In Jesner v. Arab Bank, No. 16-499, the U.S. Supreme Court will decide this year whether corporations can be sued for international law violations under the Alien Tort Statute of 1789 (ATS). Enacted as part of the initial Judiciary Act setting up the federal courts, the ATS lay dormant for 200 years—a virtual Lohengrin of the law, in Judge Henry Friendly’s memorable phrase—until it was rediscovered during the Carter administration and has become a favored tool of plaintiff lawyers to challenge practices in foreign countries alleged to violate international law but having little to no connection to the United States. ATS cases are not brought against the foreign countries themselves because they are protected by sovereign immunity. Nor are they brought against malefactors themselves who are typically judgment-proof. Rather, they are brought against U.S. and foreign corporations as aiders and abettors because they provide lawful assistance to the foreign countries—not on a U.S. ban—such as by building bridges and highways or processing financial transactions for them.
Jesner itself involves a claim by victims of terrorism in Israel and the West Bank not against the Palestinian Authority which supports the terrorists or against Hamas and the other terrorist organizations but, rather, a suit brought against the Jordanian bank that allegedly processed certain payments to fronts for those organizations. The defendant in the case did not violate Jordanian law and has resolved all questions about its banking activity to the satisfaction of U.S. bank regulators. Israel also uses the same defendant bank to process its financial obligations to the PA. Yet, the ATS litigation proceeds.
The ATS was enacted to enable foreigners to obtain a remedy for personal injuries committed by U.S. citizens against aliens in this country, not to provide a forum for extraterritorial wrongs. The concern was that the failure to provide such redress for those injured here by our own citizens would be taken as an affront by, and could lead to worsened relations with, the home country of the injured alien. The purpose was thus to avoid frictions with other countries. Yet, in the litigation-friendly culture of this country, the ATS now provides a vehicle for federal courts and juries to sit in judgment on conduct abroad claimed to violate international law but having no nexus with U.S. interests. From the standpoint of original congressional intent, it is inconceivable that the fledgling republic in 1789, bereft of a standing army and with hardly a navy, launched a litigation vehicle in U.S. courts for seeking damages from U.S. and foreign corporations for conduct on foreign shores.
Supporters of ATS litigation emphasize the importance of preventing corporations from violating human rights values when they knowingly provide assistance to states or other actors who commit rights violations. But corporate liability for international wrongs has not been firmly established absent special treaty. Corporations are creatures of national law and sometimes are instrumentalities of the foreign states. Because different countries have different ways of regulating corporate conduct, the international community avoided entity liability both during Nuremberg right after World War II and in establishing the International Criminal Court in the 1990s.
The ATS is too unwieldly a blunderbuss, purporting to reach all international violations occurring anywhere and without regard to whether U.S. interests are at stake. Congress knows how to deal with human rights abuses when that is its focus. When Congress enacted a federal law in 1991 authorizing damages suits for victims of torture and extrajudicial killing, those suits were authorized only against individuals, not legal entities like corporations Similarly, while the United States has ratified the international Convention on Terrorist Financing, a 1999 UN treaty, that instrument carefully tailors entity liability to situations where “a person responsible for the management or control of that legal entity” engaged in the prohibited conduct.
The ATS provides a cause of action at the behest of an alien for torts in violation of international law. This requires both that there be an international standard of conduct that has been violated and an actor capable of violating international law. At this juncture, absent a special treaty, corporations are not suable for violations of international law. The case against the Arab Bank should be dismissed.
Samuel Estreicher is the Dwight D. Opperman Professor and Director of the Center for Labor and Employment Law at New York University School of Law. He authored a pro bono amicus brief for U.S. foreign relations scholars in the case discussed herein.