Morrison v. Nat’l Australia Bank Ltd.: The Supreme Court Rejects Extraterritoriality
By Paul B. Stephan
For more than forty years, U.S. courts have applied the antifraud provisions of federal securities law to actors and transactions operating outside the United States. In Morrison v. Nat’l Australia Bank Ltd.,[1] decided on June 24, 2010, the Supreme Court gave a firm and unambiguous rebuke to this practice. It is not enough, the Court stated, that international law may permit such regulation. Rather, Congress must clearly indicate that it wants U.S. law to apply to securities transactions in foreign markets. Shortly thereafter, Congress effectively confirmed this result. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on June 21,[2] Congress authorized only the U.S. government and the Securities and Exchange Commission, and not private investors, to bring suit with respect to foreign transactions.

Since 1991, the Court has applied a strong presumption against extraterritoriality to force Congress, rather than the judiciary, to manage the risk that U.S.-prescribed rules might conflict with those of other sovereigns. None of its previous cases, however, have overturned such longstanding and extensive lower-court precedent. A petition for certiorari currently before the Court may give it the opportunity to decide next year whether its approach in Morrison applies to the Alien Tort Statute, which the lower courts have embraced as a means for addressing human rights violations.  More...

Federal judge allows Iraqis' suit against military contractors to proceed

A judge for the US District Court for the District of Maryland has denied a motion to dismiss a lawsuit filed by a group of former Iraqi detainees against US military contractors. The lawsuit, Al-Quraishi v. Nakhla filed in June 2008, alleges that L-3 Services, Inc. violated US and international law by directing and participating in abuses at Abu Ghraib and other Iraqi prisons. The defendants in the case had moved for dismissal in November 2008, claiming immunity under the laws of war and sovereign immunity. Additionally, they claimed that the Alien Torts Claims Act [28 USC § 1350], under which the plaintiffs were suing, was not applicable because they did not violate the law of nations. The defendants also argued that they were immune from the claims made under state law because of government contractor immunity and because Iraqi law should be applied. Judge Peter Messitte rejected these claims, explaining:


"Defendants' actions arguably violated the laws of war such that they are not immune from suit under the laws of war. Additionally, the Court is not inclined, at this stage of the proceedings, to find that Defendants are shielded by derivative sovereign immunity, since the Court is unable to determine from the Complaint alone that Defendants were acting within the scope of their contracts with the United States as that defense requires. The Court further rejects the government contractor immunity defense[.] ... The Court declines to dismiss the Alien Tort Statute claims since, in the Court's judgment, Plaintiffs' claims constitute recognized violations of the law of nations, appropriately assertable against Defendants. As for Plaintiffs' state law claims, the Court finds that they are governed by Iraqi law. ... [T]he Court is unable to determine at this time whether Defendants are in fact immune under Iraqi law."

The court held that the case must continue to discovery to answer the issues that it was unable to resolve at this point in the litigation.

In October 2008, lawyers for private US military contractor CACI International, Inc., which was named as a defendant along with L-3 in the original complaint, filed a motion to dismiss the charges against the company based on a claim of immunity. This motion was granted in January 2009. The lawsuit was filed in 2008, alleging that L-3 and CACI subjected them to torture, cruel and inhuman treatment, committed war crimes, assault and battery, sexual assault and battery and infliction of emotional distress, in addition to conspiracy to commit those acts.

Amergi v. PLO

The 11th Circuit affirms decision involving the Alien Tort Statute in a case brought against the Palestinian Authority and the PLO.

