SDNY Applies Kiobel II And Holds Corporations May Be Liable Under The Alien Tort Statute

In a mid-April decision in the In re: South African Apartheid Litigation, the Southern District of New York ("SDNY") has tackled one of the most pressing legal questions left unanswered by the Supreme Court last year in Kiobel v. Royal Dutch Petroleum ("Kiobel II"): Can corporations be held liable under the Alien Tort Statute ("ATS") for violations of "the law of nations"?

The SDNY answered this question in the affirmative, and called upon the parties to brief the second: What acts might sufficiently "touch and concern" the United States to displace the presumption against extraterritoriality?

The plaintiffs in the Apartheid Litigation filed their suit over twelve years ago, alleging that numerous multi-national corporations had aided and abetted tortious conduct by South Africa's apartheid regime. In the time since, the case has survived multiple motions to dismiss and subsequent appeals, although now only two defendants remain: Ford Motor Company and International Business Machines ("IBM").

This latest district court ruling comes after the Second Circuit remanded the case following additional briefing in light of the Supreme Court's ruling in Kiobel II. The plaintiffs in Kiobel were Nigerian citizens who sued Royal Dutch Petroleum and other corporations alleging aiding and abetting of assorted violations of customary international law, all of which took place in Nigeria. The Second Circuit, despite having not done so on at least nine prior occasions, held in "Kiobel I" that the ATS does not confer federal jurisdiction over corporations. In so doing, the Second Circuit became the first (and thus far only) Circuit to come to this conclusion.

The Supreme Court accepted the case and originally heard argument on this question of corporate liability, but in a surprise move, the Supreme Court then requested a second round of argument on the question of whether the ATS could be used to bring claims for "extraterritorial" torts, meaning torts that took place outside the United States and involved only non-U.S. parties. The Court ultimately based its ruling on the latter question, concluding that the presumption against extraterritoriality applied and thus the ATS could not be used in this case to sue for acts that took place exclusively overseas and involved parties without U.S. ties.

In Kiobel II, the Supreme Court explained that in order to overcome the presumption against extraterritoriality, the alleged wrongful conduct would have to "touch...

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