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Diplomacy in Action

54. Department of State Legal Adviser address regarding the exercise of extraterritorial jurisdiction by domestic courts, primarily as practiced by the U.S.


Union des Industries de la Communauté européenne

“The Increasing Burden of the U.S. Legal System for European Companies —

From Sarbanes‑Oxley to Extraterritorial Court Rulings”

Brussels, Thursday, June 23, 2005, 12:00 pm

Extraterritoriality and the Rule of Law


Thank you for that kind introduction. It is a privilege to be here and I appreciate the opportunity to address UNICE and to see and meet so many European colleagues. Thank you also to the conference organizers and sponsors for making this event possible. This conference provides an excellent opportunity for us to share our views about several important international legal matters, including the exercise of extraterritorial jurisdiction by domestic courts, the subject of my brief remarks this afternoon.

The exercise of extraterritorial jurisdiction by domestic courts is an area of great practical importance to the business community in the United States as well as here in Europe, and I know that some of you in the audience have had experience with civil and commercial litigation in U.S. courts. Last year alone, the U.S. Supreme Court issued three important decisions with implications for the exercise of extraterritorial jurisdiction — one in the area of antitrust, with which Mr. Hein is intimately familiar, one in the area of discovery, and the third dealing with the Alien Tort Statute.

It’s no secret that the United States is a relatively litigious society, and that we have long had a tendency to debate and resolve issues of public policy in our courts. In fact, de Tocqueville noted long ago that “There is hardly a political question in the United States that does not sooner or later turn into a judicial one.”

I would like to assure you that despite our heavy reliance on U.S. court processes, minimizing extraterritorial frictions and increasing cooperation among national legal systems in resolving transnational disputes is a matter of great importance to many senior U.S. government officials, including my principal client, Secretary Rice. Secretary Rice has repeated many times her commitment to the rule of law internationally and the subject of extraterritoriality is most fundamentally a rule of law question. I am therefore particularly pleased to be able to share my thoughts with you today.


I would like to focus this afternoon on two specific topics concerning extraterritoriality, and then, if time permits, to take a few questions. First, I’d like to discuss some recent developments relating to our so-called Alien Tort Statute, which is the legal basis for a number of cases that may be of particular concern to many of you. Second, I’d like to say a few words about the particular problem of lawsuits against visiting officials of foreign governments. Before I address those two subjects, however, I want to make just a few comments about extraterritoriality generally.

Extraterritoriality and Conflicts of Jurisdiction Generally

We in this Administration, and particularly those of us in the State Department and the Office of the Legal Adviser, are very much aware of, and sensitive to, the concerns which have been expressed by foreign businesses and governments about what is sometimes perceived to be the unreasonable exercise of jurisdiction by U.S. courts over people, entities and activities in other countries.

Even if we come from different legal traditions — and here I am of course referring to the civil law tradition here on the Continent and the common law tradition in the United States and the United Kingdom — I think we can all agree that when you live, work or do business in a particular country, even if only temporarily, you must abide by the relevant legal rules of that country. Of course, globalization, the increasingly transnational nature of business and commerce, and the new digitally inter-connected information environment all ensure that activities are more and more likely to have impacts across national boundaries. And that’s where the legal difficulties begin. These new realities strain the ability of the law to protect our citizens, regulate our economies, and respond effectively to international crime, including terrorism. Internationally, there is naturally a rise in the number of conflicts of jurisdiction and controversies about jurisdiction. Business – which craves predictability – can be adversely affected.

Now, in the U.S. legal system, our law recognizes two separate concepts of jurisdiction, both relevant to the issue of extraterritoriality. One has to do with jurisdiction over the person, the other with jurisdiction over the subject matter of the issue before the court. As you know, our ideas of subject matter jurisdiction sometimes extend to activities which take place overseas but which have an actual or even intended impact or effect on our markets or interests. While jurisdiction over the person depends in most cases on the actual presence of the individual — even his or her temporary or transient presence in the United States — in some instances it can extend to “constructive” presence, for example through business or other activities.

Extraterritoriality is by no means unique to U.S. law — many Continental systems, and the EU itself, have adopted extraterritoriality. And our notions of extraterritoriality are by no means unlimited. Constitutional concepts of due process and our appreciation of reasonableness and comity under international law and practice are frequently invoked by courts as limiting factors on the exercise of extraterritoriality. Finally, unlike many civil law systems, U.S. law tends to disfavor jurisdiction based solely on nationality, so that it often does not extend to the activities of U.S. citizens and companies overseas.

