Kiobel Insta-Symposium: Piracy – Not Just Kiobel’s Analogy

by Roger Phillips

[Roger L. Phillips is an international criminal law practitioner. He also maintains Communis Hostis Ominum, a blog about maritime piracy. This post is cross-posted there.]

The majority opinion in Kiobel precludes Alien Tort Statute claims for foreign conduct against foreign victims, leaving a small door for potential future claims that involve extraterritorial conduct so long as they touch and concern US territorial interests. But, when does a claim “touch and concern” the territory of the United States? Roger Alford notes that piracy may present an incident of “cross-border” conduct that could clarify this issue. Indeed, two piracy cases will imminently arrive at SCOTUS’ courthouse steps.

The piracy statute 18 USC 1651 shares much in common with the Alien Tort Statute: both were passed in the same time frame and both have reference to “the law of nations.” The presumption against extraterritoriality applies to 18 USC 1651. However, the plain language of the piracy statute and its historical context clearly rebut the presumption for all conduct that occurs on the high seas. Further, neither the victim nor the defendant need be American (U.S. v. Klintock). That said, there remains an important subset of piracy cases that involve conduct both on the high seas and within the territory of another sovereign: acts of aiding and abetting piracy through financing or negotiating ransoms for acts of piracy; or recruiting of child pirates.

In US v. Shibin (4th Circuit) and US v. Ali (DC Circuit), currently on appeal, the underlying criminal conduct of hijacking vessels occurred on the high seas. But, the negotiators in these cases only boarded the vessels upon entry into Somali territorial waters. Hence the mixed loci delecti on the high seas and within the territory of another state. Does this type of mixed conduct touch and concern the territory of the United States?

First, the plain language of the piracy statute would not rebut the presumption against extraterritoriality for conduct occurring within the territory of another state (the statute merely applies to conduct on the “high seas”). However, the historical context of the piracy statute indicates that it was intended to prevent impunity for acts of piracy wherever committed. That is why the modern definition of piracy applies to conduct outside the jurisdiction of any state, as well as to the high seas.

Here is where a case-by-case analysis, suggested in Part IV of the Kiobel majority, could be determinative. In Shibin, the defendant is accused of negotiating the ransom of two vessels. The first vessel has a strong nexus to US interests; the victims were American nationals and the targeted vessel was flagged in the US. Although a vessel’s flag does not designate its surface as territory of the sovereign, it is treated in much the same fashion (Lauritzen v. Larsen) which is to say that there are strong domestic interests in exercising jurisdiction over acts of piracy on one’s flagged vessels. But the second course of conduct charged in Shibin involves a vessel with no links to the US apart from a general interest in suppressing acts of piracy. The same is true in Ali. As the district court described the case: “Defendant Ali Mohamed Ali, a Somali citizen, is accused of helping Somali pirates hijack a Bahamian ship, hold its Russian, Georgian, and Estonian crew hostage, and compel the ship’s Danish owners to pay a ransom for its release.” These latter facts would not prevent the exercise of jurisdiction if the alleged criminal conduct occurred on the high seas. The question is whether aiding and abetting conduct occurring within the territory of another state must touch and concern US interests. If answered in the affirmative, it would curtail the US’s ability to suppress and prosecute acts of piracy, which is contrary to the historical purpose and intent of 18 USC 1651. It would also be inefficient as those who initiate an act of piracy on the high seas and continue acts of piracy in foreign territorial waters could only be prosecuted for the former conduct.

One significant factor Kiobel instructs to consider is the imperative to avoid enmeshing US courts in foreign affairs. In this regard, the specific facts of the Somali cases militate in favour of exercising jurisdiction. For the then Transitional Federal Government (TFG) of Somalia did not have effective control over the territorial waters where these acts of piracy occurred. The UN Security Council authorized States and regional organizations “to undertake all necessary measures that are appropriate in Somalia, for the purpose of…

(More) Spiking the Football on Kiobel

by Julian Ku

In addition to the Ku/Yoo essay in Forbes, I’ll just point out two more positive takes on Kiobel from FOBs (friends of the Blog).

In Lawfare, John Bellinger expresses satisfaction with the Roberts opinion, and takes some credit for raising the presumption against extraterritoriality issue in government briefs during the Bush Administration and in the first round of Kiobel briefing.  He also adds a quick note on Bauman, guessing that the Court will reverse on personal jurisdiction grounds and not reach the ATS issues.

