Applying the ATS to private individuals and multinational corporations
The application of the ATS for violations of international human rights law is the culmination of a long process of evolution. In the initial years since its rebirth as a vehicle for bringing human rights cases, the ATS was invoked and applied in situations involving human rights violations committed by persons acting under color of law as public officials (see Filártiga v. Peña-Irala). 1 The ATS’s scope was subsequently extended to cover violations committed by individuals acting outside any official capacity (see Kadić v. Karadžić). 2 The application of the ATS to tort actions brought in the U.S. against multinational corporations for violations of human rights committed abroad since by the mid-1990s, from Wiwa and Unocalto Kiobel and Jesner,will be discussed below in detail.
Sosa v. Alvarez-Machain
At the request of the U.S. Drug Enforcement Agency, a group of Mexican nationals took Mexican physician Alvarez-Machain by force on U.S. soil to face trial in U.S. courts. After being found not guilty, Alvarez-Machain brought an ATS lawsuit for arbitrary arrest and detention against Jose Francisco Sosa, one of the alleged Mexican perpetrators. This was the first time the U.S. Supreme Court heard not only an ATS case, but also a transnational human rights case.
The Court found that the ATS provides an jurisdiction over claims for a limited number of international law violations, a right that was previously unrecognized.
The Court provided a more precise definition of the law of nations contained in the ATS, ruling that all actions based upon “a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of 18th century paradigms” may be brought. 3 At that time, torts included infringement of rights of diplomats and consular officials, safe conduct, and piracy. While being clear that the ATS should be understood to apply to violations in the modern era, the Court clarified that individuals may bring human rights cases for violation of universal, obligatory, specific and definable international norm such as the prohibitions of torture and genocide. In the case at hand, the Court held that arbitrary detention as pled in this case does not violate well-established customary international law and therefore dismissed the action. 4
As to whether individuals could bring ATS actions against private actors for violations of international norms, the Court held that it must “consider whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual.” 5
Displacing the presumption against extraterritoriality
In April 2013, the Supreme Court released ruled in Kiobel v. Royal Dutch Petroleum that ATS claims must displace the presumption against extraterritoriality. The presumption is linked to concerns for international comity, that adjudicating a claim could cause “diplomatic strife,” or “international discord.” 6
The Court held that “even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.” 7 The facts of Kiobel, in which Nigerian plaintiffs sued U.K. and Dutch parent companies for allegedly abetting the Nigerian government in committing abuses in Nigeria, were insufficient to displace the presumption, and the Court affirmed dismissal.
How can a claim displace the presumption against extraterritoriality?
In Kiobel, the Supreme Court noted that “it would reach too far to say that mere corporate presence” – via a public relations office in New York and listings on the New York Stock Exchange – suffices. 8 It did not specify what specific factors would be sufficient to displace the presumption, but suggested that ATS claims should be evaluated on a claim-by-claim basis, 9 and that displacing the presumption turns on whether the “claim,” rather than the alleged tortious conduct, sufficiently touches and concerns U.S. territory. This means that courts can and must consider all the facts that give rise to ATS claims, including the parties’ identities, their relationship to the causes of action, and the relationship of the claims to the United States’ territory and interests. In citing Morrison v. National Australia Bank Ltd, 10 the Supreme Court explained that courts must inquire about the “focus” or purpose of the statute in determining how to apply the presumption. Accordingly, the historical purpose of the ATS was to provide foreigners with access to a U.S. forum for violations of international law that could be attributed to the U.S., such as violations committed by a U.S. citizen, violations committed on U.S. territory or situations where the U.S. provided “safe harbor” for an international law violation, as well as for violations that occur outside the U.S. such as piracy, must be considered when assessing claims brought under the ATS. Justice Kennedy noted in his concurring opinion that “[t]he opinion for the Court is careful to leave open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute” and left open the possibility of application of the ATS to “human rights abuses committed abroad.” 11
Situations where the presumption against extraterritoriality might be displaced include cases in which:
the alleged tort occurs on U.S. soil; 12
the defendant is an U.S. national; 13
significant conduct that contributed to the Commission of the violation occurred on U.S. soil;
the defendant’s conduct substantially and adversely affects an important U.S. national interest. 14
