Academic journal article Journal of Corporation Law

Corporate Liability Abroad under the Alien Tort Statute

Academic journal article Journal of Corporation Law

Corporate Liability Abroad under the Alien Tort Statute

Article excerpt


Modern transnational corporations hold a uniquely powerful position today. While a U.S. corporation's operations in the United States unquestionably remain subject to U.S. law, whether it can be held liable for facilitation of or complicity in violating U.S. or international law in operations abroad is less clear. A number of noteworthy Alien Tort Statute (ATS) cases against transnational corporations were filed in the past fifteen years. High profile corporations such as Caterpillar, 1 Exxon,2 Pfizer,3 Shell,4 Unocal,5 and Chiquita6 have been sued under the ATS for their alleged complicity in human rights violations committed in foreign countries, and yet, the answer to whether corporations can be held liable for such abuses remains elusive. Recent decisions in the Supreme Court only confuse the question further.7

In April 2013, the Supreme Court released a unanimous decision in Kiobel v. Royal Dutch Petroleum finding that the ATS does not apply extraterritorially. The Court, however, intentionally left open several issues, and while the decision was unanimous, Justices Breyer, Sotomayor, Kagan, and Ginsburg joined in a concurrence in which they agreed with the ultimate result but disagreed with the reasoning behind it. Several cases have wrestled with the same issues since Kiobel; most interestingly, a Fourth Circuit case- Al Shimari v. CACI-which held the ATS was not presumptively barred from extraterritorial application.8 This Note analyzes the confusing standards set by Kiobel, Al Shimari, and other circuit court cases attempting to apply the Supreme Court's holding in Kiobel to litigation involving corporations involved in human rights abuses committed outside of U.S. territory.

This Note argues that the Fourth Circuit correctly based its holding on the interpretation that the ATS could provide jurisdiction in certain circumstances, and that Congress expressly intended to provide aliens access to U.S. courts and to hold American citizens (and therefore corporations) accountable for acts of torture committed abroad. This Note ultimately recommends that the preferable rule would combine the Fourth Circuit 's holding in Al Shimari with Justice Breyer's suggestions in his Kiobel concurrence. Such a rule would allow a U.S. court to hold a corporation liable for conduct abroad under the ATS if certain conditions were met.


A. Historical Background to the Alien Tort Statute

The U.S. Congress passed the ATS as part of the Judiciary Act of 1789.9 The ATS provides that "the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."10 The ATS has been infrequently invoked since its inception. 11 As a result, its modern application is not well understood. A judge once described it as a "legal Lohengrin . . . no one seems to know whence it came."12

1. Congressional Intent Behind the ATS

The Supreme Court in Kiobel13 and the Fourth Circuit in Al Shimari14 both gave significant consideration to congressional intent behind the ATS. The majority of scholars believe the inclusion of the ATS in the Judiciary Act of 1789 was an attempt by the Framers "to give the federal government supremacy over foreign affairs and avoid international conflict."15 However, an intelligent discussion of congressional intent is particularly difficult considering that the ATS went virtually unapplied for almost 200 years after its enactment.16 Despite the efforts of many renowned scholars to glean Congress's intent, ultimately, many have described it as an impossible task. 17 Without delving into detail, several theories explain possible congressional motivations behind the ATS, including protection of foreign diplomats,18 denial of justice,19 fulfillment of state responsibility,20 and universal jurisdiction.21

2. Executive Branch Interpretation of the ATS

Each recent executive administration has interpreted the ATS differently, which further confuses the standard permitting its extraterritorial application. …

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