New Report Describes the Rising Tide of Global Alien Tort Cases

Thursday, 1 February 2007
    As the era of asbestos and tobacco litigation bonanzas winds down,America’s most aggressive contingency fee law firms have in place a fee structure in search of an investment strategy.  Faced with shrinking opportunities in the increasingly competitive domestic class action arena, these firms have gone global, lodging massive foreign contingency fee class actions in U.S. courts.

    The trial lawyers have seized upon the 200-year-old Alien Tort Statute (“ATS”) as a novel source of mass tort liability.  The class actions they have begun to file surpass in size the asbestos cases that swamped U.S. courts, bankrupting over 70 companies. 
    ATS classes routinely consist of tens or hundreds of thousands of “John Doe” plaintiffs who reside in remote locations as distant as Sudan and Pakistan.  Defendant class sizes have grown to 500 or more deep-pocketed individuals or U.S. and foreign companies.  Purported damages in a single suit alone total $400 billion.  It will be impossible for U.S. courts to police these monster ATS class actions if they are allowed to proliferate. 
    In 2004, in Sosa v. Alvarez-Machain, the Supreme Court attempted to impose a “high bar” against innovative ATS lawsuits.  Because they involve wholly-foreign events, the suits interfere excessively with the conduct of U.S. foreign relations.  A few recent examples illustrate how ATS suits can interfere with U.S. foreign policy in regions vital to U.S. national security:
•    When the Israeli Defense Forces used heavy equipment to demolish buildings in the Palestinian territory, plaintiffs sought damages from the manufacturer of the equipment, Caterpillar, along with an order to stop supplying products to the Israeli armed forces.  A federal court dismissed the ATS case because it sought to challenge the acts of an existing government in a region “where diplomacy is delicate and U.S. interests are great.”
•    The D.C. Circuit dismissed an ATS case seeking reparations from Japan for crimes committed during World War II because the suit interfered with state-to-state negotiations and threatened to “disrupt Japan’s delicate relations with China and Korea , thereby creating serious implications for stability in the region.”
•    Another court dismissed an intrusive ATS case against companies doing business in Colombia because “ Colombia is one of the United States ’ closest allies in this hemisphere, and our partner in the vital struggle against terrorism and narcotics trafficking.”
     Of late, U.S. trial lawyers have filed massive ATS cases against classes of unnamed defendants in Saudi Arabia, the United Arab Emirates, Qatar and other Arab countries – predicated, no doubt, on the Willie Sutton theory.  Unless dismissed, a parade of massive contingency fee class actions filed by U.S. trial lawyers will threaten the conduct of U.S. foreign policy involving influential moderate Arab states in the volatile Middle East, where U.S. national security interests are paramount, and careful diplomacy is required. 
    Most lower courts have adhered to the Supreme Court’s instruction in Sosa that they consider innovative ATS lawsuits with “great caution,” and that they conduct “vigilant doorkeeping” to dismiss extraterritorial ATS suits that interfere with U.S. foreign relations.  The Bush Administration has promoted strict conformance with Sosa by filing progressively stronger “Statements of Interest” in cases that affect U.S. foreign policy.
    But, as a few courts have issued decisions inconsistent with Sosa, trial lawyers have filed an array of imaginative stalking horse ATS class actions.  They believe that, if they can weather dismissal motions in a few of these cases, they will convert the one-sentence 200-year old ATS into a source of modern day mass tort liability.
    When confronted with the objection that their ATS lawsuits amount to the privatization of U.S. foreign policy, the trial lawyers scoff:
“If we left justice to the U.S. Government, when it has so many commercial and other interests…what action would be taken?”
And, as for Sosa:
“Sosa is the absolute beginning of the fight over the Alien Tort Statute…We’re going to fight for our lives.”
    Post-Sosa global ATS class actions are the leading edge of a dangerous megatrend which, if it reaches critical proportions, will subject the U.S. court system to a new wave of abusive lawsuits; will subvert the conduct of U.S. foreign policy in vital regions of the world; will undermine U.S. national security will interfere with our international commerce and will saddle U.S. and foreign corporations with exponential financial liability never contemplated by Congress. 
    In Sosa, the Supreme Court did not foreclose ATS actions altogether.  Instead the Court left the “door ajar,” but subject to “vigilant door keeping” by lower courts.  Now, with the wolf at the door, the trial bar is beginning to bombard district courts with global ATS class actions, and district courts’ dismissals of ATS cases are ripening for appellate reviews  The ATS class actions are entering a dispositive phase in which it will become clear whether or not lower courts will conduct the vigilant doorkeeping expected by the Supreme Court.
    Recently, a divided Ninth Circuit appellate panel rendered a decision that attempts to sidestep Sosa and revert to pre-Sosa ATS judicial expansionism.  The D.C. Circuit has applied Sosa more fastidiously.  The Supreme Court invited Congress to weigh in and define the scope of the ATS, but that is very unlikely.  The principal line of defense against expansion of the ATS is rigorous involvement by the Executive Branch in cases that affect foreign policy and faithful application of the Sosa restrictions by lower courts.
    The National Legal Center for the Public Interest recently published a paper, authored by Arthur Fergenson and John Merrigan, which describes the rising tide of global ATS class actions and trends in recent court decisions, then offers practical advice concerning the issuance of SOIs by the Executive Branch.  The paper can be viewed at the following link,