Jesner v. Arab Bank, PLC
The Supreme Court ruled that foreign corporations cannot be sued under the Alien Tort Statute, a 1789 law letting foreign nationals bring lawsuits in U.S. courts for serious violations of international law. The Court affirmed dismissal of lawsuits accusing a major Jordanian bank of helping finance terrorist attacks in the Middle East.
The decision closes off a major avenue that human-rights victims had used to sue multinational corporations in American courts, leaving it to Congress to decide whether and how foreign companies should ever face such liability.
“the Court holds that foreign corporations may not be defendants in suits brought under the ATS.”
The core holding barring lawsuits against foreign corporations under the statute.
How it got here: A federal trial court dismissed the claims based on the Second Circuit's earlier ruling that foreign corporations cannot be sued under the statute; the Second Circuit affirmed, and the Supreme Court agreed to review.
The Case in Depth
What happened
Thousands of foreign nationals, or their family members, were injured or killed in terrorist attacks in the Middle East. They sued Arab Bank, a major Jordanian financial institution, claiming its employees used its New York branch to clear transactions and launder funds that ended up benefiting groups like Hamas, and that the bank should be held responsible for its employees' conduct.
The question before the Court
Could foreign victims of terrorist attacks abroad sue a Jordanian bank in U.S. federal court, using an old law that lets foreigners sue for violations of international law?
The Court's answer
No — the Court ruled that foreign corporations cannot be sued under the Alien Tort Statute. Rather than decide whether international law itself imposes liability on corporations, the Court found it unnecessary to resolve that question, because either way courts should defer to Congress before creating this kind of lawsuit. The Court pointed to Congress's own Torture Victim Protection Act, which limits liability to human "individuals," as strong evidence that Congress did not want corporations treated as defendants in this area.
The Court also stressed practical concerns: the litigation had caused years of diplomatic tension with Jordan, and letting foreign corporations be sued this way could invite other countries to let their courts sue American companies in return. Weighing separation-of-powers and foreign-policy considerations together, the Court concluded that expanding liability to foreign corporations is a decision for Congress, not judges, to make.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Victims of overseas human-rights abuses linked to corporate conduct will no longer be able to sue foreign companies under this particular federal law, even when the company has U.S. banking or business ties. Multinational banks and corporations gain protection from a category of lawsuits that had been working through American courts for years, while advocates must now look to Congress for any new remedy.
What changes now
The lawsuits against Arab Bank under the Alien Tort Statute are over; the Second Circuit's dismissal stands. Because the ruling is a final merits decision on a legal question, foreign corporations generally cannot be sued under this statute going forward unless Congress passes new legislation. Individual employees of corporations, and domestic corporations in some circumstances, remain open questions the Court did not resolve here.
What this does not decide
The Court did not decide whether the bank's alleged conduct had a close enough connection to the United States to overcome separate limits on suing over conduct occurring mostly overseas, nor whether individual bank employees or domestic (as opposed to foreign) corporations could still be sued under the statute.
Concurrences and dissents
Concurrence — Justice Thomas
Justice Thomas joined the Court's opinion in full and separately endorsed the views of Justices Alito and Gorsuch: that courts generally should not create new causes of action under the Alien Tort Statute, especially where doing so risks international friction, and that the statute likely does not apply to suits between two foreign parties.
Concurrence in part — Justice Alito
Justice Alito agreed with barring foreign corporate liability but argued the outcome is compelled by separation-of-powers principles, not just judicial caution. He reasoned that courts should decline to create new common-law lawsuits under the Alien Tort Statute whenever doing so would not actually reduce diplomatic friction, and concluded that suing foreign corporations would not meaningfully avoid such friction.
Concurrence in part — Justice Gorsuch
Justice Gorsuch would have gone further, arguing courts should never create new causes of action under the Alien Tort Statute at all, since that job belongs to Congress. He also argued the statute likely requires a domestic defendant, meaning courts should not hear lawsuits between two foreign parties over international-law violations.
Dissent — Justice Sotomayor
“In so doing, it absolves corporations from responsibility under the ATS for conscience-shocking behavior.”The dissent's central objection to shielding corporations from liability.
Justice Sotomayor argued the text, history, and purpose of the Alien Tort Statute all support allowing lawsuits against corporations, and that international law does not distinguish between corporations and individuals for these purposes. She argued the majority misapplied the relevant legal test and would have sent the case back to let the lower court address other unresolved issues, warning the ruling lets corporations escape accountability for serious human-rights abuses.
How the Court got there
The legal reasoning, step by step
- The Court applied the two-part framework from Sosa v. Alvarez-Machain for deciding when courts may recognize a lawsuit under the Alien Tort Statute: first asking whether the alleged violation matches a well-defined, universally accepted international-law rule, and second asking whether courts should exercise discretion to allow the suit or instead defer to Congress.
- Rather than resolve whether international law itself imposes liability on corporations specifically, the Court moved to the second step, reasoning that courts should be very cautious about creating new categories of lawsuits without clear direction from Congress, especially where foreign policy is at stake.
- Looking for guidance, the Court turned to the Torture Victim Protection Act, the only Alien-Tort-related cause of action Congress itself wrote, and noted that Congress limited liability there to 'individuals' -- meaning human beings, not corporations.
- The Court treated Congress's deliberate choice to exclude corporations from that statute as strong evidence that expanding liability to corporations under the Alien Tort Statute is a decision for Congress, not judges, to make.
- The Court also weighed practical foreign-policy risks, noting the litigation had strained relations with Jordan for over a decade and that recognizing corporate liability could invite other countries to let their courts sue American corporations in return.
- Balancing these separation-of-powers and foreign-relations concerns, the Court concluded that, absent further action from Congress, courts should not extend liability under the Alien Tort Statute to foreign corporations.
Doctrinal impact
Cases affected by this decision
Reaffirms Kiobel v. Royal Dutch Petroleum Co. (569 U. S. 108)
The Court builds on Kiobel's reasoning about foreign-policy caution while resolving the corporate-liability question Kiobel left open.
Reaffirms Sosa v. Alvarez-Machain (542 U. S. 692)
The Court applies and relies on Sosa's two-step test for recognizing new lawsuits under the statute.
Reaffirms Correctional Services Corp. v. Malesko (534 U. S. 61)
The Court relies on Malesko's refusal to extend corporate liability to a related type of lawsuit as supporting analogy.