Jesner v. Arab Bank, PLC
The Court ruled that foreign corporations cannot be sued under the Alien Tort Statute, a nearly 230-year-old law letting foreigners bring certain human-rights claims in U.S. courts. The bank at issue, Jordan's Arab Bank, escaped liability for allegedly helping finance terrorist attacks in the Middle East.
The decision closes off a major avenue that victims of overseas human-rights abuses had used to sue multinational corporations in American courts, leaving it to Congress to decide whether and how foreign companies should ever face this kind of liability.
“the Court holds that foreign corporations may not be defendants in suits brought under the ATS.”
The Court's central holding barring lawsuits against foreign corporations under the statute.
How it got here: A federal trial court dismissed the claims based on a prior Second Circuit ruling barring ATS suits against corporations, and the Second Circuit affirmed that dismissal.
The Case in Depth
What happened
Thousands of foreign nationals injured or whose family members were killed by terrorist attacks in the Middle East sued Arab Bank, a major Jordanian financial institution, claiming its New York branch processed dollar transactions that benefited Hamas and other terrorist groups and helped launder money from a Texas charity allegedly tied to Hamas.
The question before the Court
Can foreign corporations be sued in U.S. courts under the Alien Tort Statute for human rights abuses committed abroad?
The Court's answer
No — the Court ruled that foreign corporations may not be sued as defendants under the Alien Tort Statute. Rather than deciding whether international law itself bars corporate liability, the Court moved straight to asking whether courts should use their limited power to create new legal remedies here, and concluded they should not without Congress's say-so.
The Court leaned heavily on Congress's own model in a related law, the Torture Victim Protection Act, which allows suits only against individual people, not organizations. Combined with the serious diplomatic friction this decade-plus of litigation had caused with Jordan, the Court found it was Congress's job — not the courts' — to decide whether foreign companies can be sued this way.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Victims of terrorism, torture, and other human-rights abuses abroad can no longer use the Alien Tort Statute to sue foreign corporations in U.S. courts, even when those companies have U.S. operations. Foreign banks and businesses gain protection from this category of lawsuit, while plaintiffs must look to Congress, other statutes, or suits against individual employees instead.
What changes now
The ruling is final on the merits: Arab Bank and other foreign corporations cannot be sued under the Alien Tort Statute going forward, though individual employees and officials can still be. The decision leaves it to Congress to decide whether to create a statute allowing such suits against foreign companies. Some plaintiffs in this litigation separately pursued claims against Arab Bank under the Anti-Terrorism Act, which remain unaffected.
What this does not decide
The Court did not decide whether U.S. (as opposed to foreign) corporations can be sued under the statute, whether international law itself forbids corporate liability, or whether Arab Bank's New York transactions were sufficiently connected to the United States to support a suit at all.
Concurrences and dissents
Concurrence — Justice Thomas
Justice Thomas joined the Court's opinion in full and separately endorsed the points made by Justices Alito and Gorsuch: that courts should not be creating new causes of action under the statute at all, especially where doing so risks international friction, and that the statute likely does not apply to suits between two foreign parties in any event.
Concurrence in part — Justice Alito
Justice Alito agreed with barring suits against foreign corporations but grounded his view in separation-of-powers principles rather than mere 'judicial caution.' He argued federal courts creating common-law claims must ask whether doing so would actually reduce diplomatic friction, and concluded that letting foreign corporations be sued would provoke, not prevent, exactly the kind of international strife the statute was meant to avoid.
Concurrence in part — Justice Gorsuch
Justice Gorsuch agreed with the outcome but for two further reasons: courts generally should not be inventing new causes of action at all, since that job belongs to Congress, and the statute likely was never meant to cover lawsuits between two foreigners, since the original Judiciary Act required an American defendant to satisfy Article III's diversity requirements.
Dissent — Justice Sotomayor
“Nothing about the corporate form in itself raises foreign-policy concerns that require the Court, as a matter of common-law discretion, to immunize all foreign corporations from liability under the ATS, regardless of the specific law-of-nations violations alleged.”The dissent's core objection that the majority's rule was far broader than necessary.
Justice Sotomayor argued that international law says nothing about whether corporations, as opposed to individuals, can be held liable -- that question is left to domestic law, and American tort law has long allowed suits against corporations. She contended the majority's blanket ban was a 'sledgehammer' response to case-specific concerns that could be addressed through narrower tools like the extraterritoriality presumption, and noted that the Executive Branch itself had twice urged the Court not to foreclose corporate liability.
How the Court got there
The legal reasoning, step by step
- The Court applied the two-part framework from Sosa v. Alvarez-Machain (2004) for deciding whether courts may recognize a new type of lawsuit under the Alien Tort Statute: first, whether the claimed violation reflects an international rule that is specific, universal, and obligatory; second, whether courts should exercise discretion to allow the suit or instead defer to Congress.
- Without resolving whether international law itself imposes liability on corporations, the Court moved to the second Sosa question, emphasizing that courts should show 'great caution' before creating new forms of liability under the statute, consistent with the Court's general reluctance to invent private lawsuits that Congress hasn't authorized -- as reflected in Correctional Services Corp. v. Malesko, which similarly barred corporate liability under a judge-made damages remedy for constitutional violations.
- The Court treated the Torture Victim Protection Act -- the only cause of action under the statute that Congress itself created -- as the best available guide, noting that it limits liability to 'individuals,' meaning natural persons only, and treated Congress's choice to exclude organizations there as strong evidence against extending liability to corporations here.
- The Court weighed the real-world foreign-policy costs of allowing the suit, pointing to more than a decade of diplomatic tension with Jordan, a close U.S. ally that viewed the lawsuit as an affront to its sovereignty, and to the risk that recognizing foreign corporate liability could expose American companies to similar suits in foreign courts.
- Concluding that courts lack both the institutional capacity and the political accountability to weigh these foreign-relations considerations, the Court held that, absent further action by Congress, foreign corporations categorically may not be sued as defendants under the Alien Tort Statute.
Doctrinal impact
Cases affected by this decision
Reaffirms Sosa v. Alvarez-Machain (542 U. S. 692)
The Court relied on and applied Sosa's two-step test for recognizing new claims under the statute.
Reaffirms Kiobel v. Royal Dutch Petroleum Co. (569 U. S. 108)
The Court built on Kiobel's caution about extraterritorial suits but left the broader corporate-liability question it had not resolved.
Reaffirms Correctional Services Corp. v. Malesko (534 U. S. 61)
The Court relied on Malesko's refusal to extend corporate liability in a judge-made damages remedy as supporting analogy.
Reaffirms Mohamad v. Palestinian Authority (566 U. S. 449)
The Court relied on Mohamad's holding that a related statute's term 'individuals' means only natural persons.