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The (Limited) Future of Corporate ATS Liability
Michael D. Ramsey*
These brief comments address the future of corporate liability under the Alien
Tort Statute1 (ATS) in the event that the Second Circuit’s ruling in Kiobel v. Royal Dutch
Petroleum Co.2 does not prevail. In Kiobel, the Second Circuit made a bid to shut down
corporate ATS liability altogether by holding that corporations do not owe duties under
international law and thus cannot be sued under the ATS.3 Although I think that
conclusion is correct as a technical matter, I recognize that it is not free from doubt, and
its counterintuitive result (at least to an American audience) is further reason to doubt its
ultimate viability.4 As a result, in considering the future of corporate ATS liability, it
seems appropriate to look beyond Kiobel and consider whether other arguments might
largely accomplish the same result.
I will suggest three possible approaches that might have this effect: first, that
corporate acts in complicity with foreign sovereign actors or policies might be shielded
by foreign sovereign immunity; second, that the ATS does not give jurisdiction over
extraterritorial acts; and third, that claims of secondary liability require proof of an
elevated mental state that will rarely be demonstrable. Of these, as I will explain, the
third appears to be the soundest approach as well as the most attractive for policy reasons.
First, is there foreign sovereign immunity? Most (though not all) corporate ATS
cases involve claims that the corporation acted in conjunction with or in support of a
foreign sovereign. Indeed, the usual requirement of state action for international law
violations makes this, in general and with a few important exceptions, a necessity.5 In
Samantar v. Yousuf in 2010, the Supreme Court held that the Foreign Sovereign
Immunities Act (FSIA) does not provide immunity for a former individual official of a
foreign government facing an ATS claim.6 However, the Court remanded for a
determination whether common law immunity might be available.7 The argument on
* Professor of Law, University of San Diego School of Law. I have served as a consultant or amicus curiae
in various corporate ATS cases on the defense side, including the Talisman Energy case discussed below,
as well as in pending litigation, and I submitted an amicus curiae brief on the plaintiffs’ side in the
Samantar case, also discussed below. My comments here are made in an academic capacity and do not
reflect the positions or interests of any particular litigant.
1
28 U.S.C. § 1350 (2006).
2
621 F.3d 111 (2d Cir. 2010).
3
Id. at 147.
4
Lest Kiobel be dismissed as unduly counterintuitive, however, it is worth noting that courts have held that
the Torture Victim Protection Act, which expressly provides remedies for specified international human
rights violations, does not extend liability to corporations on the basis of its plain language. See Mohamad
v. Rajoub, 634 F.3d 604, 607–08 (D.C. Cir. 2011); Bowoto v. Chevron Corp., 621 F.3d 1116, 1126–28 (9th
Cir. 2010).
5
See Curtis A. Bradley, State Action and Corporate Human Rights Liability, 85 NOTRE DAME L. REV.
1823, 1827 (2010).
6
130 S. Ct. 2278, 2286–89 (2010).
7
Id. at 2292–93.
1
behalf of Samantar, the former official, would be that official acts are shielded by
immunity, even when the defendant is no longer himself a sovereign actor—that is, that
the immunity attaches to the act, not to the person’s office. If Samantar were to prevail
as a matter of common law immunity, this would surely at least raise the question
whether acts of a private entity which are sufficiently sovereign to meet the state action
requirement might also be shielded by “sovereign act” immunity.8
For various reasons, I am skeptical that this argument will prevail. It is not clear
that there is any broad international law immunity applicable even to former officials like
Samantar, much less to private entities seeking it by analogy. In the absence of a clear
international law standard, the federal courts’ authority to imply immunity into a federal
statute such as the ATS seems questionable. Further, any broad finding of immunity
would have unsettling implications. It would call into question the seminal holding of
Filartiga v. Pena-Irala,9 applying the ATS against a foreign government official—a
holding apparently approved by the Supreme Court in Sosa v. Alvarez-Machain in
2004.10 And it would threaten to largely nullify the Torture Victim Protection Act, which
provides a cause of action against foreign government officials for torture and extrajudicial killing (officials who would, presumably, often be able to claim sovereign act
immunity, were it to be recognized).11 Consequently, as a predictive matter it seems
likely that any common law immunity recognized in the Samantar remand and related
cases will be sharply circumscribed and not readily extended to the general run of
corporate ATS cases.
