Kiobel v. Royal Dutch Petroleum (10-1491)

Oral argument: 
October 1, 2012

Petitioner Esther Kiobel, representing a group of individuals from the Ogoni region in Nigeria, filed a class action lawsuit against Respondents, the Royal Dutch Petroleum Co., Shell Transport and Trading Company PLC, and Shell Petroleum Development Company of Nigeria, LTD (“Royal Dutch”) under the Alien Tort Statute (“ATS”). The ATS grants jurisdiction to some federal courts for certain violations of international law. Petitioners allege that Royal Dutch aided the Nigerian government in committing various acts of violence against protestors of the oil exploration projects in the Ogoni region.  Petitioners claim that they have standing to sue under the ATS because the history, text, and purpose of the statute support the application of the ATS to actions in foreign countries. Petitioner also contends that previous court decisions interpreted the ATS to extend beyond U.S. territory. In response, Royal Dutch argues that the ATS is not an exception to the presumption that U.S. law does not apply extraterritorially, and should not be applicable to actions outside of the U.S. The Court's decision in this case will clarify the reach of the U.S. federal courts' jurisdiction over certain extraterritorial tort claims. 

Questions as Framed for the Court by the Parties 

Whether the issue of corporate civil tort liability under the Alien Tort Statute ("ATS"), 28 U.S.C. § 1350, is a merits question, as it has been treated by all courts prior to the decision below, or an issue of subject matter jurisdiction, as the court of appeals held for the first time.

Issue(s)

Whether an American federal court can hear a claim under the Alien Tort statute, when that claim arose out of conduct in a foreign country.

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Facts

Esther Kiobel represents a class of citizens from the Ogoni region in Nigeria who filed a class action suit against the respondents Royal Dutch Petroleum, Shell Transport and Trading Company and Shell Petroleum Development Company of Nigeria (“Royal Dutch Petroleum”) in the United States District Court for the Southern District of New York in 2002. Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 123–24 (2d Cir. 2010). Respondent corporations are incorporated in the Netherlands, United Kingdom, and Nigeria, respectively. Id.at 123. Respondents are companies that have been engaged in oil exploration and production in the Ogoni region of Nigeria since 1958. In response to Royal Dutch Petroleum’s exploration efforts, a group of Ogoni citizens formed the “Movement for the Survival of Ogoni People” which protested the detrimental environmental effects that Royal Dutch’s oil exploration has on the region. Id.

Petitioners in this case (“Kiobel”) allege that Royal Dutch Petroleum partnered with the Nigerian government in 1993 to stop the Ogoni from protesting the oil exploration projects. Id.Petitioners allege that Nigerian military forces committed atrocities against the Ogoni people including raping, murdering, beating, and making unlawful arrests to further the government’s efforts to stop the protesting, which would allow Royal Dutch  to continue oil exploration in the region. Id.Petitioners claim that Royal Dutch Petroleum provided the Nigerian soldiers with transportation, food, compensation and staging areas for carrying out attacks against the Ogoni. Id.

Kiobel brings the claim under the Alien Tort Statute (“ATS”), which allows foreign citizens to bring suits in U.S. federal courts for certain violations of the law of nations.  Id.at 123, 125 Kiobel brought suit arguing that Royal Dutch Petroleum had aided and abetted the Nigerian government, or was otherwise complicit, in the atrocities committed against the people.Id.at 111, 124 In 2006, the District Court dismissed some of the claims of aiding and abetting but allowed claims of aiding and abetting arbitrary arrest and detention; crimes against humanity; and torture or cruel, inhuman, and degrading treatment to stand. Id.The District Court recognized the importance of interpreting the law properly and thus certified the whole case for interlocutory appeal by the United States Court of Appeals for the Second Circuit. Id. The Second Circuit ruled that the ATS had never served as a basis for liability on the part of corporations. Id.at 148. The court dismissed all of Kiobel’s claims for lack of subject matter jurisdiction.  Id.at 149. This case was the first time that the Second Circuit directly addressed whether its jurisdiction under ATS extends to civil actions involving corporations. Id.at 124.

The Supreme Court heard oral arguments for the case on February 28, 2012 and on March 5, 2012 ordered re-arguments. American Bar Association, Preview of United States Supreme Court Cases http://www.americanbar.org/publications/preview_home/10-1491.html. The re-arguments will be on the question of under what circumstances the Alien Tort Statute allows American courts to litigate tort claims that are based on actions that did not occur within the territory of the United States. Kiobel v. Royal Dutch Petroleum Co., 132 S.Ct. 1738 (2012).