On both sides of the Atlantic, though, we share a common desire for cooperation between our different systems so that commercial parties can expect the efficient and effective resolution of disputes in the most logical and appropriate forum. We know that business parties value their ability to choose the forum in which disputes may be resolved, whether that is through arbitration or through litigation in a specified domestic court. We know that they prize certainty and predictability in the process. This, in fact, is why our lawyers and experts are working as we speak in The Hague to achieve a global convention on the enforcement of choice of court agreements and related civil judgments. We hope that you will support these negotiations and other efforts to enhance international judicial cooperation and the development and harmonization of private law. Through creative approaches, we can reduce pressures to exercise overlapping and even conflicting jurisdiction over the same events.

Alien Tort Statute

Let me turn now to the Alien Tort Statute, a statute whose jurisdictional reach I know has become increasingly a concern for European companies in the last several years.

The statute itself is deceptively short and simple. It simply says that our federal district courts have “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.”

The statute was originally enacted in 1789 and was essentially dormant until 1980. In that year, our Court of Appeals for the Second Circuit in New York gave the statute new life in a famous case, Filartiga v. Pena-Irala. The Filartiga case was brought by Paraguayan nationals against a former Paraguayan official found in the U.S., who was allegedly responsible for the torture and death of their son in Paraguay. The narrow legal issue in that case was whether torture by a government of its own citizens could properly be considered a violation of the law of nations. The court said that it could, given the development of modern human rights law.

Although that specific holding might seem unremarkable today, it was revolutionary in its time, and as a practical matter the court’s decision in Filartiga opened the door for victims of human rights abuses around the world to bring their claims in U.S. courts. Since 1980, a substantial number of cases have been filed under this statute, in which foreign victims sue current or former officials of foreign governments for abuses which allegedly took place in their home countries. It is my impression that no other country has a law quite like the ATS, which potentially provides civil jurisdiction in U.S. courts over human rights abuses occurring literally anywhere in the world, with little connection to the United States, other than the presence of one or both parties.

It is easy to understand why plaintiffs from other countries would be eager to take advantage of such access to U.S. courts. The abuses about which they complain are frequently appalling. Moreover, in many situations, there is no practical possibility for the victims of such abuses to seek, much less receive, a fair hearing or any potential recovery in their domestic courts. The presence in the U.S. of their alleged abuser, even for a temporary period, provides an opportunity to seek a measure of justice in U.S. courts. And, as you know, damage awards by U.S. courts tend to be considerably larger than in many other legal systems.

As a matter of long-standing policy, the U.S. government consistently deplores human rights abuses wherever they occur and has strongly opposed the conduct and policies complained of in the ATS cases. We, therefore, can sympathize with those who have turned to our legal system for relief. However, one may legitimately ask whether the U.S. Congress in 1789 that enacted the ATS seriously believed that abuses perpetrated by a sovereign government against its own citizens within its own territory ought to be litigated in U.S. courts. The question can seem especially significant when no apparent connection exists between the United States and the events and parties in question.

The efficacy of these suits is also open to question, because plaintiffs rarely succeed in actually recovering any damages since defendants tend to default and, in any event, have no assets in the U.S. against which judgments can be executed. Moreover, such lawsuits can, and sometimes do, generate serious friction between the United States and other governments, for example when foreign governments complain that issues submitted to our courts have already been resolved by their own internal processes. While such friction cannot always be avoided — and certainly not when vital interests are at stake — jurisdictional conflicts can in some circumstances hinder broader U.S. government efforts to persuade foreign governments to modify their behavior in a variety of areas that are both related and unrelated to the subject matter of the particular lawsuit.

Finally, on a more technical legal note, the way the ATS is written so broadly — by referring to “torts in violation of the law of nations” — has left open which specific types of abuses can form the basis of litigation in our courts. As you might expect, plaintiffs have moved well beyond instances of “torture” and “extrajudicial killing” to claim damages for a wide variety of abuses, from interference with labor rights and religious freedom to racial discrimination and damage to the environment.

For these reasons, and the specific history of the statute, the Bush Administration has urged the courts to adopt a narrow interpretation of the ATS. Specifically, we have argued that the courts should be very hesitant to apply their federal common law powers to expand the kinds of cases that can be brought as “torts in violation of the law of nations” — that is the function of the legislature, not the courts. We have also argued that the focus of the ATS should be on cases arising in the United States, especially in light of the potential for creating disputes with foreign nations when the ATS is applied extraterritorially.