"The [lower] court ruled that acts of terrorism were not cognizable under the ATS and, therefore, it had no subject matter jurisdiction pursuant to a terrorism theory. [Amergi] at *6, 7. Moving next to the Amergis’ theory that the killing violated the Geneva Conventions on the law of war and was cognizable under the Alien Tort Statute as a war crime, the court observed that not every violation of the Geneva Conventions supports ATS jurisdiction. Id. at *8. Moreover, the district court concluded, extending the ATS to cover this act, or any violation of the Geneva Conventions, would dramatically expand federal jurisdiction, in violation of the Supreme Court’s direction in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004). See Saperstein, 2006 WL 3804718, at *8. It therefore dismissed the ATS count."
...
"The federal courts of the United States are permitted to recognize a limited set of causes of action for international wrongs under the ATS. Their ability to do so, however, is sharply circumscribed, both by precedent and by prudence. The Amergis urge this Court to recognize their claim under the ATS, but because the act they allege -- a single killing by non-state actors purportedly in the course of an armed conflict -- fails to meet the Alien Tort Statute’s high bar, we hold that the district court properly dismissed their ATS claim for lack of subject matter jurisdiction. We also hold that the district court did not abuse its discretion in declining to exercise supplemental jurisdiction over a common law wrongful death claim, or in severing the Amergis’ claims from that of Moshe Saperstein, a coplaintiff proceeding under the Federal Terrorism Act, 18 U.S.C. § 2333 (“FTA”).  Accordingly, we affirm."  More...

Speaking Hypothetically: What to Do When a PMC Tortures
by David Isenberg on July 27, 2010

Let's just suppose for a moment, speaking hypothetically, that a private military contractor engaged in acts of torture. I write "hypothetically" because PMCs mentioned in the past (think CACI and Titan at Abu Ghraib) in this regard fiercely object to the idea that they did any such thing. And even if they did something that was not perhaps one hundred percent kosher, even if it wasn't torture, (think of John Yoo's infamous memo on permissible interrogation techniques back when he was in the Bush Administration's Department of Justice's Office of Legal Counsel (OLC) during 2001 to 2003) a PMC could argue they were just doing what their U.S. government client wanted or ordered.

One wonders if a PMC really wants to use the same defense that Nazi war criminals used back at the Nuremberg tribunal, i.e., I was just following orders, but that is the subject of another post. 

Anyway, the question remains; what can be done about it if such a thing happens? That sounds like a legal question, and there are very few legal issues that, sooner or later, don't get written about in a law journal. And, serendipitously a recent issue of the Santa Clara Law Review addresses this very question (50 Santa Clara L. Rev. 1277). The modest (for a law journal), 18,789 word article, titled "SUING PRIVATE MILITARY CONTRACTORS FOR TORTURE: HOW TO USE THE ALIEN TORT STATUTE WITHOUT GRANTING SOVEREIGN IMMUNITY-RELATED DEFENSES" is by law student Efrain Staino.  More...

Read: IN RE: CHIQUITA BRANDS INTERNATIONAL, INC. ALIEN TORT STATUTE AND SHAREHOLDER DERIVATIVE LITIGATION

Judge Marra ruled against Chiquita, finding that allegations of substantial payments over a long period of time preceding kidnappings and murders are sufficient if proven to make Chiquita liable, without more in terms of actual knowledge of these specific acts of violence.  Legal observers and the parties hotly debate whether this standard of “causation” is too loose.

Supreme Court UPDATE

Presbyterian Church of Sudan v. Talisman Energy, Inc.; Talisman Energy, Inc. v. Presbyterian Church of Sudan

[Note: The petition and cross-petition were distributed for the Justices' conference on Sept. 27, 2010.]
Docket: 09-1262; 09-1418

Issues: From 09-1418: (1) Whether, under the Alien Tort Statute, federal courts lack subject matter jurisdiction to impose liability on corporations for torts committed in violation of customary international law; (2) whether federal courts lack subject matter jurisdiction to apply ATS extraterritorially to claims for such torts arising entirely outside the United States; and (3) whether causes of action for violations of customary international law exist when (i) the claims are based on events arising solely outside the United States and had no effect on the United States, (ii) the claims are asserted against a foreign defendant not in the custody of the United States, and (iii) a country providing an adequate alternative forum has a close tie to the dispute.

Journal of International Criminal Justice Advance Access - published online on June 30, 2010: Civil Litigation and Transnational Business: An Alien Tort Statute Primer, by Katherine Gallagher.   Defense attorneys beware? See Abstract.