We don’t know how to mind our own business.
‘Cause the whole world’s got to be just like us.
Now we are fighting a war over there
No matter who wins, you know we can’t pay the cost.
Some might say that John Kay’s musical biopic of American history is as true today as it was back in 1969 – only the location of “over there” having changed. But something else changed yesterday. The Supreme Court unanimously (albeit with diverse reasoning) cut back on the hubris reflected in the lower courts’ dramatic hyperextension of the Alien Tort statute, 28 U.S.C. §1350. See Kiobel v. Royal Dutch Petroleum Co., No. 10–1491, slip op. (U.S. April 17, 2013).
We’re the Drug and Device Law Blog. Why should we give a damn about Kiobel and the Alien Tort statute?
We care because among the hubristic applications of the Alien Tort statute has been to the overseas activities of American drug companies. Back in 2009, we blogged about Abdullahi v. Pfizer, 562 F.3d 163 (2d Cir. 2009), an absurd application of the Alien Tort statute to a Nigerian drug trial involving an investigational antibiotic drug used to treat meningitis in children. The court allowed the plaintiff to equate allegations of deviations from the study’s protocols with violations of the “law of nations.” Those purported violations were:
- The informed consent documentation was not read aloud to the study subject.
- The subjects or their guardians were not “alerted” to the drug’s risks and side effects (it’s an experimental drug; that’s what studies try to discover).
- The alleged availability of alternative treatments was not disclosed.
- The drug was administered orally even though oral absorption is difficult for sick children.
- Failure to conduct “regular blood tests” to identify side effects that warranted switching to alternative treatments.
- Not independently verifying whether this particular strain of meningitis was responsive to the drug before beginning the study.
Id. at 169-70 & n.2. While we agree that most, if not all, of these steps sound like good ideas, we hardly think that their absence equates a major drug company’s clinical trial of a potentially lifesaving product to Nazi war crimes. The court, however, had no trouble doing just that. Id. at 177-79. Throw in broad allegations of conspiracy with the Nigerian government, and presto – foreigners allegedly injured in a foreign country can bring suit in the United States under admittedly “nonbinding” platitudes that supposedly established the “law of nations.” Id. at 181-82. We awarded Abdullahi the number two position on our bottom ten decisions for 2009.
Kiobel brings these fantastical uses of a 1789 statute directed against piracy on the high seas to a screeching halt. The statute can no longer be used to force the “whole world” to be “just like us” – as Steppenwolf might have put it. Instead, it does not apply to activities “occurring in the territory of a foreign sovereign.” Kiobel, slip op. at 4. Rather, there’s a presumption that federal statutes are not intended to apply extraterritorially:
[W]hen a statute gives no clear indication of an extraterritorial application, it has none, and reflects the presumption that United States law governs domestically but does not rule the world. This presumption serves to protect against unintended clashes between our laws and those of other nations.
Id. (citations and quotation marks omitted). Hmmm. We remember blogging about similar presumptions in the context of state consumer fraud statutes. The same general principle also prohibits states from imposing punitive damages on conduct that took place solely in other states. Kiobel will provide useful reinforcement of those other applications of the presumption against extraterritoriality.
There wasn’t any way to rebut the presumption. Indeed, trying to do so was almost as absurd as the application of the statute in Abdullahi. The statute was passed in 1789. The Founding Fathers’ jaws would drop at the way the Alien Torts statute has been used to meddle in the affairs of, potentially, every other nation on earth.
No nation has ever yet pretended to be the custos morum of the whole world. It is implausible to suppose that the First Congress wanted their fledgling Republic − struggling to receive international recognition − to be the first.
Kiobel, slip op. at 12 (citations and quotation marks omitted). Back then, there were precisely three recognized “offenses against the law of nations:” piracy, violations of “safe conducts,” and infringements on the “rights of ambassadors” – and the last two didn’t necessarily involve extraterritoriality. Id. at 8.
Thus, where “all the relevant conduct took place outside the United States,” there is no basis for allowing foreign nationals to litigate foreign claims here. Id. at 14. “Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices.” Id.
That’s a bright line – and a good one. If alleged foreign violations, allegedly injuring foreigners, are to be prosecuted, they should be prosecuted (as serious human rights violations already are) in international courts. The game of suing American corporations as “aiders and abettors” of the actions of the really guilty parties (although in Abdullahi any “human rights violation” worthy of the name was lacking) thus comes to an end. As John Kay might say, no more “stuffing [the statute] just like a hog.”