Jesner v. Arab Bank, Plc

138 S.Ct. 1386 (2018)

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Nature of the Case

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Facts

Ps are a group of people (about 6,000 of them) who were injured to killed by terrorist acts committed abroad. A significant majority of the plaintiffs are foreign nationals whose claims arise under the ATS. Ps seek to impose liability on D, a foreign corporation for the conduct of its human agents, including its then-chairman and other high-ranking management officials. Ps filed suit in a United States District Court under the ATS. D is a major Jordanian financial institution with branches throughout the world, including in New York. Some of D's officials allowed D to be used to transfer funds to terrorist groups in the Middle East, which in turn enabled or facilitated criminal acts of terrorism, causing the deaths or injuries. Most of the allegations involve conduct that occurred in the Middle East. Ps seek to prove Ps alleged that D used its New York branch to clear dollar-denominated transactions through the Clearing House Interbank Payments System (CHIPS). It is alleged that some of these CHIPS transactions benefited terrorists. The “clearance activity is an entirely mechanical function; it occurs without human intervention in the proverbial ‘blink of an eye.’” Individual supervision is simply not a systemic reality. Ps allege that D’s New York branch was used to launder money for the Holy Land Foundation for Relief and Development (HLF), a Texas-based charity that is affiliated with Hamas. D used its New York branch to facilitate the transfer of funds from HLF to the bank accounts of terrorist-affiliated charities in the Middle East. In Kiobel, the Supreme Court held that, given all the circumstances, the suit could not be maintained under the ATS. The Court ruled that “all the relevant conduct took place outside the United States.” Dismissal of the action was required based on the presumption against extraterritorial application of statutes. Kiobel affirmed the ruling that the action there could not be maintained, it did not address the broader holding of the Court of Appeals that dismissal was required because corporations may not be sued under the ATS. Here, the courts below deemed that broader holding to be binding precedent. The District Court dismissed Ps’ ATS claims based on the earlier Kiobel holding in the Court of Appeals; and on review of the dismissal order the Court of Appeals, also adhering to its earlier holding, affirmed. Ps appealed.