Ed. note. This article is the latest in our series on the 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 for human rights violations and terrorism.

In Jesner v. Arab Bank, the Supreme Court is asked to decide whether corporations can be sued under the Alien Tort Statute (ATS).  The Court faced this question in the 2012 case, Kiobel v. Royal Dutch Petroleum Co., but avoided it by deciding the case on other grounds.  The court should avoid the issue again in Jesner – again because there is an easier way to resolve the case.

Jesner involves a claim by non-U.S. plaintiffs against a non-U.S. defendant (a bank based in Jordan) for injuries suffered at the hands of a non-U.S. terrorist group (Hamas) outside the U.S. (in Israel and the Palestinian territories).  The bank is alleged to have provided financial services to Hamas affiliates, but the only connection to the U.S. is that some of the funds are said to have been channeled through the bank’s New York branch.  The purpose of the ATS was not to facilitate this sort of claim, and this sort of claim would not have been subject to ATS jurisdiction when the ATS was originally enacted in 1789. 

The purposes of the ATS are easily understood from its background.  Under the Articles of Confederation, the national government was anxious to comply with its obligations under treaties and the law of nations (as customary international law was then called), in order to promote diplomacy with and avoid offense to powerful European nations.  However, the U.S. states often did not respect the nation’s international obligations, leading to various foreign policy difficulties, and Congress under the Articles lacked power to compel compliance or to provide remedies to injured parties.  A key goal of the Constitution and the 1789 Judiciary Act (of which the ATS was part) was to give the national government power to prevent violations for which the United States would be held responsible and to provide remedies at the national level if such violations occurred.

Crucially, though, the founding-era concern was over violations for which the U.S. had responsibility.  The goal of the ATS was not to provide a forum for worldwide grievances; it had the very practical object of promoting and protecting U.S. foreign policy.  Claims involving alleged transgressions by foreign banks against foreigners were not the sort of matters for which the U.S. would be held responsible or for which foreign nations would expect the U.S. to provide a forum.

One may object, however, that the ATS’s text does not contain any such limit, whatever its purposes may have been.  It appears to give jurisdiction over “any” claim by any alien for a tort committed in violation of the law of nations.  Nonetheless, in the founding era it could not have granted jurisdiction over alien-versus-alien claims such as Jesner because Article III of the U.S. Constitution did not extend federal jurisdiction to such claims.

As relevant to Jesner, Article III, Section 2 extended federal jurisdiction to admiralty and maritime cases, cases affecting ambassadors, cases between a U.S. citizen and an alien, and cases arising under “this Constitution, the Laws of the United States, and treaties made [by the United States].”  Article III did not extend federal jurisdiction to cases arising under the law of nations (international law) as a general matter. Many law-of-nations cases would fit within the various categories Article III set forth, but Jesner does not: it is not an admiralty or maritime case, it does not involve ambassadors, it does not involve a U.S. citizen party, and it does not arise from the Constitution, laws of the United States (as understood in the founding era) or a U.S. treaty.

Some scholars contend that the law of nations was understood to be part of the “Laws of the United States” in Article III, but Article III’s text and structure are inconsistent with this reading.  First, Article III specifically lists cases arising under “this Constitution, Laws of the United States and treaties.”  Thus the category “Laws of the United States” did not include either the Constitution or U.S. treaties, even though those are obviously in some sense laws of the United States: the Constitution lists them as part of “the supreme Law of the Land” in Article VI.  It is hard to see how the law of nations – which is not listed as part of Article VI’s supreme law – could be considered part of Article III’s “Laws of the United States” when the Constitution and treaties were not.  It seems much more likely that “Laws of the United States” in Article III meant laws made by the United States, i.e., statutes enacted by Congress.  That apparently was Hamilton’s view in Federalist 80, where in describing Article III’s categories of jurisdiction he referred to “all those [cases] that arise out of the laws of the United States, passed in pursuance of their just and constitutional powers of legislation.”

Further, the structure of Article III shows that, rather than making all of the law of nations a jurisdictional category, the framers picked the types of law-of-nations cases they thought most appropriate for federal jurisdiction.  Thus for example, Article III separately lists admiralty cases and cases involving ambassadors as categories of jurisdiction.  If not governed by U.S. statues or treaties (where there would be “arising under” jurisdiction), these cases would at the time usually have been governed by the law of nations.  But if the law of nations as a whole was already part of federal jurisdiction, these jurisdictional grants would be largely superfluous.  The better view of Article III is that the framers gave specific grants of jurisdiction over particular kinds of law-of-nations cases.  Again, this is confirmed by Federalist 80, in which Hamilton discussed the specific jurisdictional grants as cases likely governed by the law of nations, but made no mention of a general grant of jurisdiction over all law-of-nations cases.

True, the ATS’s text does not expressly limit itself to cases within Article III jurisdiction.  But as the Supreme Court held in Mossman v. Higginson (1800), the 1789 Judiciary Act’s jurisdictional grants should be read to implicitly incorporate Article III’s jurisdictional limits.  In Mossman, the Court considered the Judiciary Act’s grant of jurisdiction (subject to an amount-in-controversy limitation) over suits to which an alien is a party.   The Court held that this provision could not grant jurisdiction in a suit between two aliens, because the Act could not go beyond Article III: “the Judiciary Act can and must receive a construction consistent with the Constitution.”  There is every reason to believe the Court would have seen the ATS (a provision of the same Act) to be similarly limited.

This is not the end of the story, because more recently the Court has held that federal courts may in cases of “unique federal interests” create federal common law causes of action, and these causes of action are “Laws of the United States” sufficient for Article III jurisdiction.  And in Sosa v. Alvarez-Machain (2004), the Court seemed to assume that federal courts could create such causes of action under the ATS.

But this development simply reframes the question as whether the Court should recognize a cause of action under the ATS to cover the situation in Jesner.  The answer should be no.  Jenser is not the sort of claim Congress had in mind in passing the ATS.  It is not a situation in which the United States is obliged under international law to provide a remedy.  It is not a situation in which U.S. foreign policy will be damaged by failure to provide a remedy.  It is not a situation in which the United States has a substantial foreign policy interest.  It is not a situation in which, under the original meaning of Article III and the ATS, federal courts would have had jurisdiction.  The Court may have power, under modern law, to recognize causes of action to facilitate the purposes of the ATS, even as to suits between aliens (especially those involving ambassadors or maritime claims, as envisioned by Article III).  But that power does not support the Court recognizing a cause of action in Jesner.