The Post-Kiobel – and pre- Nestlé – Landscape
A number of corporate cases involving U.S. corporations have addressed Kiobel’s “touch and concern” requirement. These include Cardona v. Chiquita, a case filed in June 2007 on behalf of multiple plaintiffs by NGO earthRights International with the Colombian Institute of International Law, Cohen Milstein Sellers & Toll PLLC, Paul Hoffman, Judith Brown Chomsky, and other counsel arising out of Chiquita’s alleged financing of paramilitary death squads in Colombia. Chiquita is a U.S. company, and there is evidence that Chiquita’s board of directors in the United States approved payments to paramilitaries. 15 In July 2014, the eleventh Circuit concluded that the alleged acts of torture perpetrated by a private actor (rather than by a state) did not satisfy the requirement in Sosa of being sufficiently clearly prohibited by customary international law. 16 Additionally, while the dissent maintained that relevant conduct – the decisions to fund the paramilitaries and funding of them – occurred within the United States, the eleventh Circuit rejected that reasoning, holding that “all relevant conduct” took place outside the United States. As the Eleventh Circuit believed neither the specificity nor “touch and concern” requirements were met, it concluded the case should be dismissed. In April 2015, the Supreme Court declined to review the eleventh Circuit’s decision. 17
Numerous other cases were dismissed in the wake of Kiobel including Doe v. Drummond, in which the U.S.-based coal mining company was alleged to have provided funding to paramilitaries to drive guerrillas out of the areas of Drummond’s operations in Colombia 18 , and Mastafa v. Chevron Corp. , which alleged that Chevron and Banque Nationale de Paris Paribas provided money to Saddam Hussein’s regime in violation of international sanctions which financed torture 19 . The Second Circuit found that the proper focus of the touch and concern test was whether the relevant conduct – which it defines as the conduct which actually violated the law of nations – occurred within the United States.
Other cases, including Doe v. Cisco Systems, Inc. . are pending.Cisco, brought against a U.S. network technology corporation by a group of Falun Gong practitioners who allege they were subjected to serious human rights abuses in China through the China’s “Golden Shield” project, alleges Cisco played a central role in the design and implementation of the Golden Shield, despite widespread knowledge that its central purpose is to facilitate the violent persecution of dissident groups. The plaintiffs were detained and severely mistreated for visiting Falun Gong websites, discussing the practice of Falun Gong online, and sharing information about the widespread human rights abuses suffered by Falun Gong practitioners in China. One of the plaintiffs was beaten to death while in custody and another has disappeared. Cisco continues to work with Chinese security officials 20 . In September 2014, a District Court for the Northern District of California dismissed the plaintiffs’ claims, finding that the claims did not “touch and concern” the United States, as the human rights abuses were not planned, directed, or executed in the United States. 21 Plaintiffs have appealed to the Ninth Circuit Court of Appeals. (Amicus briefs were submitted on January 2016 by The Center for Constitutional Rights (FIDH member league), the Electronic Frontier Foundation and former U.S. Ambassador-at-Large for War Crimes Issues David Scheffer.) 22
The U.S. Court of Appeals for the Ninth Circuit thereafter requested additional information. The plaintiffs argued that Jesner (see below) does not exclude the liability of domestic companies against companies such as Cisco. They also added that foreign policy issues did not apply in this case given the company’s non-foreign character. Contrary to the complainants, Cisco countered by saying that Jesner’s logic excludes the liability of domestic companies – the question before the Supreme Court in Nestlé/Cargill - and that foreign policy concerns applied to the situation, as this is a case involving a domestic company that is held liable for aiding and abetting foreign governments to behave on foreign soil. 23
Other cases have survived the Kiobel test, including Doe v. Exxon Mobil Corp. , which alleges ExxonMobil funded security forces who killed and tortured civilians living near Exxon’s facilities in the Aceh Province of Indonesia. 24 In July 2015, the District Court of the District of Columbia found that in an aiding and abetting case, the decision to provide assistance to the principals touched and concerned the United States, notwithstanding the fact that the actual provisions of assistance occurred outside the United States. The Court found Exxon’s awareness of the security forces’ record of human rights abuses satisfied the knowledge requirement for aiding and abetting, and further found the Kiobel test satisfied because of substantial domestic conduct and the U.S. corporate status of the defendant. The Court also noted that, apart from the location of the conduct, “important national interests” might “warrant an expansive application of the touch and concern test,” though it found no such interests in the case. 25
Al shimari v. CACI Int’l and CACI Premier Technology, Inc.
