Jesner v. Arab Bank

  • October 10, 2017
    Guest Post

    by Jeffrey S. Vogt, Legal Director, Solidarity Center

    Since the modern “rediscovery” of the Alien Tort Statute (ATS), starting with Filártiga v. Peña-Irala in 1980, corporations have been named as defendants in ATS cases. That corporations could be held liable under the ATS for jus cogens violations of customary international law had for years generated little controversy. In 1997, in Doe v. Unocal Corp, the first major ATS case against a corporation, the question as to whether corporations, as opposed to natural persons, could be held liable under ATS was not at issue. By 2008, the 11th Circuit Court of Appeals, in Romero v. Drummond Company, could quickly dispense with the issue holding that, “The text of the Alien Tort Statute provides no express exception for corporations[.]” This acceptance came to a halt when in 2010, the Second Circuit Court of Appeals, in Kiobel v. Royal Dutch Shell, held that corporations could not be held liable under the ATS because corporate liability was not sufficiently developed under customary international law (as opposed to US law). The US Supreme Court avoided addressing the issue when Kiobel was before it in 2013, instead finding a lack of jurisdiction over the Dutch, corporate defendant due to a presumption against extraterritoriality. Notably, not all courts followed Kiobel; the Seventh Circuit, in the 2011 case of Flomo v. Firestone National Rubber Company, kept the doors open to corporate ATS cases.  

  • October 2, 2017
    Guest Post

    by John M. Eubanks, Member, Motley Rice LLC, Petitioners’ Counsel in Jesner v. Arab Bank

    Imagine a situation where an international bank with a presence in Manhattan holds accounts for known terrorists and serves as the end-payor to beneficiaries of a fund created for the explicit purpose of supporting an armed uprising typified by suicide bombings and indiscriminate killing of civilians carried out by known terrorist organizations with whom the bank’s accountholders are directly affiliated. Then, picture this international bank being immune from lawsuits filed by the victims of these suicide bombings and indiscriminate killings solely on the basis of its corporate form. This is precisely the issue with which the Supreme Court will grapple in Jesner v. Arab Bank, to be argued before the Court on October 11, 2017. 

    Jesner addresses the same question that was raised in Kiobel v. Royal Dutch Petroleum Co. during the October Term 2011. That question is whether the Alien Tort Statute (ATS),  creates a categorical bar to corporate liability for violations of the law of nations, or customary international law. The U.S. Court of Appeals for the Second Circuit – from which this appeal came – is the only federal court of appeals to determine that corporations are immune from the reach of the ATS, finding itself in conflict with the U.S. Courts of Appeals for the Seventh, Ninth, Eleventh, and District of Columbia Circuits. While the Supreme Court had the opportunity to decide this issue in Kiobel, the Court instead answered a distinct question of whether claims under the ATS are subject to the presumption against extraterritoriality – that is, laws do not cover conduct that takes part outside the territorial confines of the United States absent explicit language to that effect. The Supreme Court carved out a test for overcoming this presumption under the ATS – “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.”