Kiobel Oral Argument: Why the ATS as We Know it is in Jeopardy

by Roger Alford

My initial impression of the Kiobel oral argument is that the Supreme Court is going to do its best to do an historical analysis of the ATS and use that history to find ways to limit its scope. It could do so by holding that the ATS does not apply extraterritorially, or that it does not apply unless there is some U.S. nexus, or that it does not apply to corporations, or that it does not apply without exhausting local remedies, or that it does not apply to certain types of conduct (such as aiding and abetting). But one way or the other, I predict that the ATS as it currently is applied by lower courts will be severely limited.

I say that by reading the tea leaves of the Justices’ votes that are up for grabs. Justice Kennedy asked, among other things, about whether there was a U.S. nexus in this case (page 4), about risks of reciprocal claims brought against U.S. corporations in foreign courts (page 5), about the risk of ATS litigation causing complications with foreign governments (page 10), and about the scope of the presumption against extraterritoriality (p. 37). Several Justices, including Chief Justice Roberts, asked about the possibility of vindicating one’s rights in another forum that has a closer connection to the events or the parties, including the defendant’s domiciliary forum (the United Kingdom or the Netherlands) or the place of injury (Nigeria). None of the swing Justices seemed interested in the concept of universal jurisdiction, except to preserve the Sosa paradigm that embraced piracy on the high seas as an actionable international law violation.

The good news for the plaintiffs is that Paul Hoffman did an exceptional job of trying to make the ATS sound unexceptional. One of his best arguments was that courts have all the tools they need to address the concerns about friction with foreign nations, including the political question doctrine, the act of state doctrine, international comity, forum non conveniens, and personal jurisdiction. In other words, these concerns about tensions with foreign nations are legitimate, but courts already have developed doctrines sensitive to those concerns. When pressed, he was even willing to make more concessions, such as the possible need to exhaust local remedies. The bad news is that the swing Justices did not appear to be buying the argument that the arrows currently in the quivers of the courts are enough to limit the reach of the ATS.

As for extraterritoriality, Hoffmann’s key argument was that the presumption against extraterritoriality is overcome where the purpose of the statute requires its extraterritorial application. The presumption, he argued, “would undermine the very purposes of the statute” which is “the best evidence that we have about what it meant in the era” (page 52). He cogently cited the Bradford opinion as an historical example of what the drafters were thinking in this regard.

To be sure, there is ample Supreme Court case law to support an argument that sometimes the purpose of a statute requires its extraterritorial application. See United States v. Bowman, Blackmer v. United States, United States v. Flores, Cook v. Tait, Browder v. United States. One way to articulate this is to say that the clear intent of Congress is expressed in drafting a statute that necessarily requires extraterritorial application. Whether or not the swing Justices will interpret the ATS in this fashion is anyone’s guess.

Kathleen Sullivan’s key argument was that the presumption against extraterritoriality required clear congressional intent, which she argued was lacking in this case. She then fumbled by trying to argue that the Court’s recognition of piracy in Sosa did not undercut this argument. She should have stuck with her argument about the purpose of the presumption against extraterritoriality—to avoid encroachment on the sovereign prerogatives of other nations to regulate conduct in their territory—and conceded the point about piracy on the high seas as falling within the scope of the ATS. Instead, she argued that pirate ships are mini-foreign countries and tried to argue that that the presumption applied even to pirate ships. It was not a fatal mistake, but it was painful to read.

Sullivan also struggled with Justice Kagan’s creative reverse Marbois question, (page 30-32) which aptly addresses the possibility that foreign tensions can arise from an American’s misconduct against a foreign national on foreign soil, just as much as an American’s misconduct on domestic soil. Sullivan argued that other remedies were available, such as extradition or state law torts for assault. That may be true, but that is also true for an American’s misconduct on domestic soil. Her argument didn’t address the critical question of why Congress believed the ATS was necessary in the first place, and why it should only apply to domestic misconduct by Americans. If concern about foreign friction is what is driving the ATS, she should have taken a page from Hoffman and conceded points that were not essential to her case, such as the possibility that the ATS applied to foreign conduct by an American non-corporate defendant. (That seemed to be Solicitor General Verrilli’s position: that the ATS should only apply where there is a clear U.S. nexus, such as misconduct by an American national on foreign soil or misconduct by a foreign national on U.S. soil.)

So I predict that the ATS as we know it will be curtailed. I don’t know exactly how it will be curtailed, but based on the oral argument today I predict that the future of foreign plaintiffs using the ATS to sue foreign corporations for conduct on foreign soil is in serious jeopardy.

http://opiniojuris.org/2012/10/01/kiobel-oral-argument-why-the-ats-as-we-know-it-is-in-jeopardy/

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