Terror Liability Troubles Kennedy, Conservatives At High Court

The court's four liberals indicated that corporations should not be immune.

The case at hand grew out of terrorist attacks carried out by Hamas and other groups between 2004 and 2010 during the Second Palestinian Intifada, the Arabic word for uprising. Claiming that the Jordan-based Arab Bank sponsored the violence by processing $2.5 million in payments at its New York City branch, relatives of some 6,000 foreign victims filed suit in Brooklyn.

The court has wrestled before with the kind of lawsuits authorized by the Alien Tort Statute, which was enacted by the first Congress in 1789.

Kagan appeared sympathetic with this point, and elsewhere in the argument said the bank has "plenty of things to gripe about", in this case. Her comments raise the possibility that the justices could reach a compromise, concluding this case may not proceed in an American court given its weak connection to the US while saving the question of corporate liability for another day. "I think the question is do you have something to gripe about as to this particular point, which is corporate versus individual liability".

Chief Justice John Roberts said he was concerned that corporate liability would cause "foreign entanglements", alluding to the Trump administration's contention the case has caused friction with the Jordanian government. But he urged the justices not to adopt a categorical rule that corporations may never be sued under the 1789 law.

"Norms control behavior", said Kennedy, who usually serves as a tiebreaker in cases split along party lines. But she added that corporate liability was not one of them. "That seems to me to be a norm".

Justices Samuel Alito and Neil Gorsuch also questioned whether corporations could be sued.

Human rights advocates say the ATS is an essential vehicle for corporate oversight and accountability.

A law adopted by the first Congress in 1789 called the Alien Torts Statute (ATS) allows US courts to hear cases involving foreign nationals for "violation [s] of the law of nations or a treaty of the United States". "In the two years after Kiobel", he said, "over 70 percent of those cases were dismissed on extraterritoriality grounds, and another 10 percent were dismissed for other reasons". Royal Dutch Petroleum Co.

But that room narrowed in Kiobel where Nigerian plaintiffs had accused foreign oil companies of aiding atrocities against villagers in the Ogoni region carried out by the Nigerian military and police forces. The U.S. Court of Appeals for the 2nd Circuit in NY agreed with that position. "If suits like this were taken away, Israel and countries like it might well have a complaint to the United States".

Arab Bank disputes this, saying the transactions occurred entirely overseas, with no money being transmitted through the U.S.

"Imagine Israel's view if our entire finance system could be used and accessed to commit terrorist attacks, make them easier, make them more deadly, make the funding more effective", he said. The organization, they claim, helped "identify, locate, and pay the families of suicide bombers and other terrorists".

The lead plaintiff in the Arab Bank case is Joseph Jesner, whose British citizen son was killed at age 19 in a 2002 suicide bombing of a bus in Tel Aviv.

Before coming into vogue in the 1980s, the Alien Tort Statute had been gathering dust for centuries. It reads: "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".

"So, there is an American corporation", she said, beginning her hypothetical.

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