The U.S. Supreme Court sharply limited the reach of a federal law used to hold corporations and others accountable for human rights abuses committed abroad. But human rights lawyers predicted additional litigation over the degree to which the federal courthouse door was left ajar.

Writing for the court in Kiobel v. Royal Dutch Petroleum Co., Chief Justice John Roberts Jr. said the presumption against the extraterritorial application of federal laws applies to the 1789 Alien Tort Statute (ATS).

That presumption, a canon of statutory interpretation, holds that when a law gives no clear indication that it applies to conduct outside the United States, it does not apply. The ATS, enacted by the First Congress, states: "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 law has been a major tool in the past 30 years for bringing alleged human rights violators into the federal courts.

Roberts wrote that nothing in the text, history or purposes of the ATS indicated that the law was intended "to make the United States a hospitable forum for the enforcement of international norms."

The immediate effect of the ruling was to shut down the Kiobel case in the federal courts. The case stemmed from a lawsuit filed in 2002 by 12 Nigerian nationals against three foreign oil companies. The Nigerians alleged the oil companies enlisted the Nigerian military in a campaign of torture, executions and detentions to suppress opposition to the companies’ operations in the environmentally sensitive Ogoni region.

"On these facts, all the relevant conduct took place outside the United States," Roberts wrote. "And even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application."

Roberts added that corporations often are present in many countries, "and it would reach too far to say that mere corporate presence [in the United States] suffices."

Although all of the justices agreed that the Kiobel case could not proceed, the chief justice garnered only five votes for his reliance on the presumption against extraterritoriality. He was joined by justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito Jr.

KENNEDY LEAVES DOOR OPEN

Alito, joined by Thomas, wrote in a separate concurring opinion that he would use a broader standard to block cases under the presumption. But Kennedy, also writing separately, said the court’s opinion was "careful to leave open a number of significant questions" about the reach and meaning of the ATS.

"Other cases may arise with allegations of serious violations on international law principles protecting persons, cases covered neither by the [Torture Victim Protection Act] nor by the reasoning and holding of today’s case; and in those disputes the proper implementation of the presumption against extraterritorial application may require some further elaboration and explanation," Kennedy wrote.

The remaining four justices took a different approach to determining whether cases could go forward under the ATS. In an opinion concurring in the judgment, Justice Stephen Breyer wrote that he would find jurisdiction under the law where the alleged tort occurs on American soil; the defendant is an American national; or the defendant’s conduct substantially and adversely affects an important American national interest. The last factor, Breyer said, includes "a distinct interest in preventing the United States from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind."

The U.S. Chamber of Commerce, a number of whose members have been sued in recent years under the ATS, hailed the high court’s ruling. The chamber supported Royal Dutch Petroleum in the case.

"The U.S. Supreme Court’s decision today ensures that trial lawyers cannot continue to use the American judicial system to expose global businesses to frivolous and costly lawsuits," Thomas Donohue, the chamber’s president and chief executive officer, said in a written statement. "Today’s decision helps to ensure that America will continue to be an attractive place to do business and removes barriers for companies looking to do business throughout the world."

Andrew Pincus of Mayer Brown, who filed an amicus for The Clearing House Association on behalf of Royal Dutch Petroleum, said, "By ruling that the U.S. law applies only to conduct within the United States, the Supreme Court has eliminated a source of considerable tension between the U.S. and many of its closest friends and allies, who resented our country’s assertion of world-wide jurisdiction over their citizens’ acts outside of the territory of the United States." Although human rights lawyers and organizations expressed deep disappointment with the decision, a number of them said they believed some cases would be allowed to go forward under the ATS.

"It’s fairly clear from all of the opinions that the court is still uncertain about the extent to which the ATS allows claims that arise outside of the United States for human rights violations," said the Nigerians’ high court counsel, Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison in Venice, Calif. "Significantly, Justice Kennedy is the fifth vote and he is more explicit that this is a narrow holding and there may be other cases that arise not covered by the [Torture Victim Protection Act] nor by the holding in this case.

"I think there will be briefing in cases pending around country, both involving corporations and individuals, to flesh out the meaning of the majority opinion and whether a case ‘touches and concerns’ the United States in such a way that the presumption against extraterritoriality does not apply," Hoffman said.

Marco Simons, legal director of EarthRights International, said the decision in some ways privileges the rights of multinational corporations over the rights of U.S. corporations. "The court has essentially said while U.S. corporations may be sued in the U.S. for international human rights abuses, foreign corporations who have the privilege of doing business in the U.S. don’t need to worry about getting sued here simply as a consequence of doing business in the U.S.," Simons said. "This is bad policy being written by the Supreme Court."

Simons predicted a number of pending cases would be the subject of additional briefing and would be likely to survive. He mentioned Doe v. Exxon Mobil, pending in the U.S. Court of Appeals for the D.C. Circuit, and the apartheid cases, which have U.S. corporations as defendants, as well as litigation arising out of the September 11, 2001, attacks.

"There is a pretty strong ray of hope that U.S. courts in the right circumstances will still be able to hear the right kinds of cases, but that is for additional litigation in the future," said Ralph Steinhardt of the George Washington University Law School, counsel to an amicus group of international law scholars who supported the Nigerian nationals.

Contact Marcia Coyle at mcoyle@alm.com.