United States: Supreme Court Addresses For The First Time
The Alien Tort Claims Act

On Monday, June 29, 2004, the United States Supreme Court issued a compromise decision that leaves many corporations in the mining or oil and gas industries still susceptible to allegations that their operations abroad (often in conjunction with foreign governments) have inflicted labor or human rights abuses on foreign workers, but which may help limit the types of claims they face. In Sosa v. Alvarez-Machain, ___ U.S. ____ (2004), the Supreme Court addressed for the first time the Alien Tort Claims Act, 28 U.S.C. § 1350, which increasingly has sparked litigation in U.S. courts against multinational corporations for alleged human-rights and environmental abuses occurring outside the United States.

Dating back to the Judiciary Act of 1789, the Alien Tort Claims Act gives federal district courts original jurisdiction over civil actions "by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." In recent years, much debate has centered on what types of claims qualify as a violation of the "law of nations." Although not involving a corporate defendant, Sosa was viewed as an opportunity for the Court to severely curtail the reach of the statute. The U.S. Government had urged the Court to rule that the statute did not authorize private lawsuits or incorporate modern notions of international law. The Court declined to so rule. However, it did caution that lower federal courts should engage in "vigilant doorkeeping" and recognize only "a narrow class of international norms."

In Sosa, the plaintiff contended that prohibitions against "arbitrary arrest" had attained the status of an "international norm." The Court easily rejected his claim, finding that "its implications would be breathtaking" since it "would support a cause of action in federal court for any arrest, anywhere in the world, unauthorized by the law of the jurisdiction in which it took place." Beyond that, however, the Court shed little light on what will amount to a violation of the "law of nations," except to emphasize that it must be a "binding customary rule having the specificity" similar to the "defined and actionable" violations of the law of nations that existed in 1789 – such as assaults on foreign ambassadors, violations against safe conduct, and private actions arising out of prize captures and piracy. Thus, for the time being, it remains for the lower federal courts to hash out what will qualify as a violation of the law of nations in modern times.

Many commentators view the decision as a disappointment for U.S. corporations who had hoped the Court would seize the opportunity to stanch the recent wave of lawsuits seeking damages for overseas operations – lawsuits frequently premised on a company’s involvement in joint ventures or operations with foreign governments. However, the decision reinforces the susceptibility of such cases to several defensive theories that make many claims subject to early dismissal. One is the failure of the plaintiff to plead a viable violation of "the law of nations," which the Supreme Court has now confirmed to be a narrow term encompassing only those rules that command the general assent of civilized nations.

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