A Supreme Court ruling on Tuesday held that a foreign corporation cannot be sued in American courts for terrorist attacks and other human rights violations.
In a 5-4 decision, the top U.S. court affirmed the ruling of a lower court. The court held that the victims of attacks in Israel could not use an 18th-century law to uphold a lawsuit against the Arab Bank, PLC, a multinational financial institution.
The decision for the precedent-setting case rested on a legal provision that is almost 230 years old.
The plaintiffs had accused the Jordanian bank of using its New York branch to clear dollar-denominated transactions that directly benefitted terrorist agents. The bank allegedly did this through the Clearing House Interbank Payments System.
Notably, the plaintiffs allege that the bank facilitated transfers specifically to Hamas, the Palestinian militant Islamist movement that now controls the Gaza Strip. The United States and Syria have labeled the group a terrorist organization.
Approximately 6.000 foreign claimants were a part of the case, which included victims of militant attacks in Israel, the West Bank, and Gaza. They based their legal action on the Alien Tort Statute (ATS) of 1789.
On Tuesday, the judges were apprehensive about the risk of diplomatic tensions and refused to extend the application of the ATS to multinationals with no link to the U.S.
In delivering the Court’s majority opinion, Justice Anthony Kennedy stated that the connection between the terrorist attacks and the alleged conduct in the U.S. was relatively minor. It was added that most of the petitioners’ allegations involved conduct that occurred in the Middle East.
“The ATS was intended to promote harmony in international relations by ensuring foreign plaintiffs a remedy for international-law violations in circumstances where the absence of such a remedy might provoke foreign nations to hold the United States accountable,” Kennedy wrote. “But here, and in similar cases, the opposite is occurring.”
He said it is up to Congress to revise the law if it sees fit.
Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito and Neil Gorsuch joined Kennedy were part of the majority.
Justice Sonia Sotomayor dissented from the court’s ruling in an opinion that Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan joined.
In a dissent, Justice Sonia Sotomayor insisted that the majority ruling “absolves corporations from responsibility under the ATS for conscience-shocking behavior” and human rights violations.
The ruling has essentially closed off the path for anyone harmed by terrorism to sue financial institutions that might be looking the other way when their clients fund terrorism.
H/T: The Hill