Volume 34 - Issue 6 Fordham International Law Journal

The Alien Tort Claims Act and Corporate Liability: A Threat to the United States’ International Relations

Abstract: 

An obscure sentence, penned by the first US Congress in 1789, has found its way to the forefront of human rights litigation, and is being utilized against multinational corporations. The statute, the Alien Tort Claims Act (“ATCA”), wielded by plaintiffs who have suffered human rights violations, has managed to pull multinational corporate giants, such as Coca-Cola Company, Yahoo!, Unocal, and ExxonMobil into US courts for alleged human rights violations committed on non-US soil with little nexus to the United States. While human rights plaintiffs have embraced the ATCA with increasing frequency and enthusiasm, businesses are “sounding the alarm” and painting nightmare scenarios of high punitive damages, negative economic impact, and international relations consequences.

ATCA litigation has been concentrated in the US Courts of Appeals for the Second, Ninth, and Eleventh Circuits. Initially, all three circuits, applying different standards of proof, recognized the possibility of a multinational corporate defendant’s liability for violations of a plaintiff’s human rights. In 2010, however, the Second Circuit in Kiobel v. Royal Dutch Petroleum Company ruled that human rights plaintiffs could no longer bring claims of corporate liability under the ATCA, thereby closing the circuit’s door to such cases.

This Note examines the newly-created circuit split between the Second Circuit and the Ninth, and Eleventh Circuits regarding corporate liability. Part I introduces the ATCA, chronicling its transformation from a short provision in the Judiciary Act of 1789 to the weapon of choice employed against international corporations for alleged human rights violations. Part II focuses on the newly-created circuit split, identifying important case law and the current standing of ATCA human rights corporate liability in all three circuits. Emphasis is placed upon the international implications of and reactions to these decisions. Finally, Part III concentrates on the international implications of the split and advances the argument that the Second Circuit correctly decided Kiobel in light of the ATCA’s purpose and the potential impact that continued ATCA litigation poses to US external relations.

 

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