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Discussion

Petitioners argue that the text, history, and purpose of the Alien Tort Statute (“ATS”) support their contention that the ATS was applicable in foreign nations. See Petitioners’ Supplemental Opening Brief, at 18. However, Respondents argue that the ATS is not an exception to the presumption that U.S. law does not apply extraterritorially, and should not be applicable to actions outside of the U.S. See Supplemental Brief for Respondents at 11.

Business Implications

BP America and others (“BP America”) point out that the U.S corporations often have contacts with foreign military and government entities when the corporations conduct foreign business. See Supplemental Brief of Amicus Curiae BP America et al. in Support of Respondents at 34. BP America maintains that if ATS liability for aiding and abetting is extended in this case, many corporations conducting business in developing countries will be at risk of billion-dollar claims based solely on their incidental contacts with the governing regimes in these countries. See id. at 35. The Chamber of Commerce further argues that if ATS is extended to cases involving U.S. corporations’ conduct in foreign countries, the ATS could effectively act as embargos or international sanctions. See Supplemental Brief of Amicus Curiae Chamber of Commerce of the United States of America in Support of Respondent at 23–24.  Moreover, the Chamber of Commerce contends that the ATS will impose additional risks to corporations and discourage corporations from investing overseas. Id. at 25.  Furthermore, the Chamber of Commerce argues that the decrease in investment in developing nations will not only harm corporations but also the developing nations themselves, as well as negatively affect U.S. foreign policy. See id. at 23. The Chamber of Commerce also contends that the United States has often encouraged investment in developing nations to further political policies, and the ATS will serve as a barrier to those policies. See id. at 24.

Ambassador David J. Scheffer (“Scheffer”) contends that if the ATS has extraterritorial reach, it will enforce the global trend that is moving towards applying more civil liability for corporations that violate international human rights, and as a permanent member of the United Nations Security Council, the. U.S. should support the trend and hold corporations accountable for their human rights violations. See Supplemental Brief of Amicus Curiae Ambassador David J. Scheffer, Northwestern University School of Law in Support of Petitioner at 38. Scheffer also argues that if the ATS has foreign reach, it will signal to other countries America’s commitment to justice, and promote international justice. Id. at 39.  The members of the Parliament of the Federal Republic of Germany (“German Parliament”) also maintain that the ATS would support notions of international justice, and provide a remedy to victims of human rights violations.  See Supplemental Brief of Amicus Curiae Volker Beck and Christopher Strasser, Members of Parliament of the Federal Republic of Germany in Support of Petitioner at 13. The German Parliament contends that the ATS does not act as a barrier to international corporations, since the number of human rights claims that are brought against multinational corporations are very small due to the high cost of bringing a class action lawsuit.  Id. at 12–13.  Petitioners further state that the settlements in these types of human rights cases are so minor for large corporations that they will not greatly hamper income so drastically as to prevent a corporation from considering foreign investment. See id. at 14.

Sovereign Power vs. Protection of Human Rights

The Cato Institute states that a sovereign should limit its punishment of crimes to those crimes that occur within the sovereign’s jurisdiction, independent of the nature of the crime. See Supplemental Brief of Amicus Curiae the Cato Institute  in Support of Respondent at 27. The Cato Institute argues that allowing the Petitioners to continue to litigate the case would greatly expand the boundaries of the reach of American courts in cases dealing with international law. See Brief of Cato at 28. The Cato Institute maintains that this will create an overreach of U.S. power, which will undermine U.S. foreign policy by allowing U.S. courts to decide disputes in foreign countries. Id. at 28–29.  The Federal Republic of Germany believes that if the Court finds for Petitioners, the sovereign judicial powers of foreign nations will be reduced even though they have stronger interests in cases that concern their own corporations. See Supplemental Brief of Amicus Curiae the Republic of Germany in Support of Respondent at 10.

Navi Pillay, the United Nations High Commissioner for Human Rights (“Pillay”), believes that victims of human rights violations are entitled to compensation for the atrocities committed against them and this compensation is necessary because often human rights violations create an inability to support a family or make a livelihood. See Supplemental Brief of Amicus Curiae Navi Pillay, the United Nations High Commissioner for Human Rights in Support of Petitioner at 37. Pillay also states that often there are no avenues in the domestic judicial systems to recover for human rights violations and if Petitioners are unsuccessful in this instance, a potential avenue for recovery will be lost to victims of human rights violations. See id. at 39. Petitioners also state that the need for a forum to hear the human rights violations far outweighs any infraction on the sovereignty of a nation. See Supplemental Brief of Beck and Strasser at 10. 

