants jurisdiction over actions brought by aliens for violations of customary international law or treaties, much of the task of interpreting the ATS has turned on trying to determine the substantive content of international law. The Supreme Court raised the stakes on this question in Sosa by requiring federal courts to limit ATS actions to only those international law claims that were “specific, universal, and obligatory.”
But this standard posed a serious, or nearly impossible, obstacle for claims against corporations because international law provides almost no guidance on suing or otherwise holding corporations liable. While some scholars attempted to build an argument that international law does indeed support corporate liability under the Sosa standard, most courts reacting to Kiobel simply held that the question was actually governed by domestic U.S. law. ATS plaintiffs began arguing that domestic federal law, and not international law, should govern key questions, including that of whether a corporation could be sued under the ATS.
There are good reasons for this shift. There are embarrassingly few precedents for holding corporations directly liable for violations of international law. And those that do exist provide little if no guidance on a variety of issues that will arise when suing corporations: such as standards for piercing the corporate veil, holding parents liable for subsidiaries, or even questions of successor liability. There are strong reasons to think that if the question of corporate liability is governed by customary international law, the Kiobel court was correct to dismiss the case because it can draw on no well-established principles of international law to resolve such questions.
But if the petitioners in Kiobel succeed in shifting the Court away from customary international law, they intensify the other largely overlooked problem with ATS lawsuits. As the Court’s decision to seek reargument indicates, ATS lawsuits may apply substantive norms of international law that bear wide acceptance, but they also result in the application of U.S. law to matters outside the territory of the United States and usually within the sovereign jurisdiction of another country.
This is especially true if the Court is applying domestic norms of corporate law to resolve questions such as parent-subsidiary liability and veil piercing, which will inevitably arise in future ATS litigation against corporations. Imagine a court in the United States attempting to apply norms of U.S. law to pierce the corporate veil of a business incorporated under the law of a foreign country. This is certainly not impossible, but it is likely to result in the application of U.S. law to the corporate law issues of a foreign corporation acting in a foreign jurisdiction.
Perhaps recognizing the impossibility of drawing upon international law for these questions, the Kiobel petitioners have retreated to a transitory tort theory of the ATS, which treats ATS claims as simply another variety of domestic common law tort. This theory has a variety of problems, but what is striking about this argument is how it no longer makes grand claims about the ATS’s importance as a mechanism for developing international law. It reduces the ATS to little more than a garden-variety state common law tort claim that happens to occur in federal court.
It is likely that the Court will avoid addressing the corporate liability question in its final decision in Kiobel and instead hold that the ATS’s extraterritorial scope is limited to claims with a substantial nexus to the U.S. If so, it may never resolve the corporate liability question. But it was the corporate liability question that has forced ATS defenders to recast the ATS as a domestic law.
Thus, the Kiobel litigation has thus confirmed that the ATS is not a free-floating universalist tool for enforcing international law norms on behalf of the international community. It is a law of the United States, which authorizes courts to apply domestic American law to activities with some substantial connection to the United States. As a domestic statute, it is, and should be, subject to the same kinds of limitations that are imposed on other domestic statutes. This new, more modest ATS is perhaps less interesting and attractive to international law scholars and advocates. But it is far more likely to survive as a meaningful tool for extraterritorial corporate regulation.