In the WSJ, Eugene Kontorovich of Northwestern Law offers a more sweeping take on Kiobel. My favorite line: “Yet many who think the U.S. should not be the world’s policeman nonetheless want it to be the world’s judge.”  (One question: Is the converse also true?)

The whole essay is worth reading. He also offers a cautionary lesson for academic lawyers, most of whom failed to take the extraterritoriality issue more seriously. 

The unanimous vote in Kiobel also shows how the legal academy and bar tend to underestimate the strength of arguments that they politically disfavor. Foreign-cubed suits had proceeded for decades without any serious questions raised about their propriety. Instead, professors largely cheered them on. Nearly everyone anticipating the Kiobel decision (including myself) predicted a Supreme Court vote starkly divided on ideological lines. Yet all nine justices voted unreservedly in favor of ending ATS suits against foreign corporations….

Kiobel Insta-Symposium: Degrees of Territoriality

by Roger Alford

“[E]ven 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.”

That is the operative language in Kiobel. Which raises the question, if mere corporate presence is not enough, what kind and how much territorial activity within the United States is enough? After Kiobel, that will be a critical question for future ATS litigation. Without expressing an opinion on how much is enough, I thought it worth considering the types of activities that might be the subject of future litigation. Here’s a non-exhaustive list:

Execution. In some ATS cases it is alleged that individuals commit international law violations within the United States. Examples include allegations of unlawful conduct within U.S. prisons, immigration deportation centers, or military bases, or conduct within the United States such as sex trafficking or slavery.

Cross-border Conduct. In some ATS cases it is alleged that individuals commit international law violations based on conduct that occurs partly within the United States and partly outside the United States. Examples include cross-border kidnapping, airline hijacking, or piracy within and outside territorial waters.

Planning and Authorization. In some ATS cases it is alleged that individuals located within the United States either plan or authorize an international violation occurring abroad. If the judgment call to conduct an international violation occurred within the United States, is that enough? Examples include the decision to conduct medical experiments without patient consent or the approval within the United States to engage in extraterritorial torture or killings.

Design and Testing. In some ATS cases it is alleged that products known to harm individuals are designed and tested in the United States, but the manufacture and exposure to the product occurs abroad. Examples include the design and testing in the United States of pesticides or medicines known to cause death or blindness, with the manufacture and human exposure of those products occurring abroad.

Training. In some ATS cases it is alleged that individuals are trained within the United States to engage in conduct that would constitute an international law violation. Examples include training to commit acts of torture within the United States, and then committing those acts of torture abroad.

Construction. In some ATS cases it is alleged that products are manufactured within the United States and those products are then used abroad to commit international law violations. Examples include the manufacture of weapons, armor-plated bulldozers, pesticides, etc.

Contracting. In some ATS cases it is alleged that contracts for employment were signed within the United States, and the individuals committed acts abroad pursuant to those contracts that constitute an international law violation. Examples include contracts signed within the United States for nongovernmental security forces, but the performance of those contracts occurring abroad. Another territorial nexus might be a contract executed and performed abroad that has a territorial nexus based on the choice of law clause, such as a New York governing law clause.

Financing and Money Transfers. In some ATS cases it is alleged that the unlawful behavior and injuries occurred abroad but the financing for such conduct was done within the United States or the money used to commit such crimes was transferred through U.S. banks. Examples are too numerous to mention, but include the financing of terrorism or other unlawful conduct.

Electronic Communications. In some ATS cases it is alleged that unlawful conduct and resulting injuries occurred abroad, but the electronic communications with respect to such conduct occurred within the United States. With the root servers located in the United States, any Internet-based electronic communication might satisfy this territorial nexus. Communications conducted through email accounts based within the United States, such as Gmail and Yahoo, might also satisfy this territorial requirement.

Unlawful Gains. In some ATS cases it is alleged that the unlawful conduct and injuries occur abroad, but the benefits that accrue from such unlawful behavior are experienced at home. Examples include profits derived from corporate aiding and abetting government abuse, corporate profits from unlawful labor practices occurring abroad, or extraterritorial sex trafficking or criminal activity with the ill-gotten proceeds accruing at home.

Injury. In some ATS cases it is alleged that the unlawful conduct occurs abroad, but the resulting injuries occur within the United States. Examples include the expropriation of property located abroad owned by individuals located within the United States, poisoning or medical testing abroad with resulting injuries occurring within the United States, or torture or extrajudicial killing of individuals abroad that causes secondary injuries (intentional infliction of emotion distress) to loved ones within the United States.

