Goodbye ATS? U.S. Appeals Court Dismisses South African Apartheid ATS Case and Rejects Narrow Reading of Kiobel

by Julian Ku

The Second Circuit’s decision in Balintulo v. Daimler* (already discussed at length by John Bellinger at Lawfare) is one of the first major U.S.court opinions to apply the Supreme Court’s decision in Kiobel.  It is pretty much a complete smackdown of the ATS plaintiffs, and for any hopes they might have that the Kiobel decision’s bar on extraterritoriality for ATS suits would be read narrowly.  While they were at it, the Court pretty much kills every other kind of ATS lawsuit as well. In particular, it rejects the notion that mere corporate nationality in the U.S. would be enough to overcome the Kiobel bar.  Here is a key passage (emphasis mine).

The Supreme Court’s Kiobel decision, the plaintiffs assert, “adopted a new presumption that ATS claims must ‘touch and concern’ the United States with ‘sufficient force’ to state a cause of  action.” Plaintiffs Letter Br. 6 (quoting Kiobel, 133 S. Ct. at 1669). The plaintiffs read the opinion of the Court as holding only that “mere corporate presence” in the United States is insufficient for a claim to “touch and concern” the United States, but that corporate citizenship in the United States is enough. Id. at 11 (“[I]nternational law violations committed by U.S. citizens on foreign soil ‘touch and concern’ U.S. territory with ‘sufficient force’ to displace the Kiobel presumption.”). Reaching a conclusion similar to that of Justice Breyer and the minority of the Supreme Court in Kiobel, the plaintiffs argue that whether the relevant conduct occurred abroad is simply one prong of a multifactor test, and the ATS still reaches extraterritorial conduct when the defendant is an American national. Id. at 8–11.

We disagree. The Supreme Court expressly held that claims under the ATS cannot be brought for violations of the law of nations occurring within the territory of a sovereign other than the United States. Kiobel, 133 S. Ct. at 1662, 1668–69. The majority framed the question presented  in these terms no fewer than three times; it repeated the same language, focusing solely on the location of the relevant “conduct” or “violation,” at least eight more times in other parts of its eightpage opinion; and it affirmed our judgment dismissing the plaintiffs’ claims because “all therelevant conduct took place outside the United States,” id. at 1669. Lower courts are bound by that rule and they are without authority to “reinterpret” the Court’s binding precedent in light of  irrelevant factual distinctions, such as the citizenship of the defendants. See Agostini v. Felton, 521 U.S. 203, 237–38 (1997); see also Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 66–67 (1996).  Accordingly, if all the relevant conduct occurred abroad, that is simply the end of the matter under Kiobel.

The Second Circuit also dismissed the plaintiffs’ claim that the fact that there was some affirmative steps in support of the agents’ conduct in South Africa, this would be enough to displace the presumption.  The key holding is that the conduct giving rise to the violation of the law of nations must occur in the U.S.

Finally, the plaintiffs argue that the defendants “took affirmative steps in this country to circumvent the sanctions regime, though discovery would be necessary to determine the full scope of such U.S.-based conduct.” … [But] The complaint alleges only vicarious liability of the defendant corporations based on the actions taken within South Africa by their South African subsidiaries. See In re South African Apartheid Litig., 617 F. Supp. 2d 228, 275 (S.D.N.Y. 2009) (“[A]llegations [of an agency relationship] are sufficiently plausible to allow this claim to proceed on a theory of vicarious liability.”). Because the defendants’ putative agents did not commit any relevant conduct within the United States giving rise to a violation of customary international law—that is, because the asserted “violation[s] of the law of nations occurr[ed] outside the United States,” Kiobel, 133 S. Ct. at 1669— the defendants cannot be vicariously liable for that conduct under the ATS.

Emphasis added.

