Amicus Curiae Brief — Kiobel v. Royal Dutch Petroleum Co.

No. 10-1491

IN THE

Supreme Court of the Anited States

ESTHER KIOBEL, INDIVIDUALLY AND ON BEHALF OF HER

LATE HUSBAND, DR. BARINEM KIOBEL,

et al.,

Petitioners,

v.

ROYAL DUTCH PETROLEUM CoO., et ail.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF FOR THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS AMICUS

CURIAE IN SUPPORT OF RESPONDENTS

ROBIN S. CONRAD NEAL KUMAR KATYAL*

KATE COMERFORD TODD CHRISTOPHER T. HANDMAN

SHELDON GILBERT DOMINIC F. PERELLA

NATIONAL CHAMBER SEAN MAROTTA

LITIGATION CENTER, INC. HOGAN LOVELLS US LLP

1615 H Street, N.W. 555 Thirteenth Street, N.W.

Washington, D.C. 20062 Washington, D.C. 20004

(202) 463-5337 (202) 637-5528

neal. katyal@hoganlovells.com

Counsel for Amicus Curiae

“Counsel of Record

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES........0..000.00000.00000cceee. ii

STATEMENT OF INTEREST ........0.00000000000000000.0000008. l

SUMMARY OF ARGUMENT.......0000000000.00000cccc cee. 3

ells tanntweniiion 5

I. CORPORATE ATS SUITS RISK

DANGEROUS ALTERATIONS OF

FOREIGN POLICY THROUGH

IIIT shcisrdensicieikesesestetentsiaininiunviecssesscone 5

Il. CORPORATE ATS LIABILITY

HARMS DEVELOPING COUN-

TRIES BY DETERRING CORPO-

oe _, SE 14

A. The Potential For ATS Liability

Presents Extraordinary Risks For

Corporations Considering Foreign

TRUSS Rie IRS Se ae 14

B. These Risks Can Chill Investment

And Damage Developing Countries........... 22

III. CORPORATE ATS _ LIABILITY

THREATENS FOREIGN INVEST-

MENT IN THE UNITED STATES .............. 29

I aa eco di aa ns nppebsnleuniingnes snaleepines 32

TABLE OF AUTHORITIES

Page

Cases:

Arias v. DynCorp.,

517 F. Supp. 2d 221 (D.D.C. 2007).................. 5

Balintulo v. Daimler AG,

No. 08-2776 -cv (Bd. Cis.).......ceccccoccccccveccesss 7, 26

Baloco v. Drummand Co.,

631 F. 3d 1350 (11th Cir. 2011) ...................... 5

Bauman v. DaimlerChrysler Corp.,

644 F.3d 909 (9th Cir. 2011) .......................008 6

Bell Atl. Corp. v. Twombly,

SEO UB. BOG Cee ei cecececécstessecm acca 17

Blue Chip Stamps v. Manor Drug Stores,

Age &. [: Sess POR A i 15, 20

Bowoto v. Chevron Corp.,

621 F.3d 1116 (9th Cir. 2010) ...........0000000..... 20

Chamber of Commerce of U.S.

v. Whiting, 131 S. Ct. 1968 (2011) ................ 10

Chicago & S. Air Lines v. Waterman S.S.

Corp., SBS UB. BOB CRG nncsscncscvceccocvecscocsessons 9

Corrie v. Caterpillar, Inc., 403 F. Supp.

2d 1019 (W.D. Wash. 2005), aff'd, 503

we Et. ht Oe. 7

Crosby v. National Foreign Trade Coun-

cil, 530 U.S. 363 (2000)........................ 9, 10, 28

Daobin v. Cisco Systems, Inc.,

No. 11-cv-01538-PJM (D. Md.).............0..0.0..... 6

Diggs v. Shultz,

470 F.26 461 (D.C. Cit. 19GB)... ccccccevesccssssessens 10

TABLE OF AUTHORITIES—Continued

Doe v. Cisco Systems, Inc.,

No. 11-cv-2449 (N.D. Cal.)...........00000.008.

Doe v. Exxon Mobil Corp.,

anaes 6

654 F.3d 11 (D.C. Cir. 2011)................0.. 6, 11

Doe v. Nestle, S.A., 748 F. Supp. 2d 1057

(C.D. Cal. 2010), appeal pending, No.

ins cecccussvesssestessoniesseseees 6, 7

Enahoro v. Abubakar,

408 F.3d 877 (7th Cir. 20085) ...................

Flomo v. Firestone Natural Rubber Co.,

643 F.3d 1013 (7th Cir. 2011) ............0000.... 3,6

Goodyear Dunlop Tires Operations, S.A.

v. Brown, 131 S. Ct. 2846 (2011)..............

Helicopteros Nacionales de Colombia,

S.A. v. Hall, 466 U.S. 408 (1984) .............

In re Chiquita Brands Int'l Inc., No.

10-CV-80954 (S.D. Fila.)................:::cceeee.

Intel Corp. v. Advanced Micro Devices,

Inc., 642 U.S. 241 (2004) ..........................

Khulumani v. Barclay National Bank

Ltd., 504 F.3d 254 (2d Cir. 2007),

aff'd for lack of quorum sub nom.

American Isuzu Motors, Inc.

aia 30

jenbead 6

v. Ntsebeza, 553 U.S. 1028 (2008)............. 7, 20

Muyjica v. Occidental Petroleum Corp.,

381 F. Supp. 2d 1134 (C.D. Cal. 2005).... 17, 26

Muyjica v. Occidental Petroleum Corp.,

564 F.3d 1190 (9th Cir. 2009) ................... 6, 12

TABLE OF AUTHORITIES—Continued

Obe v. Royal Dutch Shell PLC,

No. 2:11-cv-14572 (E.D. Mich.) ..............0........ 6

Oetjen v. Central Leather Co.,

ee ee re ae ee g

Presbyterian Church of Sudan v. Talis-

man Energy, Inc., 582 F.3d 244 (2d

Cir. 2009), cert. denied, 131 S. Ct. 79

isi ids cctsradactinadigginmslatibinddiavoddetnberet aimee 6, 8

Regan v. Wald,

ee ee I siciciinintetesecncubbatetanaae een 10

Sinaltrainal v. Coca-Cola Co.,

578 F.3d 1252 (11th Cir. 2009) .........00000000.... 16

Sosa v. Alvarez-Machain,

Ee Bee Ge a iicistcccccccdscncvecnnacniens passim

Stoneridge Inv. Partners LLC v. Scien-

tific-Atlanta, Inc., 552 U.S. 148

Turedi v. Coca Cola Co., 460 F. Supp. 2d

507 (S.D.N.Y. 2006), aff'd, 343 F.

Aapy's, GES BG Cir. BUD) si. .0css0ccsccc.ccensc0ese 17

United States v. Amirnazmi,

645 F.3d 564 (3d Cir.), cert. denied,

ey ie eT EE eitinittititetcncwe as 9

Vietnam Ass'n for Victims of Agent Or-

ange v. Dow Chem. Co., 517 F.3d 104

I SITE -éssrrictesnssnsaendnunpideainbiadcamadacinidaaemnaaames 6

Statute:

Fr Ok I cvirivnvcncenusnintiitienintamiaabiouien passim

TABLE OF AUTHORITIES—Continued

Legislative Materials:

Testimony of Under Secretary of State

Eizenstat before the Trade Subcom-

mittee of the House Ways and Means

Committee (Oct. 23, 1997) ..................cccceseeeee 10

U.S.-Africa Trade Relations: Creating a

Platform for Economic Growth: Joint

Hearing Before the H. Comm. on En-

ergy and Commerce and the H.

