Why were the Plaintiffs using U.S. courts? Because of the Alien Tort Statute.

And – the more particular question of this case – does the Alien Tort Statute work against a foreign corporation?

First, to explain the statute generally…

Alien Tort Statute

The Alien Tort Statute was established in 1789. A couple altercations had arisen to illustrate that Congress might want to address whether foreigners could use U.S. courts to sue for damages. For example, a French adventurer had assaulted a French diplomat in Philadelphia. The dispute seemed sufficiently connected to the U.S. that U.S. courts should be able to get involved.

But courts can only get involved if they have jurisdiction. At the time, they didn’t have jurisdiction to hear suits like that from foreigners.

So Congress passed the Alien Tort Statute to provide jurisdiction. Jurisdiction gives someone the right to use a U.S. court, and the Alien Tort Statute only said: If a particular action would violate the international norms, then a foreigner has the right to use U.S. courts to request monetary damages from the wrongdoer.

There are a few important limitations here. One, jurisdiction under the ATS is only for civil actions (monetary damages). Two, the foreigner must allege that the defendant has broken an international norm. And three, the dispute must “touch and concern” the U.S. (Kiobel v. Royal Dutch Petroleum Co. (2013).

From the 18th Century to today

At the time the ATS was passed, international norms spoke about things like piracy on the seas, slave trading, and diplomatic rights. They didn’t include some of the more modern norms of international law, like the one alleged in this case: facilitation of financial support to terrorist activity.

After the ATS was passed, it wasn’t used much. Not until the 20th Century, when international law became more recognized (think WWII and crimes against humanity). By the time cases started appearing in the courts under the ATS, it had been so long, that the courts had to figure out what types of cases the law actually allowed into courts.

Bright-line limit

This case gave the Court an opportunity to declare a limit to the Alien Tort Statute’s jurisdictional grant. The question was: does the statute allow plaintiffs to pull foreign corporations into court?

The Court said no.

The Alien Tort Statute, it reminds us, is only meant to provide a right to get into court for violations of international norms recognized at the time the ATS was passed. And the statute was meant to resolve potential issues of diplomacy, not to cause more complications. Bringing foreign corporations into it changes the entire nature of what was intended.

For one, what was meant to be a right to use U.S. courts for things uniquely connected to the U.S. would – with the inclusion of foreign corporate liability – “ha[ve] the potential to involve groups of foreign plaintiffs suing foreign corporations in the United States for alleged human-rights violations in other nations.” Furthermore, the international norms the statute intended were a mere modest set. The types of actions that the U.S. could get itself into redressing in relation to multinational corporations is vast.

When it comes down to it, the Court said, it’s not the judicial branch’s role to extend the ATS to suits against foreign corporations. It would be Congress’ role to consider all of those implications, if Congress so desired.