Jesner v. Arab Bank, PLC

Jesner v. Arab Bank, PLC
Argued October 11, 2017
Decided April 24, 2018
Full case name Joseph Jesner, et al., Petitioners v. Arab Bank, PLC.
Docket nos. 16-499
Citations 584 U.S. ___ (more)
Argument Oral argument
Holding
Foreign corporations may not be sued under the Alien Tort Statute.
Court membership
Chief Justice
John Roberts
Associate Justices
Anthony Kennedy · Clarence Thomas
Ruth Bader Ginsburg · Stephen Breyer
Samuel Alito · Sonia Sotomayor
Elena Kagan · Neil Gorsuch
Case opinions
Majority Kennedy, joined by Roberts, Thomas, Alito, Gorsuch (parts I, II–B–1, and II–C); Roberts, Thomas (parts II–A, II–B–2, II–B–3, and III)
Concurrence Thomas
Concurrence Alito
Concurrence Gorsuch
Dissent Sotomayor, joined by Ginsburg, Breyer, Kagan
Laws applied
Alien Tort Statute

Jesner v. Arab Bank, No. 16-499 (2018), was a case before the United States Supreme Court concerning the scope of the Judiciary Act of the 1789. At issue was whether the Judiciary Act of 1789, now known as the Alien Tort Statute, allows foreign corporations to be named as defendants. The Alien Tort Statute gives federal courts jurisdiction over civil suits brought by foreign nationals “for a tort only, committed in violation of the law of the nations or a treaty of the United States.” In an opinion delivered by Justice Kennedy, The Supreme Court held 5-4 that foreign corporations cannot be sued under the Alien Tort Statute.

Background

The Arab Bank was founded in 1930 in Jerusalem.[1] It is one of the largest financial institutions in the Middle East. It has over 600 branches. It is headquartered in Amman, Jordan. The bank is a major part of Jordan’s economy. It routinely works with Israel to transfer taxes to the Palestinian Authority.[2] The U. S has described the Arab bank as “constructive partner” in its effort to abate the financing of terrorism. The petitioners are victims of terrorism attacks that occurred between 1995 and 2005. Petitioners claim that some Arab Bank officials transferred funds to terrorists groups in the Middle East. Petitioners allege that Arab Bank helped transfer funds partially through its New York City offices.[3] They allege that those funds in turn enabled acts of terrorism for which they now seek compensation. They filed five separate lawsuits against Arab Bank under the Alien Tort Statute in the United States District Court for Eastern District of New York. The district court dismissed their claim citing Kiobel v. Royal Dutch Petroleum Co.[4] They appealed the decision in the United States Court of Appeals for the Second Circuit. The second circuit court reaffirmed the district court’s ruling. The Supreme Court granted certiorari in October 2016 to consider whether the Alien Tort Statute allows suits against foreign corporations.

The Articles of Confederation did not contain any statutes or regulations that allowed the Central United States government to adequately address harms against foreign nationals. Alien Tort Statute was enacted in 1789 to allow for foreign nationals to address such harms. The Alien Tort Statute went mostly unused until Filartiga v. Pena-Irala. In Filartiga, a Paraguayan doctor filed suit against Americo Pena-Irala, a former Paraguayan police supervisor living in New York. The doctor claimed that Pena-Irala supervised and participated in the torture of his son. The 2nd circuit found that U.S. courts had jurisdiction to decide the case under the Alien Tort Statute. The 2nd circuit based its decision on the fact that acts of torture violates laws of nations.

After Filartiga, plaintiffs increasingly brought lawsuits under The Alien Tort Statute for human-right violations committed in foreign countries. Those lawsuits were brought against individuals as well as corporations. In Sosa v. Alvarez-Machain, the Supreme Court held “in a certain narrow circumstances courts may recognize a common-law cause of action for claims based on present-day law of nations.” In Sosa, the court narrowed the types of claims that could be filed under the Alien Tort Statute. The court next addressed the exact Jurisdiction of the Alien Tort Statute in the Kiobel case. In Kiobel, the court held that claims could not be brought under the Alien Tort Statute if the all of the actions in question took place outside the U.S. It held that “the presumption against extraterritoriality applies to claims under the ATS, and that nothing in the statute rebuts the presumption.” It did not address the Second Circuit’s ruling that foreign corporations could be sued under the Alien Tort Statute.

Supreme Court Opinion

In his majority opinion, Justice Kennedy notes that most of the petitioners are foreign nationals who are suing a foreign defender. The only connection to the United States is that Arab Bank used its New York branch to clear transactions through the Clearing House Interbank Payments System (CHIPS). Putting aside the question of whether corporations can be named as defendants, under Kiobel, there is insufficient connection to the U.S. for Arab Bank to be liable under the Alien Tort Statute. Moving on to address the question of liability under The Alien Tort Statute, Kennedy notes that for an action to be liable under The Alien Tort Statute, it has to pass the test the court developed in Sosa. Petitioners have to prove that the actions by defendant violates "a norm that is specific, universal and obligatory."

Ultimately, Kennedy argues that “it would be inappropriate for courts to extend Alien Tort Statute liability to foreign corporations.” The minor connection between the terrorist attacks in consideration and the United States illustrate the dangers of extending the scope of The Alien Tort Statute to foreign corporations. Making foreign corporations liable under The Alien Tort Statute creates diplomatic problems that only political branches of government, as opposed to the judiciary are well equipped to handle. As such foreign corporations may not be defendants in Alien Tort Statute suits.

References

  1. ↑ "Arab Bank", Wikipedia, 2018-07-02, retrieved 2018-07-07
  2. ↑ "An introduction to the Alien Tort Statute and corporate liability: In Plain English - SCOTUSblog". SCOTUSblog. 2017-07-24. Retrieved 2018-07-07.
  3. ↑ https://www.supremecourt.gov/opinions/17pdf/16-499diff_868c.pdf
  4. ↑ http://www.scotusblog.com/wp-content/uploads/2016/10/16-499-op-below-2d-cir.pdf


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