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Jesner v. Arab Bank: U.S. Foreign Policy and National Security Interests

 

Editor’s note. This post  is the latest in our series on the upcoming U.S. Supreme Court case Jesner. v. Arab Bank, a case that is slated to resolve the question of whether corporations can be sued under international law.

Jesner v. Arab Bank, being argued today before the U.S. Supreme Court, presents the Court with the question of whether the Alien Tort Statute (ATS), 28 U.S.C. 1350, “categorically forecloses corporate liability.” (The ATS states: “The district courts shall have original jurisdiction of 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.”) The case is on appeal from the U.S. Court of Appeals for the Second Circuit, which affirmed the decision of the U.S. District Court for the Eastern District of New York. The trial court dismissed petitioners’ suits on the ground that the Second Circuit had foreclosed claims against corporations under the ATS.

The Court previously granted certiorari to resolve the same question in Kiobel v. Royal Dutch Petroleum Co. (2013). However, the Court declined to address that question directly, holding on the alternative ground that the presumption against extraterritoriality applies to claims under the ATS. Under Kiobel, any such claim must “touch and concern” the United States with “sufficient force to displace the presumption,” which the Court found that the Kiobel plaintiffs’ claims did not do.

As part of the Just Security symposium that Beth Van Schaack has organized, the following commentary focuses on the brief for the U.S. government (USG) in Jesner as amicus curiae supporting neither party. As stated in that brief, the USG is interested in “the proper application of the ATS because actions under the statute “can have implications for the Nation’s foreign and commercial relations and for the enforcement of standards of conduct under international law.” The USG argues that the Court should vacate the decision of the court of appeals because it “rests on the mistaken premise that a federal common-law claim under the ATS may never be brought against a corporation.” In doing so, the USG further contends, the Court should remand the case to the court of appeals to determine whether petitioners’ claims satisfy the “touch and concern” extraterritoriality standard identified in Kiobel

Jesner’s facts and issues are well summarized elsewhere (here and here). In short, several alien persons suffered injury or death from terrorism in Israel and the Palestinian territories. Petitioners—survivors and the deceased’s relatives—accused Arab Bank, which is headquartered in Jordan and has multiple branches around the world, including one in the United States (specifically, New York), of “financing and facilitating” terrorist groups that perpetrated the attacks. In particular, petitioners allege that respondent

knowingly used its New York branch to collect donations, transfer money, and serve as a “paymaster” for international terrorists. . . . [T]he Bank distributed U.S. dollar payments in the hundreds of millions to finance suicide bombings and to make so-called “martyrdom” payments – payments rewarding families of the perpetrators for killing innocent civilians.

Petitioners invoked the ATS in a suit they filed in the district court seeking damages from Arab Bank. The USG observes that petitioners’ claims may not be sufficiently connected to the United States to satisfy the extraterritoriality concerns raised in Kiobel. As the USG summarizes, petitioners’ claims “involve foreign plaintiffs seeking recovery from a foreign defendant based on injuries incurred at the hands of foreign terrorist organizations acting on foreign soil.” The USG notes that the only connection to the United States that the court of appeals identified “is the alleged routing of dollar-denominated foreign transactions through respondent’s New York branch.”

The case presents important questions at the intersection of corporate social responsibility and liability, terrorism and terrorism financing, international law, extraterritoriality, and human rights. The USG ultimately argues that the continuation of Jesner, without having the court of appeals directly address the extraterritoriality issue, “would be detrimental to the foreign-policy interests of the United States.” The USG is concerned that continued jurisdictional ambiguity would harm its relationship with, on the one hand, Jordan (and other, unnamed allies in combatting terrorism), and, on the other hand, Arab Bank itself, which the USG states has helped prevent terrorist financing.

But are there countervailing foreign-policy interests that the USG should acknowledge? The United States has an interest in urging Jordan to combat terrorist financing allegedly emanating from what the USG identifies as the Middle Eastern country’s “leading financial institution.” A civil suit against its major bank may prompt Jordan to regulate its domestic financial institutions more rigorously and cooperate in global counterterrorism efforts more effectively. If, as the USG contends, Jordan is such “a key counterterrorism partner” that “cooperates with measures to thwart the financing of terrorist activities,” then why would the U.S.-Jordan relationship necessarily be harmed if a well-founded suit against Arab Bank proceeded? Such a precedent could even lead other countries to participate more seriously in combating terrorism.

For its part, Arab Bank publicly touts its supposed commitment to the very principles that it allegedly violated in giving rise to this case. On its website, under “corporate responsibility,” the financial institution states: “Since its founding, Arab Bank has been an active community member. The Bank’s leadership places strong emphasis on best practice approach [sic] toward issues related to economic and social aspects of its business, with relation to the communities of its operation areas and stakeholders.” But if petitioners’ claims are true, then Arab Bank is neither the paragon of corporate virtue it boasts nor is it the “constructive partner . . . in working to prevent terrorist financing” that the USG claims. In that case, the U.S.-Arab Bank relationship may not actually be as positive as the USG asserts or even knows. If that’s the case, holding Arab Bank liable would promote the U.S. interest in identifying, deterring, and punishing terrorist financing and making civil damages available to terrorism survivors and the deceased’s relatives.

As the USG brief observes, the Supreme Court emphasized in Kiobel that courts adjudicating ATS claims should be “particularly wary of impinging on the discretion of the Legislative and Executive Branches in managing foreign affairs.” But the USG’s brief in Jesner fails to consider how advancement of the case could be helpful, rather than detrimental, to the foreign policy interests of the United States.

Image: Getty/Drew Angerer

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About the Author

is Lecturer in Law and Fellow at Stanford Law School, Visiting Scholar at the Hoover Institution, and Senior Fellow at Harvard University John F. Kennedy School of Government’s Carr Center for Human Rights Policy. You can follow him on Twitter (@zacharykaufman ).