In June 2008, the Center for Constitutional Rights (CCR) filed a civil lawsuit on behalf of four Iraqi former detainees who, had been tortured at Abu Ghraib, against CACI Premier Technology (CACI), a private contractor that provided interrogators to the U.S. government. In 2004, U.S. military investigators had determined that employees of the company, headquartered in Arlington, Virginia, had participated in torture and other “sadistic, blatant, and wanton criminal abuses” of detainees at Abu Ghraib. The plaintiffs brought claims of war crimes, torture and cruel, inhuman and degrading treatment, as well as state law claims including assault and battery. The complaint alleged that the plaintiffs were deprived of food and water, sexually assaulted, beaten, forced to witness the rape of another prisoner, and imprisoned under conditions of sensory deprivation.
In holding that the case was not barred by Kiobel, the Fourth Circuit Court of Appeals found that the Supreme Court had broadly stated that the “claims,” rather than the alleged tortious conduct, must “touch and concern” the United States, “suggesting that courts must consider all the facts that give rise to ATS claims, including the parties’ identities and their relationship to the causes of action.” 26 Because plaintiffs aimed to enforce the customary law of nations “recognized by other nations as being actionable,” and because “defendants are United States citizens,” the Court concluded that there was no risk of “international discord,” which the presumption of extraterritoriality is meant to avoid. 27
The Court of Appeals concluded that the plaintiffs’ ATS claims “touch and concern” the territory of the United States with sufficient force to displace the presumption against extraterritorial application based on a combination of factors: (1) CACI’s status as a United States corporation, (2) the United States citizenship of CACI’s employees, upon whose conduct the ATS claims are based; (3) the facts in the record showing that CACI’s contract to perform interrogation services in Iraq was issued in the United States by the United States Department of the Interior, and that the contract required CACI’s employees to obtain security clearances from the United States Department of Defense; (4) the allegations that CACI’s managers in the United States gave tacit approval to the acts of torture committed by CACI employees at the Abu Ghraib prison, attempted to “cover up” the misconduct, and “implicitly, if not expressly, encouraged” it; and (5) the expressed intent of Congress, through enactment of the TVPA and the torture statute (18 U.S.C. § 2340A), to provide aliens access to United States courts and to hold citizens of the United States accountable for acts of torture committed abroad.
Conditions for the application of the ATS to private persons
The 1995 decision in Kadićv.Karadžić clarified that for some of the most serious human rights violations, private individuals not acting under color of law may be held directly responsible under the ATS for violations of international law. In other cases, the court must establish a private actor’s de jure or de facto complicity with a government.
- Direct liability : The private actor’s complicity with the state need not be demonstrated if the acts in question do not require state action under international law, such as piracy, slavery, genocide, war crimes, crimes against humanity or forced labour. 28
- Indirect liability or the state action requirement : For other violations of international law, private persons must have acted as a state agent or “ under color of law ”. 29 Examples include torture, extrajudicial execution, prolonged arbitrary detention, and racial discrimination.
In this case, the activities of private persons may violate international law when, in accordance with international law, the person in question has acted with the complicity of a state and can considered a public agent. Otherwise, one of the following alternative criteria must be met in accordance with national law (case references to these criteria are not uniform): 30
- Public function : A private person’s activities are traditionally state functions,
- State compulsion : A private person’s activities are imposed by the state,
- Nexus : An individual’s conduct is strongly interwoven with that of the state such that it renders the individual responsible for the action as if the action had been carried out by the state (the state’s involvement in the international law violation must be important), 31
- Joint action : The violation resulted from a significant degree of collaboration between a private person and a public authority, 32 or
- Proximate cause : The private person exercises control over government decisions linked to the Commission of violations. 33
Applying the ATS for violations committed by multinational corporations
The Second Circuit’s decision in Kadić v. Karadžić 34 opened the door for filing suit for international law violations by non-state actors, including those committed by multinational corporations.
Following Kadić, and encouraged by Sosa v. Alvarez-Machain, foreign victims turned to U.S. courts to obtain redress for human rights violations committed by multinationals through their operations abroad, in which the multinational was either a perpetrator or an accomplice to the investment’s host government. Among these are companies with headquarters in the United States, including Chevron Texaco, Wal-Mart, exxonMobil, Shell Oil, Coca-Cola, Southern Peru Copper, Pfizer, Ford, Del Monte, Chiquita, Firestone, Unocal, Union Carbide, Gap, Nike, Citigroup, IBM and General Motors, and other corporations in the United Kingdom, Australia and Canada, including Rio Tinto, Barclays Bank and Talisman energy.
