On June 29, the Supreme Court curtailed the right of foreigners to use the Alien Tort Statute (ATS), an antiquated but increasingly popular vehicle for suing individuals and corporations in U.S. courts for alleged human rights abuses abroad. However, it did not entirely shut the door on future cases against companies, as business groups including USCIB had sought.
In its ruling on Sosa v. Alvarez-Machain, the court blocked a lawsuit by a doctor kidnapped in Mexico and brought to the U.S. to face trial in the death of federal drug agent. The doctor was acquitted, and he subsequently sued the individuals who orchestrated his abduction under the 18th-century ATS, which was enacted by the first Congress as part of the original Judiciary Act.
Justices agreed that the law gave federal courts jurisdiction to hear some claims, but they said the actions visited on the plaintiff did not rise to the level of violating international law. Justice David H. Souter, writing for the court, said that Congress envisioned only a "modest" set of lawsuits under the federal law, over such things as offenses against ambassadors and piracy.
“The decision in Sosa v. Alvarez-Machain was, on balance, a positive development” said USCIB President Thomas Niles in a statement. “The court set a very high standard for such cases to be entertained by the lower courts.”
According to Mr. Niles, the tendency to make the U.S. federal court system the world’s civil court of first resort should, at the very least, be seriously impeded.
“Indeed, if the lower courts faithfully follow the guidance of the Supreme Court, the court’s decision should considerably strengthen the defendants in all the currently pending ATS cases against U.S. and foreign companies and lead to dismissals in many of them.”
In follow-up to the Sosa decision, Mr. Niles and Timothy Deal, head of USCIB’s Washington, D.C. office, met in mid-July with State Department Legal Adviser William Howard Taft, IV, to discuss the practical implications of the Supreme Court’s decision. They urged that the Departments of State and Justice move quickly to inform the relevant federal courts of the U.S. government’s interpretation of the decision, and press for dismissal of the cases filed against companies – U.S. and foreign – under the ATS.
“We will continue to work with the Departments of State and Justice in our effort to ensure that the misuse of the ATS is halted, or at the very least significantly curtailed,” stated Mr. Niles.
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Positive Ruling in Key Antitrust Case – Also in June, the Supreme Court issued a decision of great importance regarding the reach of U.S. antitrust laws over non-U.S. commerce. In F. Hoffmann-La Roche Ltd. v. Empagran S.A., the court limited the ability of foreign plaintiffs to seek damages in U.S. courts for anticompetitive behavior such as price-fixing whose effects take place largely overseas. ICC had joined in an amicus brief before the court urging such a course of action. You can read an analysis of the Supreme Court’s ruling at: Click Here.