“Extraterritorial Territory.” In some ATS cases, it is alleged that the unlawful conduct occurs abroad, but there is nonetheless a territorial nexus to the United States. Examples include conduct that occurs on U.S. territories, within U.S. embassies and consulates, on U.S. military bases located overseas, or on U.S.-flagged vessels or airlines.

Obviously, not all of these activities will touch and concern the United States with sufficient force to displace the presumption against extraterritoriality. But these are the kinds of questions that will be the subject of future litigation.

Why Kiobel’s Rejection of Universal Jurisdiction Matters

by Julian Ku

Our discussion of Kiobel has been fascinating, but it has been focused on the question of what exactly is left of the ATS in the future and what differences exist between the majority opinion and the various concurrences.

In our contribution today to Forbes.com, John Yoo and I focus on Kiobel’s significance in light of the history of ATS litigation.  Building on my earlier post on this subject, we argue that the real significance of Kiobel is its unanimous rejection of an interpretation of the ATS that would grant universal jurisdiction.

The Supreme Court’s unanimous decision last week to dismiss a lawsuit alleging human rights violations by Royal Dutch Shell in Nigeria is already being portrayed as a victory for big corporations over human rights victims. While the decision will allow some multinational corporations to avoid being sued in the United States for business activities overseas, the real significance of the Court’s decision is that it provides a wise example of judicial restraint and deference to the role of Congress and the President to set American foreign policy.

In particular, we argue:

Kiobel’s unanimous rejection of universal civil jurisdiction is thus the most significant part of its ruling. Writing for the Court, Chief Justice John Roberts held that the presumption that U.S. law does not apply to acts outside the territory of the United States should apply to ATS cases. Championed by Justice Antonin Scalia in an earlier 2010 decision involving the reach of U.S. securities laws, this rule forces Congress and not the courts to decide whether to apply U.S. law to foreign activity.

This common sense rule reserves for the political branches the crucial right to weigh the foreign policy consequences of subjecting foreign conduct to U.S. law. It also gives Congress a chance to determine whether it wants to give private plaintiffs the power to enforce such norms or keep it in its traditional home, the President and the executive branch.

So before we all end up in the weeds of interpreting Roberts’ last paragraph and Kennedy’s concurrence, let’s keep in mind the bigger picture.  Nine justices rejected the universal jurisdiction reading of the ATS.  Breyer’s concurrence would have preserved only Filartiga-style safe harbor cases under a weird (or at least creative) version of the protective principle.  This is already a pretty big shift in most observers’ understanding of the ATS, and, in our view, a welcome one.

Kiobel Insta-Symposium: Questions of Personal Jurisdiction Lurk Beneath the Surface

by Ishai Mooreville

[Ishai Mooreville is an attorney at Baker & Miller PLLC, Washington, DC.  His forthcoming article on the 1795 Bradford Opinion regarding the Alien Tort Statute can be found here.]

The opinions expressed in this article belong to the author alone, and the author has not received any compensation from any party for writing this article.

The question of personal jurisdiction over the defendant in Kiobel, which was raised during oral argument and mentioned in passing in Justice Breyer’s concurrence, may have had a significant effect on the outcome of the decision.    But the issue was not before the Court in this case, and had not been raised by the defendant as a reason for dismissal, apart from asserting the defense in their answer to the complaint filed in 2006.

Let’s back up and review the facts.  When Plaintiffs filed their original suit in 2002, they chose to sue only two Shell entities: the Shell parent entity, based in the Netherlands and U.K. (“Shell Europe” for the purposes of this post), and Shell’s Nigerian subsidiary, which allegedly aided and abetted the human rights violations at issue.

However, the District Court Judge dismissed Shell’s Nigerian subsidiary from the case for lack of personal jurisdiction, as it had no minimum contacts with the United States.  Kiobel  v. Royal Dutch Petroleum Co., No. 02-CV-7618, 2010 WL 2507025, at *1 (S.D.N.Y. June 21, 2010).  That left only Shell Europe, whose only presence in the United States (as of the year 2000) was operating an office in New York through which it managed its listing on the New York Stock Exchange.

