Foreigners Suing Foreigners for Foreign Conduct: Remaining Loopholes
By Mike Dorf
My latest Verdict column discusses last week's SCOTUS ruling in Kiobel v. Royal Dutch Petroleum. I argue in the column that notwithstanding the Court's seemingly sweeping rejection of extraterritorial application of the Alien Tort Statute (ATS), in light of Justice Kennedy's concurrence, the actual holding may not be that far from the test proposed by Justice Breyer for the more liberal wing of the Court: namely, that foreigners may sue based on conduct occurring in the territory of another sovereign where the case sufficiently touches on U.S. interests.
Other commentators have noted further wrinkles. For example Tom Lee suggests that even after Kiobel, treaties that are not self-executing may nonetheless be deemed to provide the basis for causes of action under the ATS. And, as I note in the column, commentators (including Tom) also suggests that failed states (like Somalia) could be treated as lacking a sovereign, and thus more akin to the high seas than to the territory of a foreign sovereign. If so, allowing ATS claims could be analogized to allowing ATS claims against pirates. (This point was also made to me in private by my colleague Jens Ohlin, before Tom's post appeared, so I didn't bother to credit either of them in the column. I'm crediting them both here.) Indeed, the analogy is arguably more than an analogy--as actual pirates sometimes operate out of failed states (such as Somalia).
Thus, the thrust of my column and some other commentary I've seen (also including this SCOTUSblog piece by attorney Anton Metlitsky) tend in the direction of saying that despite first impressions, Kiobel may not prove so ruinous for human rights litigation in the U.S. courts. There's yet another way in which that appears to be true: No Justice raised the Article III objection in any of the Kiobel opinions.
What Article III issue? As I noted in my preview post on the case, the first oral argument in Kiobel indicated that at least some Justices might use it as an opportunity to cut back on the power of U.S. courts to recognize international law as federal common law. That would present an Article III issue because, in order for a foreigner-versus-foreigner case to be in federal court, it must arise under federal law for purposes of Article III. The diversity of citizenship portion of Article III allows party-based cases between U.S. citizens and foreigners but not between two foreigners. Jurisdiction in such cases must be based on a federal question. But if customary international law (CIL) isn't federal common law (or incorporated by a treaty or a federal statute), then it isn't federal law at all, and thus there would be an Article III problem.
And as I noted in my preview post, there is a body of revisionist scholarship arguing that customary international law is not federal law. In a nutshell, the revisionists argue that in the 19th century, CIL was thought to be "general common law" not attributable to any sovereign; thus, when the Supreme Court in the Erie case did away with general common law, CIL was demoted to state law (at least in those states that incorporate CIL as part of their common law).
The idea that CIL could be state law but not federal law is deeply counter-intuitive, given federal supremacy on matters of foreign relations. And thus not surprisingly, there's a substantial body of scholarship contesting the revisionist view and contending that, notwithstanding Erie, CIL is indeed federal law (at least absent a contrary statute or treaty). The SCOTUS has not definitively weighed in on this controversy but in the academy, views on the subject tend to track ideological divisions and one would expect the same in the SCOTUS: Liberals take the traditional view that CIL is federal law; conservatives take the revisionist view that CIL can be state law but no more. This issue--like so many others--could well come down to Justice Kennedy, who would be likely pulled in competing directions. On the one hand, his internationalist bent would drive him towards the traditionalist view; on the other hand, his federalist bent would drive him towards the revisionist view.
There is a potential irony here. As Roger Alford notes in a recent blog post, following Kiobel, claims that once might have been brought under the ATS for violations of human rights will (or at least should) now be brought as ordinary tort cases in state courts. For such cases to succeed, it won't be necessary for plaintiffs to show that the particular state tort law incorporates CIL; it will only be necessary to show that under the applicable choice-of-law rules, the defendant committed a tort. And even that won't be hard because nearly all countries have something like a tort system that provides for civil liability in cases involving serious harm.
What about forum non conveniens--the discretionary doctrine that permits courts to dismiss cases based on lack of connections to the case? Alford says that "forum non conveniens does not have the same force or favor in state courts as in federal courts," but that may be an overstatement. Consider Kiobel, which was brought in the federal district court for the Southern District of NY. Suppose it had been brought instead as a state tort suit in the state court across the street. Then NY's forum non conveniens statute would apply, and it's not so forgiving. In the leading case, the NY Court of Appeals affirmed a FNC dismissal as within the discretion of the trial judge, even though there was no alternative forum. So it's possible that going to state court won't be a good option, at least for some states. But Alford is broadly right about FNC nonetheless, because even though particular states (like NY) may enforce FNC as strictly as the federal courts, other states will not, and so the good plaintiff's lawyer will simply shop for the right forum.
In the end, the biggest obstacle to tort suits may be personal jurisdiction. Individual human rights abusers will avoid the relevant fora. Corporate presence might be enough to get around that problem--and in state tort litigation, unlike ATS litigation, it's clear that there can be corporate liability. But proving sufficient corporate presence to establish personal jurisdiction may be difficult because the Supreme Court may be about to close that door. On Monday the Court granted cert in a case presenting the question of when a foreign company's subsidiary's contacts with a state may be the basis for the assertion of general (personal) jurisdiction over the parent company for alleged human rights abuses by another sub outside of the country. The fact that Judge Reinhardt (aka Chief Justice of the Warren Court in Exile) wrote the opinion finding personal jurisdiction is a pretty good predictor that the Supreme Court plans to reverse.
