Jesner v. Arab Bank, PLC, 138 S. Ct. 1386

Background

Petitioners (mostly foreign nationals) sued Arab Bank, a Jordanian bank with a NY branch, under the Alien Tort Statute (ATS) alleging the bank facilitated terrorism financing that caused injuries and deaths abroad.
Allegations focused on dollar-clearing (CHIPS) through Arab Bank’s New York office and money transfers linked to Hamas-affiliated charities.
Lower courts (Second Circuit) dismissed ATS claims based on its precedent (Kiobel C.A. ruling) holding foreign corporations cannot be defendants under the ATS; the District Court and Second Circuit affirmed dismissal.
The Supreme Court granted certiorari to decide whether the ATS permits suits against foreign corporations and to address related Sosa framework issues.
The United States and various amici (including Jordan) participated; the case raised separation-of-powers and foreign-relations concerns about creating new ATS causes of action targeting corporations.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether foreign corporations may be sued under the ATS	ATS permits federal common-law causes for violations of international norms; corporate liability is appropriate to hold institutions accountable	ATS does not authorize corporate liability; imposing it would exceed judicial authority and risk foreign-policy consequences	Foreign corporations may not be defendants under the ATS (categorical bar)
Whether international law already establishes corporate liability for law-of-nations violations	Petitioners: international instruments and state practice permit or leave remedies to domestic law, so corporate liability is consistent with international law	Arab Bank: international law and international tribunals generally impose liability on natural persons only; no specific, universal, obligatory norm of corporate liability exists	Court found doubt that international law imposes corporate liability and relied on that doubt in deferring to Congress; did not definitively decide whether international law imposes corporate liability
Whether courts should recognize new ATS causes of action against corporations absent congressional authorization	Petitioners: Sosa allows courts to recognize new causes where norms are specific and universally accepted	Respondent: separation-of-powers and foreign-relations concerns counsel against judicially creating corporate liability; Congress is better suited to weigh policy	Court held Sosa’s caution and separation-of-powers require deference to Congress; courts should not extend ATS liability to foreign corporations without congressional action
Whether analogous statutes or practical considerations support corporate ATS liability	Petitioners: other statutes and practices show corporate liability is plausible	Arab Bank: TVPA’s limitation to “individuals” and comprehensive regulatory schemes (e.g., anti-terrorism statutes) indicate Congress chose not to impose corporate ATS liability	Court treated TVPA and statutory/regulatory frameworks as persuasive that Congress has considered and limited liability to persons; this supports deferring to Congress

Key Cases Cited

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) (framework for when courts may recognize ATS-based federal common-law causes and caution about foreign-relations issues)
Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013) (presumption against extraterritoriality applies to ATS; required sufficient U.S. connection)
Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980) (early modern ATS decision recognizing claims for torture as violations of the law of nations)
Mohamad v. Palestinian Authority, 566 U.S. 449 (2012) (TVPA liability limited to natural persons)
Correctional Servs. Corp. v. Malesko, 534 U.S. 61 (2001) (courts should not create Bivens-style claims against corporations; deference to Congress)
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (abrogation of federal general common law and its implications)
Daimler AG v. Bauman, 571 U.S. 117 (2014) (limits on general jurisdiction over foreign corporations)