Corporate Liability Under The Alien Tort Statute

On July 8, 2011 and July 11, 2011, the Courts of Appeals for the District of Columbia Circuit and the Seventh Circuit, respectively, handed down decisions concerning the scope of liability under the Alien Tort Statute ("ATS"), 28 U.S.C. § 1350, a federal statute that grants district courts jurisdiction to entertain suits sounding in torts committed in violation of international law.

The implications of the Courts' rulings are significant, and have deepened a split among the federal appellate courts by holding that corporations are subject to civil liability under the ATS on the ground that they "aided and abetted" violations of customary international law undertaken by third parties in the nations where they were operating. By so ruling, the Courts' signaled their disagreement with the Second Circuit's recent ruling in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010), which held that corporations could not be held liable under the ATS.1

The ATS

The ATS was adopted by the First Congress in 1789 as part of the original Judiciary Act. The statute simply provides that "[t]he district courts shall have original jurisdiction over 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."2 At the time of its passage, the ATS was thought to cover only three specific offenses against the law of nations: violations of the right of safe passage, interference with ambassadors, and piracy.

The statute was seldom invoked in the first 200 years following its adoption, and while the Supreme Court has only addressed the statute once, its ruling in that case appears to have encouraged plaintiffs to attempt to expand dramatically the standards of international law for which it may be invoked. Specifically, in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), the Supreme Court held that in "accepting a cause of action subject to jurisdiction under [the ATS]," a court "should not recognize private claims for violations of any international law with less definite content and acceptance among civilized nations than the historical paradigms familiar when [ATS] was enacted."3 Despite this, and while cautioning that federal courts should exercise restraint in considering new causes of action under the ATS, the Supreme Court held in Sosa that the question of what constitutes customary international law must be determined with reference to the "present day law of nations," a standard that necessarily, if implicitly, recognizes that the international law standards upon which the statute may be invoked will evolve over time.4

Corporate Liability

Sosa did not address the categories of defendants who may be held liable under the ATS, and the Courts of Appeals have been left to determine whether customary international law allows for the imposition of liability against corporations or other non-natural, non-state actors. In addressing this question, the Courts of Appeals have canvassed historical sources and events, ultimately reaching different conclusions on the question.5 The Eleventh Circuit was the first federal appellate court to directly address the question of corporate liability under the ATS, and found that because the ATS provided no express exception for corporations, corporations were not immune from suit under the statute.6 Two years later, the Second Circuit disagreed, finding that courts must "look to international law to determine our jurisdiction over ATS claims against a particular class of defendant, such as corporations,"7 and that "the concept of corporate liability for violations of customary international law has not even begun to 'ripen[ ]' into a universally accepted norm of international law."8

Doe v. Exxon Mobil Corp., ___ F.3d ____, 2011 WL 2652384 (D.C. Cir. July 8, 2011)

Exxon involved two actions brought in 2001 and 2007 by a group of Indonesian villagers alleging that Exxon's security force, which was comprised of members of the Indonesian military, committed murder, torture, sexual assault, battery, and false imprisonment while operating in the Aceh province of Indonesia. Plaintiffs based their claims under both the ATS and Torture Victims Protection Act ("TVPA")9 on allegations that Exxon "took actions both in the United States and at its facility in the Aceh province that...