My latest Verdict column discusses last week's SCOTUS ruling in Kiobel v. Royal Dutch Petroleum. I argue in the column that notwithstanding the Court's seemingly sweeping rejection of extraterritorial application of the Alien Tort Statute (ATS), in light of Justice Kennedy's concurrence, the actual holding may not be that far from the test proposed by Justice Breyer for the more liberal wing of the Court: namely, that foreigners may sue based on conduct occurring in the territory of another sovereign where the case sufficiently touches on U.S. interests.
Other commentators have noted further wrinkles. For example Tom Lee suggests that even after Kiobel, treaties that are not self-executing may nonetheless be deemed to provide the basis for causes of action under the ATS. And, as I note in the column, commentators (including Tom) also suggests that failed states (like Somalia) could be treated as lacking a sovereign, and thus more akin to the high seas than to the territory of a foreign sovereign. If so, allowing ATS claims could be analogized to allowing ATS claims against pirates. (This point was also made to me in private by my colleague Jens Ohlin, before Tom's post appeared, so I didn't bother to credit either of them in the column. I'm crediting them both here.) Indeed, the analogy is arguably more than an analogy--as actual pirates sometimes operate out of failed states (such as Somalia).
Thus, the thrust of my column and some other commentary I've seen (also including this SCOTUSblog piece by attorney Anton Metlitsky) tend in the direction of saying that despite first impressions, Kiobel may not prove so ruinous for human rights litigation in the U.S. courts. There's yet another way in which that appears to be true: No Justice raised the Article III objection in any of the Kiobel opinions.
What Article III issue? As I noted in my preview post on the case, the first oral argument in Kiobel indicated that at least some Justices might use it as an opportunity to cut back on the power of U.S. courts to recognize international law as federal common law. That would present an Article III issue because, in order for a foreigner-versus-foreigner case to be in federal court, it must arise under federal law for purposes of Article III. The diversity of citizenship portion of Article III allows party-based cases between U.S. citizens and foreigners but not between two foreigners. Jurisdiction in such cases must be based on a federal question. But if customary international law (CIL) isn't federal common law (or incorporated by a treaty or a federal statute), then it isn't federal law at all, and thus there would be an Article III problem.
And as I noted in my preview post, there is a body of revisionist scholarship arguing that customary international law is not federal law. In a nutshell, the revisionists argue that in the 19th century, CIL was thought to be "general common law" not attributable to any sovereign; thus, when the Supreme Court in the Erie case did away with general common law, CIL was demoted to state law (at least in those states that incorporate CIL as part of their common law).
The idea that CIL could be state law but not federal law is deeply counter-intuitive, given federal supremacy on matters of foreign relations. And thus not surprisingly, there's a substantial body of scholarship contesting the revisionist view and contending that, notwithstanding Erie, CIL is indeed federal law (at least absent a contrary statute or treaty). The SCOTUS has not definitively weighed in on this controversy but in the academy, views on the subject tend to track ideological divisions and one would expect the same in the SCOTUS: Liberals take the traditional view that CIL is federal law; conservatives take the revisionist view that CIL can be state law but no more. This issue--like so many others--could well come down to Justice Kennedy, who would be likely pulled in competing directions. On the one hand, his internationalist bent would drive him towards the traditionalist view; on the other hand, his federalist bent would drive him towards the revisionist view.
There is a potential irony here. As Roger Alford notes in a recent blog post, following Kiobel, claims that once might have been brought under the ATS for violations of human rights will (or at least should) now be brought as ordinary tort cases in state courts. For such cases to succeed, it won't be necessary for plaintiffs to show that the particular state tort law incorporates CIL; it will only be necessary to show that under the applicable choice-of-law rules, the defendant committed a tort. And even that won't be hard because nearly all countries have something like a tort system that provides for civil liability in cases involving serious harm.
What about forum non conveniens--the discretionary doctrine that permits courts to dismiss cases based on lack of connections to the case? Alford says that "forum non conveniens does not have the same force or favor in state courts as in federal courts," but that may be an overstatement. Consider Kiobel, which was brought in the federal district court for the Southern District of NY. Suppose it had been brought instead as a state tort suit in the state court across the street. Then NY's forum non conveniens statute would apply, and it's not so forgiving. In the leading case, the NY Court of Appeals affirmed a FNC dismissal as within the discretion of the trial judge, even though there was no alternative forum. So it's possible that going to state court won't be a good option, at least for some states. But Alford is broadly right about FNC nonetheless, because even though particular states (like NY) may enforce FNC as strictly as the federal courts, other states will not, and so the good plaintiff's lawyer will simply shop for the right forum.
In the end, the biggest obstacle to tort suits may be personal jurisdiction. Individual human rights abusers will avoid the relevant fora. Corporate presence might be enough to get around that problem--and in state tort litigation, unlike ATS litigation, it's clear that there can be corporate liability. But proving sufficient corporate presence to establish personal jurisdiction may be difficult because the Supreme Court may be about to close that door. On Monday the Court granted cert in a case presenting the question of when a foreign company's subsidiary's contacts with a state may be the basis for the assertion of general (personal) jurisdiction over the parent company for alleged human rights abuses by another sub outside of the country. The fact that Judge Reinhardt (aka Chief Justice of the Warren Court in Exile) wrote the opinion finding personal jurisdiction is a pretty good predictor that the Supreme Court plans to reverse.