THE ALIEN TORT STATUTE: A PRIMER ON LIABILITY FOR MULTINATIONAL CORPORATIONS

Paul E. Hagen Anthony L. Michaels Beveridge & Diamond, P.C. ALI-ABA Course of Study Environmental Law May 5-6, 2005 I. INTRODUCTION

U.S. federal courts are increasingly being called upon to redress human rights abuses and environmental damage that has occurred outside the territorial jurisdiction of the United States. Most often, these cases are brought against large multinational corporations under the Alien Tort Statute (ATS) (also called the Alien Tort Claims Act or ATCA), a statute enacted over 200 years ago that allows alien plaintiffs to bring actions for damages in U.S. federal court for tortlike injuries caused by a violation of international law. In recent years, the number of cases brought against U.S. companies has grown. While the case law continues to evolve, companies should take care to ensure that their activities abroad, particularly in developing countries (and especially in developing countries with a history of human rights abuses or military rule) conform to accepted international norms in the areas of human rights and environmental protection so as to reduce reputational risks and litigation exposure in the U.S. Similarly, companies investing overseas must take care to partner with governments that respect human rights and adhere to widely accepted environmental and labor protections. II. STATUTORY LANGUAGE AND BACKGROUND

A form of the ATS, 28 U.S.C. 1350, was first enacted as part of the Judiciary Act of 1789. In its current form, the ATS provides: Aliens action for tort 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. 28 U.S.C. 1350. The statute was rarely invoked until the landmark 1980 decision of the Second Circuit in Filartiga v. Pena-Irala, 630 F.2d 876 (2nd Cir. 1980) (holding that deliberate torture perpetrated under color of official authority violates international law, and gives rise to an ATS claim whenever the perpetrator is properly served within the United States). Since then, the lower

federal courts began to develop a complex jurisprudence for dealing with international human rights cases brought under the ATS. In other cases, plaintiffs have sought remedy for alleged environmental damage caused by defendants outside the U.S. On June 29, 2004, the Supreme Court addressed and resolved some of the fundamental questions concerning the scope of the ATS, and provided guidance concerning the types of international legal norms that can support an ATS cause of action. Sosa v. Alvarez-Machain, 124 S. Ct. 2739 (2004). Many other issues remain unresolved, however, and the legal landscape of ATS liability continues to evolve. III. ANATOMY OF CLAIMS UNDER THE ATS A. The ATS Provides Subject Matter Jurisdiction, But Does Not Create a Cause of Action

Prior to Sosa, the majority lower court view (adopted by the Second, Fifth, Ninth, and Eleventh Circuits), was that the ATS created a cause of action for an alien seeking damages for tort-like injuries caused by a violation of international law. Flores v. Southern Peru Copper Corp., 343 F.3d 140 (2nd Cir. 2003) (the Filartiga Court not only held that the [ATS] provides a jurisdictional basis for suit, but also recognized the existence of a private right of action); Beanal v. Freeport-McMoran, Inc., 197 F.3d 161 (5th Cir. 1999) (following Filartiga); AbebeJira v. Negewo, 72 F.3d 844, 847 (11th Cir. 1996) (we read the [ATS] as requiring no more than an allegation of a violation of the law of nations in order to invoke section 1350); In re Estate of Ferdinand Marcos, Human Rights Litigation, 25 F.3d 1467, 1475 (9th Cir. 1994) (Marcos) (the ATS creates a cause of action and nothing more than a violation of the law of nations is required to invoke section 1350); see also Iwanowa v. Ford Motor Co., 67 F.Supp.2d 424, 443 (D. N.J. 1999); Xuncax v. Gramajo, 886 F.Supp. 162, 179 (D. Mass. 1995). Under the minority view, the ATS was deemed to provide subject matter jurisdiction, but not to create a cause of action. See Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 798 (D.C. Cir. 1984) (Bork, J., concurring) (ATS provides only subject matter jurisdiction -- it does not create a cause of action). The Supreme Court resolved this question in Sosa v. Alvarez-Machain, 124 S. Ct. 2739 (June 29, 2004). The Court reviewed the history of the ATS and held that it is a jurisdictional statute that was not intended to create any new causes of action. As discussed below, the Court concluded that the ATS was enacted on the understanding that the common law would provide a cause of action for the modest number of international law violations with a potential for personal liability at the time, and that under limited circumstances courts may cautiously recognize new international law principals that create personal liability. Id. at 2761.1

A related statute, the Torture Victim Protection Act of 1991 (TVPA), 28 U.S.C. 1350 App., provides a cause of action in certain human rights cases. The TVPA expressly authorizes a federal civil action against anyone who engages in torture or extrajudicial killing, under color of foreign authority or law. In legislative history, it was explained that [t]he TVPA would establish an unambiguous and modern basis for a cause of action that has been
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B.

