Jesner v. Arab Bank, PLC
Headline: Court bars lawsuits against foreign corporations under the Alien Tort Statute, blocking foreign victims from suing foreign companies in U.S. federal courts and leaving changes up to Congress.
Holding: The Court held that the Alien Tort Statute does not permit suits against foreign corporations, so federal courts may not impose ATS liability on foreign corporate defendants without Congress authorizing such claims.
- Stops foreign victims from suing foreign corporations under the Alien Tort Statute.
- Leaves injured parties to sue individual employees or press Congress for corporate liability.
- Shifts decision on corporate human-rights liability to Congress and the political branches.
Summary
Background
A group of about 6,000 foreign nationals sued Arab Bank, a large Jordanian bank with a New York branch, saying it helped finance terrorist attacks abroad by clearing dollar transactions through CHIPS and laundering funds for an alleged charity. The cases were filed between 2004 and 2010 in U.S. federal court under the Alien Tort Statute; some related claims under the Anti-Terrorism Act were also pleaded but are not before this Court. Lower courts dismissed the ATS claims based on Second Circuit precedent, and the Supreme Court agreed to resolve whether foreign corporations can be sued under the ATS.
Reasoning
The Court framed the question as whether federal courts may impose ATS liability on foreign corporate defendants without Congress’ authorization. Applying the Sosa framework and emphasizing separation-of-powers and foreign-relations concerns, the majority concluded that courts should not create such a remedy for foreign corporations. The opinion relied on the TVPA’s limit to natural persons, the practice of international tribunals, and diplomatic tensions the litigation had caused, and it affirmed dismissal of the suits against Arab Bank while saying Congress should decide whether to allow corporate ATS liability.
Real world impact
The decision means foreign victims generally cannot use the ATS to sue foreign companies in U.S. federal courts; plaintiffs may still sue individual employees, pursue other U.S. statutes, or ask Congress to create corporate liability. The litigation had strained relations with Jordan, and the Court stressed the risk of judicially created rules that could provoke international friction. Moving forward, pressure to change rules will fall to Congress, other statutes, state courts, or different legal theories.
Dissents or concurrances
Justice Sotomayor’s dissent argued the ATS does not categorically bar corporate suits and urged a narrower approach; other Justices wrote concurrences stressing separation-of-powers and judicial caution, and the Executive Branch had urged against a blanket ban on corporate ATS claims.
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