Shell’s U.S. subsidiary, which clearly would have been subject to…

Kiobel Insta-Symposium: Interpreting “Touch and Concern”

by Roger Alford

A few posts yesterday suggest that the reports of the death of the ATS have been greatly exaggerated. Oona Hathaway argues that “[t]hose celebrating the demise of the ATS may thus find themselves surprised to discover that the end result of the Supreme Court’s decision yesterday may not be the end of the ATS after all, but instead a renewed focus of ATS litigation on U.S. corporations.” Marty Lederman argues that “the language and history of the ATS provide no basis for wholly rebutting the presumption against extraterritoriality; but that there also remain unresolved sets of “significant” cases in which the conduct alleged might be sufficient to “displace[]” the presumption…. [T]he cases most amenable to such displacement would be those in which a U.S. person or corporation is responsible for the violation.”

In both cases they seize on the “touch and concern” language in Section IV of the majority opinion in Kiobel, which states as follows:

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. See Morrison, 561 U. S. ___ (slip op. at 17–24). 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.

They seem to suggest that “touch and concern” is not about U.S. conduct, but rather U.S. interests. I respectfully disagree.

One cannot interpret that phrase without looking to pages 17-24 of the Morrison slip opinion. That section of Morrison clearly addresses the question of conduct that partly occurs abroad and partly occurs at home.

Here’s a few choice excerpts from the relevant section of Morrison:

[I]t is a rare case of prohibited extraterritorial application that lacks all contact with the territory of the United States. But the presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case…

“[W]e think that the focus of the Exchange Act is not upon the place where the deception originated, but upon purchases and sales of securities in the United States…. Those purchase-and-sale transactions are the objects of the statute’s solicitude. It is those transactions that the statute seeks to “regulate”; it is parties or prospective parties to those transactions that the statute seeks to “protec[t]….”

The Solicitor General suggests a different test, which petitioners also endorse: “[A] transnational securities fraud violates [§]10(b) when the fraud involves significant conduct in the United States that is material to the fraud’s success.” Neither the Solicitor General nor petitioners provide any textual support for this test. The Solicitor General sets forth a number of purposes such a test would serve … [b]ut it provides no textual support for the last of these purposes, or for the first two as applied to the foreign securities industry and securities markets abroad. It is our function to give the statute the effect its language suggests, however modest that may be; not to extend it to admirable purposes it might be used to achieve….

The Solicitor General points out that the “significant and material conduct” test is in accord with prevailing notions of international comity. If so, that proves that if the United States asserted prescriptive jurisdiction pursuant to the “significant and material conduct” test it would not violate customary international law; but it in no way tends to prove that that is what Congress has done….

Section 10(b) reaches the use of a manipulative or deceptive device or contrivance only in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States. This case involves no securities listed on a domestic exchange, and all aspects of the purchases complained of by those petitioners who still have live claims occurred outside the United States.

In light of Morrison, how should one interpret the Court in Kiobel when it says that “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. See Morrison, 561 U. S. ___ (slip op. at 17–24).” I think the answer can only be that it is a reference to conduct that occurs at least partly within the United States. I say that because the referenced language in Morrison addresses situations in which the presumption applies, but to avoid it being a “craven watchdog” must be reconciled with some U.S. activity. Section IV in Kiobel concerns situations in which there is both territorial and extraterritorial conduct. It is not a backdoor attempt to embrace Justice Breyer’s concurring opinion, or an attempt to convert domestic conduct into domestic interests.

The “significant questions” that remain unanswered by Kiobel are how much and what kind of domestic activity is sufficient to rebut the presumption against extraterritoriality. Consistent with Morrison, those questions must be answered in light of the text, history, and purpose of the statute as interpreted by the Court in Section III of Kiobel.

Kiobel Insta-Symposium: What Remains of the ATS?

by Marty Lederman

At first glance, the Court’s decision in Kiobel appears to portend a significant restriction on Alien Tort Statute jurisdiction—even for suits that allege torture, genocide, or another of what the Court in Sosa called the “modest number of international law violations” cognizable under the ATS, those with “definite content and acceptance among civilized nations” equal to that of the “historical paradigms” (such as piracy and violation of safe conducts) familiar in 1789.

And perhaps that will, indeed, be Kiobel’s legacy.  But perhaps not.  What’s most striking about the collected opinions is that the Justices themselves apparently do not think the decision will necessarily cut off ATS claims in such a comprehensive manner.  Justice Kennedy writes that the decision “leave[s] open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute”; and even Justices Alito and Thomas acknowledge, with evident regret, that the Court’s opinion “obviously leaves much unanswered” (emphasis added).

What is the “much” that the Court does not answer?  The “number” of “significant” questions that remain unresolved?  If only it were as “obvious[]” as Justice Alito suggests.

