UK Supreme Court Blog

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By Lyle Denniston, a reporter for scotusblog.com, an online journal of American law

Taking a position close to what the UK government had sought, the US Supreme Court yesterday sharply curtailed the authority of American courts to hear and decide lawsuits claiming human rights abuses in countries outside the US.   The case of Kiobel v. Royal Dutch Petroleum had been under study by the Court for nearly two years, and had been argued twice.

The majority of the US Court said that its decision resulted in part from a desire to avoid the pretense of being “the custos morum [moral custodian] of the whole world.”

The UK government, in a brief along with the government of The Netherlands filed last June, had argued that American courts for years had been using a law passed in 1789 by the first US Congress to reach beyond US shores to judge alleged atrocities on foreign soil, involving only foreigners.

“The Governments,” that brief noted, “have maintained their concern with the extraterritorial application of U.S. law over a long period of time….They remain deeply concerned about the failure of some U.S. courts to take account of the jurisdictional constraints under international law.”

The object of that concern, shared by a wide array of international business firms and by professors of international law, is America’s Alien Tort Statute.  The ATS provided nearly an open-ended grant of jurisdiction to federal courts in the US to hear and decide “any civil action” by foreign nationals claiming wrongdoing in violation of international law, even when all of the incidents involved occurred on foreign soil, and involved only foreign nationals on both sides.   The ATS has very strong support, though, from many human rights organizations.

Although the ATS remained almost entirely unused for decades, its use came into vogue after an American federal court of appeals in 1980 began a trend of allowing lawsuits with expansive claims of human rights abuses, especially by international corporations.  That trend has accelerated, leading the US Supreme Court in a 2004 decision to tell federal courts to use caution in recognizing new causes of action under the ATS, but nevertheless allowing such lawsuits to continue.

The case decided by the Justices on Wednesday, in widely splintered opinions among the nine Justices, arose out of claims by 12 Nigerian nationals, now living in the US, that they were the victims of atrocities by the Nigerian government in the 1990s.  Because the Nigerian government has sovereign immunity, it could not be sued directly in a US court, so the Nigerians sued Royal Dutch Shell Petroleum Co., a Netherland-based firm, and two of its subsidiaries: the British firm of Shell Transport and Trading Co., and a separate Dutch subsidiary.  The claim was that those companies enlisted the Nigerian government in violently suppressing resistance to oil exploration in the Niger delta.

By a unanimous vote, the nine members of the US Court agreed that the lawsuit could not proceed under the ATS because it had no connections to the US.  But the Court issued four separate opinions, with varying combinations of votes among the Justices.  The lead opinion, written by Chief Justice John G. Roberts, Jr., had the support of a clear majority of five Justices.

The Court applied a doctrine, developed by American courts long ago, of a presumption against extraterritorial reach of US laws.  That doctrine, traced back to the great Chief Justice John Marshall as early as 1804, held that US laws are to be applied only to the US itself unless Congress has explicitly extended their effect beyond US shores. 

That is exactly the doctrine that the three oil companies – and the UK and Netherlands governments as well – had advocated.   The effect on Wednesday was to end the Nigerians’ lawsuit.

The Court’s ruling, however, left open “a number of significant  questions  regarding the reach and interpretation of the Alien Tort Statute,” according to Justice Anthony M. Kennedy in one of the separate opinions.

Justice Kennedy did not spell out what questions did remain.  But perhaps the most significant one was how far the Chief Justice’s opinion had actually gone to restrict the overseas reach of the ATS.  The Chief Justice, in a brief comment, had suggested that the presumption against overseas application might be displaced, if the US interest claimed to be at stake was strong enough.  He did not elaborate, however.

That comment appeared to be an indication that the decision did not entirely forbid all ATS claims that might be made about foreign human rights abuses.  The opening for future lawsuits, though, appeared to be narrow, at most.

Among other issues that the decision appeared to have left open is whether international corporations could be a target of any future ATS claim, if any were allowed to proceed.  That is an issue that the US Court had agreed to decide in the first round of the Kiobel case.   But the Court bypassed that issue when it ordered new briefing and argument on whether the ATS applied at all to foreign acts conducted in the country of a foreign sovereign.  The new decision mentioned the corporate liability issue, but did not resolve it.

Another issue not resolved is whether a corporation, if it could be sued under ATS, could be targeted for “aiding and abetting” atrocities rather than engaging in them directly.

Four Justices argued in a separate opinion that the Court should have left open more opportunity for ATS lawsuits, against “an American national” whose conduct had “substantially and adversely affected an important American national interest.” That opinion did not articulate how expansive those phrases were meant to be.  In any event, the four were in a minority in the decision.

With that decision now made, the US Supreme Court will now decide what to do with a similar pending case in which British and Australian companies that are part of a global mining company, Rio Tinto, are seeking to head off an ATS lawsuit against them for allegedly aiding in human rights violations in Papua New Guinea in the operation of copper and gold mines there and in the company’s role during a ten-year civil war.  The companies are Riot Tinto PLC, a British firm, and Rio Tinto, Ltd., an Australian firm.  They are part of the London-based Rio Tinto.

The Justices’ likely response to that case is to return it to federal appeals court in San Francisco to take account of the Kiobel decision.  The Rio Tinto case raises the extraterritoriality issue, the corporate liability question, and the aiding-and-abetting question.