Second, is the ATS extraterritorial? Most corporate ATS claims center on injuries
suffered abroad. In another 2010 case, Morrison v. National Australia Bank Ltd., the
Supreme Court said flatly and without qualification that a U.S. statute does not have
extraterritorial effect unless the statute says it does. 12 The ATS says nothing about
extraterritorial effect.13 ATS defendants have begun to argue strongly that the ATS
therefore does not extend to injuries suffered abroad, a position previously endorsed by
the George W. Bush administration.14
One largely unexplored issue is whether the ATS (passed in 1789) should be
subject to a clear-statement rule that crystallized long afterward.15 More significantly,
8
See Curtis A. Bradley & Jack L. Goldsmith, Foreign Sovereign Immunity, Individual Officials, and
Human Rights Litigation, 13 GREEN BAG 2D 9 (2009),
http://www.greenbag.org/v13n1/v13n1_bradley_and_goldsmith.pdf.
9
630 F.2d 876 (2d Cir. 1980).
10
542 U.S. 692, 732 (2004).
11
See Torture Victim Protection Act of 1991, Pub. L. No. 102-256, 106 Stat. 73 (1992).
12
130 S. Ct. 2869, 2878–79 (2010).
13
See 28 U.S.C. § 1350 (2006); Kiobel v. Royal Dutch Petroleum Co., 621 F.3d at 117 n.10 (declining “to
address . . . lurking questions, including whether the ATS applies ‘extraterritorially’”).
14
Brief for the United States as Amicus Curiae in Support of Petitioners, Am. Isuzu Motors, Inc. v.
Lungisile Ntsebeza, 509 F.3d 148 (2d Cir. 2007) (No. 07-919), 2008 WL 408389.
15
The historical presumption, based on then-existing rules of international jurisdiction, was that generallyworded statutes would not be read to extend beyond U.S. territory “except so far as regards [U.S.] citizens.”
The Apollon, 22 U.S. 362, 370 (1824). The pure presumption against extraterritoriality, disconnected from
international rules of jurisdiction, is a more recent development. See Melissa A. Waters, International Law
2
Congress’ purpose in enacting the ATS appears to have been to give a cause of action for
injuries which, if unredressed, would constitute international law violations for which the
United States would be responsible.16 This category, as understood in 1789, would have
included extraterritorial acts of U.S. citizens. Attorney General William Bradford stated
in 1795 that U.S. citizens who plundered a British post in Sierra Leone could be sued
under the ATS17 (a result consistent with the ATS’ purposes because international law
would hold the United States responsible for their actions if they were not punished).
It is true that the purpose of the ATS appears not to encompass suits against
foreign defendants for foreign acts. As one recent dissent put it, it is hard to imagine that
the framers of the ATS would have wanted it to extend to claims by a French plaintiff
against a French defendant for injuries suffered in France.18 The United States would
have no international obligation to provide a remedy in such cases, and allowing such
suits would tend to thrust the United States into international controversies when the
whole point of the ATS was for the then-young-and-weak United States to avoid
international controversies. But this limited congressional purpose does not line up well
with Morrison’s presumption against extraterritoriality nor is it easily found in the ATS’
unqualified language. And finally, a territorial limit on the ATS would overthrow
Filartiga and its progeny with respect to individual defendants, a result courts may not be
prepared to accept.
A third line of defense—the one I find most promising to corporate defendants as
a practical matter and most appealing as a theoretical matter—involves the framework for
finding secondary liability. Most ATS allegations of corporate wrongdoing are indirect
rather than direct—that is, the claim is not that the corporation itself injured anyone but
that the corporation assisted others (typically foreign sovereign actors) who committed
human rights violations.19
A key question, therefore, is the mental state required to establish secondary
liability.20 Is it sufficient that the corporation knew (or should have known) that the
primary (typically sovereign) actor was engaged in wrongdoing? Or must the plaintiff
also show that the corporate actor shared the intent of the primary actor—that is, that the
corporate actor wanted the resulting harm to occur?
