alien tort claim lawyer transnational matters

The Alien Tort Claims Act (ATCA), also known as the Alien Tort Statute (ATS), holds a significant place in the domain of international human rights law. It was incorporated into the Judiciary Act in 1789, granting non-U.S. citizens the ability to initiate lawsuits in U.S. federal courts for torts committed in violation of international law. 

Throughout its existence, the ATCA has undergone transformations and encountered notable challenges, giving rise to intricate discussions about its jurisdiction, scope, and application. Today, the ATCA is an important pillar of human rights standards across the world. 

The History of the ATCA

The ATCA was introduced in the United States as part of the Judiciary Act of 1789, legislation that helped to establish the federal court system. The ATCA is Section 1350 of the Act and was intended to provide a forum for foreign plaintiffs to seek justice in U.S. courts for wrongful acts that violated the law of nations or treaties.

When it was introduced, the ATCA was mostly seen as a way to address piracy claims and violations of safe passage rights, which were common issues during the late 18th and early 19th centuries. However, the Act was widely forgotten until the end of the 20th century. 

During the 1980s and 1990s, the ATCA became more widely utilized as human rights activists and victims of international human rights violations sought compensation from perpetrators who dodged accountability in their home nations. This rebirth of the ATCA was primarily attributed to its broad language, which allowed it to apply to a diverse variety of human rights abuses.

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Landmark ATCA Cases

There are various landmark cases that have shaped the ATCA.

Filartiga v. Pena-Irala

In the case of Filartiga v. Pena-Irala, Joelito Filartiga, a Paraguayan citizen, brought a lawsuit in a U.S. federal court against Americo Pena-Irala, a Paraguayan police officer, for the torture and wrongful death of his teenage son. The U.S. Court of Appeals for the Second Circuit rendered a groundbreaking decision, affirming the ATCA’s jurisdiction over Pena-Irala, a foreign defendant, and finding that his alleged actions undoubtedly violated the norms of international law. This was the first time that a court held an individual accountable for human rights abuses committed outside of national borders.

Doe v. Unocal Corporation

In Doe v. Unocal, Burmese villagers brought a case against the U.S. oil company Unocal, accusing the corporation of complicity in human rights abuses, such as forced labor, rape, and murder, perpetrated by the Burmese military during the construction of a natural gas pipeline. Although the case was ultimately settled out of court, its impact on the evolving interpretation of the ATCA was major, as it enforced the notion of corporate liability for human rights violations.

The use of the ATCA to address human rights abuses has faced numerous challenges. Those who oppose it argue that the statute was never originally intended to take on these types of issues and that its broad interpretation has resulted in an increase in “forum shopping” – the practice of seeking a favorable court forum for litigation.

Kiobel v. Royal Dutch Petroleum Co. 

The 2013 U.S. Supreme Court’s ruling in Kiobel v. Royal Dutch Petroleum Co., had broad implications for the ATCA’s jurisdictional boundaries. The Court determined that the presumption against extraterritoriality extended to claims filed under the ATCA. Therefore, foreign plaintiffs could only pursue lawsuits against foreign corporations in U.S. courts for violations of international law if there was a clear and specific connection to the United States.

The Kiobel decision significantly narrowed the jurisdictional reach of the ATCA and limited the ability of foreign plaintiffs to seek justice in U.S. courts for human rights abuses committed outside of the United States. It raised complex questions about the scope and application of the ATCA and had important implications for the enforcement of international human rights law in the United States.

The ATCA has been used to address issues such as:

  • Human trafficking
  • Environmental issues
  • Forced labor
  • Violations of Indigenous rights 

Jesner v. Arab Bank, PLC

Then, in 2018, in the case of Jesner v. Arab Bank, PLC, the Court decided that the Act does not extend to claims against foreign corporations.

Nestlé USA, Inc. v. Doe et al.

However, these cases left a question unanswered: whether the ATCA applies to U.S. corporations when the challenged conduct occurs mainly in the United States. This issue was addressed in Nestlé USA, Inc. v. Doe et al.

In the 2021 Nestlé case, the plaintiffs alleged that the defendants were complicit in using child slave labor on cocoa farms in the Ivory Coast. The plaintiffs argued that the case could proceed in federal court under the ACTA because the companies made operational decisions from within the United States. The Court, however, ruled that almost all the conduct challenged by the plaintiffs occurred in the Ivory Coast, not the United States, and any alleged decision-making in the United States was merely “general corporate activity.”

The Court clarified that before creating a cause of action under the ATCA, plaintiffs must establish that the defendant violated a “norm specific, universal, and obligatory” under international law and that courts should exercise judicial discretion to create a cause of action rather than defer to Congress. The Court stressed that creating a cause of action under the Act should be done carefully, as it can affect foreign policy.

In this case, the Supreme Court showed caution against expanding the role of U.S. courts in international human rights cases without clear Congressional direction. Although human rights-related litigation and enforcement risks are increasing globally, the Court has highlighted the importance of having strong human rights-related policies and procedures to mitigate risks and reinforce company values.

U.S. Counsel Services for Foreign Businesses 

If your business is located outside of the United States but you engage in U.S.-based operations, it’s critical that you seek legal counsel from an attorney who understands the complex issues involved. Whether you have ongoing legal issues related to a business expansion or are simply engaged in a singular transaction, the lawyers at Transnational Matters can assist with all of your American endeavors.

When it comes to foreign and domestic businesses, we can assist with your transactions and general corporate needs. Contact our experienced transnational litigation and arbitration attorneys today!