10 May Kiobel Insta-Symposium: Kiobel Contradicts Morrison
[Anthony J. Colangelo is Associate Professor of Law at SMU Dedman School of Law.]
I explained in a previous post why I think extending the presumption against extraterritoriality to causes of action crafted by forum law is strange. But there may be another (bigger?) problem with Kiobel’s application of the presumption to the Alien Tort Statute—namely, it appears to contradict Morrison v. National Australia Bank—the very case on which Kiobel overwhelmingly relies for both its reasoning and its result. As readers will recall, Morrison applied the presumption against extraterritoriality to the principal antifraud provision of the Securities Exchange Act.
As the Court in Kiobel itself, as well as many commentators (myself included) have observed, the presumption against extraterritoriality has traditionally applied only to what are generally referred to as “conduct-regulating” rules. These are rules that govern primary conduct and are easily classified under the category of jurisdiction to prescribe or prescriptive jurisdiction. Yet as the Court in Kiobel also explained, the ATS “does not directly regulate conduct or afford relief. It instead allows federal courts to recognize certain causes of action based on sufficiently definite norms of international law.” Indeed the Court framed the relevant question under the ATS as “whether the court has authority to recognize a cause of action under U.S. law to enforce a norm of international law.” In short, the conduct-regulating rule under the statute comes from international law. And since international law applies everywhere, the presumption against extraterritoriality has no application to conduct-regulating rules of decision under the ATS. The Court appeared to accept this view, noted that the ATS was “strictly jurisdictional,” and then decided to apply the presumption anyway. In so doing, the Court explained that “to rebut the presumption, the ATS would need to evince a clear indication of extraterritoriality,” which the ATS failed to do.
Here’s the problem. In Morrison (which, again, Kiobel overwhelmingly relied upon) the Court went out of its way to make clear that the presumption against extraterritoriality applies to conduct-regulating—as opposed to jurisdictional—statutes. Indeed an entire section of the opinion is devoted to precisely this point. Like Kiobel, Morrison involved claims arising out of activity abroad. The question in Morrison was “whether § 10(b) of the Securities Exchange Act of 1934 provides a cause of action to foreign plaintiffs suing foreign and American defendants for misconduct in connection with securities traded on foreign exchanges.” This question, in turn, boiled down to whether and how a presumption against extraterritoriality applied to the Exchange Act.
According to the Supreme Court in Morrison, the Second Circuit had, mistakenly, “considered the extraterritorial reach of § 10(b) to raise a question of subject-matter jurisdiction.” To correct this “threshold error,” the Court clarified the difference between prescriptive jurisdiction to regulate conduct on the one hand, and the “quite separate” issue of the district court’s adjudicative jurisdiction to entertain suit on the other. In Morrison, the presumption applied to the former but not the latter. To be sure, the Court explicitly observed that “the District Court here had jurisdiction under 15 U.S.C. § 78aa to adjudicate the question whether § 10(b) applies …” The Court elaborated:
Section 78aa provides: ‘The district courts of the United States . . . shall have exclusive jurisdiction of violations of [the Exchange Act] or the rules and regulations thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by [the Exchange Act] or the rules and regulations thereunder.’
To reiterate, Morrison, like Kiobel, involved claims arising out of activity abroad. Like § 78aa, the ATS is—as the Court in Kiobel openly acknowledged—“strictly jurisdictional.” And like § 78aa, the ATS authorizes U.S. courts with “jurisdiction.” Under the ATS, that “jurisdiction” encompasses “any civil action by an alien for a tort only, committed in violation of the law of nations.” If the ATS does not sufficiently indicate extraterritorial application, certainly neither does § 78aa. And if the district court in Morrison “had jurisdiction under 15 U.S.C. § 78aa” over claims involving extraterritorial activity—as the Supreme Court explicitly said it did—then the district court in Kiobel also should have “had jurisdiction under [the ATS]” over claims involving extraterritorial activity.
Having decided, correctly in my view, that the conduct-regulating rule under the ATS comes from international law, the Court essentially painted itself into a corner. It wanted to apply the presumption against extraterritoriality, but had only a jurisdictional statute left to construe. The problem with construing the ATS in light of the presumption (apart from the fact that the ATS was enacted well before the presumption ever came into existence) is there was no U.S. conduct-regulating rule to which the presumption could apply and the Court had just found the presumption inapplicable to a jurisdictional statute in Morrison. I tend to agree with those who have suggested that the Court in Kiobel was likely making a merits-based, rather than a subject matter jurisdiction, determination. But why be so cagey about this point? Morrison certainly wasn’t. Perhaps the reason is that Kiobel contradicts not only longstanding principles of U.S. and international law, but also the Court’s own most recent precedent on the presumption against extraterritoriality.