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.”