Litigating Abroad: U.S. Legal Risks for Energy Companies

In this episode, we’re diving into a topic that continues to challenge energy and natural resources companies operating globally: U.S. litigation risks tied to overseas operations—especially those involving human rights and environmental impacts.

While these risks have declined in recent years, they haven’t disappeared. Let’s unpack where things stand and what companies need to watch out for.

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• Key U.S. Litigation Risks from Overseas Operations in the Energy and Natural Resources Sector

About the author

• David L. Attanasio

Transcript

Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape.

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Welcome back to Womble Perspectives, where we explore the legal landscapes shaping business today. In this episode, we’re diving into a topic that continues to challenge energy and natural resources companies operating globally: U.S. litigation risks tied to overseas operations—especially those involving human rights and environmental impacts.

While these risks have declined in recent years, they haven’t disappeared. Let’s unpack where things stand and what companies need to watch out for.

The Alien Tort Statute has long been a tool for foreign plaintiffs to bring human rights claims in U.S. courts. Originally passed in 1789, it allows non-U.S. citizens to sue in federal court for violations of international law.

Over the past few decades, energy companies have found themselves in the crosshairs of Alien Tort Statute litigation. Think of cases like:

• Drummond Company, accused of aiding paramilitary forces in Colombia,
• Royal Dutch Shell, tied to human rights abuses in Nigeria,
• And Unocal, facing allegations of forced labor in Myanmar.

But the U.S. Supreme Court has steadily narrowed the Alien Tort Statute’s reach. In Sosa v. Alvarez-Machain, the Court ruled that only a narrow set of international norms—like piracy or violations of ambassadorial rights—could support Alien Tort Statute claims.

Then came Kiobel v. Royal Dutch Petroleum, which limited the statute’s extraterritorial reach. And in Jesner v. Arab Bank, the Court barred Alien Tort Statute suits against foreign corporations altogether.

So where does that leave us?

Today, Alien Tort Statute claims can only proceed against U.S. corporations, and only when the alleged conduct both “touches and concerns” U.S. territory and violates clearly defined international norms.

Despite these limitations, the Alien Tort Statute isn’t dead.

In a recent case—Doe v. Cisco Systems—the Ninth Circuit allowed claims to proceed against Cisco for allegedly aiding human rights abuses in China. The key? The plaintiffs argued that Cisco designed and developed the surveillance tech used to target Falun Gong practitioners—right here in the U.S.

The court found that this domestic conduct was substantial enough to support Alien Tort Statute liability. Cisco has asked the Supreme Court to review the case, and if it does, we could see the Alien Tort Statute narrowed even further—or clarified in new ways.

But, the Alien Tort Statute isn’t the only game in town.

Foreign plaintiffs have also used diversity jurisdiction in federal courts, as seen in the Aguinda v. Texaco case, where Ecuadorian and Peruvian plaintiffs sued over environmental damage in the Amazon.

And in state courts, claims like those in Maynas Carijano v. Occidental Petroleum have survived dismissal attempts, even after being removed to federal court.

But perhaps the most underappreciated risk? U.S. discovery laws.

Under Section 1782, foreign litigants can request U.S.-style discovery—even for cases being tried abroad. That means internal documents, emails, and depositions could be fair game, adding a layer of exposure many companies overlook.

So, what’s the takeaway?

While the legal landscape has shifted in favor of corporations, risks remain—especially for U.S.-based companies with global operations. The Alien Tort Statute may be narrower, but it’s not gone. And other legal tools, like diversity jurisdiction and Section 1782 discovery, continue to pose challenges.

The best defense? Proactive due diligence, robust compliance programs, and a clear understanding of how domestic actions can create international liability.

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