On April 17, 2013, the Supreme Court decided Kiobel v. Royal Dutch Petroleum. For all intents and purposes, the decision eliminates use of the federal Alien Tort Statute ("ATS") as an employment law weapon to be used against multinational companies for employment practices overseas.
History of the Alien Tort Statute
The ATS (also known as the Alien Tort Claims Act) - a creature of the first United States Congress and passed in 1789 - is all of one sentence long. It reads in full: "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."
The ATS received little attention for over 180 years. Then, in 1980, a Paraguayan woman living in Washington, D.C. on a visitor's visa learned that a former official of the Paraguayan government (also a Paraguayan citizen), who had allegedly participated in the torture death of her 17-year-old brother, was living in Brooklyn, New York. She sued the official under the ATS. In Filartiga v. Pena- Irala,1 the Second Circuit Court of Appeals held that the ATS permits aliens to file tort claims against violators of what is variably known as "the law of nations," or "customary international law," including war crimes and crimes against humanity.
Over the past 25 years, a limited number of federal courts have permitted foreign victims to sue under the ATS for violations of international law, such as summary executions, genocide, war crimes, crimes against humanity, and cruel, inhuman, or degrading treatment.2
Some of those lawsuits were brought against U.S.-headquartered multinational corporations for their alleged involvement with improper and abusive labor practices in developing countries that were said to constitute human rights violations.
Historically, there has been a split among federal appellate courts as to whether ATS cases may be successfully prosecuted against private corporations. In 2010, a federal district court and a federal appellate court held that corporate liability was unavailable under the ATS. In one such case,3 a federal district court dismissed claims that a company was complicit in the forced labor and torture of Malian field workers located in the Ivory Coast, finding insufficient support under international law to hold corporate entities accountable under the ATCA.
Similarly, in Kiobel v. Royal Dutch Petroleum4 - the case which ultimately wound its way to the U.S. Supreme Court - the Second Circuit Court of Appeals held that the ATS does not provide a basis for corporate liability for alleged violations of international law.
In many cases, however, lower courts have recognized an "aiding and abetting" theory of corporate liability. Under this theory, a corporation that assists or...