Comm. on Foreign Affairs, 111th

I 25

Other Authorities:

J. Auspitz, Issues in Private ATS Litiga-

tion, 9 Bus. L. Int’l 218 (2008)........... 14, 17, 18

A. Buffa, Chocolate’s Horror Show (Oct.

eR ORE oe EE OEE BA er ee 16

M. Chalos, Successfully Suing Foreign

Manufacturers, Trial, 44-NOV Trial

I ia aaa a 17

Chiquita Brands Int'l, Inc., Quarterly

Report (Form 10-Q) (Nov. 7, 2011)................ 18

Council on Foreign Relations, More

Than Humanitarianism: A Strategic

U.S. Approach Towards Africa (2006).......... 27

J. Cowman, The Alien Tort Statute—

Corporate Social Responsibility Takes

On A New Meaning, Metro Corp.

Ac I i a i on 21

L.J. Dhooge, A Close Shave in Burma, 24

N.C. J. Int'l L. & Com. Reg. 1 (1998) ...... 18, 19

TABLE OF AUTHORITIES—Continued

D. Diskin, Note, The Historical & Mod-

ern Foundations for Aiding & Abet-

ting Liability Under the Alien Tort

Statute, 47 Ariz. L. Rev. 805 (2005)..............

J. Drimmer & S. Lamoree, Think Glob-

ally, Sue Locally: Trends & Out-of-

Court Tactics in Transnational Tort

Actions, 29 Berkeley J. Int’] L. 456

Tee te 2, 14,

S. Hanson, Council on Foreign Relations,

Backgrounder: China, Africa, and Oil

eimai sale

C. Holzmeyer, Human Rights in an Era

of Neoliberal Globalization: The Alien

Tort Claims Act and Grassroots Mo-

bilization in Doe v. Unocal, 43 Law &

eC 16, 20

G. Hufbauer & N. Mitrokostas, Awaken-

ing Monster: The Alien Tort Statute

2, ER Seca 23, 24, 26, 31

G. Hufbauer & N. Mitrokostas, /nterna-

tional Implications of the Alien

Tort Statute, 7 J. Int'l Econ. L. 245

Ee iiins-salcsanstenineseatedsieanigaiinnanineebunesints 17, 19, 24

S.J. Korbin, Oil and Politics: Talisman

Energy and Sudan, 36 N.Y.U. J. Int’

ia: GE ME III re oniecnccenatuuegnanniaaaniankienns

J. Kurlantzick, Taking Multinationals to

Court: How the Alien Tort Act Pro-

motes Human Rights, 21 World Poly.

Fi, SF lets gnsaicaseniatnichnticamesusnnsteseniniis 15, 16

TABLE OF AUTHORITIES—Continued

Letter from Maria Livanos Cattaui to

Roman Prodi, President, European

Commission (Oct. 22, 2003).................00cc00

Letter from William H. Taft, Legal Ad-

viser, U.S. Dep’t of State, to Daniel

Meron, Principal Deputy Assistant

Attorney General, U.S. Dep’t of Jus-

I te ae emeniuasates

S. Maberry, Overview of U.S. Economic

Sanctions, 17-WTR Currents: Int’l

TE Ba Ge IE eceancusnssesecncecucacecdeeesiasous

P. Magnusson, A Milestone for Human

Rights, Bus. Wk., Jan. 24, 2005..................

J. Mouawad, Shell to Pay $15.5 Million

to Settle Nigerian Case, N.Y. Times,

PTR epee tne nr ON er

National Chamber Litigation Center, Al-

ten Tort Statute (ATS) Cases.......................

Nat'l Security Council, The National Se-

curity Strategy of the United States of

I int cctrndtannmnieccanueudckeunsocsiazins

A. Nichols, Note, Alien Tort Statute Ac-

complice Liability Cases: Should

Courts Apply the Plausibility Plead-

ing Standard of Bell Atlantic v.

Twombly?, 76 Fordham L. Rev. 2177

Se ithennintcerdvonskscasnuctassnitenponiasepneeciedasiioctsioiin

R. O’Gara, Procedural Dismissals Under

the Alien Tort Statute, 52 Ariz. L.

Bc WEE CPTI inc. s edistubentsvdtatussnecrbassscitabieicecas 20

TABLE OF AUTHORITIES—Continued

D. Orr, Slave Chocolate?, Forbes, Apr.

E. Schrage, Judging Corporate Account-

ability in the Global Economy, 42

Colum. J. Transnat’l L. 153 (2003) ......... 11, 23

J. Strasburg, Saipan Lawsuit Terms

OK'd: Garment Workers to Get $20

Million, S.F. Chron., Apr. 25, 2003............... 22

U.S. Chamber of Commerce, Africa

Business Initiative, A Conversation

Behind Closed Doors: Inside the

Boardroom: How Corporate America

Really Views Africa (May 2009).................... 22

U.S. Dep’t of Commerce, The U.S. Liti-

gation Environment and Foreign Di-

rect Investment: Supporting U.S.

Competitiveness by Reducing Legal

Costs and Uncertainty (2008)........................ 30

U.S. Dep't of Defense Task Force for

Business and Stability Operations,

Mineral Resource Team 2010 Activi-

ties Summary (Jan. 29, 2011)............0...00000... 29

U.S. Dep't of State, Preparation of Let-

I nic ic cntasiadieslanmeanisiedumasenmcinaatie 19

P.J. Youngblood & J.J. Welsh, Obtaining

Evidence Abroad: A Model for Defin-

ing & Resolving the Choice of Law

Between the Federal Rules of Civil

Procedure & the Hague Convention,

10 U. Pa. J. Int’] Bus. L. 1 (1988).................. 18

IN THE

Supreme Court of the Anited States

No. 10-1491

ESTHER KIOBEL, INDIVIDUALLY AND ON BEHALF OF HER

LATE HUSBAND, DR. BARINEM KIOBEL, et al.,

Petitioners,

V.

ROYAL DUTCH PETROLEUM CO., et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF FOR THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS AMICUS

CURIAE IN SUPPORT OF RESPONDENTS

STATEMENT OF INTEREST!

The Chamber of Commerce of the United States of

America (“Chamber”) respectfully submits this brief

as amicus curiae.

The Chamber is the world’s largest business feder-

ation, representing more than 300,000 direct mem-

bers and an underlying membership of more than

three million businesses and trade and professional

! No party or counsel for a party authored this brief in whole or

in part. No party, counsel for a party, or person other than

amicus curiae, its members, or counsel made any monetary

contribution intended to fund the preparation or submission of

this brief. All parties have filed blanket amicus consent letters.

organizations of every size, sector, and geographic

region. An important function of the Chamber is to

represent its members’ interests in matters before

Congress, the Executive Branch, and the courts,

including this Court.

The Chamber has a direct and substantial interest

in the issues presented in this case. Its members

transact business around the world, and many of

them—based on nothing more than doing business

around the world—have been targeted by plaintiffs

suing under the Alien Tort Statute (“ATS”), 28

U.S.C. § 1350. In the past two decades, various

plaintiffs have filed more than 150 ATS lawsuits

against U.S. and foreign corporations doing business

in two dozen industry sectors, including agriculture,

financial services, manufacturing, and communica-

tions. See J. Drimmer & S. Lamoree, Think Global-

ly, Sue Locally: Trends & Out-of-Court Tactics in

Transnational Tort Actions, 29 Berkeley J. Int'l L.

456, 460-462 (2011). ‘These lawsuits have maligned

business activities in more than 60 countries as

alleged human-rights abuses actionable in U.S.

courts. See id. at 464. And they have had—and have

the potential to create in the future—substantial

adverse effects not just on the targeted businesses

themselves, but on U.S. foreign policy and on the

countries where the claims originate. In light of

those adverse effects, the Chamber has filed amicus

briefs in a host of ATS cases in this Court and the

lower courts. See National Chamber Litigation

Center, Alien Tort Statute (ATS) Cases.?

2 Available at http:/)www.chamberlitigation.com/cases/issue/

foreign-affairs-international-commerce/alien-tort-statute-ats.

While the Chamber takes no position as to the va-

lidity of the factual allegations in the Complaint, it

unequivocally condemns violations of human rights.

