In 1789, Congress passed a law called the Alien Tort Statute. The law basically said that district courts have jurisdiction over tort litigation brought by non-citizens that involved laws of other nations or treaties involving the U.S. and other nations. The ATS was barely used for about 200 years.
Then, in the 1980s and 90s, a few cases came about that allowed foreign or non-citizen plaintiffs to sue U.S. companies for violations of international law under the umbrella of the Alien Tort Statute -- even if the offense did not occur on U.S. soil, and even if the company in question was only a tertiary or loosely-involved party in the alleged violation.
Now, the Alien Tort Statute certainly serves a noble cause. It protects people from civil rights violations and abuses that are perpetrated by entities and governments, holding those violators responsible on an international scale. These types of crimes are deplorable and completely unacceptable. The creeping expansion of the Alien Tort Statute over the past few decades is a good thing in that regard.
However, there are downsides to the ATS. Because lawsuits that involve the Alien Tort Statute can be very damaging to a company or organization from a public relations standpoint, most companies immediately seek a settlement in the case no matter the validity of the plaintiff's claim. The expanding reach of the ATS empowers people to make a claim against companies under the guise of the Alien Tort Statute. In turn, companies are forced (more or less) to pay something to the plaintiff out of court, even if the claim is partially or completely untrue.
In the near future, the Alien Tort Statue may be scaled back in a significant way. The U.S. Supreme Court will soon rule on a case brought by Shell Oil that challenges the ATS.
Source: Business Insider, "The Supreme Court Might Do Yahoo And Other Corporations A Favor In A Case Over An Obscure Human Rights Law," Erin Fuchs, Sept. 29, 2012
- Tort litigation can be very complicated. To learn more about what you can do to protect your business, please visit our Hartford commercial litigation page.