Jesner v. Arab Bank, PLC
Legal Issues
BrynoDC Coverage 1 video
Overview
Overview
The Supreme Court held that the Alien Tort Statute does not permit federal courts to impose liability on foreign corporations for human rights violations committed abroad, resolving a decades-long question about the reach of the ATS and significantly narrowing the ability of foreign victims to seek redress in U.S. courts for atrocities committed overseas by multinational corporations.
The Facts
Facts
Survivors and families of victims of terrorist attacks in the Middle East sued Arab Bank PLC, a Jordanian bank incorporated under foreign law, alleging that the bank's New York branch processed payments that financed terrorist groups responsible for the attacks. Plaintiffs brought claims under the Alien Tort Statute, which gives federal courts jurisdiction over suits by aliens for violations of international law. Arab Bank argued that corporations, especially foreign ones, cannot be defendants under the ATS after the Supreme Court's Kiobel v. Royal Dutch Petroleum (2013) decision.
The Issue
Issue
Whether foreign corporations may be defendants in suits under the Alien Tort Statute for violations of customary international law, or whether corporate liability under the ATS is available only for natural persons.
The Rules
Rule
The Alien Tort Statute, 28 U.S.C. § 1350, grants federal courts jurisdiction over civil suits by aliens for torts 'committed in violation of the law of nations or a treaty of the United States.' Kiobel v. Royal Dutch Petroleum Co. (2013) held that the ATS has a strong presumption against extraterritorial application. Sosa v. Alvarez-Machain (2004) recognized a narrow set of actionable norms under the ATS. Whether corporations are proper ATS defendants is a separate question from extraterritoriality.
The Application
Analysis
Although the plaintiffs alleged that Arab Bank's New York branch facilitated financing of terrorist attacks. Conduct that might implicate customary international law norms against genocide and torture. The Court's holding regarding corporate liability foreclosed their claims at the threshold. The ATS does not provide a cause of action against foreign corporations regardless of whether the underlying conduct violates international law, because federal common law has not extended corporate liability under the statute and judicial creation of such liability would raise separation-of-powers concerns. The Court found that recognizing corporate liability would require federal courts to make precisely the kind of policy judgments about the scope of international obligations that should rest with the political branches, not the judiciary. This holding meant that even though the bank's alleged conduct occurred through its U.S. Operations and harmed foreign nationals, the plaintiffs' only potential remedy lay against individual officers or employees, not the corporation itself.
The Conclusion
Conclusion
Decided April 24, 2018. The Court held 5-4 that foreign corporations may not be sued under the Alien Tort Statute. The plurality held that federal common law imposes no corporate liability under the ATS, and that recognizing such liability would require separation-of-powers concerns that weigh against judicial expansion. The ruling effectively barred ATS suits against foreign banks and companies for overseas conduct, a major limitation on human rights litigation in U.S. courts.
Flag an issue
This tracker is maintained by BrynoDC and is free because readers fund it. Support