The Alien Tort Statute and U.S. Extraterritorial Jurisdiction: Legal and Economic Corporate Governance Implications Beyond Al Shimari v. CACI Int'l

This note is divided into four overall parts. To continue with the academic dialogue regarding the ATS, the first part (Part I) deals with the historical overview and case law of the ATS, while contrasting the development of extraterritoriality in the United States with that abroad (particularly, Europe). More specifically, the first part is divided into two subparts—Subpart A provides a comprehensive background and historical legal overview of the ATS and Subpart B discusses the international trend, particularly in Europe, in extending legal mechanisms to hold corporations accountable beyond their borders, unlike the United States—which, again, was once at the forefront of extending jurisdiction in the 1980s and 1990s.39 The second part (Part II) focuses more closely on the repercussions relevant to Al Shimari v. CACI and presents an economic analysis of the case and of having a functioning enforcement mechanism (via a resuscitated ATS) while analyzing different consequential schemas possible given the different trajectories of the court may follow in its final ruling. Beginning with the analytical component of this exercise (i.e., Part II, Subpart A), the note presents an analysis of how the Al Shimari v. CACI case fits into the current landscape of the ATS. In this section, the potential ramifications of three possible outcomes are outlined, namely, the demise of ATS, the continuation of specific ATS applications, or the possibility of pushing against the limitations set by prior cases, effectively challenging prior precedent (setting up a new enforcement regime). Finally, Subpart B of Part II focuses on the economic and regulatory implications of how the ATS is ultimately operationalized. This part discusses how to analyze the case using the idea of capturing negative externalities, differing with each outcome, and provides insights into the regulatory reality that these situations may impose. This should encompass a comprehensive examination of how each outcome affects businesses, accountability, and the global legal landscape. This section is organized as follows: the first component constructs an economic analysis of the case; the second component explores the economics of the institutionalization of human rights claims via extraterritorial jurisdiction (i.e., regulatory development); and finally, summarizes the costs associated with each possible outcome.