But the question here is not whether such wrongs

occurred. Rather, it is whether private plaintiffs can

reach defendants who fall outside the scope of the

relevant law. The Chamber has a substantial inter-

est in encouraging this Court to hew to its own

teaching in Sosa: The federal courts “have no con-

gressional mandate to seek out and define new and

debatable violations of the law of nations.” Sosa

v. Alvarez-Machain, 542 U.S. 692, 728 (2004). The

decision below should be affirmed.

SUMMARY OF ARGUMENT

As Respondents cogently explain, the notion that

there is a customary international norm of corporate

liability for alleged human-rights violations is not

“debatable.” Sosa, 542 U.S. at 728. There is no such

norm. See Resp. Br. 27-48; see also Br. of Chamber

of Commerce of the U.S. in Support of Defendants-

Appellees 8-20, Flomo v. Firestone Natural Rubber

Co., 643 F.3d 1013 (7th Cir. 2011) (No. 10-3675).*

But even if the Court could somehow discern such an

international norm, it would be inappropriate to

apply it through the mechanism of the ATS. Sosa

also taught, after all, that “[t]he determination

whether a norm is sufficiently definite to support a

cause of action should (and, indeed, inevitably must)

involve an element of judgment about the practical

consequences of making that cause available to

3 Available at http://www.chamberlitigation.com/sites/default/

files/cases/files/20 1 1/Flomo,% 20et% 20al.%20v.%20F irestone%2

ONatural%20Rubber%20Co.,%20et%20al. %20(NCLC% 20Brief).

pdf.

litigants in the federal courts.” 542 U.S. at 732-733.

Those “practical consequences” cut sharply against

recognizing corporate ATS liability.

First, ATS suits against corporations are often

based on nothing more than allegations that the

corporations did business in countries where human

rights abuses are known to occur. Such suits seek, in

other words, to punish companies for—and thus

deter them from—engaging in commerce with trou-

bled nations. But there is a term for those sorts of

deterrents: economic sanctions. And economic sanc-

tions fall squarely within the purview of the political

branches. The prospect of multitudes of private

plaintiffs—hailing from other countries throughout

the world—who attempt to shape American foreign

policy through ad hoc ATS litigation is precisely the

sort of “practical consequence” that counsels against

extending ATS liability. /d.

Second, ATS lawsuits against corporations certain-

ly threaten to harm corporations, but they also

threaten to harm the countries where those corpora-

tions do business. Complaints asserting ATS claims

impose a severe social stigma that may scuttle stock

values or destroy debt ratings; they often require

extraordinarily burdensome overseas discovery; they

take many years to litigate; and they result in co-

erced settlements. These are harms that corpora-

tions will, naturally, take concrete steps to avoid. As

a result, if this Court endorses corporate ATS litiga-

tion, corporations will divest from countries with

tarnished human-rights records—a _ potentially

catastrophic result for the countries that need that

investment most. And once again U.S. foreign policy

will suffer as well; for the federal government has

aggressively promoted a policy of using commercial

engagement to help developing nations along the

path to democracy.

Third, corporate ATS liability can harm the domes-

tic economy, too, by tightening the spigot of foreign

investment in the United States. After all, foreign

companies in our global economy often have ties to

the United States that suffice—at least in the view of

some courts—to give the federal] courts jurisdiction

over alleged overseas ATS violations. Thus under

plaintiffs’ ATS theories, a foreign corporation can be

brought into U.S. courts for alleged activity in a third

country. The best—and in some cases the only—way

for a foreign company to insulate itself from that risk

is to avoid the U.S. market altogether, thus making

it impossible for a federal court to assert in personam

jurisdiction over it.

In short, we agree with Respondents that corporate

ATS liability for the offenses alleged here does not

comport with customary international law. But even

if the question were close, the “practical consequenc-

es’ of such a regime would counsel against its adop-

tion. The decision below should be affirmed.

ARGUMENT

I. CORPORATE ATS SUITS RISK DANGEROUS

ALTERATIONS OF FOREIGN POLICY

THROUGH LITIGATION.

1. The first two centuries of the ATS saw no rec-

orded lawsuit against a corporate defendant. Now,

however, there are scores of ATS actions pending or

recently decided in the federal courts, the vast major-

ity of which involve corporate defendants.4 In many

4 See, e.g., Arias v. DynCorp., 517 F. Supp. 2d 221 (D.D.C.

2007); Baloco v. Drummand Co., 631 F. 3d 1350 (11th Cir.

of those cases, the plaintiffs’ allegations boil down to

this: The defendant corporation did business in a

nation known to have a tarnished human-rights

record—a category that unfortunately includes many

developing countries throughout the world.5 For

example, in Presbyterian Church of Sudan v. Talis-

man Energy, Inc., 582 F.3d 244 (2d Cir. 2009), cert.

denied, 131 S. Ct. 79 (2010), the plaintiffs alleged

that an energy company “understood that the [Suda-

nese] Government had cleared and would continue to

clear the land cf the local population if oil companies

were willing to come to the Sudan and explore for oil,

and that understanding that to be so, [the company}

should not have come.” Jd. at 261 (quoting district

court opinion; alteration in original). As the court of

appeals recognized, the actual corporate activities

2011); Bauman v. DaimlerChrysler Corp., 644 F.3d 909 (9th

Cir. 2011); In re Chiquita Brands Int? Inc., No. 10-CV-80954

consolidated (S.D. Fla.) (six actions); Doe v. Cisco Systems, Inc.,

No. 11-cv-2449 (N.D. Cal.); Doe v. Exxon Mobil Corp., 654 F.3d

11 (D.C. Cir. 2011) (No. 01-CV-01357 (D.D.C.)); Doe v. Nestle,

S.A., 748 F. Supp. 2d 1057 (C.D. Cal. 2010); Daobin v. Cisco

Systems, Inc., No. 11-cv-01538-PJM (D. Md.); Flomo v. Firestone

Natural Rubber Co., 643 F.3d 1013 (7th Cir. 2011); Kiobel,

supra; Mujica v. Occidental Petroleum Corp., 564 F.3d 1190

(9th Cir. 2009); Obe v. Royal Dutch Shell PLC, No. 2:11-cv-

14572 (E.D. Mich.).

5 Although many ATS suits are brought on an aiding-and-

abetting or doing-business theory of liability, that is not always

the case; in some suits, plaintiffs claim that a company directly

engaged in human-rights violations overseas. See, e.g., Vietnam

Ass'n for Victims of Agent Orange v. Dow Chem. Co., 517 F.3d

104, 112-114 (2d Cir. 2008) (alleging that a U.S. chemical

company violated international norms in manufacturing Agent

Orange). The practical consequences of ATS hability we discuss

here—such as impact on U.S. foreign policy, infra at 8-11—are

equally applicable to direct-action theories of ATS liability.

the plaintiffs identified in their complaint—for

example, scouting out sites for their physical plant—

“generally accompany any natural resource develop-

ment business or the creation of any industry.” /d.

Likewise, in Khulumani v. Barclay National Bank

Ltd., 504 F.3d 254 (2d Cir. 2007), affd for lack of

quorum sub nom., American Isuzu Motors, Inc.

v. Ntsebeza, 553 U.S. 1028 (2008), plaintiffs sued a

host of manufacturing, financial, and other compa-

nies, arguing that by doing otherwise lawful business

in apartheid-era South Africa they helped prolong

apartheid. See also Balintulo v. Daimler AG, No. 09-

2778-cv (2d. Cir.) (alleging that companies aided and

abetted the apartheid-era South African govern-

ment’s human-rights abuses). In Corrie

v. Caterpillar, Inc., 403 F. Supp. 2d 1019 (W.D.

Wash. 2005), aff'd, 503 F.3d 974 (9th Cir. 2007),

plaintiffs argued that a manufacturer should be held

liable under the ATS because its bulldozers were

purchased by the Israel Defense Force and allegedly

used to commit human rights violations. And in Doe

v. Nestle, S.A., 748 F. Supp. 2d 1057 (C.D. Cal. 2010),

appeal pending, No. 10-56739 (9th Cir.), plaintiffs

alleged that three multinational corporations should

be held liable for providing “logistical support” to

farming activities in Céte d'Ivoire, including agreeing

to purchase cocoa from various farms and providing

farming supplies. The plaintiffs claimed that those

workaday business actions were enough to trigger

ATS liability because the companies should have

known that some Ivorian farmers might end up

using child labor and involuntary labor on their

farms. First Am. Compl., Doe v. Nestle, S.A., No.

