Multinational Companies Become Targets Under the Alien Tort Claims Act

by Erica Krennerich, a partner in V&E's Houston office, experienced in complex commercial litigation.

Multinational corporations increasingly find themselves being sued in U.S. courts for alleged human-rights and environmental abuses that occur outside the United States. In the last few years plaintiffs have seized on the Alien Tort Claims Act as a means of holding multinational companies liable for alleged wrongs associated with their overseas operations, particularly in developing or emerging nations. Many of the cases target defendants in the mining or oil and gas industries and allege that the defendants' construction, mining, or drilling operations have inflicted labor, human-rights, or environmental abuses on local villagers, workers, and the land itself. But cases have also been brought against financial institutions and other well-known companies such as Coca-Cola and Del Monte Foods.

Dating back to the Judiciary Act of 1789, the Alien Tort Claims Act ("ATCA"), 28 U.S.C. 1350, provides that federal district courts have original jurisdiction over civil actions "by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." The ATCA has no legislative history, and its original intent is subject to debate. But most scholars trace its origin to a series of crimes and assaults on foreign diplomats and ships during the period between American independence and ratification of the Constitution. Concerned that lack of redress by the States would jeopardize the fledgling country's international relations, Congress created a cause of action in federal court for foreign diplomats and ships protected by international law.

For almost two centuries, the ATCA was rarely invoked. See Filartiga v. Pena-Irala, 630 F.2d 876, 887 & n.21 (2d Cir. 1980). Thefirst significant cases under the statute did not appear until the 1980s and were brought almost exclusively by individuals who claimed they had been tortured and abused by foreign governments, quasi-military regimes, or related government officials acting under color of state law. See, e.g., Tel-Oren v. Libyan Arab Republic, 726 F.2d 774 (D.C. Cir. 1984), cert. denied, 470 U.S. 1003 (1985) (victims of the PLO); Kadic v. Karadzic, 70 F.3d 232, 238 (2d Cir. 1995), cert. denied, 518 U.S. 1005 (1996) (torture victims of self-proclaimed Bosnian president); Abebe-Jira v. Negewo, 72 F.3d 844 (11th Cir.), cert. denied, 519 U.S. 830 (1996) (Ethiopian prisoners charging government official with torture and cruelty); Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996) (Phillipine nationals charging former president with torture).

In the late 1990s, however...