Is that title a mouthful, or what?

On January 30, the Second Circuit decided Abdullahi v. Pfizer, No. 05-4863-cv(L), 05-6768-cv(CON), slip op. (2d Cir. Jan. 30, 2009) (link here). In a nutshell, plaintiffs pleaded that Pfizer, “working in partnership with the Nigerian government, failed to secure the informed consent” of children (or their guardians) who were enrolled in an allegedly dangerous clinical trial of the drug Trovan. The trial court dismissed the complaints for lack of subject matter jurisdiction under the Alien Tort Statute. On appeal, the Second Circuit panel majority (with Wesley, J., dissenting) held that Nigerian residents can sue a U.S. drug company under international law in a U.S. court.

Let’s step way back.

Suppose the Ugandan government engages in genocide. A resident of Uganda is unlikely to have much luck suing the Ugandan government in a Ugandan court for damages. The plaintiff would probably do much better if he or she could sue a private actor (rather than a government, which may have some form of sovereign immunity) in a more favorable court (let’s say, one in the United States) under a more generous legal theory (say, international law).

Enter the Alien Tort Statute, which gives federal courts in the U.S. “original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” 28 U.S.C. Sec. 1350.

Presto! If our poor Ugandan can find an American company that supposedly aided the Ugandan government in violating the law of nations, then our Ugandan can present his or her claim to an American jury. That’s a switch in defendant (private actor), law (the “law of nations” instead of the law of Uganda), and forum (American jury instead of whoever the heck decides cases in Uganda) that could do a plaintiff a world of good.

In a very narrow set of circumstances, allowing these types of claims may make good sense. But if the Alien Tort Statute is loosened from its mooring, American companies will be in a heap of trouble awfully fast.

“As a moth is drawn to light, so is a litigant drawn to the United States.” Smith Kline & French Labs v. Bloch, 2 All E.R. 72, 74 (1983). If American courts are opened to litigants from around the world, our courts will quickly spend much of their time resolving disputes that properly belong in the courts of other countries.

If, for example, a large American company has a factory in China, then a class of tens of thousands of Chinese plaintiffs might sue that company in an American federal court for conspiring with the Chinese government to deny the plaintiffs their political rights. It’s American-style litigation for everyone!

That’s why the Abdullahi decision is so dangerous. When courts properly read “the law of nations” narrowly, they limit the number of claims by foreigners that can be brought in American courts. But, in Abdullahi, the Second Circuit read the “law of nations” broadly. The court found that the duty to obtain informed consent for clinical trials is not simply a matter of U.S. (or other countries’) domestic law, but rather is customary international law. To reach that conclusion, the panel majority relied on the International Covenant on Civil and Political Rights (which does not create privately enforceable rights), non-binding ethical guidelines of private organizations (which hardly constitute “the law of nations”), the Nuremberg Code (which applied only in the context of a “war crime”), and assorted other directives (all of which post-dated the 1996 clinical trial involved in the lawsuit).

This expansive interpretation of the Alien Tort Statute is bad news for drug companies, as well as all other companies that do business internationally. Although Abdullahi arises in the context of a clinical trial (and many drug companies conduct clinical trials overseas), the case is not limited to that context. Abdullahi will surely be cited by many future foreign plaintiffs trying to obtain access to American courts and generous American juries.

Here’s the good news: Pfizer has petitioned for a rehearing or rehearing en banc in Abdullahi and, since Judge Wesley dissented, that petition will have some support within the court. If that route fails, many justices on the U.S. Supreme Court have expressed their concerns about grafting foreign laws or the customary law of nations into causes of action that are recognized by American courts.

Although our crystal ball is cloudy, we’re guardedly optimistic that the expansive view of the Alien Tort Statute espoused by Abdullahi will be be rejected by either the en banc Second Circuit or the U.S. Supreme Court. If that happens, we’ll be there to report on the development.