U.S. Supreme Court Rejects Israelis' Complaint Against Arab Bank of Jordan

In 5-4 ruling, court decides not to allow plaintiffs to seek damages against major Jordanian bank for allegedly providing services to terror groups

FILE PHOTO: The U.S. Supreme Court in Washington, DC, U.S., January 19, 2018.
\ ERIC THAYER/ REUTERS

WASHINGTON – The U.S. Supreme Court decided on Tuesday to reject a complaint by Israeli terror victims against the Arab Bank of Jordan, one of the largest banks in the Arab world, which alleged that the bank provided financial services to terror organizations.

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The court's four conservative justices, together with Justice Anthony Kennedy, who is often considered a "swing vote" on the current court, ruled that a foreign corporation could not be sued under the law on which the terror victims based their lawsuit, the Alien Tort Statute. This statute allows foreign nationals to appeal to American courts, but the justices stated that it was not relevant for this specific case.

The justices wrote that the petitioners "are foreign nationals seeking millions of dollars in damages from a major Jordanian financial institution for injuries suffered in attacks by foreign terrorists in the Middle East. The only alleged connections to the United States are [...] transactions in Arab Bank’s New York branch and a brief allegation about a charity in Texas. At a minimum, the relatively minor connection between the terrorist attacks and the alleged conduct in the United States illustrates the perils of extending the scope of Alien Tort Statute liability to foreign multinational corporations like Arab Bank."

The justices also noted that "for 13 years, this litigation has caused considerable diplomatic tensions with Jordan, a critical ally that considers the litigation an affront to its sovereignty," adding that they do not believe "the courts [are] well suited to make the required policy judgments implicated by foreign corporate liability."

The four liberal justices on the court – Sonia Sotomayor, Elena Kagan, Ruth Bader-Ginsburg and Stephen Breyer – dissented from the majority ruling, saying that the bank, and international corporations in general, should be held accountable under the Alien Tort Statute. Justice Sotomayor, who wrote the minority opinion, stated that the court's decision "absolves corporations from responsibility under the ATS for conscience-shocking behavior."

The majority and minority opinions were not based on a disagreement regarding the evidence of the Arab Bank's practices during the years of the second intifada, when the bank was accused of providing financial services to terror groups, but rather on the legal question of whether an international corporation based in another country can be sued under the Alien Tort Statute. The decision, however, was a clear victory both for the bank and for the Kingdom of Jordan, which objected to the lawsuit ever since it was first filed.