In recent years, a minority of federal judges started to question the applicability of the ATS to corporations. In 2010, a panel of the Second Circuit Court of Appeals held that the ATS does not confer jurisdiction over claims against corporations in Kiobel v. Royal Dutch Petroleum Co. 35 Although the Supreme Court granted certiorari on the question of whether corporations could be held liable under the ATS, its decision in the case did not directly address the issue, but implied that corporations may be held liable under the ATS if the presumption against extraterritoriality is displaced, noting that “mere corporate presence” alone was not enough to do so. Since the Second Circuit’s decision in Kiobel, the Seventh, Ninth and District of Columbia Courts of Appeal joined the Fifth and Eleventh Circuits in finding that corporations can be sued under the ATS, and since the Supreme Court’s ruling, a district court in New York has done likewise. 36
As discussed below, although courts have generally found that corporations can be held liable for violations of international law, the Supreme Court ruled that the ATS did not apply to foreign corporations -- a ruling based largely on comity concerns – and is currently considering its reach to U.S. corporations.
Determining the liability of multinational corporations under the ATS is a subject of some controversy. The question is whether liability should be guided by the norms of international law or those of U.S. federal law. 37 One area where this debate has had particular consequences is in relation to aiding and abetting. Some courts and judges favored looking to federal common law for the requisite mens rea for aiding and abetting, and concluded that the standard was knowledge. 38 In recent years, however, courts have looked to international law to provide the standard. Circuits’ standards for the requisite mens rea for aiding and abetting liability differ: some hold the accomplice must know their actions will further the principal’s Commission of the violation, and other Circuits require that the accomplice must further have the purpose that the principal commit the crime. Courts that hold the appropriate standard is purpose focus on, inter alia, the fact that the Rome Statute permits a finding of aiding and abetting liability if the accomplice provides assistance “[f]or the purpose of facilitating the Commission” of the crime. Art. 25(3)(c). In Presbyterian Church of Sudan v. Talisman Energy, Inc, the Second Circuit found that this and one of the Nuremberg trials indicate that customary international law only recognizes claims of aiding abetting liability in which the accomplice not only knew that his actions would assist the perpetrator’s Commission of the crime, but he specifically intended they would do so. 39 Subsequent cases in the Second Circuit have applied this requirement; for example in July 2015, the court in Balintulo v. Ford Motor Co. held the ATS claim should be dismissed because the requisite mens rea was not present. 40 It found that, in designing vehicles and software for the implementation of apartheid in South Africa, defendants might have known their efforts would further the crimes of the principal, but the defendants did not have the purpose that the principal commit those acts. Other Circuits have adopted the Second Circuit’s reasoning. 41 Other Circuits have focused on extensive jurisprudence of other international tribunals, such as the ICTY and ICTR, which have found that the proper mens rea is knowledge that the accomplice’s actions will further the violations of the perpetrator. 42 In Doe. v. Exxon, the District of Columbia Circuit Court of Appeals held that significant jurisprudence from international tribunals supports a mens rea of knowledge for aiding and abetting liability. 43 The Court also added that the Rome Statute itself, properly construed permits such liability: in addition to Article 25(3)(c), Article 25(3)(d)(ii) considers the mens rea also established when an accomplice provides assistance “in the knowledge of the intention of the group to commit the crime.” Other Circuits also apply a mens rea of knowledge for aiding and abetting liability. 44
Courts’ approach to the actus reus of aiding and abetting liability is more consistent, finding that the standard is providing practical assistance to the principal which has a substantial effect on the perpetration of the crime. 45
It has been rare for cases against multinationals to proceed to trial. 46 In some cases, the parties have entered into financial settlement. 47 The development of the ATS’s usage in U.S. courts and the numerous exceptions that may arise during proceedings effectively render the application of the ATS difficult and unpredictable.
