Regarding the second issue, the Court did not resolve the question of whether U.S. corporations are immune from suit under the ATS. Instead, the Court dismissed the Respondents’ lawsuit on the first issue. However, a majority of the Justices stated in separate concurring opinions that U.S. corporations are not exempt from ATS lawsuits. In his concurring opinion in which Justice Alito joined in part, Justice Gorsuch stated that “[n]othing in the ATS supplies corporations with special protections against suit,” and that “the ATS has never distinguished between [individual and corporate] defendants.” Justice Gorsuch noted that the ATS’s text does not exempt U.S. corporations from being a namable defendant and that actions for torts against U.S. corporations and other legal entities such as ships have long been recognized in the United States. Similarly, in her concurring opinion in which Justices Breyer and Kagan joined, Justice Sotomayor stated that “there is no reason to insulate domestic corporations from liability for law-of-nations violations simply because they are legal rather than natural persons.” As she previously explained in her dissent in Top of Form
Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018), the text, history, and purpose of the ATS, as well as the long and consistent history of corporate liability in tort, confirmed that tort claims for law-of-nations violations could be brought against corporations under the ATS. Although the opinions of these five Justices are not binding law, they are nevertheless telling as to the Court’s view on issue two. At minimum, the Court did not categorically foreclose ATS lawsuits against U.S. corporations like it did against foreign corporations in Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018), as Doori Song has previously shown here.
Nestle and the Future of ATS Litigation
With its opinion in Nestle, the Supreme Court again narrowed the jurisdictional scope of the ATS. When the Court first reviewed the ATS’s scope in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), the Court held that the ATS was a jurisdictional statute that created no new cause of action other than for claims involving three principal offense that were commonly accepted as violations of international law when the ATS was enacted in the eighteenth century: (1) offenses against ambassadors, (2) violation of safe conducts, and (3) piracy. Courts could only exercise judicial discretion to recognize a new cause of action other than for these three in narrow truemoney database circumstances. The Court further narrowed the ATS’s scope in Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013) where it held that the ATS cannot be applied extraterritorially unless the ATS claims sufficiently “touch and concern” the territory of the United States. The Court further discussed the domestic application of the ATS in RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090, 2101 (2016), where it held that the ATS only applies where the defendant’s conduct relevant to the ATS’s “focus” occurred in the United States.
With respect to corporate defendants, the Court stated in Kiobel that “mere corporate presence” in the United States is not sufficient domestic conduct. The Court then categorically foreclosed ATS litigation against foreign corporations in Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018). Although the Court in Nestle did not exempt domestic corporations from ATS lawsuits like it did for foreign corporations in Jesner, the Court nevertheless limited the scope of ATS claims against U.S. corporations to those that plead more domestic conduct than “general corporate activity.” Thus, to sufficiently plead an ATS claim against a U.S. corporation, the corporation’s domestic conduct must consist of more than merely being “present” in the United States and more than “general corporate activity.” The Court did not define the meaning of “mere corporate presence” or “general corporate activity,” but based on its opinion in Nestle, “general corporate activity” includes making “operational decisions” in the United States and providing offshore contractors with technical and financial resources in return for an exclusive buyer-seller relationship.