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Analysis

Application of Sosa v. Alvarez-Machain to International Torts

Petitioner argues that the seminal case, Sosa v. Alvarez-Machain, already resolved the question of whether the ATS allows U.S. courts to recognize a cause of action for international law violations that occur outside the United States. Petitioner contends that Sosa, a case in which plaintiffs sued the defendants for kidnapping under the ATS, held that ATS jurisdiction extends to a small subset of common law tort cases derived from international law. See Petitioners’ Supplemental Opening Brief at 18. Petitioner points out that the Sosa court held that the plaintiffs were not entitled to damages under the ATS, since the ATS was a jurisdictional statute that was intended to regulate common law causes of actions for a small number of international law violations, including crimes against ambassadors, breaches of safe conducts, and piracy. Petitioners’ Supplemental Reply Brief  at 7. Petitioner argues that Sosa authorized ATS jurisdiction to include human rights violations by foreign nationals in its discussion of remedies. Id. Petitioner further argues that international law prohibits any government from committing human rights violations against their citizens, especially within their own sovereignty. Id. at 7. Moreover, Petitioner states that no court since Sosa has held that ATS jurisdiction is limited to conduct occurring within the U.S. or on the high seas. Petitioners’ Supplemental Reply Brief at 17.

Respondent argues that Sosa stands for the proposition that to apply the ATS and federal common law is to recognize U.S. law in a foreign country. See Supplemental Brief for Respondents at 16. Respondent asserts that, under the ATS, courts apply federal common law to a violation of an international law “norm,” therefore applying U.S. law to foreign nations. Id. Thus, respondent argues, that while these causes of action do look partially to international law for substantive content, because it is based on a violation of an international law custom, it is nonetheless an application of U.S. federal common law. Id. Respondent argues that to find otherwise would likely be a violation of international law, which prohibits universal civil jurisdiction. Id. at 37. Respondent further argues that even if it would not be a clear violation of international law, it would be an arguable violation. Id. at 38. In support of this, Respondent cites Sosa , which lists the potential violation of international law as a consideration a court should use when determining whether or not to extend jurisdiction to international tort cases under the ATS. Id. Respondent further contends that there is no acceptable circumstance where it would be appropriate for the U.S. to apply its own laws to a case such as this one. Id.

Presumption Against Extraterritoriality

Petitioner argues that the presumption against extraterritoriality is not applicable to the ATS because it is a jurisdictional statute and that the presumption against extraterritoriality does not apply to jurisdictional statutes. See Petitioners’ Supplemental Opening Brief at 34. Petitioner also asserts that the ATS does not have any geographic limitations on the scope of its jurisdiction. Id. at 18.  Moreover, Petitioner compares the ATS to U.S. adjudication of international tort claims (also known as Transitory Tort claims), where both parties are based outside of the United States. Id. at 19–20. Petitioner states that international tort claims may be adjudicated in the U.S. regardless of where the cause of action arose, so long as the plaintiffs can satisfy personal jurisdiction requirements. Id. Petitioner argues that both the ATS and the Transitory Tort doctrine derive their power from customary international law and not the substantive law of any particular nation. Id. at 24. Petitioner notes that although the ATS uses some federal common law to provide rules, this is consistent with international law principles, which dictate that each state may enforce international law through their own legal system. Id. at 39–40. Thus, petitioner contends that adjudication of this case would not apply U.S. law extraterritoriality. Id.

Respondent contends that the ATS and federal common law should not be interpreted to apply to conduct on foreign soil because U.S. law is presumed not to apply extraterritorially. See Supplemental Brief for Respondents at 11–12. Respondent thus argues that, by extending ATS and federal common law to suits involving foreign territories and parties, the Court would extend U.S. law outside of its borders. Id. at 11–13.Respondent contends that this presumption against extraterritoriality applies to the ATS despite the fact that it is a jurisdictional statute. Id. at 19–20. In support of this claim, Respondent cites the Sosa decision, in which the Court determined that the decision to create a private right of action is usually best left to the legislature. Id. at 19. Respondent continues by stating that the Court intended for the extraterritoriality presumption to also apply to the ATS. Id. Respondent argues that, although several lower courts have permitted suits arising from incidents in foreign nations, the Court should explicitly foreclose such suits because they cause international friction. Id. at 12. In response to Petitioner’s comparison of international tort cases and ATS claims, Respondent replies that ATS cases and international tort claims require entirely different procedural rules: while international tort cases are adjudicated in a U.S. forum, the law of wherever the violation occurred supplies the choice of law. Id. at 17–19. Respondent argues that in contrast, ATS cases require application of U.S. federal common law—meaning the law of the nation where the incident occurred has no impact. Id.