2:05-CV-05133 (C.D. Cal. July 22, 2009). The plain-

tiffs did not allege that the defendant companies

participated in any way in the alleged imprisonment

or abuse; as the district court found, “the overwhelm-

ing conclusion” is that the companies were merely

“purchasing cocoa and assisting the production of

cocoa.” Doe, 748 F. Supp. 2d at 1109.

2. These cases—and many others too numerous to

recount here—are essentially bids to block corpora-

tions from investing in, or doing business in, coun-

tries with poor human-rights records. See Talisman

Energy, 582 F.3d at 261 (plaintiffs’ allegations “serve

essentially as proxies for their contention that Tal-

isman should not have made any investment in the

Sudan”) (quoting District Court opinion). Such

efforts have a pair of interrelated adverse effects on

foreign policy. First, as this Court has recognized,

they may interfere with the domestic-policy preroga-

tives of foreign nations. See Sosa, 542 U.S. at 733 &

n.21. Developing countries emerging from periods of

human-rights turmoil often seek reconciliation

through nonjudicial means. See id. at 733 n.21

(noting South Africa’s objection that ATS litigation

interfered with the work of its Truth and Reconcilia-

tion Commission). ATS lawsuits risk usurping those

countries’ considered decisions that a _ non-

adversarial process is the best way to heal the

wounds of past conflict.

Second, as the Talisman Energy court recognized,

plaintiffs’ efforts to block corporate investment in

countries with tarnished human-rights records

amount to an attempt “to impose embargos or inter-

national sanctions through civil actions in United

States courts.” 582 F.3d at 264. That is an inappro-

priate use of the federal judiciary.

To let federal courts—at the behest of ATS plain-

tiffs located half a world away—dictate ad hoc for-

eign policy would place federal courts well outside of

their constitutional responsibilities. It is well settled

that “[t]he conduct of the foreign relations of our

government is committed by the Constitution to the

executive and legislative—‘the political’—

departments of the government.” O6cetjen v. Central

Leather Co., 246 U.S. 297, 302 (1918); accord Chica-

go & S. Air Lines v. Waterman S.S. Corp., 333 U.S.

103, 111 (1948). That distribution of authority holds

true with respect to economic sanctions just as with

other aspects of foreign affairs: The Legislative

branch typically authorizes sanctions, and the Exec-

utive then implements them according to the terms

Congress has fashioned. See, e.g., Crosby v. National

Foreign Trade Council, 530 U.S. 363, 374 (2000)

(discussing statute that gave the President “flexible

and effective authority over economic sanctions

against Burma”). The International Emergency

Economic Powers Act, for example, authorizes the

President to impose peacetime sanctions but “sub-

ject[s] the President's authority to a host of proce-

dural limitations.” United States v. Amirnazmi, 645

F.3d 564, 572 (3d Cir.), cert. denied, 132 S. Ct. 347

(2011). Those limitations exist “to ensure Congress

would retain its essential legislative superiority in

the formulation of sanctions regimes erected under

the Act’s delegation of emergency power.” /d.; see

also S. Maberry, Overview of U.S. Economic Sanc-

tions, 17-WTR Currents: Int'l Trade L.J. 52, 52

(2008) (sanctions themselves “generally are imposed

by the President through the issuance of an Execu-

tive Order,” though Congress will sometimes “impose

sanctions directly”); Crosby, 530 U.S. at 374.

10

The key point is that questions about whether and

how to impose sanctions are to be decided by Con-

gress and the President—not the Judiciary, and

certainly not private alien plaintiffs pursing their

own idiosyncratic agendas. The political branches

can calibrate sanctions to the circumstances they are

meant to address. And as we discuss infra at 28,

they can use the threat of sanctions together with

economic-engagement strategies to achieve maxi-

mum effect. Courts can do neither. Precisely be-

cause sanctions fall squarely within the “foreign

affairs powers” of the political branches, Chamber of

Commerce of U.S. v. Whiting, 131 S. Ct. 1968, 1983

(2011), this Court has rejected attempts to use the

federal judiciary to interfere in decisions regarding

when to—and when not to—impose sanctions. See,

e.g., Regan v. Wald, 468 U.S. 222, 242-243 (1984); see

also Diggs v. Shultz, 470 F.2d 461, 465 (D.C. Cir.

1972). As the D.C. Circuit explained, the decision to

discontinue sanctions against a foreign country

“present[s] issues of political policy which courts do

not inquire into.” Diggs, 470 F.2d at 465.

Those precedents underscore the dangerous “prac-

tical consequences” of using the ATS to deter trans-

national business activities. Sosa, 542 U.S. at 732-

733. The Executive branch has long maintained that

“sanctions measures [must be] well conceived and

coordinated, so that the United States is speaking

with one voice,” lest an uncoordinated effort “put the

U.S. on the political defensive.” Crosby, 530 U.S. at

382 n.16 (quoting Testimony of Under Secretary of

State Eizenstat before the Trade Subcommittee of the

House Ways and Means Committee (Oct. 23, 1997)).

But ATS litigants regularly seek just such uncoordi-

nated, de facto sanctions regimes: Litigant after

11

litigant has sought to make his or her own foreign

policy by punishing corporations for investing in

troubled nations and thus deterring other corpora-

tions from similar investments. That is “a direct

challenge to U.S. foreign policy leadership.” E.

Schrage, Judging Corporate Accountability in the

Global Economy, 42 Colum. J. Transnat’] L. 153, 153

(2003). And even if that “direct challenge” does not

render a particular ATS case non-justiciable, cf. Doe

v. Exxon Mobil Corp., 654 F.3d 11, 88-89 (D.C. Cir.

2011) (Kavanaugh, J., dissenting), the fact that

conflicts arise again and again certainly amounts to

an adverse “practical consequence” that undermines

the coherence of U.S. foreign policy. Sosa, 542 U.S.

at 732. This consequence weighs against any finding

that the purported corporate-liability norm is “suffi-

ciently definite to support a cause of action.” Id.

3. The Solicitor General has decided to support the

Petitioners in this particular case. His brief, howev-

er, ignores the problems that an ad hoc sanctions

mechanism can create for United States foreign

policy—a notable omission, given Sosa’s command

that “practical consequences” are central to the ATS

analysis. 542 U.S. at 732. It is unclear whether the

Solicitor General sees no adverse practical conse-

quences or has not considered them. But in any

event, even if the Department of Justice were willing

to accept the foreign-policy consequences that ac-

company corporate ATS liability, that would not

mean Congress is similarly willing to do so. That is

an important distinction, given that Congress shares

in the constitutional authority to craft sanctions

regimes. See supra at 9. And that Congressional

prerogative takes on additional significance in light

of the fact that the Office of the Solicitor General has

12

long insisted, in this Court and others, that the

foreign-policy consequences of broad ATS liability

are not acceptable.

In Sosa, for example, the Solicitor General told this

Court that ATS suits “may frustrate if not displace

the efforts of the political branches to address inter-

national events or foreign policy issues by speaking

with one voice[.}” Br. for the United States as Re-

spondent Supporting Petitioner at 43, 542 U.S. 692

(2004) (No. 03-339), 2004 WL 182581. In Enahoro v.