In a crucial case on this point, Presbyterian Church of Sudan v. Talisman Energy,
Inc., the Second Circuit chose the higher standard, holding that the secondary defendant
as an Interpretive Tool in the Supreme Court, 1946–2000, in INTERNATIONAL LAW IN THE U.S. SUPREME
COURT: CONTINUITY AND CHANGE 381–93 (David L. Sloss et al. eds., 2011).
16
See Thomas H. Lee, The Safe-Conduct Theory of the Alien Tort Statute, 106 COLUM. L. REV. 830 (2006).
17
Breach of Neutrality, 1 Op. Att’y Gen. 57, 58 (1795).
18
Sarei v. Rio Tinto, PLC, 625 F.3d 561, 564 (9th Cir. 2010) (en banc) (Kleinfeld, J., dissenting).
19
Typically these claims are couched as aiding and abetting the primary wrongdoer, although the exact
formulation is not material to the points made here. There are of course exceptions to this pattern, a point
to which I will return shortly, but in general the alleged corporate ATS liability is secondary rather than
primary
20
A related and under-examined question is the extent to which the secondary defendant’s action must have
substantially assisted the primary wrongdoer.
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must share the intent of the primary wrongdoer for ATS liability to apply.21 The court
argued first that international law governs this question, and second that international law
is not clear whether the higher or lower standard should apply.22 Since the Supreme
Court in Sosa said that ATS causes of action should be recognized only for clear
violations of international law,23 the Second Circuit concluded that only secondary
liability under the higher mental state (shared purpose) amounted to a clear international
law violation.24
This result seems correct (or even too generous toward finding liability). In the
modern era, the secondary liability for state violations of international law of those
engaged in overseas business and investment activity has not been addressed outside the
United States at all. A few possibly analogous cases arose in the post-World-War II
prosecutions at Nuremberg and related tribunals, but these appear inconclusive and have
not sustained a body of law outside the particular context of the Nazi-era prosecutions.
To the extent there is any claim of support from international practice, it depends on
analogies to the international criminal law of individual war crimes, a body of law of
doubtful relevance to business and investment liability. If the question is whether those
engaged in overseas business enterprises have, by assisting primary human rights
violators, themselves violated a clear standard of international law, at minimum it seems
that actions taken with mere knowledge or less are insufficient.25
The Talisman rule, if sustained, will likely doom most corporate ATS cases.
Corporate actors typically do not share the bad intent of the primary sovereign actors (or
at least it will be hard to prove that they do). Corporate actors seek to maximize profits,
and generally lack a stake in the internal politics that drive human rights violations. As in
Talisman itself, they may arguably be aware of the bad acts of the government (or at least
of the government’s propensity to commit bad acts) but have no apparent stake in what
the government is doing. And even if plaintiffs suspect that the corporate actors share the
government’s bad intent, under Ashcroft v. Iqbal26 that may be difficult even to
successfully allege.
There are reasons to think the Talisman rule will prove broadly attractive as a
policy matter. Unlike other non-Kiobel barriers to corporate ATS liability, Talisman
leaves intact the Filartiga line of cases (which typically involve primary rather than
secondary liability). Further, it forges a compromise on foreign investor liability. Truly
bad corporate actors would remain liable under Talisman: for example, a corporation that
21
582 F.3d 244 (2d Cir. 2009).
Id. at 259.
23
Sosa v. Alvarez-Machain, 542 U.S. 692, 732–33 (2004).
24
Talisman Energy, Inc., 582 F.3d at 259.
25
I would say, in fact, that there is no international law at all on the subject, if one views international law
as the consistent practice of nations done out of a sense of legal obligation. For further development of
these points, see Michael D. Ramsey, International Law Limits on Investor Liability in Human Rights
Litigation, 50 HARV. INT’L L.J. 271 (2009).
26
129 S. Ct. 1937, 1949 (2009) (holding that “to survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face’”) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
22
4
solicited government abuses against people threatening its investment, or a corporation
that directly participated in those abuses, would remain liable. But ordinary business
activity in countries with abusive governments would not be threatened with ruinous
litigation. Thus Talisman offers a way to impose a minimum standard of foreign investor
responsibility without generally deterring foreign investment in nations with less-thanideal governments. Without offering firm conclusions as to whether this is technically
the correct answer, my prediction is that courts will find it an attractive one.
5