History, Text, and Purpose of the ATS

Petitioner contends that maintaining federal jurisdiction over these types of alien tort cases is appropriate and has been assumed since the formation of the United States. See Petitioners’ Supplemental Opening Brief at 18–19, 58–60. Petitioner argues that the ATS was enacted to adjudicate treaty violations and therefore extends territorial jurisdiction everywhere international law reaches. Id. at 18–19. Moreover, Petitioner argues that even if the presumption against extraterritoriality does apply, it is rebutted by the text, history, and purpose of the statute. Id. at 36–37. Petitioner states that the ATS has long been understood to include violations committed in foreign nations by foreign actors. Id.at 36. In support of this, Petitioner points to the fact that Congress has long supported international human rights compliance and accountability and that, by restricting the jurisdiction of ATS claims, U.S. foreign policy would be compromised. Id. at 47­–48. Petitioner additionally argues that the founders did not apply a territorial limitation to the scope of the ATS. Id. at 60.

Respondent supports its ATS interpretation by claiming that, where Congress has intended for an Act to include violations that occur on foreign soil, it has explicitly said so. See Supplemental Brief for Respondentsat 20­–21. Respondent cites the Torture Victim Protection Act (“TVPA”) as an example of this. Id. The TVPA explicitly extends jurisdiction to acts occurring in foreign nations regardless of the actors. Id. Respondent further contends that application of the ATS has historically involved incidents occurring on U.S. soil. Id. at 27. Respondent thus concludes that only Congress may outline territorial jurisdiction of the ATS and, if it intends for jurisdiction to include acts committed on foreign soil by foreign nations, it must explicitly say so. Id. at 20–22. Respondent argues that to conclude otherwise would be to establish absolute U.S. jurisdiction over all international matters. Id. 21–22.

Application of U.S. Law to International Claims

Petitioner argues that U.S. law is not applied here because the ATS and federal common law call for the application of international law to any disputes filed under the statute. See Petitioners’ Supplemental Opening Brief at 35. Petitioner states that these laws are utilized worldwide and are easily applied by the federal courts to ATS disputes. Id. In this way, Petitioner argues that it is not U.S. law that applies extraterritorially but rather international law that applies universally. Id. at 40. Petitioner argues that the history of the ATS demonstrates that Congress intended it to provide federal courts with extraterritorial reach, a prospect shown by the many foreign tort cases litigated in U.S. federal courts. Id. at 18–19. Petitioner also notes that adjudication of foreign violations does not violate the prohibition on universal civil jurisdiction because there are restrictions on ATS jurisdiction, such as where defendant is not sufficiently connected to the forum nation to satisfy due process requirements. Id. at 48–51. Petitioner concludes that these jurisdictional limitations are sufficient to prevent U.S. courts from unilaterally exercising universal civil jurisdiction. Id.

Respondent responds first by pointing to the fact that the case before the Court is especially sensitive because it involves passing judgment on the commercial conduct of a foreign government, not just a non-government actor. See Supplemental Brief for Respondents at 12. Respondent additionally argues that the ATS was enacted as a means of preventing international conflict and was not intended to include violations committed by alien actors in foreign nations. Id. at 12. Respondent states that the alleged conduct occurred entirely in Nigeria and Nigeria objects to U.S. adjudication of the matter because they believe it will jeopardize their ability to reconcile the country with the Ogoni people. Id at 14–17. Respondent argues that foreign nations often object to the application of laws outside the construct of their own sovereignty because they choose their own means of dealing with internal conflict. Id. at 16. Respondent points to South Africa as an example of a country that took an alternative route—by creating the Truth and Reconciliation Commission (“TRC”)—to address the disputes that arose in the aftermath of apartheid. Id. at 16–17. Respondent argues that this as an example of a situation where imposition of foreign jurisdiction would have been a serious disruption of South Africa’s autonomy. Id.

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Conclusion

The re-arguments in this case will focus on the interpretation of the Alien Tort Statute as it relates to the ability for an American court to have jurisdiction on civil cases that would otherwise be outside their reach. The Court’s decision will greatly affect corporate investment in emerging markets and international human rights law. Petitioners will argue that they must be allowed to bring their claim in a United States court in order to allow for justice for human rights cases, while Respondents will urge to the Court that there is no jurisdiction on the part of the United States and the case would be better served in a jurisdiction that has greater ties to the underlying action.

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