Abubakar, 408 F.3d 877 (7th Cir. 2005), the Justice

Department emphasized that ATS litigation has

“serious consequences for both the development and

expression of the Nation’s foreign policy.” Br. for the

United States as Amicus Curiae at *1, 2004 WL

5706063. In Mujica v. Occidental Petroleum Corp.,

564 F.3d 1190 (9th Cir. 2009), the Department of

Justice explained that corporate ATS lawsuits

brought under an aiding-and-abetting theory “could

be the basis for a wide range of claims” that indirect-

ly, and inappropriately, seek “to challenge the law-

fulness of a foreign government's conduct.” Br. of the

United States as Amicus Curiae in Support of Affir-

mance, 2006 WL 6202351. And in Ntsebeza, the

Solicitor General told this Court that ATS

“{ljitigation such as this would also interfere with the

ability of the U.S. government to employ the full

range of foreign policy options when interacting with

regimes whose policies the United States would like

to influence.” Br. for the United States as Amicus

Curiae in Support of Petitioners at *21, 553 U‘S.

1028 (2008) (No. 07-919), 2008 WL 408389 (“Ntsebe-

za Brief’). He offered this example:

13

[I]n the 1980s, the United States supported

economic ties with black-owned companies and

urged companies to use their influence to

press for change away from apartheid, while

at the same time using limited sanctions to

encourage the South African government to

end apartheid. Such policies would be greatly

undermined if the corporations that invest or

operate in the foreign country are subjected to

lawsuits under the ATS as a consequence. [/d.

(emphasis added)].

Our point exactly. Corporate ATS liability has the

effect of empowering civil litigants—aliens suing in

U.S. courts—to curtail U.S. economic interactions

with foreign nations. The Solicitor General has long

recognized the potential for mischief that such a

species of liability invites. Under Sosa, and despite

the Solicitor General's new views, those factors

continue to militate against recognizing corporate

ATS liability.

6 The Solicitor General's brief in this case generally fails to

acknowledge the striking degree to which its current position is

at war with the one it took just a few years ago in Ntsebeza.

The Solicitor General at that time told this Court that the ATS

does not authorize aiding-and-abetting liability, id. at *8, and

cannot be applied extraterritorially. Jd. at *12. The Solicitor

General also cited with approval the district court’s conclusion

that “[iJn a world where many countries may fail considerably

short of ideal economic, political, and social conditions,” the

courts “must be extremely cautious in permitting suits * * *

based upon a corporation's doing business in countries with less

than stellar human rights recorda[.]” Jd. at *3. Each of those

positions counsels in favor of affirmance here.

14

Il. CORPORATE ATS LIABILITY HARMS

DEVELOPING COUNTRIES BY DETER-

RING CORPORATE INVESTMENT.

The long shadow of corporate ATS liability also has

a second adverse “practical consequence|]”: the

extraordinary expenses and risks associated with

such liability. These expenses and risks harm de-

fendant corporations regardless of whether those

corporations have done anything wrong. And those

harms, in turn, create important secondary effects:

They deter corporate investment in developing

countries, retarding those countries’ growth and

further undercutting executive branch policies that

encourage economic engagement abroad.

A. The Potential For ATS Liability Presents

Extraordinary Risks For Corporations

Considering Foreign Investment.

Petitioners downplay the extraordinary corporate

risks engendered by ATS litigation, suggesting in a

footnote that “a relatively small number of cases are

pending” and that they “constitute an insignificant

portion of the dockets of federal courts.” Pet. Br. 57

n.55, 60; see also Amicus Br. of Joseph Stiglitz 5.

Not so. Plaintiffs have filed more than 125 ATS

cases against corporate defendants in the past 15

years alone,’ dozens remain pending, and those suits

have sought as much as $400 billion in damages. J.

Auspitz, Jssues in Private ATS Litigation, 9 Bus. L.

Int'l] 218, 220 (2008). But beyond those absolute

values, petitioners ignore many other reasons why

ATS litigation “presents a danger of vexatiousness

different in degree and in kind from that which

7 Drimmer, 29 Berkeley J. Int'l L. at 460.

15

accompanies litigation in general.” Blue Chip

Stamps v. Manor Drug Stores, 421 U.S. 723, 739

(1975). That danger is especially significant here

given the need in the ATS context to examine the

“practical consequences” of adopting a plaintiffs

theory. Sosa, 542 U.S. at 732.

1. The mere filing of an ATS case can topple corpo-

rate stock values and debt ratings. See J. Kur-

lantzick, Taking Multinationals to Court: How the

Alien Tort Act Promotes Human Rights, 21 World

Poly. J. 60, 63 (2004). To be sure, other litigation

may carry some of that risk if a corporation faces an

extraordinarily lurid accusation or an unusually

sweeping class action. But here, of course, the Court

has required an examination of the practical conse-

quences of the rule plaintiffs seek. Moreover, the

burden is particularly pronounced in ATS cases for

several reasons. ATS cases tend to feature extreme

allegations—genocide, torture, slavery—as a matter

of course. Needless to say, those allegations can

inflict significant damage on a business's reputation,

regardless of whether the business has done any-

thing wrong. And courts have permitted ATS law-

suits based on vague allegations of wrongdoing and

have employed variable, unpredictable legal stand-

ards regarding third-party liability. See Chamber of

Commerce Br. as Amicus Curiae in Support of Peti-

tioners at *13-*17, Rio Tinto PLC v. Sarei, No. 11-

649 (9th Cir. Dec. 28, 2011), 2011 WL 6859447. That

uncertainty invites stigmatizing lawsuits that are

hard to dismiss even when the allegations are dubi-

ous at best.

ATS plaintiffs themselves understand quite well

that even vexatious lawsuits can taint corporations

doing business abroad, damage corporate identities,

16

and chill foreign investment. See C. Holzmeyer,

Human Rights in an Era of Neoliberal Globalization:

The Alien Tort Claims Act and Grassroots Mobiliza-

tion in Doe v. Unocal, 43 Law & Soc’y Rev. 271, 290-

91 (2009). Indeed, plaintiffs have exploited those

dynamics as part of their overal) litigation strategy.

To take just two examples of many: In the Doe case,

press releases and demonstrations just before Hal-

loween and Valentine’s Day urged parents and

children to refuse to purchase chocolate candy from

the defendant corporations because it was allegedly

the product of “child slavery’—with the pending ATS

action cited as support for that claim. See, e.g., D.

Orr, Slave Chocolate?, Forbes, Apr. 24, 2006;8 A.

Buffa, Chocolate’s Horror Show (Oct. 31, 2006).9 And

in a case against Coca-Cola based on the alleged

activities of its subsidiaries in Colombia, the plain-

tiffs and their lawyers launched protests at the

company’s shareholder meetings. See Drimmer, 29

Berkeley J. Int'l L. at 517. The news that the com-

pany was being accused of murder and torture

prompted some shareholders to quickly dump Coca-

Cola stock, even though the case ultimately was

dismissed. Kurlantzick, 21 World Poly. J. at 63-64;

see Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252

(11th Cir. 2009). That sort of reputational harm is

different in kind from the publicity accompanying a

run-of-the-mill commercial! or tort suit.

2. Because ATS claims typically relate to conduct

occurring in distant corners of the globe, the discov-

ery process can be unusually expensive and burden-

some. See G. Hufbauer & N. Mitrokostas, Jnterna-

8 Available at http://www.forbes.com/forbes/2006/0424/096. html.

® Available at http://www.tompaine.com/articles/2006/ 10/3 1/

chocolates_horror_show.php.

17

tional Implications of the Alien Tort Statute, 7 J. Int'l

Econ. L. 245, 253 (2004) (“International Implica-

tions’) (describing “massive costs” associated with

ATS lawsuits). As this Court has recognized, the

costs involved in complex civii litigation like ATS

cases give plaintiffs an “in terrorem increment of the

settlement value.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 559 (2007). The burdens can be greater

than usual in ATS litigation for at least two reasons.

First, “obtain[ing] discovery from foreign sources”

almost invariably is an “expensive, cumbersome, and

difficult” process—one that often renders the litiga-

tion as whole “prohibitively expensive and resource-

consuming.” M. Chalos, Successfully Suing Foreign

Manufacturers, Trial, 44-NOV Trial 32 (Nov. 2008).

Second, the usual difficulties of overseas discovery

are magnified in ATS cases. “Witnesses and docu-

ments are overseas, typically in remote locations and

developing countries.” Auspitz, 9 Bus. L. Int'l at 221.