I agree with the Court that this approach (“relevant conduct that violates the law of nations”)  is the most natural reading of Kiobel, I am less confident it fits with the historical purpose of the ATS, which did seem to have a particular interest in providing remedies against U.S. nationals.  Although it seems clear from the history that the ATS was largely aimed at U.S. nationals in United States territory, there seems some possibility that it would apply to the actions of U.S. nationals abroad.

In any event, this reading of Kiobel is pretty much everything corporate ATS defendants could ask for, especially U.S. ones that might have been uncertain about their status.  I doubt the Supreme Court will revisit this anytime soon, so expect a spirited en banc petition to get this reversed by the full appeals court.  If that doesn’t happen, the only remaining question is how much conduct in the U.S. would satisfy Kiobel (knowledge? active participation?).  Balintulo doesn’t resolve that question.

It also doesn’t resolve whether Filartiga-like lawsuits involving foreign nationals who committed violations abroad but whom are now living in the U.S. can still be sued.  Under Balintulo,I think the answer is no, which would mean the end of almost every ATS lawsuit against foreign government officials.   If Balintulo is followed, the era of ATS lawsuits in the U.S. is coming to an end

*I forgot to note that Michael Ramsey and I, on behalf of a number of law professors, filed an amicus brief in Balintulo in support of the defendants.  

http://opiniojuris.org/2013/08/22/goodbye-ats-u-s-appeals-court-dismisses-south-african-apartheid-ats-case-and-rejects-narrow-reading-of-kiobel/

2 Responses

  1. The logic of this opinion strongly resonates with a lesser-emphasized section of the Supreme Court’s Sosa opinion—one that dealt with the so-called “headquarters doctrine” that had developed in the lower courts related to the Federal Tort Claims Act (FTCA).  
    For those unfamiliar, the FTCA erects a jurisdictional bar to claims arising in a foreign country.  The Sosa opinion clarified that a cause of action arises where the injurious act and actual injury occur. It rejected the notion that because some elements of the government’s conduct were planned or approved of domestically that the case could be said to arise to some extent within the U.S.

  2. I agree with Julian and both Johns – congratulation for the success in gutting the ATS and closing the door to these claims for horrendous things that were done by corporations that are American or foreign in violation of international law. Congratulations – since the US government would not make such a case – for raising the burdens for injured plaintiffs so much higher as to make the task impossible under the ATS. Congratulations on having succeeded in expanding the space of impunity.
    Godwin’s law moment: please read Edwin Black’s 2000 book IBM and the Holocaust in which he meticulously lays out how IBM leadership sought the  census contract soon after Hitler was made Chancellor in 1933 and the years of service in developing specialized card punch cards (80 bit standard had not yet been codified).  Thanks to the sorters, Hitler’s minions were able to create the lists of people to be stopped. Those famous numbers tattooed on concentration camp persons were actually numbers of the punch cards that were carried on the trains to the camps. When they opened the car doors,  these punch cards were taken to a small building where the IBM sorting machines were used to identify who had come on the train – only thing needed to do it. The way the engineers of IBM had to work closely with the Nazis is laid out clearly in that book.
    Under Kiobel, an alien who managed to escape Germany and get to America and falls sick on the street seeing a huge IBM building in New York or Armonk and who thought of all the property lost and family back in Germany suffering.  This person over a glass of wine tells the story of what he saw to a lawyer and the lawyer tries to see what can be done and brings the case against IBM – these are not renegades in the IBM operations but operations providing worldwide booked profits under generally accepted accounting principles.
    Congratulations for building a rule that would throw that suit out. And congrats to the Supreme Court and the Second Circubit building such a wall of impunity. Sickening retreat of the jurisdiction to adjudicate for dubious reasons and demonstratimg a studied judicial contempt for these types of plaintiffs and solicitude for these types of corporate defendants.
    You start to wonder to what extent is there an entire hidden intelligence layer where these companies are permitted to export these technologies as  part of our ongoing cooperation with the South African intelligence services and what is going on is judicial pantomime that obscures an underlying set of relationships that us ordinary Americans are not permitted to know. 
    Sickening.
    Yes congratulations,
    Ben

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