Recent Developments In Suits Against Foreign Governments And Corporations Doing Business Abroad

The United States is an attractive forum for plaintiffs to challenge the actions of foreign states, due to U.S. courts' liberal discovery rules, higher damage awards, availability of class actions, and the absence of "loser pay" rules. But foreign states are generally entitled to immunity from such civil suits under the Foreign Sovereign Immunities Act ("FSIA"). As a result, plaintiffs often seek to circumvent FSIA immunity through three different strategies. First, plaintiffs sue private corporations that are not covered by the FSIA, claiming that the corporations were complicit in the foreign state's alleged wrongdoing. Second, plaintiffs sue the foreign states directly, but try to fit the action into one of the FSIA's exceptions to immunity, principally the exceptions for commercial activity, torts, or takings. Third, plaintiffs sue the foreign officials who allegedly committed or ordered the sovereign acts in question, who do not enjoy FSIA immunity. This Commentary analyzes the U.S. Supreme Court's April 17, 2013 decision in Kiobel v. Royal Dutch Petroleum Co.1 and other recent developments related to these circumvention strategies, and discusses how corporations, foreign states, and foreign officials can respond to such suits.

Suits Against Corporations

Plaintiffs seeking to circumvent FSIA immunity often sue private corporations under the Alien Tort Statute ("ATS"), which confers jurisdiction in U.S. courts over torts committed against foreign citizens "in violation of the law of nations or a treaty of the United States." The Supreme Court recently revisited ATS jurisdiction in Kiobel. In that case, plaintiffs alleged that the Nigerian military committed various human rights abuses when it responded to an uprising in the Ogoni region of the country. Rather than sue the Nigerian government, plaintiffs instead sued Dutch and British oil companies, claiming that they aided and abetted the Nigerian military. In affirming the dismissal of the plaintiffs' claims, the Supreme Court held that the ATS does not confer jurisdiction in U.S. courts over claims "seeking relief for violations of the law of nations occurring outside the United States." Two issues remain unresolved under the Kiobel decision. First, the Kiobel case had initially gone to the Supreme Court on the question of whether corporate defendants may be sued under the ATS. The Court in the end did not reach that issue, which currently divides lower courts. Second, in Kiobel the Court left open the possibility that the ATS may provide jurisdiction over claims that "touch and concern the territory of the United States ... with sufficient force to displace the presumption against extraterritorial application." And Justice Breyer, in an opinion concurring in the judgment, suggested that the ATS provides jurisdiction when the defendant is "an American national," or where "the defendant's conduct substantially and adversely affects an important American national interest." And certain human rights violations would still be actionable in U.S. courts under statutes, such as the Torture Victims...