“{SJuits often involve dozens of defendants, their

interactions with each other and government agen-

cies, claims going back dozens of years, documents in

foreign languages, and similar logistical hurdles.”

Id. Discovery is therefore “vastly expensive.” Jd.

Courts and commentators have recognized as much,

observing that discovery in ATS cases is “costly and

time-consuming,” A. Nichols, Note, Alien Tort Stat-

ute Accomplice Liability Cases: Should Courts Apply

the Plausibility Pleading Standard of Bell Atlantic

v. Twombly?, 76 Fordham L. Rev. 2177, 2208 (2008),

and imposes “financial hardships” and “significant

delays” on parties and courts alike. Turedi v. Coca

Cola Co., 460 F. Supp. 2d 507, 526 (S.D.N.Y. 2006),

aff'd, 343 F. App’x 623 (2d Cir. 2009); accord Mujica

v. Occidental Petroleum Corp., 381 F. Supp. 2d 1134,

18

1152 (C.D. Cal. 2005) (“significant cost and delays”

caused by need for translation of foreign documents).

A few examples illustrate the problem. Chiquita

Brands International, in defending against an ATS

suit, recovered over $8 million for defense costs from

just one of its five insurers. Chiquita Brands Int'l,

Inc., Quarterly Report (Form 10-Q), at 23 (Nov. 7,

2011). And in the Unocal ATS litigation, the compa-

ny’s legal bill ran to $15 million—and that case was

not even a class action. Auspitz, 9 Bus. L. Int’] at

221. As one commentator observed: “Where plain-

tiffs and defendants are more numerous than in

Unocal, and the challenged conduct more complex,

the costs of litigation might make the $15 million

Unocal reportedly spent look like a bargain.” Id.

These sorts of expenses can accompany ATS litiga-

tion even in developed countries where formal meth-

ods of obtaining discovery for use in the United

States—for example, the Hague Convention proce-

dures—are available. See P.J. Youngblood & J.J.

Welsh, Obtaining Evidence Abroad: A Model for

Defining & Resolving the Choice of Law Between the

Federal Rules of Civil Procedure & the Hague Con-

vention, 10 U. Pa. J. Int'l Bus. L. 1, 46-47 (1988) (cost

of complying with Hague Convention formalities is

“exceedingly high”). And with respect to undevel-

oped countries—from where virtually all ATS cases

take root—those nations are often not signatories to

the conventions. Parties accordingly are stuck with

relying on letters of request from U.S. courts to

foreign ones—requests that often go unheeded due to

unequipped, or even corrupt, judiciaries. See L.J.

Dhooge, A Close Shave in Burma, 24 N.C. J. Int'l L.

& Com. Reg. 1, 53-54 (1998) (discussing difficulties in

obtaining evidence from Burma in ATS cases); U-S.

19

Dep't of State, Preparation of Letters Rogatory (warn-

ing that execution of a letter of request may take “a

year or more worldwide”).'° That means “delays,

increased costs, a narrower scope of discovery, and

loss of control of the process, all of which may prove

prejudicial to [djefendants.” Dhooge, 24 N.C. J. Int'l

L. & Com. Reg. at 54. Meanwhile, the specter of

large amounts of monetary liability (and negative

publicity) will hang over a company for years.

3. ATS cases also inevitably take years to litigate,

even just to the point of a ruling on dismissal mo-

tions. One reason, of course, is that litigation at the

motion-to-dismiss stage often requires the court and

the parties to explore complex issues of international

law. And ATS plaintiffs have been creative in identi-

fying novel “norms” for the courts to consider.

“(Rjecognizing the elasticity of the term ‘law of

nations,” plaintiffs “have brought suits alleging that

the following acts violate the ‘law of nations’: * * *

environmental harms; violations of cultural, social,

and political rights; breach of a duty to provide the

best proven diagnostic and therapeutic treatment;

and breach of a duty to treat with dignity.” Interna-

tional Implications, 7 J. Int’] Econ. L. at 249. No

doubt many of these claims are meritless. But they

may not be “ ‘frivolous’ in the legal sense because of

the expansive reading courts have given the ATS.”

Id. They therefore drag on, with the parties conduct-

ing preliminary discovery and enlisting the assis-

tance of experts and amici even before the case has

survived a motion to dismiss.

10 Available at http://travel.state.gov/law/judicial/judicial_683.

html.

20

The result is massive briefing and extensive delays.

In Bowoto v. Chevron Corp., 621 F.3d 1116 (9th Cir.

2010), for example, a jury verdict came after 10 years

of litigation. And in the Doe case involving Céte

d'Ivoire chocolate, it took five-plus years and multi-

ple rounds of briefing before the district court even

ruled on the motion to dismiss. See 748 F. Supp. 2d

1063. That decision is now up on appeal—an appeal

that has already drawn a passel of amicus briefs and

that could take years to resolve in its own right. As

one commentator has put it: “Multinational corpora-

tions will spend millions of dollars moving these

cases through motions and procedures and changing

forums[.]” R. O'Gara, Procedural Dismissals Under

the Alien Tori Statute, 52 Ariz. L. Rev. 797, 820-621

(2010).

4. All of these factors—the stigma of human-rights

allegations, the unique burdens of overseas discov-

ery, and the prospect of lengthy litigation—make

ATS suits particularly effective vehicles to coerce

settlements from corporate “deep pockets,” even in

meritless actions. See Holzmeyer, 43 Law & Soc’y

Rev. at 291; Khulumani, 504 F.3d at 295 (Korman,

J., dissenting) (characterizing ATS litigation in that

case as “a vehicle to coerce a settlement”).

As this Court has recognized, “even a complaint

which by objective standards may have very little

chance of success at trial has a settlement value * * *

out of any proportion to its prospect of success at

trial so long as [the plaintiff] may prevent the suit

from being resolved against him by dismissal or

summary judgment.” Blue Chip Stamps, 421 U.S. at

740. Indeed, “cost and delay, or threats of cost and

delay, can themselves force parties to settle underly-

21

ing disputes.” Intel Corp. v. Advanced Micro Devices,

Inc., 542 U.S. 241, 268 (2004) (Breyer, J., dissenting).

Given the stigma that can attach to even a baseless

ATS complaint, see supra at 15-16, it is all the more

likely that a business might make the rational—but

costly—decision to settle a claim just to avoid years

of expense and burden. Myriad members of the

Chamber have had the misfortune of being target-

ed—often repeatedly—by such lawsuits. Faced with

the prospect of a “decade or more litigating, exten-

sive world-wide discovery and seemingly endless

procedural motions, coupled with the likely prospect

of negative and graphic publicity campaigns,” some

companies choose to settle even dubious ATS claims.

J. Cowman, The Alien Tort Statute—Corporate

Social Responsibility Takes On A New Meaning,

Metro Corp. Couns., July 1, 2009.!!

In the last few years alone, several corporate ATS

cases have settled for well over $10 million. Unocal,

for example, reportedly settled its ATS case for $30

million. See P. Magnusson, A Milestone for Human

Rights, Bus. Wk., Jan. 24, 2005.'2 Shell settled an

ATS case against it for $15.5 million. See J.

Mouawad, Shell to Pay $15.5 Million to Settle Nige-

rian Case, N.Y. Times, June 9, 2009.'3 And various

American clothing manufacturers settled an ATS

case involving labor conditions in Saipan for $20

\!' Available at http://www.metrocorpcounsel.com/articles/

11491/alien-tort-statute-corporate-social-responsibility-takes-

new-meaning.

12 Available at http://www.businessweek.com/magazine/

content/05_04/b3917113_mz017.htm.

'3 Available at http://www.nytimes.com/2009/06/09/business/

global/09shell. html.

