Last days of judicial imperialism?

In recent decades, the Alien Tort Statute has spawned a steady stream of litigation by foreign citizens in federal courts for alleged injuries in foreign countries at the hands of foreign actors. The ATS -- enacted in 1789, but largely unused until the late 20th century -- confers federal jurisdiction over "any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." This single sentence of text leaves much unsaid and much room for differing interpretations as to its scope. The U.S. Supreme Court's recent grants of certiorari in Nestle USA, Inc. v. Doe and Cargill, Inc. v. Doe (now consolidated for review) could significantly clarify the scope of the ATS -- and give the court a new opportunity to rein in the expansive view of the ATS that has made the federal courts a magnet for international human rights litigation having little if anything to do with the United States.

The Supreme Court first attempted to cabin the ATS in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), where it explained that, although the ATS did not itself create any causes of action, it did authorize courts to recognize claims -- but only for violations of the few "specific, universal, and obligatory" norms of international law. Even where plaintiffs could meet that first step, Sosa required courts to consider whether creating a private cause of action for the norm was a proper exercise of judicial discretion. Despite the Supreme Court's call for restraint, some lower courts found "in Sosa a green light, not a note of caution" (as Justice Stephen Breyer observed). What ensued has been called "judicial imperialism," with federal courts authorizing a plethora of ill-defined causes of action under the purported guidance of international law -- and foreign plaintiffs flocking here to leverage plaintiff-friendly procedures and the prospect of high jury awards for injuries suffered in other countries.

Frequently, these courts ignored the presumption against the extraterritorial application of U.S. law, instead permitting ATS claims even when no misconduct occurred in the United States. There was also uncertainty over who could be liable. Often, the primary wrongdoers are foreign citizens or governments not subject to jurisdiction in the United States, or not able to cover a sizable judgment. As a result, ATS plaintiffs typically train their sights on domestic corporations through an aiding-and-abetting theory -- arguing, for example, that a domestic corporation should be liable because it or its foreign subsidiary did business with (and thus funded) the wrongdoer. Courts have differed on when aiding-and-abetting liability is available, as well as on whether corporations (as opposed to natural persons) can even be liable under the ATS without a "specific, universal, and obligatory" international-law norm of corporate liability.

These questions often arise together. For example, in Nestle/Cargill, the plaintiff contends that domestic corporations should be held liable for child slavery in Côte d'Ivoire because they or their subsidiaries purchased cocoa from (and provided financial assistance to) third-party farmers there who used child labor. In Bowoto v. Chevron Corp., another notable example, Nigerian plaintiffs contended that the U.S. defendant corporation should have been liable for injuries caused by Nigerian law enforcement in Nigeria -- on the theory that the company's Nigerian subsidiary had requested law enforcement's assistance after the plaintiffs had taken hostages on the subsidiary's oil platform there.

In recent years, the Supreme Court has twice addressed when (if ever) suits like this are appropriate -- and twice attempted to correct courts' overly expansive views of the ATS. In Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013), after initially granting certiorari to decide whether corporations could be liable under the ATS, the court instead held that ATS claims must "touch and concern" the United States with sufficient force to displace the presumption against extraterritoriality.

And in Jesner v. Arab Bank PLC, 138 S. Ct. 1386 (2018), the Supreme Court held that foreign corporations could never be liable under the ATS. Without resolving whether a universal norm supported liability (Sosa's first step), the court held that separation-of-powers principles required deferring to Congress regarding corporate liability. No domestic corporations had been sued in Jesner, which thus left the question of domestic corporate liability technically unresolved. But Jesner underscored the extreme restraint that courts must exercise before recognizing any ATS cause of action -- both clarifying Sosa's second step, which courts had often overlooked, and sharpening its import. As Jesner explained, the typical presumption against judge-made causes of action applies with "particular force" to the ATS, given the foreign-policy implications inherent in ATS litigation.

Many thought that Kiobel and especially Jesner would dial back courts' lenient understandings of Sosa. But some courts have interpreted both cases permissively. For example, in the Nestle/Cargill ruling being reviewed, the 9th U.S. Circuit Court of Appeals construed Jesner as leaving undisturbed its ATS precedents finding all "universal" norms to be actionable against domestic corporations and ignoring the presumption against judge-made causes of action. The court read Jesner as limited to foreign corporations even though its reasoning plainly applies to all defendants.

In Nestle/Cargill, the Supreme Court can now clarify that courts cannot create liability for domestic corporations under the ATS. Jesner's application of basic separation-of-powers principles does not depend on where the defendant happens to be incorporated. Moreover, to explain its rejection of the plaintiffs' ATS claim against a foreign corporation, the Jesner court relied on cases that declined to create a cause of action against domestic defendants in settings without any foreign-policy implications. This reasoning all but compels the conclusion that, just like foreign corporations, domestic corporations cannot be sued under the ATS. Indeed, Congress already reached this conclusion with the Torture Victim Protection Act, which allows U.S. citizens to sue individuals but not corporations for torture and similar human-rights violations.

The Supreme Court also can now clarify what connection to the United States will suffice to allow the ATS's application to misconduct and injuries occurring abroad. In Nestle/Cargill, the only alleged domestic actions were essentially generic functions such as the oversight of foreign operations.

The enduring uncertainty over who may be sued under the ATS, and for what conduct, has bogged down ATS litigation for many years -- with Nestle/Cargill having been filed in 2005 but still not proceeded past the pleadings, and Bowoto lasting a decade before a jury rejected the claims (mooting these more fundamental questions). By opening the door to ATS suits about alleged misconduct with which a corporation has zero material involvement, this uncertainty can discourage investments overseas by U.S. companies. No one disputes that human-rights abuses are reprehensible and should be forcefully condemned. But if lawsuits like these belong in the federal courts, that decision must come from Congress -- not from judges acting under the purported authorization of an ambiguous centuries-old statute. 

Jones Day represented Chevron in the Bowoto case and as amicus in Nestle/Cargill.