The Jesner case and the new scope of the ATS
In 2018, Jesner v. Arab Bank PLC,went to the Supreme Court and led to an important development regarding the application of the ATS to foreign corporations. 48 The case is a consolidation of five civil actions against a Jordanian corporation, by foreign nationals claiming that Arab Bank aided and abetted and financed terrorist groups and is therefore responsible for the terrorist attacks perpetrated by them. Although the company is based outside the United States, it uses a banking transaction system through New York. The question before the Supreme Court was whether corporations, and in particular foreign corporations, can be held liable on the basis of the ATS – a question raised but not answered in Kiobel 49 . CCR and FIDH joined many academics, organizations, historians and practitioners in submitting an amicus to the Court arguing against further restriction in the scope of application of the ATS. 50
In a deeply fractured series of opinions, a 5-Justice majority decided that the ATS did not provide jurisdiction over claims against foreign corporations. 51 Two arguments were decisive in the Court’s decision. First, the Court relied on the notion of separation of powers. 52 By applying the ATS to a legal person, it reasoned, the judiciary would create a new cause of action. However, in the Court’s view, the judiciary is not competent to do so. Thus, the Court said that express authorization from Congress was required.
The second argument concerns foreign affairs and the primary purpose of the ATS which was to promote harmony in international relations. 53 The Court held that holding corporations liable for damages in a U.S. court would cause tension in international relations and run counter to the historical objectives of the ATS. Moreover, it points out that political tensions already exist with Jordan, a key partner of the United States in the Middle East. Finally, the Court notes that in the Sosa and Kiobel cases, foreign states such as Germany, the United Kingdom and the Netherlands had submitted amicus briefs in ATS cases in which they objected to ATS litigation. 54 Thus, it would be inappropriate for the Supreme Court to convict Arab Bank, a foreign corporation 55 .
The decision was adopted by a narrow majority (5-4) with four dissenting judges and concurring judges who, while agreeing with the relevant part, did not entirely agree with the rationale of the holding 56 . Only Chief Justice Robert and Justice Thomas fully supported Justice Kennedy’s point of view 57 .
Justice Gorsuch identified two additional reasons why the Jesner case should be dismissed. Firstly, in order to respect the principle of separation of powers, the Court should never establish new causes of action under the ATS. Secondly, looking at the ATS’s history, it was intended to apply only to American defendants, whether individuals or corporations. 58
The dissenting Justices, Sotomayor, Ginsburg, Breyer and Kagan, considered that the Court’s decision to exclude the liability of foreign corporations from the scope of the ATS is not justified, in that the form of the foreign corporation as such does not contravene foreign affairs. 59 In their view, political tensions can be better resolved through other limitations of the ATS, including doctrines like forum non conveniens or exhaustion. 60 Finally, as to the argument that the issue at stake was closer to the political branch’s activities, they pointed out that the Court had been urged by the U.S. Solicitor General and members of Congress to recognize the liability of foreign corporations. 61
The Future of ATS and Corporate Liability: Nestlé and Cargill v. Doe
The Supreme Court is once against considering the application of the ATS to claims against corporations, with the question this time whether the ATS provides jurisdiction over U.S. corporations. In long-running case, Doe v. Nestle, Malian children forced to work on cocoa fields in Cote d’Ivoire brought claims against U.S. corporations Nestlé and Cargill for allegedly aiding and abetting forced labor. In September 2014, the Ninth Circuit Court of Appeals held that corporations can be held liable under the ATS and granted the plaintiffs leave to amend their complaint in light of the Kiobel decision, in order to present allegations that their claims “touch and concern” the territory of the United States with sufficient force to displace the presumption against extraterritoriality. 62 The Court did not resolve the question of the appropriate standard of mens rea for aiding and abetting, but found that in any case, both purpose and knowledge were satisfied by the facts; in finding that “purpose” was established, the court reasoned that because the violation benefited the defendants the inference could be made that they acted with the purpose to facilitate it. 63 On 14 July 2016, the plaintiffs presented their Second Amended Complaint, demonstrating that the Kiobel territoriality test was met. On November 7, 2016, the defendants filed a motion to dismiss the case. The dismissal was granted on March 10, 2017. 64 However, the plaintiffs appealed in 2018, and since the judicial landscape on which plaintiffs based their complaints was changed by Jesner, the panel allowed them to clarify whether the aiding and abetting charges that took place on U.S. territory engaged the liability of the U.S. corporations in this case, and reversed the district court’s decision to dismiss the case. 65 The corporate defendants’ writ for certiorari was granted. The Court is considering whether U.S. corporations can be held liable under the ATS, as well as arguments regarding the elements of aiding and abetting and whether such conduct can satisfy Kiobel’s “touch and concern” test. Numerous amicus briefs were filed in support of both the plaintiffs and defendants ahead of oral argument heard in December 2020. A decision is expected by the end of June 2021.