Jesner v. Arab Bank, PLC

Background

Petitioners are thousands of foreign nationals and family members who say they were injured or killed in terrorist attacks abroad and sued a major Jordanian bank, which has a New York branch. They alleged the bank cleared dollar transfers through CHIPS in New York that benefited terrorists and helped launder money for a Texas charity. The district court dismissed the lawsuits, and the Second Circuit affirmed based on its earlier Kiobel ruling that foreclosed ATS suits against foreign corporations.

Reasoning

The core question was whether the Alien Tort Statute lets federal courts impose new liability on foreign corporations for violations of the law of nations. The Court explained the ATS is jurisdictional and said courts must be cautious about creating new causes of action under Sosa because that raises separation-of-powers and foreign-relations concerns. The Court relied on the Torture Victim Protection Act, international practice, and the risk of diplomatic friction—noting tension with Jordan—and concluded that courts should not recognize ATS claims against foreign corporations without Congress acting.

Real world impact

The decision prevents most suits against foreign corporations under the ATS, so victims who sued banks like Arab Bank cannot recover under this statute. Plaintiffs can still pursue individual employees, use other federal or state laws, or ask Congress to create remedies. The Court emphasized that Congress or the Executive may decide whether and how to allow corporate liability in the future.

Dissents or concurrances

Justice Sotomayor’s dissent argued the ATS, history, and purpose allow corporate suits and would remand to test the alleged terrorism-financing norm and U.S. contacts. Concurring Justices warned about separation-of-powers and urged deference to Congress on creating new causes of action.