Strained Relations Not a Concern in Arab Bank Appeal, Justices Told

WASHINGTON (CN) – An attorney for families suing Arab Bank over its alleged sponsorship of terrorism urged U.S. Supreme Court justices to set aside their concerns that holding the bank liable could exacerbate diplomatic tensions.

The case at hand grew out of terrorist attacks carried out by Hamas and other groups between 2004 and 2010 during the Second Palestinian Intifada, the Arabic word for uprising. Claiming that the Jordan-based Arab Bank sponsored the violence by processing $2.5 million in payments at its New York City branch, relatives of some 6,000 foreign victims filed suit in Brooklyn.

Invoking the 1789 Alien Tort Statute, the families accuse Arab Bank of violating the law of nations. But Paul Clement, an attorney for Arab Bank with the firm Bancroft PLLC, noted Wednesday that the torts considered justiciable under the law are limited to those defined as prohibited norms.

A former U.S. solicitor general, Clement told the justices that there is nothing in the case that approaches an international norm, and that they should not invent a common-law action.

Clement demurred when Justice Sonia Sotomayor pressed him about the many nations that hold both individuals and corporations civilly liable for violations of international norms.

“I don’t think there is a norm to hold corporations liable for violations of international law, especially under jurisdictional circumstances like this where the United States is a stranger to the dispute,” he said.

Justice Anthony Kennedy turned to the issue of norms during arguments by Jeffrey Fisher, an attorney for the families with Stanford Law School.

“Norms control behavior,” said Kennedy, who usually serves as a tiebreaker in cases split along party lines. “And we’re saying that corporations with this extensive liability under respondeat superior now must conform their behavior. That seems to me to be a norm.”

Fisher fired back at the justice that statutes of limitations and the rules of evidence also influence the way a corporation acts.

“So just the mere fact that it’s going to influence corporate behavior does not make it a norm question,” Fisher said.

Urging the court to set aside its concerns about straining foreign relations, Fisher said the argument is not persuasive enough to immunize corporations.

“Some ATS cases do not involve foreign relations at all,” Fisher said, abbreviating the Alien Tort Statute. “Take piracy, for example. So a foreign relations argument cannot justify the categorical rule the Second Circuit has laid down in this area.”

Fisher also argued that a categorical prohibition of corporate liability could actually create foreign relations problems that the Alien Tort Statute was intended to solve.

The Supreme Court has taken several stabs at the issue, first in the 2004 case Sosa v. Alvarez-Machain and again in the 2013 case Kiobel v. Royal Dutch Petroleum Co.

In the first case, the Supreme Court left the door slightly ajar for victims of human rights abuses to redress a small number of violations of customary norms of international law, like genocide, crimes against humanity and war crimes.

But that room narrowed in Kiobel where Nigerian plaintiffs had accused foreign oil companies of aiding atrocities against villagers in the Ogoni region carried out by the Nigerian military and police forces. In that case, the court held that the claims must “touch and concern” the U.S. with enough force to overcome the presumption that the American law doesn’t apply extraterritorially.

Fisher, the attorney for the families, noted Wednesday that the corporate activity at issue here took place in the United States, making it acceptable under Kiobel.

Arab Bank disputes this, saying the transactions occurred entirely overseas, with no money being transmitted through the U.S.

With the exception of four instances the bank blames on human or machine error, none of the transactions involved individuals on terrorist watch lists, either, Arab Bank says.

The families meanwhile claim that the Arab Bank “served as the ‘paymaster’ for Hamas and other terrorist organizations through an organization called the Saudi Committee for the Support of the Intifada Al-Quds.” The organization, they claim, helped “identify, locate, and pay the families of suicide bombers and other terrorists.

Lead plaintiff Joseph Jesner is the father of a 19-year-old British man who was killed on a Tel Aviv bus in 2002 by a suicide bomber.

Before coming into vogue in the 1980s, the Alien Tort Statute had been gathering dust for centuries.  The statute says district courts have the authority to consider “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.” Jesner and the other plaintiffs say it allows corporations to be held liable for human rights abuses committed overseas.

The Supreme Court is expected to issue a ruling by the end of June.

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