Plaintiffs were foreign nationals who alleged they were injured (or their family members were injured or killed) in terrorist attacks in Israel, the West Bank, and Gaza between the mid-1990s and early 2000s. They sued Arab Bank, PLC, a Jordanian financial institution with a New York branch, under the Alien Tort Statute (28 U.S.C. § 1350). Plaintiffs alleged the Bank knowingly facilitated terrorism by, among other things, maintaining accounts for known terrorists and terrorist-affiliated charities, processing and clearing U.S.-dollar transactions through its New York branch, and distributing funds to families of suicide bombers through so-called "martyr" payment programs. Arab Bank denied liability and argued, inter alia, that the ATS does not permit suits against corporations, that much of the relevant conduct occurred abroad, and that permitting such suits would intrude on foreign relations. The Second Circuit, adhering to its prior precedent, held that corporations could not be sued under the ATS and dismissed the claims. The Supreme Court granted certiorari to resolve whether the ATS permits corporate liability, specifically as to foreign corporations.
Does the Alien Tort Statute permit suits against foreign corporations for alleged violations of international law committed abroad or connected to the United States?
The Alien Tort Statute is jurisdictional and authorizes federal courts to recognize a narrow set of federal common-law causes of action for violations of specific, universal, and obligatory international norms, subject to substantial caution and separation-of-powers constraints (Sosa v. Alvarez-Machain). Courts must also heed the presumption against extraterritorial application (Kiobel v. Royal Dutch Petroleum). In Jesner, the Court held that, consistent with Sosa's directive of judicial restraint and given the foreign-relations and separation-of-powers concerns, the ATS does not allow suits against foreign corporate defendants. Any expansion of ATS liability to include foreign corporations is for Congress, not the courts.
Foreign corporations may not be defendants in lawsuits brought under the Alien Tort Statute.
1) Separation of powers and Sosa's caution: The Court emphasized that the ATS is a jurisdictional grant and that recognizing new private causes of action under it is a matter of federal common lawmaking that must be undertaken, if at all, with great restraint. Expanding ATS liability to include foreign corporations would be a significant step with substantial foreign-policy implications. Under Sosa, such expansion is generally for Congress to decide, not the judiciary. 2) International law and corporate liability: The majority observed that international law typically defines substantive norms of conduct (e.g., prohibitions on genocide, war crimes, crimes against humanity), but often leaves enforcement mechanisms and forms of liability to domestic law. Historically, international criminal tribunals have prosecuted natural persons, not corporations, and instruments like the Rome Statute omit corporate criminal liability. The Court concluded that there is no specific, universal, and obligatory norm of international law that clearly requires corporate civil liability, and therefore courts should not create such liability by common law under the ATS, at least as to foreign corporations. 3) Foreign-relations and comity concerns: Allowing ATS suits by foreign plaintiffs against foreign corporations risks diplomatic friction and may invite retaliatory litigation abroad. The case at bar implicated the interests of Jordan, a key U.S. ally; the Court underscored that adjudicating such disputes is the province of the political branches. Congress has legislated extensively in adjacent areas (e.g., the Anti-Terrorism Act (ATA) and the Justice Against Sponsors of Terrorism Act (JASTA)) and chosen specific remedial schemes that notably differ from what plaintiffs sought under the ATS. Those statutes reflect careful, calibrated judgments about who may sue and for what conduct—judgments the judiciary should not disrupt by extending ATS liability to foreign corporate defendants. 4) Kiobel and extraterritoriality backdrop: Although the Court did not rest its decision solely on extraterritoriality, it reinforced Kiobel's requirement that ATS claims must sufficiently "touch and concern" the United States to displace the presumption against extraterritoriality. The allegations here concerned predominantly foreign conduct and actors, with the New York branch's dollar-clearing activities insufficient to warrant broad ATS corporate liability. 5) Scope of the holding: The controlling holding bars suits against foreign corporations under the ATS. The Court did not resolve whether domestic corporations can be sued under the ATS, leaving that question open. Dissenting Justices would have allowed corporate liability, reasoning that international law defines substantive norms while domestic law supplies remedies and defendants, but that view did not command a majority.
Jesner narrows ATS litigation by foreclosing claims against foreign corporate defendants, significantly reducing the statute's reach against multinational companies headquartered abroad. For law students, Jesner completes a trilogy with Sosa and Kiobel that frames modern ATS practice: Sosa's strict gatekeeping for new causes of action, Kiobel's presumption against extraterritoriality, and Jesner's categorical bar on foreign corporate defendants. The decision channels many human-rights and terrorism-financing claims into congressionally created schemes like the ATA and TVPA or into foreign courts, and it leaves unresolved—and thus still litigated—the question whether domestic corporations may face ATS liability.
Jesner v. Arab Bank is a pivotal decision restricting ATS litigation by holding that foreign corporations cannot be sued under the statute. Anchored in Sosa's call for judicial restraint and sensitivity to foreign-relations consequences, the ruling emphasizes that any significant expansion of ATS liability belongs to Congress. In doing so, Jesner narrows the field of potential defendants and reorients transnational human-rights and terrorism-financing claims toward explicit statutory schemes and forums better tailored by the political branches.