Plaintiffs in Jesner v. Arab Bank have sought certiorari from the United States Supreme Court requesting that the Court take up, and answer, the unresolved question of whether the Alien Tort Statute (ATS) permits corporate liability for violations of the law of nations. Seeking certiorari does not ensure that the Supreme Court will agree to hear the case—the Court agrees to hear only a small fraction of the cases submitted to it for review. In this case, however, the chances of review are somewhat increased because: (i) there is currently a split between the various Courts of Appeal on the question of whether corporate liability is possible in a claim brought under the ATS, and (ii) because the Second Circuit, which decided Jesner, specifically noted that the issue could benefit from the Supreme Court’s review.
Briefly, plaintiffs sued Arab Bank, which is one of the largest financial institutions in Jordan, several years ago alleging a variety of claims, including some under the ATS. The plaintiffs, U.S. and foreign nationals who were injured, or whose family members were killed or injured in certain terrorist attacks carried out in Israel, seek to hold the bank responsible for allegedly financing and facilitating the activities of Hamas, which the United States has labelled a terrorist organization. (Arab Bank previously settled claims brought on the basis of the same conduct by plaintiffs under the U.S. Anti-Terrorism Act, which allows U.S. citizens to pursue claims arising from international terrorism, having lost its bid to avoid liability in court.)
With respect to the ATS claims, the Second Circuit ruled for Arab Bank. The Second Circuit applied an earlier Second Circuit decision and held that ATS does not permit claims against corporations. That case, Kiobel v. Royal Dutch Petroleum, went to the Supreme Court, which ultimately decided the case on different grounds, finding that the presumption against extraterritorial application of U.S. law bars ATS claims that lack a sufficient connection to the United States. In rejecting the possibility that the claims presented in Kiobel had sufficient connections to the United States to permit them to go forward, the Court ruled that “it would reach too far to say” that [a defendant’s] mere corporate presence [in the United States] suffices.”
The question the Jesner plaintiffs, represented by Stanford Law School and two law firms, now ask the Court to address is the question left unanswered in Kiobel: whether a corporation, as opposed to a natural person, can be found liable under the ATS. The certiorari petition notes that several Courts of Appeal—by a margin of, according to the petition, “four to one”—have decided that the ATS permits corporate liability. Plaintiffs also argue that the Supreme Court’s decision in Kiobel suggests (or appears to suggest) that the ATS contemplates corporate liability. The petition disputes what it describes as the Second Circuit’s outlier position that, following Kiobel’s introduction of the “touch and concern” test, the issue of whether the ATS allows corporate liability will “rarely” matter. In support, and among other arguments, the petition points to another case currently making its way through the Second Circuit, involving terror financing allegations against another financial institution.
In that case, Licci v. Lebanese Canadian Bank, the Second Circuit concluded that plaintiffs’ ATS claims had “surpassed [Kiobel’s] jurisdictional hurdle,” since the conduct alleged touched and concerned the United States with the requisite “sufficient force” necessary to survive dismissal, and had stated a claim for a violation of the law of nations. Specifically, the court pointed to the bank’s use of a correspondent banking account in New York to facilitate wire transfers to a terrorist organization that enabled and facilitated terrorist rocket attacks harming or killing plaintiffs and their decedents. Ultimately, however, the court determined that the circuit’s bar on corporate liability under the ATS foreclosed the claims.
Back to Jesner, Arab Bank’s opposition is due on November 12. The petitioners have consented to any and all amicus briefs, and we expect at least one from Arab Bank. We will continue to monitor.