NCPA - National Center for Policy Analysis

Abusive Use of the Alien Tort Claims Act

February 6, 2003

Through an obscure legal loophole, the United States is being turned into the world's catchall civil claims court to the detriment of the U.S. economy and its interests abroad. The loophole is the Alien Tort Claims Act passed in 1789.

  • The Act gives federal district courts sole jurisdiction over civil actions brought by non-U.S. residents for torts, or wrongful acts, "committed in violation of the law of nations or a treaty of the United States."
  • The law was originally intended to clarify jurisdiction in cases involving such matters as piracy and the actions of diplomats -- and was never intended to be used against Americans engaged in commerce abroad.
  • Yet in the last two decades, critics of global capitalism have turned the law against U.S. corporations doing business in countries whose governments have been accused of human rights and environmental abuses.

For example, in Doe et al. vs. Unocal Corp. et al., the American energy company stands accused of benefiting from forced relocations and other human rights abuses by the government of Burma during construction of a pipeline.

Since 1980, two dozen cases have been filed seeking damages from U.S.-based corporations accused of being "vicariously liable" for the alleged actions of government agents in countries where they operate.

Another group of suits targets more than 100 western multinational companies that operated in South Africa during apartheid.

Critics say that misuse of the Alien Tort Claims Act constitutes bad law, bad economics and bad foreign policy and Congress should pass legislation to close this loophole.

Source: Daniel T. Griswold (Cato Institute), "Foreigners Use Obscure Law to Go After U.S. Companies," Investor's Business Daily, February 5, 2003.

 

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