Supreme Court to weigh if firms can be sued in human rights cases

Adam Liptak
A sign sits on display outside the headquarters of Arab Bank PLC in the financial district in Amman, Jordan.
Freya Ingrid Morales | Bloomberg | Getty Images

The Supreme Court agreed on Monday to decide whether corporations may be sued in American courts for complicity in human rights abuses abroad.

The case concerns Arab Bank, which is based in Jordan and has been accused of processing financial transactions through a branch in New York for groups linked to terrorism. The plaintiffs in the case seek to hold the bank liable for attacks in Israel and in the Palestinian territories by Hamas and other groups.

The case turns on the meaning of the Alien Tort Statute, a cryptic 1789 law that allows federal district courts to hear "any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."

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The law was largely ignored until the 1980s, when federal courts started to apply it in international human rights cases. A 2004 Supreme Court decision, Sosa v. Álvarez-Machain, left the door open to some claims under the law, as long as they involved violations of international norms with "definite content and acceptance among civilized nations."

The federal appeals courts are divided over whether corporations may be sued under the law.

The Supreme Court had agreed to decide the question once before, in 2011, in Kiobel v. Royal Dutch Petroleum. The Obama administration urged the court to rule that corporations could be subject to the law.

After hearing arguments on the question in 2012, the Supreme Court asked the parties to brief and argue a broader issue: whether American courts may ever hear disputes under the law for human rights abuses abroad, whether the defendant was a corporation or not.

In 2013, the court said that there was a general presumption against the extraterritorial application of American law, ruling against Nigerian plaintiffs who said foreign oil companies had aided in atrocities by Nigerian military and police forces against Ogoni villagers.

Chief Justice John G. Roberts Jr., writing for the majority, wrote that even minimal contact with the United States would not be sufficient to overcome the presumption. "Even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application," he wrote.

But the Supreme Court did not answer the question it had initially agreed to consider, whether corporations are categorically excluded from the law.

The new case, Jesner v. Arab Bank, No. 16-499, is likely to produce an answer. It is an appeal from a decision of the United States Court of Appeals for the Second Circuit, in New York, which ruled in favor of Arab Bank, saying that corporations may not be sued under the 1789 law.

The plaintiffs in the case said the bank had "served as the 'paymaster' for Hamas and other terrorist organizations, helping them identify and pay the families of suicide bombers and other terrorists."

The bank responded that it had helped the United States in "the fight against terrorism financing and money laundering" and was not accused by the plaintiffs of being "involved in the planning, financing or commission of the attacks that caused their injuries."