To begin with, what legal propositions is it fair to say the Kiobel decision does establish?  Well, it is now settled that where the alleged conduct in question occurred wholly abroad, the mere fact that a corporate defendant has an office in the United States and shares that are traded on a U.S. exchange is insufficient to establish ATS jurisdiction, unless and until Congress amends the statute.  (All nine Justices agree that this is the case where only aiding and abetting is alleged; and I think it’s safe to say that a majority would rule the same way even where the defendant corporation is alleged to be the principal tortfeasor.)

By contrast, all nine Justices agree that there is ATS jurisdiction when, in Justice Alito’s words, “the domestic conduct is sufficient to violate an international law norm that satisfies Sosa’s requirements of definiteness and acceptance among civilized nations.”

But what about cases falling somewhere in between these polar ends?

Tom Lee describes some hypothetical cases that might not be covered by the Kiobel holding, such as where the conduct occurred in a “failed state”; but I doubt such rare hypotheticals are what the Justices had foremost in mind.  (It’s hard to imagine these are the “significant” questions that the decision “obviously” does not answer.)

I can think of at least three more familiar types of cases that the Justices might have had in mind as those that remain “unresolved” by Kiobel:

(i) Cases alleging Sosa-sufficient torts committed overseas by U.S. defendants;

(ii) Cases such as Filartiga, where a foreign defendant uses the U.S. as an effective “safe harbor,” thereby preventing other states from bringing him to justice;

and

(iii) Cases in which the defendant is alleged to have engaged in conduct in the United States that contributed materially to the violation of a Sosa-sufficient law of nations norm (such as providing active assistance to torture), but where that conduct in the U.S. was not itself sufficient to establish the violation.  (I am not including in this category cases alleging aiding and abetting predicated solely on knowledge by a U.S. corporation of a foreign subsidiary’s bad acts.  Although even that case is not technically resolved by Kiobel, I think it’s safe to predict the Court would not recognize such a claim, most likely on the theory that such general knowledge, and failure to stop the tort, does not satisfy the scienter requirement for a Sosa-qualified claim.)

We can say with some confidence that at least four current Justices (Breyer, Ginsburg, Sotomayor and Kagan) would recognize ATS jurisdiction in many or all cases in these three categories . . . and that, by contrast, two Justices (Alito and Thomas) would not.  What we do not know is whether and in what circumstances one or more of the other three Justices — or future Justices — would recognize ATS jurisdiction in such cases.

The question going forward, then, is whether such claims can satisfy the standard the Chief Justice articulates in the key, final paragraph of the Court’s opinion:  Do they “touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application”?

(more…)

Kiobel Insta-Symposium Insta-Roundup

by An Hertogen

With the steady stream of posts on Kiobel in the past 24 hours, you may have lost track of it all. So here is a little insta-roudup with links to all the posts we’ve had so far (there’ll be more in the regular roundup on Saturday).

To start, you can find the opinions here.

Julian posted on Roberts’ opinion, Kennedy’s concurrence (as did Deborah) and Breyer’s concurrence. He also provided his quick take and discussed the end of universal civil jurisdiction. Looking at the future, Peter wrote on how human rights will survive Kiobel and Roger on the rise of transnational tort litigation.

We also have a series of guest posts by Thomas Lee, Anthony ColangeloJohn Knox, Chimène Keitner, Mike KoehlerAlex Mills and Chris Whytock.

There is more to come, and remember, we welcome unsolicited submissions by young academics who wish to contribute to our insta-symposium.

And if you want to refresh your memory, the posts from our roundtable when Kiobel was reargued in October 2012 can be found here.

Kiobel Insta-Symposium: After Kiobel: Human Rights Litigation in State Courts and Under State Law

by Christopher A. Whytock

[Christopher A. Whytock is a Professor of Law and Political Science at UC Irvine School of Law]

I do not think the Court’s opinion in Kiobel means that ATS litigation in federal courts is going away any time soon.

First, make no mistake, the “presumption against extraterritoriality” applied by the Court in Kiobel is a new creation that is likely to give rise to further litigation.  In at least three ways, the new presumption is different from the Morrison-style presumption used by the Court to determine whether a federal statute applies abroad: (1) the coverage of the new presumption is different (it covers recognition of causes of action under the ATS), (2) the new presumption can be overcome on grounds not available for the Morrison version of the presumption (e.g., if “the claims touch and concern the territory of the United States . . . with sufficient force to displace the presumption”), and (3) a case-by-case analysis seems necessary to determine whether the new presumption is displaced (see my comments on Tom Lee’s earlier post).  I agree with Anthony Colangelo that the creation of this new presumption is a bit of a “strange move,” and I think it creates more problems than it solves (as evident in the analytical tension I pointed out between Parts III and IV of Chief Justice Roberts’ opinion).  These problems may take many more years of federal ATS litigation to figure out.

