[William S. Dodge is The Honorable Roger J. Traynor Professor of Law at the University of California, Hastings College of the Law. From August 2011 to July 2012, he served as Counselor on International Law to the Legal Adviser at the U.S. Department of State, where he worked on the amicus briefs filed by the United States in Kiobel v. Royal Dutch Petroleum Co. The views expressed here are his own and do not necessarily reflect the views of the State Department or of the United States.]
In Kiobel v. Royal Dutch Petroleum Co., the U.S. Supreme Court held that the cause of action for human rights suits under the Alien Tort Statute (ATS) did not reach claims against a foreign corporation if all the relevant conduct occurred abroad. Lower courts have struggled with how to apply Kiobel to cases involving American corporations and conduct in the United States. On Friday, the second anniversary of the Kiobel decision, the Justices are scheduled to discuss the petition for review in Cardona v. Chiquita Brands International, Inc., a case that would allow them to provide further guidance in such cases.
Kiobel was something of an outlier—a class action against a foreign parent corporation (Royal Dutch Shell) based entirely on its foreign subsidiary’s activities in a foreign country (Nigeria), in which the foreign parent’s home countries (the Netherlands and the United Kingdom) objected that their own courts were more appropriate forums for the plaintiffs’ claims. The Supreme Court held that the principles underlying the presumption against extraterritoriality limit the causes of action that may be brought under the ATS, but it did not close the door to corporate suits entirely. In a cryptic final paragraph, Chief Justice Roberts wrote:
On these facts, all the relevant conduct took place outside the United States. And even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application. Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices. If Congress were to determine otherwise, a statute more specific than the ATS would be required.
But what if some of the relevant conduct took place inside the United States? The Court majority plainly did not adopt the position of Justice Alito’s concurring opinion that the international law violation itself must occur in the United States. And what if the corporate defendant were not just “present” in the United States (as foreign corporations are considered to be for jurisdictional purposes) but actually had U.S. nationality?
Justice Breyer (whose concurring opinion was joined by Justices Ginsburg, Sotomayor, and Kagan) thought the ATS cause of action should cover claims against U.S. nationals and claims based on conduct in the United States. Justice Kennedy, who provided the crucial fifth vote for the majority opinion, did not tip his hand, but he emphasized in his own concurring opinion that the decision “leave[s] open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute.”
Lower courts are divided over how to answer these questions. The Second Circuit has been the most restrictive. It has held that the U.S. nationality of the defendant is simply irrelevant and that the alleged conduct in the United States must itself constitute a violation of the law of nations (although significantly the Second Circuit recognizes that the law of nations violation in the United States could consist of aiding and abetting a human right violation abroad). See Mastafa v. Chevron Corp., 770 F.3d 170, 187-89 (2d Cir. 2014). The Second Circuit also continues to hold that suits against corporations cannot be brought under the ATS at all because the law of nations does not recognize corporate liability. See Chowdury v. World Bangladesh Holding Ltd, 746 F.3d 42, 49 n.6 (2d Cir. 2013).
Other circuits have concluded that the U.S. nationality of a corporation is relevant in recognizing a cause of action under the ATS but not sufficient by itself. See Doe v. Drummond Co., 2015 WL 1323122, at *14 (11th Cir. Mar. 25, 2015); Mujica v. Airscan Inc., 771 F.3d 580, 594 (9th Cir. 2014); Al-Shimari v. CACI Premier Technology, Inc., 758 F.3d 516, 527 (4th Cir. 2014). None have held, like the Second Circuit, that the international law violation itself must occur in the United States. And one has expressly reaffirmed its prior holding—again, contrary to the Second Circuit—that corporations may be sued under the ATS. See Doe v. Nestle USA, Inc., 766 F.3d 1013, 1022 (9th Cir. 2014); see also Doe v. Exxon Mobil Corp., 654 F.3d 11, 40-57 (D.C. Cir. 2011) (recognizing corporate liability); Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013, 1017-21 (7th Cir. 2011) (same).
The petition the Justices are planning to discuss on Friday has facts at the other end of the spectrum from Kiobel. The defendant corporations are both U.S. companies. They allegedly approved payments from their offices in the United States to the terrorist organization Autodefensas Unidas de Colombia (AUC) and facilitated shipments of weapons and ammunition with the purpose of aiding and abetting extrajudicial killings to suppress labor activism and local competition. Although the case is before the Supreme Court on a motion to dismiss, there is no dispute that the alleged payments occurred. In a criminal prosecution brought by the United States, Chiquita pleaded guilty to making illegal payments to the AUC. A divided panel of the Eleventh Circuit concluded in Cardona that all the relevant conduct occurred abroad, but without bothering to explain why the conduct alleged to have occurred in the United States was not relevant.
The facts alleged in Cardona certainly seem sufficient to recognize a cause of action under the criteria set forth in Justice Breyer’s concurring opinion. Four Justices joined that opinion, and it takes only four votes to grant cert. If those Justices think the facts in Cardona are sufficiently egregious to persuade Justice Kennedy that an ATS cause of action against U.S. corporations should exist in at least some circumstances, they could well vote to hear the case.