By a 5-4 majority the U.S. Supreme Court on April 17 finally decided the Kiobel case, which initially was argued in February 2012 (see blog post of March 4, 2012) and reargued in October 2012 (see blog post of October 1, 2012). The case was brought by survivors of environmental activists killed by the Nigerian military in Nigeria. They sued Royal Dutch Shell, a Dutch corporation, in federal district court in New York. The plaintiffs alleged that the company conspired with the Nigerian military to kill their relatives to silence their complaints about Shell’s oil pollution in Nigeria. The case involved review of a September 2010 decision by the U.S. Court of Appeals for the Second Circuit holding that corporations cannot be held liable under the Alien Tort Statute because corporations cannot violate international law (see blog post of October 4, 2010).
The Alien Tort Statute (ATS) was enacted in 1789 by the first U.S. Congress. The ATS gives U.S. federal courts jurisdiction over “any civil action by an alien for tort only, committed in violation of the law of nations.” For further background on ATS cases see the blog posts of September 2, 2007 and May 31, 2009. The five-Justice majority applied the presumption against extraterritorial application of U.S. law to the ATS to find that the Kiobel litigation could not be brought because it alleged torts occurring entirely outside the U.S. In his majority opinion Chief Justice Roberts concludes that “all the relevant conduct took place outside the United States. 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.” But the Chief Justice had a difficult time explaining why the presumption against extra-territorial application of U.S. law, a doctrine that had not even been developed at the time the ATS was enacted, should apply. He notes that the doctrine is designed to avoid conflicts with foreign sovereigns by not applying U.S. norms to foreign conduct unless Congress so specifies. But the ATS does not seek to apply U.S. norms abroad, but rather only to create jurisdiction to redress egregious violations of international law. The Chief Justice concedes that the ATS permits actions against those who commit piracy on the high seas, but he concludes that the presumption against extra-territorial application bars suits for other international law violations committed within the territory of another country.
It was widely expected that the decisive vote in the case would come from Justice Kennedy. Kennedy joined the Court’s four most conservative members in providing the fifth vote for the Chief Justice’s majority opinion. In a truly classic example of a Kennedy concurring opinion, he tried to soften the harsh implications of the decision for human rights litigation. Kennedy noted that in future cases alleging “serious violations of international law principles protecting persons, the proper implementation of the presumption against extraterritorial application [of the ATS] may require some further elaboration and explanation.”
In 2004 the Supreme Court had limited the reach of the Alien Tort Statute (ATS) by holding in Sosa v. Alvarez-Machain that the ATS provides federal courts with jurisdiction to hear only cases alleging violations of international norms that are “specific, universal, and obligatory.” This effectively ruled out most environmental cases unless they also involved conduct that constituted egregious human rights violations. In the Unocal and Saro-wiwa cases oil company defendants paid large sums to settle post-Sosa ATS litigation alleging that they had conspired with the Myanmar and Nigeria militaries to torture and kill their opponents. See the June 12, 2009 blog post on the $15 million settlement Shell paid the survivors of Ken Saro-wiwa. Despite Justice Kennedy’s concurrence, the Kiobel decision now apparently would rule out such litigation in the future because the conduct occurred abroad.
The four liberal Justices rejected Chief Justice Roberts’s view that the ATS cannot apply to conduct that occurs in another country. In an opinion by Justice Breyer they concurred in the judgment on other grounds, which may have represented an unsuccessful attempt to attract Justice Kennedy’s vote. These four Justices argue that the majority’s use of the presumption against extraterritoriality is particularly inappropriate because the ATS was enacted to deal with foreign matters. The four interpret the ATS to provide jurisdiction if any of the three following conditions are met: “(1) the alleged tort occurs on American soil, (2) the defendant is an American national, or (3) the defendant’s conduct substantially and adversely affects an important American national interest.” Justice Breyer noted that the third condition could be met to prevent the U.S. “from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind.” The four agreed that Kiobel should be dismissed because it involves the acts of a foreign corporation (Shell) that occurred outside the U.S. without affecting an important U.S. interest.
What impact will the Kiobel decision have on environmental cases? No environmental plaintiff ever has successfully litigated an ATS case to judgment, though some cases have been settled on terms favorable to plaintiffs (see the Unocal and Saro-wiwa cases discussed above). Ironically the decision means that Chevron would have prevailed in the litigation against it for polluting Ecuador had it not fought and won dismissal from the U.S. courts on the grounds that Ecuador was a more convenient forum. Chevron now is asking the U.S. courts to block enforcement of what it claims is a fraudulently obtained $18 billion judgment rendered by the Ecuadoran courts. By closing U.S. courts to such suits, plaintiffs will have to rely on foreign courts, as they have been doing in some cases (see, e.g., the litigation brought against the British trading firm Trafigura in London for dumping wastes on a beach in Cote D’Ivoire, discussed in the Sept. 20, 2009 blog post).
On April 16 the European Parliament by a vote of 334-315 rejected a plan to reduce the supply of allowances issued under the EU’s Emissions Trading System to reduce greenhouse gas emissions. The plan was designed to boost the prices of the allowances, which have plunged below $4/ton, reducing incentives to reduce emissions. The plan was rejected out of concern that it would cause economic harm by increasing energy prices in Europe. Stanley Reed, Europe Vote Sets Back Carbon Plan, N.Y. Times, April 17, 2013, ar B1.
The five countries that border on the Arctic -- the U.S., Russia, Denmark, Norway, and Canada --have agreed to negotiate an agreement to regulate commercial fishing near the North Pole. The agreement reflects a recognition that global warming has thinned the Arctic icecap to the point where such fishing is becoming commercially feasible. The negotiations will commence in Washington on April 29. Andrew E. Kramer, Accord Would Regulate Fishing in Arctic Waters, N.Y. Times, April 17, 2013 at A9.
Last week the government of Uganda reached agreement with three international oil companies -- Tullow Oil, Total and Cnoc -- to construct an oil pipeline and 30,000 barrel/day refinery in Uganda. The agreement is part of negotiations on how to develop Uganda’s newfound oil resources. It is expected eventually to result in the first significant oil exports from the east coast of sub-Saharan Africa. Nicholas Bariyo, Uganda Reaches Refinery Deal, Wall St. J., April 16, 2013, at B2.