In Re Arab Bank, PLC Alien Tort Statute Litigation
2015 U.S. App. LEXIS 21242
2d Cir.2015Background
- Plaintiffs allege that Arab Bank, PLC (a Jordanian corporation) financed and facilitated terrorist attacks in Israel, the West Bank, and Gaza via accounts and proxy entities, including HAMAS, through its New York branch.
- Five related ATS claims were filed between 2004 and 2010 in the Eastern District of New York; later, only ATS claims remained in three actions after other claims were dismissed.
- The district court, following Kiobel I, held that the ATS does not permit corporate liability, and dismissed the ATS claims on that basis.
- Kiobel II (2013) affirmed Kiobel I on extraterritoriality grounds but did not overrule Kiobel I on corporate liability; it suggested the ATS may permit some corporate liability under a different reading of the statute.
- The Second Circuit panel declined to overrule Kiobel I en banc or by Supreme Court for corporate liability, and affirmed the district court’s dismissal of the ATS claims, while noting a growing circuit consensus toward corporate liability.
- The court also denied reinstatement of federal common law claims or amendment to non-federal theories, concluding these would be futile or lack a sound basis under Erie and related authorities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kiobel I remains controlling on ATS corporate liability | Kiobel II undermines Kiobel I; corporate liability may be possible. | Kiobel II did not overrule Kiobel I; corporate liability remains unavailable under the ATS. | Kiobel I remains the law of the circuit on corporate liability. |
| Whether Kiobel II alters the extraterritoriality framework governing ATS claims | Kiobel II supports jurisdiction by focusing on territorial touch and concern in light of corporate activity. | Kiobel II relies on extraterritoriality limits that remain in force; jurisdiction remains narrow. | Kiobel II does not overrule Kiobel I; extraterritoriality remains a jurisdictional constraint that supports dismissal here. |
| Whether this court should overrule Kiobel I or grant en banc relief | Overrule Kiobel I or reconsider in en banc to allow ATS corporate liability. | Kiobel I should remain intact unless en banc or Supreme Court revises it. | The court declines to overrule Kiobel I and leaves en banc or Supreme Court review as the vehicle for potential change. |
| Whether the district court abused its discretion by denying leave to amend or reinstate non-ATS claims | Reinstate general federal common law claims or plead non-federal theories to salvage claims. | No sound basis for federal common law claims; amendment would be futile and Erie concerns apply. | Affirmed denial of reinstatement/amendment; amendment would be futile and would not survive jurisdictional or doctrinal constraints. |
Key Cases Cited
- Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010) (holding ATS does not recognize corporate liability)
- Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (affirms Kiobel I on extraterritoriality grounds)
- Sosa v. Alvarez-Machain, 542 U.S. 692 (U.S. 2004) (framework for recognizing customary international law norms in ATS)
- Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014) (discusses limits of personal jurisdiction and ATS claims post Kiobel II)
- Beanal v. Freeport-McMoRan, Inc., 197 F.3d 161 (5th Cir. 1999) (recognizes jurisdictional questions under ATS frameworks)
- Balintulo v. Ford Motor Co., 796 F.3d 160 (2d Cir. 2015) (post-Kiobel II discussion of corporate ATS liability in circuit)