22

million. J. Strasburg, Saipan Lawsuit Terms OK'd:

Garment Workers to Get $20 Million, S.F. Chron.,

Apr. 25, 2003, at Bl.'4 These examples, of course,

are only the settlements that have managed to

become public. Yet they suggest a cause of action

sufficiently vague, broad, and burdensome that ATS

plaintiffs are able to force corporations to pay mil-

lions of dollars to short-circuit cases rather than

launch long fights to seek vindication. These risks

and expenses to U.S. businesses—and the jobs and

communities they support—are alone a sufficient

“practical consequence[]” to reject expanded ATS

liability. Sosa, 542 U.S. at 732.

B. The Risks Of Being Sued Under The ATS

Can Chill Investment And Damage Devel-

oping Countries.

For the reasons set forth above, some U.S. corpora-

tions faced with the pall of ATS liability will with-

draw from developing markets. And that will inevi-

tably disrupt the U.S. economy in ways Congress

never could have envisioned or intended. In the

global marketplace, developing countries supply an

important source of raw materials and eventually

serve as export markets for U.S. business. See U.S.

Chamber of Commerce, Africa Business Initiative, A

Conversation Behind Closed Doors: Inside the Board-

room: How Corporate America Really Views Africa 5

(May 2009).'5 Without these sources of raw materi-

als, U.S. businesses will find their supply chains

'4 Avesdable at http://articles.sfgate.com/2003-04-25/business/

17486250_1 san-francisco-s-levi-strauss-saipan-rubin-factory-

workers.

'S Avatlable at http://www.uschamber.com/sites/default/files/

internationaV/africa/files/abi_ceo_suvey.pdf.

23

snarled, their costs increased, and their ability to

employ American workers jeopardized.

But corporate withdrawal from developing markets

also produces a second, closely related adverse

effect: The loss of direct foreign investment can

severely harm developing nations themselves. Many

rely on foreign investment to provide the income and

political stability they need to develop democratic

institutions and economic self-sufficiency; without

that investment, their progress may be stopped or

reversed. That is just the sort of unintended cross-

border effect that led this Court in Sosa to counsel

“caution,” “restraint,” and “vigilance” when asked to

expand the ATS’s scope. 542 U.S. at 726-729.

1. It is no exaggeration to say that any corporation

that sets foot in a developing country—and some

that do not—risk being sued under the ATS. “Since

human rights, political and economic freedoms, and

absence of corruption are highly correlated with per

capita income, it is not surprising that target coun-

tries [for ATS litigation] are by and large poor coun-

tries.” G. Hufbauer & N. Mitrokostas, Awakening

Monster: The Alien Tort Statute of 1789, at 15-16

(2003) (“Hufbauer’). Given the theories of liability

advanced by ATS plaintiffs—including theories in

which business presence, with little more, suffices to

trigger multi-million-dollar claims—any corporation

that actually sets up operations in such a country

surely is at risk. See id.

But the risk runs deeper still. That is because “all

companies whose supply chains or distribution

markets reach into developing countries are suspect”

under plaintiffs’ ATS theories. Schrage, 42 Colum. J.

Transnatl L. at 159. Foreign direct investment by

24

corporations likewise can trigger ATS liability under

these theories. And “private lenders, particularly

international banks, are surely at risk,” given that

they could be accused of lending to foreign business-

es or regimes with knowledge that those regimes

engage in some activity that can be packaged and

branded as a violation of international law. Jd. at 17.

As one study noted: “The total public debt of target

countries is now $1,229 billion; more than half

represents credit extended by private creditors. It is

no exaggeration to say that every major internation-

al bank is exposed to ATS liability.” Jd.

Just recently, the Solicitor General warned that an

ATS regime featuring corporate and aiding-and-

abetting liability would “have a deterrent effect on

the free flow of trade and investment, because it

would create uncertainty for those operating in

countries where abuses might occur.” Ntsebeza Brief,

2008 WL 408389, at *20. That remains true today.

And the effect of that deterrent is clear enough: At

the margins, it will dissuade corporations from

“investing in countries with a poor human rights

record.” D. Diskin, Note, The Historical & Modern

Foundations for Aiding & Abetting Liability Under

the Alien Tort Statute, 47 Ariz. L. Rev. 805, 809

(2005). Indeed, “[e]ven the unstated threat of future

ATS suits might dissuade some corporations from

doing business in ATS magnet countries,” Interna-

tional Implications, 7 J. Int'l] Econ. L. at 249-250,

while actual adverse ATS decisions would likely

“prompt firms to disinvest en masse.” MHufbauer,

supra, at 40.16

1% The amicus brief of Joseph Stiglitz calls these concerns “little

more than hyperbole,” Br. 5, but the arguments it offers to

25

2. Corporate ATS liability does not simply deal a

severe blow to businesses expanding into new mar-

kets; it also deals a severe blow to the target country

itself. “Since the Second World War, trade has been

an engine of world growth.” Jd. at 42. And trade

between the United States and developing nations,

and U.S. investment in those nations, is a major

factor in facilitating the economic growth of develop-

ing nations. See U.S.-Africa Trade Relations: Creat-

ing a Platform for Economic Growth: Joint Hearing

Before the H. Comm. on Energy and Commerce and

the H. Comm. on Foreign Affairs, 111th Cong. (2009)

(statement of Florizelle B. Liser, Assistant U-S.

Trade Representative for Africa). That growth

promotes the development of stable political institu-

tions. And stable political institutions, in turn,

create the conditions for further foreign investment.

See Nat'l Security Council, The National Security

Strategy of the United States of America 17 (2002).

ATS suits against corporations can destroy that

cycle. Such suits, and the threat of them, tend to

support that assertion are insubstantial. Professor Stiglitz

argues that “the risk of liability” is “just one among many

considerations that drive investment decisions,” id., but that

does not answer our point—that at the margins, firms that

might otherwise have invested in a country will be dissuaded by

potential ATS claims. And he argues that “although

corporations have faced the specter of ATS liability for more

than a decade, there is little empirical evidence that it has had

any impact on foreign direct investment.” Jd. at 5-6. But that

ignores the fact that the frequency of ATS suits has grown

exponentially in recent years, see supra at 5, and no doubt

would explode if this Court were to confirm that corporate

hability is available. That adverse effects have thus far been

difficult to measure does not mean they would remain so in a

world where the risk of ATS liability is impossible to ignore.

26

curtail trade and investment for the reasons just

discussed. See Letter from William H. Taft, Legal

Adviser, U.S. Dep't of State, to Daniel Meron, Princi-

pal Deputy Assistant Attorney General, U.S. Dep't of

Justice (Dec. 3, 2004) (corporate ATS lawsuit in

Colombia could “deter[] present and future U/S.

investment in Colombia” and “damage the stability

of Colombia”).'?7 But they can also mean “access

denied to international credit markets” because

“{cJountries on the losing side of ATS cases will find

that bank credit and bond placements are more

difficult.” Hufbauer, supra, at 43. ATS suits, in

short, “will damage target countries[.}” Jd. at 42. As

the Department of Justice has explained, that disin-

centive “adversely affect[s] U.S. economic interests

as well as economic development in poor countries.”

Br. for the United States as Amicus Curiae Support-

ing Appellees at *9-*10, Balintulo v. Barclay Nat'l

Bank Ltd., No. 09-2778-cv (2d Cir. Nov. 30, 2009),

2009 WL 7768609. The consequences are stark. As

the Solicitor General emphasized in the past, deter-

ring foreign investment due to ATS litigation “ ‘could

have significant, if not disastrous, effects on interna-

tional commerce.” Ntsebeza Brief, 2008 WL 408389

at *3 (quoting district court opinion).

Worst of all, after companies abandon developing

countries in response to ATS risks, the human-rights

situation in the country is unlikely to improve.

Talisman Energy's withdrawal from the Sudan in

response to ATS pressure is a chilling example.

While Talisman was in the country, it hired Price-

Waterhouse Coopers to help verify compliance with

‘7 Available at http://www.state.gov/s/I/2004/78089.htm. This

letter was filed in the docket in Mujica, 381 F. Supp. 2d 1164.

27

its voluntary adoption of the International Code of

Ethics for Canadian Businesses. S.J. Korbin, Oil

and Politics: Talisman Energy and Sudan, 36 N.Y.U.

