Enacted in 1789 as part of the Judiciary Act, the Alien Tort Statute (ATS) provides federal jurisdiction over lawsuits brought by non-U.S. nationals for torts “committed in violation of the law of nations or a treaty of the United States.” The ATS was intended to give federal courts of the new nation the power to resolve disputes arising from a very limited number of international law violations, such as piracy or assaults on ambassadors on U.S. soil, that might have caused diplomatic tension if left unaddressed by state courts. Despite its original intent, the ATS has served for the past two decades as the fountainhead of litigation against multinational companies for human rights violations allegedly committed by foreign governments or other foreign actors in countries all over the world. Read More...
More than 150 ATS suits have been filed against companies in practically every industry sector for business activities in over sixty countries—from Unocal in Burma, to Pfizer in Nigeria, Coca-Cola in Colombia, and Yahoo! in China. The largest ATS suit to date was filed in 2002 against more than fifty companies, including Ford and IBM, for business dealings in South Africa during the apartheid era. ATS suits are typically litigated for a decade or more, chilling international investment and imposing substantial legal and reputational costs on corporations that operate in developing countries.
The Supreme Court has twice reined in expansive interpretations of the ATS. In 2004, the Supreme Court ruled in Sosa v. Alvarez-Machain that the ATS covers only a small handful of international law crimes, not the broad panoply of suits being filed by plaintiffs’ lawyers. The Court cautioned lower courts to refrain from incorporating new violations that had not garnered universal acceptance under international law. In April 2013, the Supreme Court ruled in Kiobel v. Royal Dutch Petroleum that the ATS is limited by the legal presumption that U.S. laws do not extend beyond U.S. borders unless Congress says otherwise. Accordingly, the ATS typically does not apply when “all the relevant conduct took place outside the United States.” This decision ended the majority of ATS suits against U.S. and foreign companies, which had been sued for their overseas activities (or, more often, for the activities of their foreign affiliates).
The Supreme Court appeared to leave the door open, however, to a small set of ATS cases “where the claims touch and concern the territory of the United States” with “sufficient force.” The Court did not elaborate on what claims would satisfy this new test, but explained that “mere corporate presence” in the United States is not enough. Since Kiobel, lower courts have reached different conclusions about how to apply the “touch and concern” test. Most courts have interpreted Kiobel to require that the international law violation must itself take place within the United States, while others have held that significant contacts with the United States may be sufficient, even if the violation occurred overseas.
Recent decisions limiting the ATS have rebuffed plaintiffs’ attempt to use the ATS to bring lawsuits with little or no connection to the United States—a proposition that would have been unthinkable to the law’s framers in 1789. Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, has applauded judicial limits on the ATS that “ensure that trial lawyers cannot continue to use the American judicial system to expose global businesses to frivolous and costly lawsuits.” To help restore the ATS to its original purpose, the U.S. Chamber Institute for Legal Reform (ILR) and the National Chamber Litigation Center (NCLC) have advised and represented U.S. companies in ATS litigation for over a decade. NCLC has filed dozens of briefs in major ATS cases urging dismissal of suits that exceed the law’s intended scope, including Jesner v. Arab Bank, in which the Supreme Court will decide in Spring 2018 whether corporations can be sued under the ATS. ILR likewise monitors developments in ATS cases, publishes research, and advocates policies that would restore the ATS to its original purpose.