Facts
- Non-U.S. citizen plaintiffs alleged that they or their relatives were injured or killed in terrorist attacks in Israel, the West Bank, and Gaza between about 1995 and 2005.
- Plaintiffs sued Arab Bank, PLC, a Jordan-based bank with worldwide operations and a branch in New York.
- Plaintiffs alleged the bank knowingly facilitated transfers and related financial services that supported terrorist organizations, including clearing U.S. dollar transactions through New York and processing funds connected to entities allegedly affiliated with Hamas.
- Plaintiffs asserted the terrorist acts violated established norms of international law and that knowingly facilitating the financing would make the facilitator liable for those violations.
Issues
- Whether the Alien Tort Statute (ATS), 28 U.S.C. § 1350, permits federal courts to recognize a cause of action allowing suits against foreign corporations for alleged violations of international law.
- Whether separation-of-powers, foreign-relations, and comity concerns require courts to refrain from extending ATS liability to foreign corporate defendants without explicit congressional authorization.
Decision
- The Supreme Court affirmed the dismissal of the ATS claims against Arab Bank.
- The Court held that foreign corporations may not be defendants in suits brought under the ATS.
- Justice Kennedy wrote an opinion that commanded a majority for the judgment, with separate concurrences; four Justices dissented.
Legal Principles
- The ATS is jurisdictional and does not itself create causes of action; any judicially recognized ATS cause of action must be limited and treated with caution.
- Federal courts should not extend ATS liability to new categories of defendants where doing so risks significant foreign-relations consequences and lacks clear congressional authorization.
- Congress’s enactment of the Torture Victim Protection Act, which authorizes suits against natural persons only, supported the Court’s reluctance to impose corporate liability through judicial action under the ATS.
- The presumption against extraterritoriality and a limited U.S. nexus reinforced the Court’s decision not to expand ATS remedies to reach foreign corporate defendants.
Conclusion
The Court barred ATS suits against foreign corporations, reasoning that creating such liability is a policy decision for Congress and that judicial expansion would raise serious separation-of-powers and foreign-relations concerns, particularly where the alleged conduct is largely foreign with only limited U.S. connections.