Although the sensationalist title of this article suggests the next big budget sci-fi blockbuster from Will Smith or an issue of the Weekly World News, it addresses a topic many business owners consider all-out warfare on their interests. Did you know foreigners could sue your company in U.S. courts if you simply did business, paid taxes and complied with the laws of a foreign country in which those foreigners allege an atrocity occurred? Did you know foreign nationals can sue your company if your products or resources were used in a U.S. military campaign against terrorists in those foreign nations? Did you know your company could be sued if it was present in a country where that country's government had engaged in actions to put an end to riots, rebellion, or other disorders, whether you played any role in the disorders or the government's response?

Under the Alien Tort Statute, all of this is possible, and, in fact, numerous lawsuits have already been filed in Federal Courts against U.S. companies in similar situations. While the use of the Alien Tort Statute is still relatively infrequent compared to traditional tort lawsuits, filings are increasing and U.S. businesses that have occasion to operate outside of the United States will need to familiarize themselves with what could be the next explosive trend in business litigation.

The Alien Tort Statute (ATS), also known as the Alien Tort Claims Act, was originally a clause in the Judiciary Act of 1789, the landmark statute passed by the first session of the First United States Congress which also established the Supreme Court and gave Congress the power to establish inferior courts. The ATS, now codified in 28 U.S.C. §1350, states in pertinent part: “The district courts shall 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.” Foes and fans of the statute agreed that it most likely was originally passed to combat piracy and protect American ambassadors and it remained on the books, relatively unnoticed, for two centuries.

On March 29, 1976, a 17-year-old boy by the name of Joel Filartiga was kidnapped, tortured, and killed in his country of Paraguay. The Filartiga family contended the perpetrator of this heinous act was the Inspector General of Police in Asuncion, América Norberto Peña Irala (the killing having been done in retaliation for the political activities and beliefs of Joel Filartiga’s father). Murder charges were sought by the Filartigas in Paraguayan courts against Pena and the police force, but the case went nowhere and Filartiga’s attorney was arrested, imprisoned, threatened with death, and eventually disbarred.

In 1978, Joel Filartiga’s sister, Dolly, applied for political asylum in the United States. While there, she learned Americo Pena was also in the country under a visitor’s visa. Ms. Filartiga lodged a civil complaint for her brother’s death in U.S. court against Pena, alleging his actions violated the wrongful death statutes, the U.N. Charter, the Universal Declaration of Human Rights, the American Declaration of the Rights and Duties of Man, and other customary international law. Filartiga v. Pena-Irala 630 F.2d 876 (2d Cir. 1980). Ms. Filartiga claimed U.S. courts had jurisdiction to hear the case under the Alien Tort Statute. The Court of Appeal ultimately held deliberate torture perpetrated under color of official authority violated universally accepted norms of the international law of human rights, regardless of the nationality of the parties. The Court also held whenever an alleged torturer was found and served with process by an alien within the U.S., §1350 provided federal jurisdiction.

While not exactly opening the floodgates for alien litigation, over 100 cases based on the ATS have been filed since the Filartiga case was decided. Additional ATS cases included: 2000's Wiwa v. Royal Dutch Petroleum Co, alleging complicity in the executions of several Nigerians; 1996's Abebe-Jira v. Negewo, alleging torture of Ethiopian prisoners; 1995's Kadic v. Karadzic, alleging torture, rape, and other abuses orchestrated by Serbian military leader; 1994's In re Estate of Ferdinand Marcos, alleging torture and other abuses by former President of Philippines; 1984's Tel-Oren v. Libyan Arab Republic, alleging claims against Libya based on armed attack upon civilian bus in Israel; 1995's Xuncax v. Gramajo, alleging abuses by Guatemalan military forces.

So why should the ATS concern the typical U.S. business owner or corporate counsel? There seem to be no arguments human rights abuses by foreign countries and/or nationals are a bad thing and that ATS gives the victims a legal venue to be heard. Unfortunately (or fortunately depending on whose side you are on) these uses of the ATS did not stop at the border.

In September 1996, 13 Burmese villagers filed suit under the ATS against Unocal and its parent company, the Union Oil Company of California, for alleged human rights violations committed by Burmese soldiers in the construction of a gas pipeline project in Burma in which Unocal was a partner. Specifically, the lawsuit alleged Unocal's participation in the $1.2-billion Yadana gas pipeline project through Burma to Thailand involved slave labor, forced relocation of entire villages, and, in some cases, torture, rape, and murder by Burmese soldiers of people in the Tenasserim region of the country. After the U.S. Court of Appeals for the Ninth Circuit refused to grant Unocal’s motion for summary judgment, indicating there were genuine questions of material fact as to whether Unocal was aware the Burmese Military hired as security for the pipeline were committing human rights abuses, Unocal decided to settle.

Another example is the case of Chinese dissident Wang Xiaoning. In 2001, Wang began using a Yahoo e-mail account to post anonymous writings to an internet mailing list. Wang contends Yahoo, under pressure from the Chinese government, blocked that account. Wang then set up another Yahoo e-mail account and began sending material again. Wang contends Yahoo gave the government information that allowed it to identify and arrest him in September 2002. While Wang is serving a ten-year sentence for inciting subversion through his online treatises criticizing the government, his wife filed a lawsuit in California against Yahoo on his behalf on April 17, 2007. The ATS lawsuit accused Yahoo of corporate irresponsibility and indicated they had to know that if they provided China with identifying information then, individuals would be arrested.

Understandably, these assaults against U.S. companies operating internationally have caused quite an outcry from U.S. business interests as well as the Bush Administration. Amicus briefs have been filed by the federal government and such organizations as the National Association of Manufacturers indicating courts have been reading the ATS too expansively and that these lawsuits interfere with U.S. foreign policy and harm U.S. economic interests and the global economy. The critics of the ATS contend this threat of litigation needlessly distracts companies and hinders them from competing in the global market.

The U.S. Supreme Court may have a chance to decide the scope of the ATS as there has recently been a petition for cert to the Supreme Court following an October 2007 decision by the 2nd Circuit court of appeals. This appellate decision, despite strong opposition by the U.S. and South African governments, allowed a suit to proceed against hundreds of corporations, under the ATS, for their participation in the South African economy under the apartheid regime. These companies include Coca-Cola, Colgate Palmolive, Daimler-Chrysler, Merrill Lynch, and a host of others.

There is no doubt the founding fathers did not anticipate how the ATS would be used today. Is it a powerful tool to prevent human rights abuses or a new scheme cooked up by the plaintiffs’ bar to extract money from big companies? That question won’t be answered anytime soon but, if recent filing trends are any indication, ATS lawsuits against U.S. business interests will only increase. Until the courts give greater interpretation to the ATS than they have so far, business owners and corporate counsel will need to be cognizant of this relatively new theory when considering their international dealings.