United States: Corporate Liability And The Alien Tort Statute: Highlights From The Oral Arguments In Jesner v. Arab Bank

Last Updated: October 20 2017
Article by Sarah A. Altschuller

On Wednesday, October 11, the U.S. Supreme Court heard oral arguments in Jesner v. Arab Bank. The case may once and for all determine whether companies are appropriate defendants in cases filed pursuant to the Alien Tort Statute ("ATS").

In granting plaintiffs' petition for a writ of certiorari, the Supreme Court agreed to review the following question:

This case presents the question this Court granted certiorari to resolve, but ultimately left undecided, in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013): Whether the Alien Tort Statute, 28 U.S.C. § 1350, categorically forecloses corporate liability.

A preliminary transcript of Wednesday's arguments is available here. I had the opportunity to attend the arguments and the discussion was lively, if not particularly illuminating as to how the Court will ultimately seek to address the question at issue.


Plaintiffs filed their petition after the Second Circuit Court of Appeals upheld the dismissal of claims in five consolidated cases against Arab Bank, PLC. Plaintiffs in each of the cases alleged that they, or their family members, had been harmed in attacks by terrorist organizations that had received financing, in part, as a result of accounts and transfers arranged by the bank.

In upholding the dismissal of plaintiffs' ATS claims, the Second Circuit had relied upon its 2010 decision in Kiobel v. Royal Dutch Petroleum ("Kiobel I") in finding that the law of the Circuit still holds that plaintiffs cannot bring claims against corporations pursuant to the ATS. In its December 2015 decision, the Second Circuit found that the Supreme Court's 2013 decision in  Kiobel v. Royal Dutch Petroleum ("Kiobel II") had not overruled the Circuit on this issue, as the Supreme Court's decision was ultimately focused on the issue of extraterritoriality and did not reach the question of corporate liability.

Oral Arguments

Petitioners Argue that a Categorical Rule Against Corporate Liability is Not the Answer to the Court's Concerns about the ATS

Throughout the arguments, several Justices expressed concerns about the foreign relations concerns that can arise in the context of ATS cases. Petitioners' counsel, Jeffrey Fisher, repeatedly noted these concerns can be addressed without adopting a rule precluding corporate liability. Mr. Fisher noted that "there are many other doctrines readily available to courts to directly and effectively deal with those issues," citing the presumption against extraterritoriality, and exhaustion of remedies as examples. Citing the impact of the Supreme Court's decision in Kiobel II, petitioners observed that what remains is a "very very small universe of ATS cases, a manageable universe of cases" — one which does not require further limitation through the imposition of a bar on corporate liability.

This argument was echoed by counsel for the United States, Brian Fletcher, which is appearing in the case as amicus curiae supporting neither party. Mr. Fletcher stated that, in the government's view, a determination that a "company can never be a defendant in an Alien Tort Statute case" as a "categorical rule is wrong."

Throughout the argument, there was certainly a sense that significant concerns exist regarding the facts at issue in the case itself. As Justice Kagan noted, there are "plenty of things to gripe about in this case" and Justice Alito's questions revealed significant concerns about the extraterritorial nature of the conduct at issue. Notably, Mr. Fletcher, in presenting the views of the United States, stated clearly that the government believes that facts in the case, to the extent that they are known, are not sufficient to overcome the presumption against extraterritoriality. At this time, advocates for corporate liability may hope that, to the extent the Court does answer the question on which it granted certiorari, it does so in a way that upholds corporate liability while leaving it to the lower court to address other concerns.

Corporate Liability and the Question of "What is a Norm?"

Counsel for Arab Bank, Paul Clement, argued vehemently that there is no "specific, universal, obligatory norm under international law that imposes obligations directly on corporations." The "specific, universal, obligatory" standard has been central to ATS jurisprudence since the Supreme Court's 2004 decision in Sosa v. Alvarez-Machain, which held that, in order for conduct to be sufficient to support a claim under the ATS, it must violate well-defined and universal international law norms, such as the norms against slavery and genocide.

The views of each Justice as to whether corporate liability is a matter of conduct or a matter of remedy will clearly be central to the final opinion in the case. In Sosa's famous footnote 20, the Court left open the question of "whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual." Recognizing that the Court is likely to be split on the questions left unaddressed in Sosa, the views of Justice Kennedy are likely to be crucial to the outcome of the case.

During the arguments, Justice Kennedy questioned whether the imposition of liability "impose[s] a norm in the sense that it tells corporations what they must do, how they must run their business." The question — notably the only question Justice Kennedy asked during the arguments — is undoubtedly concerning to advocates for corporate liability. Court observers will remember that Justice Kennedy has already indicated uncertainty about the scope of the ATS. In a short concurrence in Kiobel II, he noted that the Court's opinion left "open a number of significant questions regarding the reach and interpretation of the Alien Tort Statute."

Mr. Fisher sought to address Justice Kennedy's concern in part by highlighting recent decisions in which the Court has found corporate liability to be "remedial," including United States v. Bormes Mr. Fisher also noted that "[w]hat the Court has said time and again is that part of the corporate bargain is that you get privileges and opportunities, but you also have burdens of being held liable in tort actions."

Justice Kagan's Tough Hypothetical

Justice and counsel for both parties spent time addressing the original purpose of the ATS, specifically the intent of the First Congress to provide a measure of accountability to foreign nations when their citizens are harmed. One of the questions raised during the arguments was, as Justice Kagan put it, "why would the foreign government care that the perpetrator was a corporation rather than an individual?"

In addressing this question, Justice Kagan asked whether respondent's position was that there should be no corporate liability under the ATS in a instance in which an American corporation employed foreign slave labor in the United States. Such a fact scenario limits any concerns about extraterritoriality and raises the question of whether or not the United States is going to provide the victims in such an scenario with the ability to seek compensation. Mr. Clement, in addressing the question, observed that it was a "tough" hypo. He then stated that plaintiffs would be able to sue individuals at the company, but not the company itself. He noted that "in your hypothetical, you're going to find plenty of deep-pocketed defendants." Justice Kagan seemed unmoved by this argument, questioning "why on earth would you draw a distinction" between corporate and individual liability in such a case.

Looking Ahead

This case has been watched closely both by corporate attorneys and by plaintiffs' advocates seeking to hold companies liable for complicity in human rights abuses. With a decision expected by mid-2018, at this time, it is clear that there are deep divisions within the Court regarding the fundamental questions at issue in ATS litigation.

The final opinion of the Court is likely to be fragmented, with the potential for multiple Justices to write their own concurrences or dissents. Ultimately, one can only hope that a few of the fundamental questions at issue in these cases will finally be addressed.

To view Foley Hoag's Corporate Social Responsibility Blog please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
22 Aug 2018, Webinar, Boston, United States

After years of debate, the Massachusetts Legislature recently passed a comprehensive noncompete reform law, and Governor Baker signed the bill on August 10, 2018.

12 Oct 2018, Other, Boston, United States

The New England Electricity Restructuring Roundtable has been meeting bimonthly since 1995 to discuss current topics related to important changes in the electric power industry in Massachusetts and throughout New England.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions