In A Landmark Ruling For International Corporate Litigation, The U.S. Supreme Court Imposes A Significant Limitation On Alien Tort Statute Lawsuits

Yesterday, the United States Supreme Court issued its highly anticipated decision in Kiobel v. Royal Dutch Petroleum Co.1 Chief Justice Roberts, writing for the majority, held that the presumption against extraterritoriality applies to claims under the Alien Tort Statute (“ATS”),2 and that, because the plaintiffs were “seeking relief for violations of the law of nations occurring outside the United States,” their claims were barred. The Court's decision continues a recent trend by federal courts of invoking the presumption against the extraterritorial application of U.S. laws. The decision will severely limit the ability of foreign plaintiffs to use the United States courts to sue multinational corporations for alleged wrongs, where the underlying activity occurred abroad.

BACKGROUND OF THE CASE

Kiobel was originally filed as a purported class action by a group of Nigerian nationals, now residing in the United States, against Dutch, British, and Nigerian corporations, including Shell Petroleum Development Company of Nigeria, Ltd. (“SPDC”). SPDC had been involved in oil exploration and production in the Niger delta, and residents of an area called Ogoniland began protesting the environmental impact of SPDC's activities.3 The plaintiffs alleged that the corporations aided and abetted the Nigerian Government in violent suppression of protests, and that, specifically, the defendants violated the law of nations by aiding and abetting the Nigerian Government in committing (1) extrajudicial killings; (2) crimes against humanity; (3) torture and cruel treatment; (4) arbitrary arrest and detention; (5) violations of the rights to life, liberty, security, and association; (6) forced exile; and (7) property destruction.4

The District Court dismissed the plaintiffs' claims for aiding and abetting extrajudicial killings, violations of the rights to life, liberty, security, and association, forced exile, and property destruction on the grounds that the law of nations did not provide sufficiently specific definitions for these crimes.5 The District Court declined to dismiss the remaining claims, however, and certified its order for interlocutory appeal to the U.S. Court of Appeals for the Second Circuit. On appeal, the Second Circuit dismissed the entire complaint, holding that ATS jurisdiction extends only to civil actions against individuals, and not to actions against corporations.6

The Supreme Court granted certiorari to consider the question of...