The US Supreme Court decided (in a 5-4 split) that the ‘Alien Tort Statute’ (ATS) cannot be used to sue foreign corporations for egregious human rights violations. The ATS grants non-citizens access to US Courts for alleged violations of ‘law of nations or a treaty of the United States’. While the majority’s reasoning varied along ideological grounds there was consensus that the Court should refrain from creating or extending new grounds for lawsuits, especially when dealing with a subject, like the ATS which may create foreign-policy concerns and is therefore more properly with by Congress and the executive branch. The judgement is significant and undermines efforts by individuals to hold corporations accountable for their human rights abuses internationally.
By way of background the ATS was passed by Congress in 1789. The ATS states: “the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States’. The rationale for the introduction of the law was to ensure that lawsuits involving international law and international issues would be heard in federal courts and provide outward assurance to the world that the United States was law abiding country fulfilling its obligations under international law. The ATS remained largely unutilised
The plaintiffs in this case were all victims or relatives of victims that had been injured or killed in terrorist attacks which had taken place in the Middle East. The plaintiffs alleged the defendant Arab Bank had facilitated payments to the terrorists and laundered money for them via their New York Office. The defendant bank is a Jordanian institute. The case was brought before the New York federal court alleging that the defendant had “violated the law of nations insofar as it financed terrorism, and also insofar as it directly and indirectly engaged in genocide and crimes against humanity”. As the transactions were processed by the defendant’s New York office the plaintiff’s argued this gave the US court jurisdiction under the ATS. The New York federal court disagreed and held that the ATS does not allow lawsuits against corporations. The Supreme Court affirmed this position.
Earlier pronouncements by the Supreme Court on the ATS had stressed the need for tangential connection to the US i.e. proof that the crime had been committed in the US or at the very least for there to be a sufficient connection to the US to invoke the power to try the tort. However, the effect of this decision is that foreign corporations cannot be sued under the ATS, full stop. This blanked ban means that non-American companies cannot be held accountable under the ATS even if a sufficient link to America could be proved.
In a strong dissent by Justice Sonia Sotomajor (joined by the other dissenting justices) she noted in strong terms there were less drastic ways to address the foreign-policy concerns. For example, a US court could determine that a foreign plaintiff must first try to sue a foreign corporation its home country first. With this ruling Justice Sonia Sotomajor concluded, “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”.
Click here for a copy of the judgement.
Click here and here for further commentary on the case.