Second, the door still appears open for ATS claims against U.S. corporations and other defendants with sufficient presence to subject them to general jurisdiction under Goodyear v. Brown (decided after the Kiobel case was originally filed), even when the claims arise out of extraterritorial conduct (see my comments on Julian Ku’s earlier post).

That said, the Kiobel decision obviously imposes significant new limits on ATS litigation in the federal courts.  I therefore agree with Roger Alford (and with Trey Childress) that there may be a new wave of human rights litigation in U.S. state courts in the form of transnational tort claims.  Roger’s post does an excellent job outlining the attractions of the state court transnational tort approach.  And, as Paul Hoffman and Beth Stephens remind us in a recent article, human rights claims have been litigated in state courts for decades.

But there are also potential barriers to this approach, which Trey, Michael Ramsey, and I discuss in After Kiobel: International Human Rights Litigation in State Courts and Under State Law, our foreword to a special issue of the UC Irvine Law Review on Human Rights Litigation in State Courts and Under State Law that just came out:

  • Personal Jurisdiction: In Goodyear v. Brown, decided in 2011, the Supreme Court limited the scope of general jurisdiction over corporate defendants.  This limitation is as much of a barrier in state courts as in federal courts.
  • Immunity and Act of State Doctrine: Foreign sovereign immunity and the act of state doctrine likewise impose limits in state courts as well as federal courts.
  • Removal: A defendant sued in state court may be able to remove the case to federal court.
  • State Forum Non Conveniens Doctrines: States have their own versions of the forum non conveniens doctrine that defendants can and do rely upon to seek dismissal of transnational tort claims.
  • Preemption: Federal foreign affairs preemption and other constitutional limits on state involvement in international matters may also pose barriers to human rights litigation in state courts and under state law—potentially even if styled as transnational tort claims.

As Roger notes, another issue is choice of law.  Different states use different choice-of-law methods to determine whether domestic law or foreign law provides the rule of decision in transnational tort cases.  Traditionally, American courts applied

Kiobel Insta-Symposium: A Tale of Two Presumptions

by Alex Mills

[Dr. Alex Mills is a Lecturer in the Faculty of Laws at University College London.]

Although the Kiobel Court finds unanimously for the respondents, it is nevertheless predictably split (between the opinion of the Court, written by Chief Justice Roberts, and the concurrence led by Justice Breyer) when it comes to the reasons underlying that decision. One way of characterising this split is as a competition between two presumptions (as also noted previously by Anthony Colangelo and John H Knox in this ‘Insta-Symposium’).

The first, the apparent foundation of the opinion of the Court in Kiobel, is the application to the Alien Tort Statute of the ‘presumption against extraterritoriality’, most recently articulated by the Supreme Court in its 2010 Morrison decision. The opinion of the Court finds that the presumption “applies to claims under the ATS, and that nothing in the statute rebuts that presumption” (p.13). On this basis the ATS is determined (as discussed further below) not to apply to the facts of Kiobel, in which “all the relevant conduct took place outside the United States” (p.14), and the only connection with the United States was the “mere corporate presence” (p.14) of the respondents.

The second, which finds a more implicit support in the Breyer concurrence, is the presumption against breach of international law – often known as the ‘Charming Betsy’ doctrine after the 1804 Supreme Court decision. One particular application of this presumption is that statutes should be interpreted not to violate international law’s jurisdictional rules (this has thus been called the ‘presumption against extra-jurisdictionality’) – that is, that statutes should be presumed only to assert prescriptive jurisdiction where that assertion would be acceptable under international law. These include not only assertions of jurisdiction over conduct within a State’s own territory, but also over conduct of its nationals wherever occurring, in protection of its nationals wherever located, and in protection of a State’s essential national interests. As discussed further below, these criteria are readily (if slightly roughly) recognisable as the limitations which Justice Breyer et al would apply to the ATS – under their approach the ATS is thus interpreted as constrained by these recognised jurisdictional grounds under international law.

