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No, Sir: You Are Incorrect. SCOTUS Affirms Kiobel

By Robyn Hagan Cain on April 17, 2013 4:48 PM

In a far away land, an American corporation harms people. It could be a physical attack. Maybe it's just property destruction. The victims, cognizant of the rampant corruption within their own judicial and political systems, turn to the U.S. for relief.

They sue in a federal court under the Alien Tort Statute. Over 200 years old, it's a brief law:

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.

So can the victims in the scenario we described above sue in the U.S.? Until today, popular federal opinion said yes.

The Second Circuit Court of Appeals was the lone wolf standing in the way of such suits. It ruled in Kiobel v. Royal Dutch Petroleum that aliens couldn’t bring ATS claims against foreign companies doing business overseas. But the D.C. Circuit (John Doe VIII et al v. Exxon Mobil Corp et al), and the Ninth Circuit, (Sarei v. Rio Tinto), thought that ATS suits were A-OK.

The Seventh Circuit, in Flomo v. Firestone Natural Rubber Co., not only agreed that the ATS gave federal courts the authority to hear the cases, it explicitly said that the Second Circuit was “incorrect.” In an opinion written by Judge Richard Posner, the appellate court criticized its sister circuit’s conclusion that there is no principle of customary international law that binds a corporation.

The Supreme Court, however, affirmed the Second Circuit. The Court ruled today that the ATS does not provide for “relief for violations of the law of nations” outside the U.S., The Washington Post reports. According to the majority, the presumption against extraterritoriality applies to claims under the ATS, and the statute doesn’t rebut that presumption.

The outcome, however, won’t affect that Seventh Circuit’s decision. Despite finding that a federal court could hear the plaintiffs claims in Flomo, the appellate court affirmed summary judgment in favor of the defendants because the plaintiffs’ case lacked “an adequate basis for inferring a violation of customary international law.”

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