Supreme Court Deals a Blow to the Plaintiffs’ Bar
On April 17, 2013, the United States Supreme Court handed down its opinion in Kiobel v. Royal Dutch Petroleum Co. The case involved Nigerian nationals (the petitioners) residing in the United States who sued certain Dutch, British, and Nigerian corporations on the ground that those corporations had aided the Nigerian government in committing human rights abuses in the 1990’s. The petitioners argued that U.S. courts had jurisdiction to hear the case based on the Alien Tort Statute, a U.S. law enacted in 1789, which reads in full as follows: “The [United States] 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 court unanimously ruled that the Alien Tort Statute did not grant U.S. courts jurisdiction to hear the matter. The court emphasized that there was a presumption against applying “extraterritorial application” of U.S. laws; in other words, there is a presumption against U.S. courts applying U.S. laws against a foreign nation in that foreign nation’s internal matters. The court quoted its precedent in saying that the presumption against extraterritorial application reflects “the presumption that United States law governs domestically but does not rule the world.”
Royal Dutch Petroleum was not a U.S. corporation; rather, its most prominent connection to the U.S. was that its stock was traded on the New York Stock Exchange, as is the case with many foreign corporations. The actions complained of took place in Nigeria and the victims were not U.S. citizens (or even residents at the time). In light of this lack of connection to the U.S., there was no evidence that the presumption against extraterritorial application should not apply.
Kiobel is an important case because in recent years tort lawyers have filed an increasing number of cases in the U.S. that pit foreigners versus foreigners over actions taking place in foreign countries. The Supreme Court’s decision ensures that U.S. courts will not become a forum for settling international disputes involving foreigners, enabling our justice system to operate more efficiently.