So why should one of these presumptions be adopted over the other? If the concern is avoidance of “unintended clashes between our laws and those of other nations which could result in international discord” (Roberts opinion, p.4, quoting EEOC v. Arabian American Oil Co), then clearly the presumption against extraterritoriality is the more cautious option. It is simply true that US law is less likely to conflict with the law of foreign States if it does not purport to regulate events outside US territory. But there is a self-denialism in such restraint, curiously difficult to reconcile with the US history of expansive interpretation of international law’s extraterritorial jurisdictional rules (most notably through the effects doctrine). Many States exercise jurisdiction on the basis of the nationality or protective principles, including over conduct occurring in the United States, and US restraint in exercising such jurisdiction hardly seems likely to persuade other States not to exercise their rights. The fact that these jurisdictional grounds are accepted in international law also means that States have implicitly accepted a limited possibility of regulatory conflict – making a collective policy decision that the potential for conflict in overlapping regulation is outweighed by its benefits. A broadly-applied presumption against extraterritoriality presumes (in the absence of indications to the contrary) that Congress does not wish to exercise regulatory power which it is widely agreed that Congress can exercise as a matter of US and international law. This is a highly debatable presumption – indeed, if one overriding policy concern here is “the danger of unwarranted judicial interference in the conduct of foreign policy” (p.5), this seems ironically like the Supreme Court attributing (or even dictating) a foreign policy conservatism to Congress.

But there is a perhaps even more significant issue with the Roberts approach, which is what it leaves undecided – as noted particularly in Justice Kennedy’s pivotal concurrence, as well as the Breyer opinion. While Part III of the Roberts opinion appears to argue that the ATS must conclusively be interpreted as not applying extraterritorially, Part IV appears to take a critical step ‘backward’ in concluding that it is only the facts of this case which are not subject to the ATS, providing only that where other claims “touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application” (p.14). Despite initial appearances, the ATS has thus not definitively been interpreted to have no extraterritorial effect, but rather, it has only been interpreted as not extending extraterritorially in the circumstances of Kiobel – that is, to purely extraterritorial ‘foreign cubed’ cases. This is not a presumption against any extraterritoriality, but only a presumption against total extraterritoriality. As the Breyer opinion notes, the Roberts opinion’s reliance on the presumption against extraterritoriality “offers only limited help” (p.5) in interpreting the ATS, and “leaves for another day” (p.6) the question of when the ATS might nevertheless have some extraterritorial effect, and subject to what limits.

One possible source for these guidelines remains, of course, the Charming Betsy doctrine, and its presumption of compliance with international law’s jurisdictional limitations. Thus, the ATS might still properly be interpreted as applying not only to events in US territory, but also to the conduct of US ‘nationals’ (which may extend not only to US companies but also

Kiobel Insta-Symposium: The Impact of Kiobel on FCPA Enforcement

by Mike Koehler

[Mike Koehler is an Assistant Professor of Law at Southern Illinois University School of Law and the author of the FCPA Professor website. This contribution is cross-posted on Professor Koehler’s site.]

Yesterday, the Supreme Court released its long-awaited opinion in Kiobel v. Royal Dutch Shell Petroleum.

The precise issue before the court was “whether and under what circumstances courts may recognize a cause of action under the Alien Tort Statute (“ATS”), for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

The opinion, authored by Chief Justice Roberts, holds that “the presumption against exterritoriality applies to claims under the ATS, and that nothing in the statute rebuts that presumption.”

Accordingly, the court in a unanimous opinion (several justices authored concurring opinions) affirmed the Second Circuit’s dismissal of a lawsuit brought by a group of Nigerian nationals residing in the United State who filed suit in federal court against certain Dutch, British, and Nigerian corporations, alleging that the corporations aided and abetted the Nigerian government in committing violations of the law of nations in Nigeria.

This post analyzes the impact of Kiobel on FCPA enforcement.

While the ATS and Foreign Corrupt Practices Act are separated by 188 years in terms of enactment, the statutes have often being viewed by some as siblings, or at least distant cousins within the same family.

However, it is important to grasp that the ATS and FCPA are very different statutes in very material ways.

The jurisdictional issue the Supreme Court addressed in Kiobel – whether the canon of statutory interpretation known as the presumption against extraterritorial application – was necessitated because the ATS was silent on the jurisdiction issue. Indeed, Chief Justice Roberts stated that the canon “provides that when a statute gives no clear indication of an extraterritorial application it has none” (emphasis added).

In contrast, the FCPA is explicit as to its jurisdictional scope and provides as follows depending on the category of person (legal or natural) subject to the law’s anti-bribery provisions.