Elements Of An ATS Cause Of Action

To state a claim under the ATS the plaintiff must (1) be an alien, (2) claim a tort, (3) that violates a rule in a U.S. treaty or customary international law that carries personal liability. An ATS claim may lie even where all the plaintiffs and defendants are non-U.S. citizens, and where all the conduct underlying the claim occurred in a foreign nation. Since Filartiga, the key issue in determining whether a valid claim exists is often whether the right asserted is indeed a recognized principle of customary international law that protects the plaintiff, and is sufficiently well-defined and has such other characteristics that have led courts to conclude that the right is actionable. Under Sosa, the Court resolved that courts may go beyond the handful of offenses understood to carry personal liability in 1789, but that courts should recognize new actionable rules with caution, and only under limited circumstances. IV. IDENTIFYING ACTIONABLE PRINCIPLES OF CUSTOMARY INTERNATIONAL LAW A. Courts Look to the Current State of International Law, which is Constantly Evolving

Whether a claim is actionable under the ATS must be gauged against the current state of international law, looking to those sources we have long, albeit cautiously, recognized. Sosa, 124 S. Ct. at 2766; see also Filartiga, 630 F.2d at 881. B. Sources and Evidence of Customary International Law

In Sosa, the Court addressed the types of sources to be consulted to determine international law, as follows: [W]here there is no treaty, and no controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized
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successfully maintained under [the ATS], which permits Federal district courts to hear claims by aliens for torts committed in violation of the law of nations. H.R.Rep. No. 367, 102d Cong., 2d Sess. 3, 1992 U.S.C.C.A.N. 84, 86. The Senate Report on the TVPA noted that the Filartiga case has met with general approval. S.Rep. No. 102-249 at 5 (1991). Other legislative history may be read as further suggesting that complimentary ATS remedies were intended to remain intact. The Second and Eleventh Circuits interpreted the legislative history of the TVPA as a Congressional endorsement of the Filartiga line of cases -- at least with respect to claims involving torture. Flores, 343 F.3d at 153; Abebe-Jira, 72 F.3d at 848. Similarly, in Sosa, the Court cited the enactment of the TVPA as evidence of Congress agreement with the courts conclusion that the judiciary may recognize new international law causes of action under the ATS (as discussed below).

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nations; and, as evidence of these, to the works of jurists and commentators . . . . Such works are resorted to by judicial tribunals, not for the speculations of their authors concerning what the law ought to be, but for trustworthy evidence of what the law really is. Sosa, 124 S. Ct. at 2766-67 (quoting The Paquete Habana, 175 U.S. at 700). Prior to Sosa, the lower courts identified four primary sources for establishing customary international law: International conventions and treaties establishing expressly recognized rules; Custom and practice of states, primarily as evidenced by formal lawmaking and official actions of states, acting out of legal obligation; Judicial decisions; and Works of highly qualified legal scholars.

See Flores, 343 F.3d at 157; Beanal, 197 F.3d at 165; Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 714 (9th Cir. 1992). Many lower courts recognized even before Sosa that because customary international law flows from such diverse sources, often unfamiliar to lawyers and judges, it may have a soft, indeterminate character, subject to creative interpretation. Flores, 343 F.3d at 154 (quoting Louis Henkin, International Law: Politics and Values 29 (1995)). Accordingly, courts recognized the need to proceed with extraordinary care and restraint when examining these sources to identify actionable rules of international law. Id. In Sosa, the Court examined the history of the ATS in detail, and further explained the limits and judicial restraint that courts should apply in deciding whether to recognize a new ATS cause of action. C. Recognition of New Actionable Rules of International Law Under Sosa

In Sosa, the Supreme Court provided a lengthy discussion of the types of considerations and limits that courts should follow in whether to recognize an ATS cause of action based on a particular rule of international law. The plaintiff in Sosa, Humberto Alvarez-Machain (Alvarez), was a Mexican citizen indicted by a federal grand jury for the murder in Mexico of an agent of the U.S. Drug Enforcement Agency (DEA) and a warrant for his arrest was issued by a federal court. Sosa, The DEA allegedly approved a plan to hire Mexican nationals to seize Alvarez and bring him to the U.S. for trial. The plan was executed by a group of Mexican nationals including Jose Francisco Sosa (Sosa), who abducted Alvarez from his house in Mexico, held him overnight in a motel, and brought him by private plane to the U.S. He was then tried and acquitted for the murder. Alvarez brought a number of civil claims, including a claim against Sosa under the ATS alleging that Sosa had violated the clear and universally recognized [international law] norm prohibiting arbitrary arrest and detention. After reviewing the history of the ATS at length, the Court concluded that the ATS was a jurisdictional statute creating no new causes of action, but was enacted on the understanding that -4-