J. Intl L. & Pol. 425, 444 (2004). It also “engaged in

extensive community development efforts, including

building hospitals, clinics, schools and wells” where

it operated. Jd. Yet in the wake of continuing pres-

sure—including an ATS suit—it finally sold its

assets and left Sudan. /d. at 426. For the activists

who orchestrated a massive campaign against Tal-

isman, this should have been a tremendous victory.

The reality was much bleaker. The vacuum pro-

duced by Talisman’s departure has been filled by

Chinese companies that take an official policy of

“noninterference in domestic affairs”—a polite way of

saying China will not interfere with local regimes’

oppression of their populations. See S. Hanson,

Council on Foreign Relations, Backgrounder: China,

Africa, and Oil (Jun. 6, 2008);!8 see also Council on

Foreign Relations, More Than Humanitarianism: A

Strategic U.S. Approach Towards Africa 43 (2006)

(describing how “China * * * quickly filled the gap”

after Talisman and other Western companies de-

parted the Sudan).

3. The deterrent effect ATS litigation has on for-

eign investment also underscores a second and

related way in which corporate ATS liability imping-

es on U.S. foreign policy: It impedes the political

branches’ informed choice to encourage investment

in certain strategically important nations.

The business community plays a central role in the

effective execution of U.S. foreign policy. As this

Court has explained, the President's power to per-

18 Available at http://www.cfr.org/china/china-africa-oil/p9557.

28

suade other nations rests on his capacity “to bargain

for the benefits of access to the entire national econ-

omy.” Crosby, 530 U.S. at 381. When the political

branches decide to promote trade with another

nation, American businesses can and frequently do

export their goods. And when the political branches

decide to permit investment in a country with a

problematic human rights record, as a means of

advancing U.S. interests or helping that country

along the road toward stability, American businesses

can and frequently do make the investment.

Petitioners’ theories of corporate ATS liability fly in

the face of that constructive-engagement strategy. If

their theories were correct, then private plaintiffs—

alien plaintiffs who may have no connection at all to

the United States—could pull the rug out from under

the United States’ efforts to bolster trade with care-

fully selected foreign nations. As the Solicitor Gen-

eral recently told this Court: “[I]n certain circum-

stances, the U.S. government may determine that

*** limited commercial interaction is desirable in

encouraging reform [in foreign nations] and pursuing

other policy objectives. * * * Such policies would be

greatly undermined if the corporations that invest or

operate in the foreign country are subjected to law-

suits under the ATS as a consequence.” WNtsebeza

Brief, 2008 WL 408389, at *21.

The Solicitor General's point underscores the ab-

surdity of permitting ATS claims in this circum-

stance: How can it be that an American corporation

is subjected to suit for doing what the political

branches asked it to do? And yet that is exactly what

has happened in the past. For example, the South

African ATS lawsuits discussed above, see supra at 7,

29

named as defendants companies that responded to

President Reagan’s call for constructive engagement

to help end apartheid in that country. And the same

dynamic threatens to rear its head again in the

future. If ATS corporate liability is endorsed by this

Court, efforts ranging from rebuilding in Afghani-

stan to trade with China would be subjected to

second-guessing by alien plaintiffs dissatisfied with

the pace of change. See U.S. Dep’t of Defense Task

Force for Business and Stability Operations, Mineral

Resource Team 2010 Activities Summary 3 (Jan. 29,

2011) (calling on American businesses to assist in

resource extraction efforts in Afghanistan to reinvig-

orate its economy). !®

For this reason, too, the threat of corporate ATS

liability has “potential implications for the foreign

relations of the United States” that “should make

courts particularly wary” of expanding the ATS

beyond the limits of well-established international

law. Sosa, 532 U.S. at 727.

Ill. CORPORATE ATS LIABILITY HARMS

FOREIGN COMPANIES AND THREATENS

FOREIGN INVESTMENT IN THE UNITED

STATES.

For all of these reasons, corporate ATS liability can

damage corporate reputations and financial health,

torpedo U.S. businesses’ foreign operations, and

damage the economies of developing countries. But

it also has another effect closer to home: It discour-

ages foreign investment in the United States, poten-

tially costing the domestic economy jobs.

18 Available at http://www.dtic. mil/cgi-bin/GetTRDoc?AD=ada5

45347 pdf&Location=U2&doc=GetTRDoc.pdf.

30

Foreign investment is critical to the long-term

health of the U.S. economy. See U.S. Dep’t of Com-

merce, The U.S. Litigation Environment and Foreign

Direct Investment: Supporting U.S. Competitiveness

by Reducing Legal Costs and Uncertainty 2 (2008).

Mindful of its importance, this Court has routinely

rejected doctrines discouraging such investment.

See, e.g., Goodyear Dunlop Tires Operations, S.A.

v. Brown, 131 S. Ct. 2846, 2855-56 (2011); Ston-

eridge Inv. Partners LLC v. Scientific-Atlanta, Inc.,

552 U.S. 148, 163-164 (2008). In Stoneridge, for

example, the Court concluded that the “practical

consequences” of expanding securities liability “pro-

vide[d] a further reason to reject petitioner's ap-

proach.” 552 U.S. at 163-164. Specifically,

“fo]verseas firms with no other exposure to our

securities laws could be deterred from doing business

here” if securities liability were broadened in the way

the petitioner suggested, and that deterrent “in turn,

may raise the cost of being a publicly traded compa-

ny under our law and shift securities offerings away

from domestic capital markets.” /d. at 164.

Corporate ATS liability has the same discouraging

effect. Foreign companies often invest in the United

States by establishing a business presence here. But

that step may subject a company, and its assets, to

the jurisdiction of U.S courts—including to ATS

claims arising out of conduct occurring elsewhere.

See Helicopteros Nacionales de Colombia, S.A.

v. Hall, 466 U.S. 408, 415 (1984) (“continuous and

systematic” general business contacts can suffice to

subject foreign companies to the general jurisdiction

of U.S. courts). The most obvious way for those

companies to avoid ATS litigation is to invest their

resources outside the United States. A letter by the

31

former Secretary General of the International

Chamber of Commerce made precisely this point:

“[T)he practice of suing EU companies in the US for

alleged events occurring in third countries could

have the effect of reducing investment by EU compa-

nies in the United States * * * if one of the conse-

quences would be exposure to the Alien Tort Stat-

ute.” Letter from Maria Livanos Cattaui to Roman

Prodi, President, European Commission (Oct. 22,

2003).7°

Of course, many foreign companies will decide that

access to the U.S. market outweighs the risk of ATS

litigation. Those foreign corporations that decide to

forge ahead will face all the risks of potential ATS

liability recounted above, see supra at 15-22, and

their decisions on where in the world to invest will be

affected not only by their home country’s foreign

policy directives but also by private ATS plaintiffs

who sue in U.S. courts. But not all foreign compa-

nies will accept that risk; “[a]t the margin, some * * *

may simply decide to avoid the United States in

order to avoid ATS liability.” Hufbauer, supra, at 42.

“That decision will deprive the US economy of the

benefits that come from inward foreign investment.”

Id.

20 Available at http://www.iccwbo.org/policy/environment/

icccbhc/index. html.

32

CONCLUSION

Even if a norm of corporate liability could be teased

out of the law of nations—which it cannot—

numerous “practical consequences” would counsel

against incorporating that norm through the ATS.

This Court should affirm the decision below.

Respectfully submitted,

ROBIN S. CONRAD NEAL KUMAR KATYAL’

KATE COMERFORD TODD CHRISTOPHER T. HANDMAN

SHELDON GILBERT DOMINIC F. PERELLA

NATIONAL CHAMBER SEAN MAROTTA

LITIGATION CENTER, INC. HOGAN LOVELLS US LLP

1615 H Street, N.W. 555 Thirteenth Street, N.W.

Washington, D.C. 20062 Washington, D.C. 20004

(202) 463-5337 (202) 637-5528

neal.katyal@hoganlovells.com

Counsel for Amicus Curiae

“Counsel of Record

February 3, 2012