A year ago, our Supreme Court addressed the Alien Tort Statute for the first time in a case entitled Sosa v. Alvarez-Machain. In its decision, the Court did in fact adopt a restrictive view of the statute in terms of the particular kinds of cases that can be brought as “torts under the law of nations.” The Court agreed with the Bush Administration’s position that the ATS is an essentially jurisdictional statute and does not itself establish a cause of action. It read the statute to permit federal courts to hear a very limited class of federal common law claims of aliens alleging violations of the law of nations. Such claims must “rest on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th-century paradigms,” that were actionable at the time the statute was enacted in 1789, that is, violations of safe conducts, infringement of the rights of ambassadors, and piracy.

The Supreme Court also said that courts should exercise “an element of judgment about the practical consequences of making that cause available to litigants in the federal courts.” The Court specifically recognized that ATS cases often present significant foreign policy concerns, and said there is a strong argument for giving serious weight to the Executive Branch’s view of the impact of cases on foreign policy interests. Importantly for our topic today, the Court recognized the particular sensitivity of asserting extraterritorial jurisdiction over a foreign government’s treatment of its own citizens. It therefore directed that attempts by federal courts to craft remedies in this area “should be taken, if at all, with great caution.”

Exactly what impact the Sosa decision will have on ATS litigation in the United States remains to be seen. We believe the Court sent a strong and cautionary directive to the lower courts to carefully examine the international law bases of such cases more closely than they had previously done. It also urged attention to practical considerations, as well as the possibility that doctrines such as exhaustion of foreign remedies should play a role in limiting ATS jurisdiction.

The first significant ATS decision issued after the Supreme Court’s ruling in Sosa involved the so-called apartheid cases, in which a number of lawsuits were brought on behalf of individuals who suffered damages as a result of the apartheid regime in South Africa. The defendants in these cases included a large group of U.S. and foreign corporations, including many European banks and companies. The main allegation was that these defendants had done business with apartheid South Africa, and had therefore “aided and abetted” the illegal acts of that regime. Because they contributed to, and benefited from, the apartheid regime, it was argued, they could be held civilly liable to those who suffered so enormously at the hands of the former apartheid regime in South Africa and its proponents. As you may know, the litigation was dismissed several months ago by the lower court, which found that actions in aiding and abetting international law violations, even if repugnant, do not necessarily amount to a violation of the law of nations as defined by the Supreme Court in Sosa. The apartheid case is now on appeal before the federal court of appeals in New York and the decision there may provide a signal as to the approach that the federal courts in the United States will take regarding the ATS subsequent to the Sosa decision.

Even before Sosa was decided, of course, ATS plaintiffs had targeted U.S. and foreign corporations as being complicit in the commission of human rights abuses in other countries while engaged in the pursuit of their general commercial activities. I am certain many of you have heard of one or more of these suits, for example, the Talisman case in New York where a Canadian company has been sued for damages as a result of its activities in Sudan or the Exxon-Mobil case now pending in Washington, D.C., involving the continuing conflict in Aceh in Indonesia, or the case against Unocal involving alleged human rights abuses in connection with the construction of a natural gas pipeline in Burma, which was recently settled. In a number of these cases, at the request of the courts, the Bush Administration has submitted letters identifying foreign policy and practical problems with asserting U.S. jurisdiction and urging courts to consider abstaining from exercising jurisdiction. In the Unocal case, the Administration also submitted an amicus brief urging the court not to adopt aiding and abetting liability because that would vastly increase the scope and range of the ATS without clear guidance from Congress. As I mentioned, that case was settled before the court could rule on this issue. At the moment, the apartheid litigation is the most closely watched of these cases and has the most significant potential impact on transnational business.

In Sosa, the Supreme Court took note of the growing practice of suits against private actors such as corporations but did not have occasion to address its consistency with the ATS. From a defendant’s standpoint, one of the most difficult aspects of these suits is their effort to hold corporations civilly liable for “aiding and abetting” the alleged abuses actually committed by the foreign government or its officials. The difficulty is not simply one of resolving the purely legal issue, whether customary international law evidenced by state practice provides a clear basis for imposing civil liability on private actors for acts which indirectly cause or facilitate abusive acts by others. There is also a practical dilemma of how defendant corporations can demonstrate that their actions neither caused nor contributed to the governmental actions in question.

