Jesner v. Arab Bank

DOES THE TEXT, HISTORY, AND PURPOSE OF THE ATS SUPPORT CORPORATE LIABILITY?

Jesner contends that the ATS’s text, history and purpose show that it allows for corporate liability. Jesner first argues that the Court should look to the statute’s text to determine its application, as the Court has done to inform other merits questions under the ATS, such as its extraterritorial application. Jesner maintains that the word “tort” in the ATS’s text includes the rule that corporations may be held liable for their agents’ acts. Because of this, Jesner asserts that the Court should presume that statutes providing for tort liability, including the ATS, include corporate liability, absent contrary language. In addition, Jesner argues that there is a presumption that Congress acts purposely in creating statutory language, and that this presumption applies to the fact that the ATS limits the types of plaintiffs allowed but does not limit the types of defendants. Jesner asserts that in similar statutes where Congress has specified a type of plaintiff but not a type of defendant, courts presume that Congress intended to allow both individual and corporate liability. Finally, Jesner argues that Congress’ purpose in enacting the ATS was to impose liability for tortious violations of the law of nations, and that nothing in the ATS’s history indicates that Congress did not intend to include corporate liability.

In response, the Bank argues that because the ATS is a jurisdictional statute, the Court should not look solely to the ATS’s text to determine if corporate liability is allowed. To support its argument, the Bank points to the Court’s decision in Sosa v. Alvarez-Machain et al. (“Sosa”), in which the Court stated that the ATS is a jurisdictional statute that creates no new causes of action, and that consequently any plaintiff bringing a case under the ATS must identify an external source for the cause of action. The Bank maintains that Congress enacted the ATS to include only select tort claims grounded in the rights between nations or states, including “violations of safe conducts, infringement of rights of ambassadors, and piracy.” The Bank further argues that an additional statute, the Torture Victim Protection Act (“TVPA”), also shows that Congress intended to bar corporate defendants from all causes of action under the ATS, as the TVPA is the sole congressional statute explicitly providing a cause of action under the ATS, and is limited to individual defendants.

HOW SHOULD SOSA’S TWO-STEP FRAMEWORK BE APPLIED TO THE ATS?

Jesner argues that Sosa’s two-step framework for determining whether a cause of action exists under the ATS does not preclude corporate liability under the statute.Under Sosa’s first step, a plaintiff must identify a “specific, universal, and obligatory” international norm which is comparable to the original set of tort claims which the ATS was enacted to address. Jesner maintains that the Second Circuit misinterpreted the footnote accompanying this step as requiring a plaintiff suing a corporation to identify a norm of corporate liability for the international law violated. Jesner counters that the footnote does not require plaintiffs to identify a norm of corporate liability, but rather requires plaintiffs to ensure that the international law violated does not only apply to state actors, but also allows for individuals and corporations to be held liable. Jesner further contends that because most international norms identify the prohibited wrongs but not the necessary type of wrongdoer, any actor who violates the norm can be held liable for a violation, absent indication to the contrary.

Jesner also argues that once a plaintiff has identified an appropriate norm for Sosa’s first step, Kiobel II gives the Court the power to use common-law discretion to define a cause of action under the ATS. Jesner looks to state common law, comparable legislation, and international law as guideposts for the Court’s exercise of this discretion, and argues that none of the guideposts mandate that the Court depart from the presumption of corporate liability for tortious conduct when considering claims under the ATS. Jesner instead asserts that most state common law recognizes corporate liability because there would be no possible redress for the torts of employees if the corporation were not held liable. Jesner further contends that comparable legislation most often permits corporate liability. In fact, Jesner asserts that the Court has only refused to recognize corporate liability for comparable legislation when: 1) the Court was evaluating a judicially inferred right of action, for which there was no recorded statute, e.g., in Bivens v. Six Unknown Named Agents (“Bivens”); and 2) the recorded statute at issue expressly limited liability to individuals, e.g., the TVPA. In addition, Jesner argues that corporations are subject to liability worldwide under most nations’ domestic tort doctrines which inform the general principles of international law, under many international treaties that require parties to pass laws establishing corporate liability for illegal actions, and in a growing number of international tribunals that hold corporations criminally accountable for violating the law of nations.

The Bank, in response to Jesner’s first Sosa argument, states that international law norms primarily address relations between nations, and that while there are international law norms that attach to individuals, none impose duties on corporations. The Bank argues that Sosa mandates that plaintiffs identify a “specific, universal, and obligatory norm” of corporate liability under international law, and that there is nothing resembling this type of norm for corporations. Further, the Bank asserts that there is also no universal agreement on what constitutes terrorism, nor is there a universal norm against terrorism or terrorism financing. –The Bank argues that because Congress has not enacted a statute allowing for corporate liability under the ATS, for this case to proceed, the Court would need to infer a new cause of action. The Bank further contends that even if an international norm of corporate liability existed, such inferences are disfavored and should not be adopted here.

In response to Jesner’s argument about Sosa’s second step, the Bank emphasizes the importance of the presumption against judicially created private rights of action. In evaluating the aforementioned guideposts identified by Jesner, the Bank argues that comparable legislation and international law demonstrate that liability under the ATS should not be extended to corporations. The Bank asserts that because the legislation most analogous to this issue is the TVPA, which limits liability to individuals, it is illogical to impute to Congress an intention to expand liability simply because corporate liability is the norm for violations of domestic law. The Bank also argues that this issue is analogous to cases like Bivens, in which the Courts declined to infer a cause of action because there was no equivalent legislation. The Bank asserts that although international treaties create obligations on states to create and implement corporate regulations in their domestic law, those treaties do not impose obligations on the corporations themselves. Finally, the Bank contends that though some international tribunals have imposed criminal accountability on corporations, there is nothing to show any consensus about civil liability for corporations under international law.

SHOULD THE COURT DECIDE THE CASE ON ALTERNATIVE GROUNDS?

Jesner argues that the Court should refrain from considering the Bank’s arguments beyond corporate liability, and should remand those arguments to the lower courts. Because the district court dismissed Jesner’s ATS claims solely on the ground that the ATS bars corporate liability, and because the Second Circuit affirmed the decision on that basis, Jesner maintains that corporate liability is the only ground on which the Court can rule. Jesner also asserts that if the Court holds that the ATS permits corporate liability, the Court should remand for consideration of any of the Bank’s other arguments for dismissal.

The Bank, in contrast, argues that if the Court does not affirm the Second Circuit’s judgment on corporate liability grounds, it can affirm the judgment on the ground that the case does not sufficiently “touch and concern” the United States. The Bank contends that the demonstration of such contacts is necessary to overcome the presumption against application of the ATS beyond the United States’ borders, as is outlined by Kiobel II. The Bank further argues that the ATS is not explicitly extraterritorial, and therefore can only be applied domestically if the pertinent actions occurred in the United States. The Bank argues that in this case, as in Kiobel II, all conduct relevant to the ATS took place outside of the United States, and that the plaintiffs and defendants were all foreign to the United States. The Bank argues that both elements that produce a tort—a wrongful action and a resulting injury—occurred abroad.