Jesner v. Arab Bank, PLC
The Supreme Court ruled that foreign corporations, including a major Jordanian bank accused of helping finance terrorist attacks in the Middle East, cannot be sued at all under the Alien Tort Statute, a 1789 law that lets foreign citizens bring certain international-law claims in U.S. courts.
The decision closes off a route foreign victims of human-rights abuses had used to sue multinational companies in American courts, leaving it to Congress to decide whether corporations should ever face this kind of liability.
“Accordingly, the Court holds that foreign corporations may not be defendants in suits brought under the ATS.”
The core holding barring foreign corporations from being sued under the Alien Tort Statute.
How it got here: A federal trial court dismissed the lawsuits based on the Second Circuit's earlier ruling barring corporate Alien Tort Statute liability; the Second Circuit affirmed, and the Supreme Court agreed to review that question.
The Case in Depth
What happened
Thousands of foreign nationals, or their family members, were injured or killed in terrorist attacks across the Middle East. They sued Arab Bank, a major Jordanian financial institution, claiming its officials let the bank be used to move money to terrorist groups and to launder funds through a Texas-based charity, partly using the bank's New York branch to clear dollar transactions.
The question before the Court
Could foreign victims of terrorist attacks abroad sue a foreign bank in U.S. courts under a centuries-old law, just because the bank used a New York branch to process some transactions?
Why it matters
Foreign victims of human-rights abuses tied to corporate conduct — from financing terrorism to enabling atrocities abroad — lose a legal avenue for suing corporations in U.S. federal courts under this statute. Companies with U.S. banking or business ties can no longer be sued this way for conduct occurring mostly overseas, though victims may still try to sue the individual employees involved.
What changes now
This is a final merits decision, not a temporary order. The lawsuits against Arab Bank under the Alien Tort Statute are over, though separate claims by American victims under the Anti-Terrorism Act were not affected. Future litigants seeking to sue foreign corporations for overseas human-rights harms will need Congress to create a new law, since the Court held the courts themselves cannot extend this kind of liability without congressional action.
What this does not decide
The Court did not decide whether U.S.-based corporations can be sued under the Alien Tort Statute, nor whether Arab Bank's specific New York transactions were enough on their own to connect the case to the United States. Those questions were left open because the broader ruling on foreign corporations resolved the case first.
Concurrences and dissents
Concurrence — Justice Thomas
Justice Thomas joined the Court's opinion in full and wrote separately only to say he also agreed with the additional points raised by Justices Alito and Gorsuch — that courts should not create new Alien Tort Statute causes of action, especially where doing so risks international strife, and that the statute likely does not apply to suits between two foreign parties.
Concurrence in part — Justice Alito
Justice Alito agreed corporations should not face liability but grounded his view in separation-of-powers principles: courts creating federal common law should only do so when it would materially advance the statute's purpose of avoiding diplomatic friction, and creating liability against foreign corporations would do the opposite, since international law does not generally require corporate liability.
Concurrence in part — Justice Gorsuch
Justice Gorsuch argued for two further reasons to dismiss the case: courts should never invent new Alien Tort Statute causes of action at all, since that job belongs to Congress, and the statute likely never covered lawsuits between two foreign parties in the first place, requiring an American defendant.
Dissent — Justice Sotomayor
“In so doing, it absolves corporations from responsibility under the ATS for conscience-shocking behavior.”Sotomayor's central objection that the ruling shields corporations from accountability for human-rights abuses.
Justice Sotomayor argued the majority misapplied the Sosa test by asking whether international law recognizes corporate liability, when enforcement mechanisms like who can be sued are properly a matter of domestic law, under which corporations have long been liable in tort. She would have let the case proceed and let lower courts address specific concerns like extraterritoriality individually, rather than adopting what she called an overbroad categorical bar.
How the Court got there
The legal reasoning, step by step
- The Court applied the two-step framework from Sosa v. Alvarez-Machain, which asks first whether an alleged violation involves a norm of international law that is specific, universally accepted, and legally binding, and second whether recognizing a new kind of lawsuit is an appropriate use of judicial power given the foreign-policy risks involved.
- Rather than resolve whether international law itself imposes liability on corporations, the plurality moved to Sosa's second step, stressing the Court's general reluctance to invent new private lawsuits without Congress's say-so — the same caution that led the Court to bar corporate liability in Bivens actions against federal officers.
- The plurality looked to the Torture Victim Protection Act, the only Alien-Tort-Statute-style cause of action Congress itself created, which limits lawsuits to 'individuals' — a term the Court had already interpreted to mean natural persons only, excluding corporations.
- The plurality treated Congress's choice to exclude organizations from that law as strong evidence that expanding liability to foreign corporations under the Alien Tort Statute should be a decision for Congress, not judges, absent a compelling reason to depart from that model.
- The Court also weighed the real-world foreign-policy fallout of this specific litigation — thirteen years of diplomatic tension with Jordan, a close U.S. ally that considered the lawsuit an affront to its sovereignty — as evidence that courts are poorly positioned to make these kinds of policy judgments.
- Concluding that expanding liability without congressional authorization risked exactly the sort of diplomatic friction the statute was meant to avoid, the Court held that foreign corporations may not be sued as defendants under the Alien Tort Statute.
Doctrinal impact
Cases affected by this decision
Reaffirms Kiobel v. Royal Dutch Petroleum Co. (569 U. S. 108)
The Court relied on Kiobel's presumption against applying the statute to overseas conduct and its caution about foreign-policy risks.
Reaffirms Sosa v. Alvarez-Machain (542 U. S. 692)
The Court applied and extended Sosa's two-step test for recognizing new claims under the statute.
Reaffirms Correctional Services Corp. v. Malesko (534 U. S. 61)
The Court relied on Malesko's rule that courts, not judges, should decide whether corporations face this kind of liability.