The complexity and expense of these lawsuits may well have a significant deterrent effect on trade and investment. It can affect the very corporations that adhere voluntarily to principles of good governance and seek conscientiously to avoid direct involvement in abusive situations, and whose presence can help promote better labor practices and other social progress.

The current Administration has submitted its views to the courts that the ATS was not intended to cover indirect or third-party liability of this character. Earlier Supreme Court cases held that Congress must be more explicit if it wishes to establish civil aiding and abetting liability. And Sosa itself counseled caution in extending the reach of the ATS to encompass new forms of action, particularly where significant practical consequences could be expected. Certainly that would be the case if corporations were routinely held accountable for actions by host countries against their own citizens, including non-U.S. corporations doing limited business in the United States.

However the U.S. courts resolve the aiding and abetting issue under the ATS, the question will still remain: How should the rule of law apply to the activities of multinational corporations operating in multiple jurisdictions? The current U.S. Administration has been urging U.S. courts to adopt a more constrained approach to extraterritorial jurisdiction under the ATS. Many in the Congress and the American public in turn ask whether this means it is appropriate to look solely to the local legal system where the alleged injuries occurred. Or should the home country of the enterprise be the presumptive forum for challenging its practices? How should we sort through these various jurisdictional possibilities in an increasingly interconnected world? It is the challenge to all of us to provide a satisfactory answer.

Suits Against Foreign Government Officials

I would like to move now to the specific subject of suits involving visiting foreign officials, which is an example of how international forum shopping can directly affect the conduct of diplomacy.

Under the Alien Tort Statute, suits are sometimes brought against foreign government officials traveling in the United States. In such cases, plaintiffs may name the foreign officials as individual defendants precisely because, under our rules of foreign sovereign immunity, they are unable to sue the foreign governments directly. Under traditional common law rules the plaintiffs are able to obtain personal jurisdiction by serving a complaint directly on the foreign official during the course of his visit. Foreign governments — to say nothing of the individual officials themselves — frequently react with surprise and dismay to such lawsuits, especially when the subject matter of the litigation concerns the policies and practices of that foreign government with respect to its own citizens within its own territory. In some cases, in fact, there may be no substantive nexus — no legal or factual connection — with the United States, other than the temporary, transient presence of the individual defendant. Although European legal systems may be structured differently, visiting current and former U.S. officials have also found themselves subject to legal process on matters wholly unrelated to their presence abroad.

As a general matter, it would be best if allegations of human rights abuses by foreign governments and government officials were resolved under the rule of law in their own courts. Effective human rights protection and enforcement begins at home. But certainly, if such suits or legal process are based merely on the transitory presence in another country of foreign government officials traveling on official business, this creates severe strains on foreign policy interests. Responsible officials may be deterred from carrying out a wide range of legitimate functions, including important diplomatic initiatives, humanitarian activities, and actions crucial for common defense, peacekeeping missions and interventions in foreign crises or civil wars.

When the issue involves formal criminal charges, the risks of political confrontation are even larger. Depending on the specific jurisdiction, criminal cases may not be subject to direction and control by the responsible political authorities any more than civil suits. This increases the possibilities for abuse. A zealous prosecutor or investigating magistrate can make dramatic news just by compelling testimony or demanding documents from foreign officials rather than working through government-to-government channels.

This problem is not confined to the United States, and our governments must work together to find solutions to ensure that public officials can effectively carry out their responsibilities. To the extent that information is legitimately required — for example, to further an administrative or criminal investigation — this need can normally be met through appropriate government-to-government channels on a case-by-case basis rather than by asserting jurisdiction over an individual official. More generally, we have been working, and we will continue to work energetically with foreign governments to determine whether other solutions, including treaty‑based solutions, should be pursued to prevent disruption of official travel.


The United States is firmly committed to promoting respect for human rights globally, but we are also sensitive to the frictions that inevitably arise through expansive assertions of extraterritorial jurisdiction. While we remain committed to finding appropriate remedies for victims of abuse, to shining the light of truth in all the dark places where abusers hide, to accountability and transparency, we are also committed to free movement of people, business, and capital, fair and open markets, and increased opportunities for growth and investment. Our task is to work with other nations committed to the rule of law to build structures for cooperation that will ensure a rule of reason that effectively and fairly resolves potential conflicts of jurisdiction and provides greater certainty to all of us who must operate in this increasingly interconnected world.

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