Court Limits Use of U.S. Law by Foreigners

Financial Times

By Patti Waldmeir

The US Supreme Court on Tuesday handed a partial victory to international businesses when it narrowed the scope of lawsuits that can be brought in US courts alleging misconduct by companies abroad.

But the court stopped short of barring all suits under the controversial Alien Tort statute, a 1789 law recently used by human rights activists to sue multinational companies in US courts over involvement in human rights abuses abroad.

The US government and the international business community lobbied the justices to read the Alien Tort law so narrowly that it would have ceased to exist as a tool for such suits.

The justices declined to do that but they imposed important new limits on the kind of suits that can be brought, especially against corporations. Robin Conrad of the US Chamber of Commerce said: "It clearly does not close the door to these suits and leaves far too much discretion to the lower courts."

Even so, Mark Levy of the law firm Kilpatrick Stockton said the ruling narrowed the opening for these kinds of cases by setting standards that such lawsuits should meet in order to proceed.

The Alien Tort law gives US courts jurisdiction over suits by foreigners for wrongs committed "in violation of the law of nations or a treaty of the United States". The court said lawsuits would be permitted for violations of international law that have "definite content and acceptance among civilised nations", giving the example of piracy.

"That does not include the right to organise labour unions in Guatemala or the right to the best therapeutic care in Nigeria," said Barry Carter, professor of international law at Georgetown University Law Center, citing some recent cases brought under the Alien Tort law. He said the guidelines would permit cases alleging state-sponsored torture and other egregious offences.

Legal experts said it was unclear how the new standards would affect cases such as that involving Unocal and its operations in Burma.

But the justices warned lower courts to be cautious in allowing such cases to proceed, suggesting they consider foreign policy implications and whether local remedies had been exhausted.

Justice David Souter, writing for a seven-justice majority, singled out recent lawsuits against multinationals such as Bank of America and Citigroup alleging corporate complicity in South African apartheid, suggesting that these suits might not meet the new standard.

Terry Collingsworth, executive director of the Washington, DC-based International Labor Rights Fund (ILRF) and lead counsel in half a dozen Alien Tort Claims Act cases, said the Supreme Court ruling "erases any doubt about the validity of the ATCA for addressing egregious human rights cases, and sends a clear message to multinationals who seek to profit from forced labor and torture of workers and other human rights victims".

The American Civil Liberties Union said, "We are gratified that the Court has rejected the Bush Administration's attempt to close the door to the federal courts to human rights abuse victims. The Court has recognized that the Alien Tort Claims Act provides the victims of torture, genocide, war crimes, crimes against humanity and other egregious human rights violations with access to the federal courts to hear their claims."

"Today the Supreme Court reaffirmed that U.S. courts will remain open to those who suffer torture and other terrible human rights abuses that violate international law," said Eric Biel, Deputy Washington Director and Senior Counsel of Human Rights First. "Through ATCA, victims of serious human rights violations will continue to have their day in court."

In a separate part of the ruling, the court handed the Bush administration a victory when it upheld the right of the government to apprehend suspects abroad and bring them back to America for trial, without being sued for damages.

The justices ruled unanimously that a Mexican doctor could not sue the US government for money damages because it abducted him in Mexico to bring him to trial in America.