As to U.S. persons (legal or natural) the FCPA provides for two types of jurisdictional. The original statutory standard was (and is still part of the law) “use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance” of a bribery scheme. However, in 1998 Congress amended the FCPA to also provide for so-called nationality jurisdiction as to U.S. persons. 15 USC 78dd-1(g) and 78dd-2(i) specifically state, in pertinent part, as follows: “It shall also be unlawful for [any issuer organized under the laws of the United States or for any United States person] to corruptly do any act outside the United States in furtherance [of a bribery scheme] irrespective of whether such [U.S. person] makes uses of the mails or any means or instrumentality of interstate commerce in furtherance [of the bribery scheme]. In short, as to U.S. persons, in 1998 Congress explicitly amended the FCPA to provide for extraterritorial jurisdiction thus negating the need for reference to the canon of statutory interpretation at issue in Kiobel.

As to foreign issuers subject to 78dd-1 of the FCPA (i.e. foreign companies with shares registered on U.S. exchanges or otherwise required to file periodic reports with the SEC), the 1998 amendment found in 78dd-1(g) did not apply to such companies. It can thus be inferred that Congress did not intend for the extraterritorial provisions of the 1998 amendments to apply to such entities. Here again, the need for the canon of statutory interpretation at issue in Kiobel is negated. For such foreign issuers, the FCPA explicitly provides only territorial jurisdiction as stated above.

As to persons other than U.S. persons (legal or natural) or foreign issuers, the FCPA was also amended in 1998 to create an entire new category of “person” subject to the FCPA’s anti-bribery provisions. See 78dd-3. This category applies to non-U.S. actors and non-foreign issuers such as foreign private companies and foreign nationals. This FCPA prong has explicit jurisdictional provisions. 78dd-3(a) states, in pertinent part, that it shall be unlawful for “any person” other than an issuer or domestic concern (that is a U.S. “person”) ”while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance [of a bribery scheme.” Here again, because the FCPA is explicit, the need for the canon of statutory interpretation at issue in Kiobel is negated.

Just because the canon of statutory interpretation at issue in Kiobel is not directly applicable to the FCPA, it does not follow that Kiobel will not have…

Kiobel Insta-Symposium: The ATS After Kiobel: Less Bark but More Bite?

by Chimene Keitner

[Chimène Keitner is Professor of Law, University of California Hastings College of the Law.]

The Kiobel majority concludes that the plaintiffs in that case impermissibly sought to extend a U.S. cause of action to foreign conduct by foreign companies against foreign victims (even though the victims subsequently became lawful U.S. residents). It dismisses the historical practice of allowing suits for transitory torts (which I have explored in more detail here) by reasoning that the cause of action in ATS cases comes from U.S. law, not foreign or international law (the latter of which does not provide “causes of action” as such). As the first part of the majority’s opinion acknowledges, the presumption against extraterritoriality cannot apply in a literal fashion to the ATS, because the statute is “strictly jurisdictional.” The majority opinion deals with the hybrid quality of ATS claims (which translate certain clearly defined international norms into federal common law causes of action) by treating ATS claims like any other claim brought under a federal statute. This departs from the majority’s approach in Sosa, which took the more nuanced position that federal courts do not “lose all capacity to recognize enforceable international norms simply because the common law might lose some metaphysical cachet on the road to modern realism.” Under Kiobel, federal courts have not lost “all” such capacity, but they appear to have lost much of it, contrary to what the Sosa majority believed was the intention of the First Congress, and contrary to the (in my view) more conceptually defensible approach in Justice Breyer’s concurrence, which has also been endorsed by Anthony Colangelo and John Knox in this OJ symposium.

The majority’s “narrow approach” leaves a number of specific questions open, but it also resolves a few broader issues that are likely to arise in future cases. Under the majority’s reasoning, there should be no Article III problem with remaining ATS suits, because the ATS applies (and thus “arises under”) federal law. It follows that U.S. law will govern various aspects of the claim, including the standard for accomplice liability (i.e., knowledge), and the availability of corporate liability and punitive damages. In that sense, the Kiobel decision has left us with a geographically truncated, but perhaps substantively more robust, ATS. ATS claims (including those against foreign defendants that, in Justice Kennedy’s words, are “covered neither by the TVPA nor by the reasoning and holding of today’s case”) may be brought against individuals and against corporations, where there is a greater connection to the forum than the defendant’s “mere corporate presence” in the United States. Several such claims are currently making their way through the appellate courts.