Issue
The main question in Jesner v. Arab Bank, PLC is whether federal courts are open to non-U.S. citizens who bring actions against foreign corporations for torts committed under the Alien Tort Statute (ATS). In this case, the petitioners maintained that Arab Bank was involved in facilitating acts of terrorism through its New York branch.
Justice Kennedy’s majority opinion emphasized a structural concern about the separation of powers by noting that Congress, as a legislative body, would be better placed to decide if new substantive legal obligations should be imposed. That decision effectively bars foreign corporations from being made defendants in Alien Tort Statute (ATS) claims and, consequently, limits their potential exposure to liability in American courts.
Rule of Law
The ATS, enacted as part of the Judiciary Act of 1789, confers original jurisdiction on district courts over civil actions by aliens for torts committed in violation of any recognized law of nations or a treaty of the United States (Jesner et al. v. Arab Bank, PLC). Establishing legal responsibility is a complicated issue, especially in international relations. Justice Kennedy’s opinion highlights the fine but distinct line between the branches of government.
Although it is not a court, Congress can legislate on what might constitute legal responsibility. This position is based on the idea that considering broad policy implications and being accountable to the electorate make Congress particularly well placed for this task, as it can weigh potential diplomatic consequences of lawsuits against foreigners. This means, therefore, that any matters concerning the consequences of foreign policies arising from these cases should be left to the political level.
Application
Petitioners in Jesner v. Arab Bank, PLC- all non-Americans – used ATS to sue, claiming they or their relatives became victims of terrorist attacks abroad, arguing that Arab Bank facilitated these acts despite being a Jordanian foreign corporation with branch offices in New York (Jesner et al. v. Arab Bank, PLC). The bank’s claimants insisted that its New York office served as the channel through which money transactions and fund clearing for terror groups occurred, providing a connection to US jurisdiction.
The case has implications for whether non-U.S. citizens can seek justice for alleged human rights violations committed abroad, particularly by multinational firms. It excludes foreign corporations as defendants, thus narrowing down the application of ATS. The reduction may impede prospective plaintiffs who are not U.S. citizens from bringing cases against multinational firms concerning civil liberties abuses, for example, violations of human rights with immigrants accessing U.S. justice systems.
Conclusion
In a 5–4 decision, the Supreme Court held that foreign companies are not proper defendants in suits brought under the Alien Tort Statute. This ruling reaffirmed the separation-of-powers principles articulated by the Second Circuit. Speaking for the majority, Justice Anthony Kennedy noted that Congress, rather than judges, should decide when and how to impose new substantive legal liability, especially in cases with potential effects on US relations with other countries.
This pronouncement emphasized that such cases can carry diplomatic consequences and, therefore, it was important for Congress to be involved in creating legal remedies for them. Consequently, this decision sets a precedent limiting the scope of the Alien Tort Statute concerning foreign corporations while stressing the political branches’ roles in addressing matters with international implications.
The claimants invoked the ATS as a basis for their suits in U.S. Federal District Courts on behalf of non-U.S. citizens who are injured by corporate torts they allege violated the law of nations or a U.S. treaty. Therefore, it is difficult to determine whether there is a direct nexus between the New York branch’s activities and allegations of human rights violations elsewhere, or whether the bank could be held liable under the ATS for abetting such transactions.
References
JESNER v. ARAB BANK, PLC. (n.d.). LII / Legal Information Institute.
Jesner v. Arab Bank, PLC. (n.d.). SCOTUSblog.