In a historic ruling Tuesday, the U.S. Supreme Court ruled foreign corporations cannot be sued in American courts for damages in aiding terrorism or human rights violations overseas.
Tuesday’s ruling essentially determines the right to sue individuals or corporations in such cases should be determined by Congress.
In a 5–4 ruling along ideological lines, in the case of Jesner v. Arab Bank, justices determined foreign corporations can not be held liable under the Alien Tort Statute (ATS).
A section of the Judiciary Act of 1789, the ATS determines jurisdiction for civil action by foreign nationals for torts.
The case in front of the Court Tuesday was brought by victims of terror attacks occurring between 1996–2005 in Israel, the West Bank and Gaza alleging Arab Bank kept bank accounts for known terrorists, knowingly kept cash used in terror attacks and distributed millions to families of suicide bombers.
In his majority opinion expressing the ATS was written to allow foreign nationals access to U.S. courts and noting “diplomatic tensions” with foreign nations, Justice Anthony Kennedy wrote:
“Courts are not well suited to make the required policy judgments that are implicated by corporate liability in cases like this one.”
Concurring with Kennedy, Justice Samuel Alito argued the denial of ATS as a legal basis for litigation would not bar lawsuits filed against the same corporations.
In a sharp 34-page rebuke, Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan joined Sotomayor, who wrote the dissenting opinion.
Accusing the majority of absolving “corporations from responsibility under the ATS for conscience-shocking behavior,” Sotomayor continued:
“The Court ensures that foreign corporations—entities capable of wrongdoing under our domestic law—remain immune from liability for human rights abuses, however egregious they may be. Immunizing corporations that violate human rights from liability under the ATS undermines the system of accountability for law-of-nations violations that the First Congress endeavored to impose.”
Since 1980, U.S. courts have faced an increasing number of litigants seeking redress against corporations for acts of terror or human rights violations which took place in a foreign country — a legal concept known as universal jurisdiction.
[Bloomberg] [USA Today] [Reason]