With the appointment of Justice Neil Gorsuch, the Supreme Court finally returns to its full strength. Spectators predict the advent of “5-4 split” verdicts, as the Court struggles to parlay deep divisions among justices into consensus. Several cases on the 2017 docket will prove pivotal in guiding our understanding of law in the future. One of the most relevant items is Jesner v. Arab Bank, likely to provide a more definitive answer to the question posed by previous cases Sosa v. Álvarez-Machain (2004) andKiobel v. Royal Dutch Petroleum (2011): can American courts hold foreign organizations responsible for involvement in human rights violations abroad?
Jesner is based on the plaintiff’s allegations that Arab Bank, a Jordanian financial institution with branches in the United States, processed transactions for major terrorist-linked groups, most notably Hamas, through the bank’s New York office. The plaintiffs seek to find Arab Bank liable for enabling terrorist attacks in Israel and areas in Palestine.
The case rests on the Alien Tort Statute (ATS) of 1789, which ostensibly empowers foreign citizens to sue foreign entities in United States courts for violations of international law or U.S. treaties that occurred outside of the United States. The original intent of ATS, originally introduced with the Judiciary Act of 1789, is unclear due to lack of legislative context from the 18th century. Thus, all interpretation of the scope of Alien Tort has been left to the judiciary, which to this point has typically reserved application of ATS for foreigners seeking reparations for human rights abuses perpetrated abroad. The first modern case under ATS was Filiartiga v. Peña-Irala (1976), where the parents of a Paraguayan victim of imprisonment and torture successfully sued one of their son’s captors. The precedent set by that ruling, that individuals can be held responsible for human rights violations outside of the United States, is clear. Droves of similar cases have been pursued under ATS since 1976, and Alien Tort has become a prevalent option in situations where plaintiffs have limited ability to seek reparations in their home country. Customarily, a plaintiff must prove that they have exhausted all options for reparation in their country of origin, as was the case in Filiartiga, where the corrupt Paraguayan legal system provided limited ability for the plaintiffs to pursue murder charges.
While ATS has been applied to a wide range of torts covering everything from passport fraud (Adra v. Clift (1961)) to war crimes (Kadic v. Karadzic (1996)) American jurisprudence has generally concluded that Alien Tort is applicable only against individuals. Efforts to place liability on entire governments would violate foreign sovereign immunity and constitutejudicial overreach. Essentially, cases involving ATS tend to pivot on interpretation of the court’s jurisdiction: when the American judicial system “self-authorizes” authority over foreign corporations, it compromises the legitimacy of any ruling. Arguably, this sort of discretionary expansion of the judiciary’s reach violates the Constitutional doctrine of separation of powers, which reserves issues of foreign affairs to the executive and legislative branches of government. Foreign states, and to a lesser extent foreign corporations, have not consented to the court’s jurisdiction over them and are not also technically present in U.S. territory to face charges. The Supreme Court has been hesitant to redefine their jurisdiction in the past for this reason, most notably in Daimler AG v. Bauman et al. (2014), where the justices overturned a lower court’s ruling that “extended general jurisdiction over a defendant’s activities outside of the forum where the court sits.”
Though Daimler AG carried fewer potential ramifications than Jesner might, its outcome may be prescient of the Court’s decision in 2017. Because few qualifiers for usage of Alien Tort were included in the original legislative text, the Supreme Court risks defining substantial precedent for ATS in their Jesner decision. In Jesner, an important detail is that Arab Bank’s alleged transactions with terrorist organizations purportedly took place in their New York office. The relevance of ATS in the case is contingent on this fact: if Arab Bank’s actions within the United States did indeed directly enable terrorist attacks, arguments against the validity of Alien Tort are limited. Though the plaintiffs’ basic usage of the United States’ court system as foreign citizens is enabled by ATS, a decision to hold Arab Bank liable for facilitating terrorist activity that is based on actions taken within U.S. territory would stand on a much stronger legal foundation than one based on actions abroad alone. If the Supreme Court wishes to avoid creating a precedent for foreign nationals to sue corporations in the United States through ATS, a ruling would need to place greater emphasis on prohibitions against financing terrorism than on Alien Tort.
The first time the Supreme Court directly addressed the ramifications of the Alien Tort Statute was in 2004 with Sosa, where the justices unanimously concluded that the ATS was intended to be “purely jurisdictional” when it was enacted in 1789; it granted courts the power to hear cases by foreign nationals, but did not constitute any specific cause for action. The Sosaopinion interpreted Alien Tort to “furnish jurisdiction for a relatively modest set of actions alleging violations of the law of nations,” and further defined that “law of nations” as “rest[ing] on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th-century paradigms we have recognized.” Thus, the interpretation of ATS as it stands is that any application must involve crimes as “specific, universal and obligatory” as international norms of in the late 1700s. But, is corporate obligation against enabling terror as strong as an international standard? Lower courts have found torture, degrading treatment, execution, genocide, war crimes, forced disappearance and crimes against humanity to be actionable under Alien Tort. The core issue facing the Supreme Court in the coming term is whether or not a foreign firm financially “aiding and abetting” terrorists holds equivalent severity, and is worthy of action that could be interpreted as judicial interference in executive or legislative affairs.
The Supreme Court heard oral arguments for Jesner v. Arab Bank on October 11th, 2017.