US Supreme Court Rules in Favor of Palestinian Terror-Supporting Arab Bank

Basing its ruling on a technicality, the US Supreme Court ruled that foreign victims of human-rights abuses and terror attacks cannot sue foreign businesses in American courts.

By: AP and World Israel News Staff

The US Supreme Court ruled Tuesday that foreign businesses cannot be sued in US courts by foreign victims of human rights abuses and terror attacks, thus blocking a lawsuit by terror victims against the Arab Bank, which allegedly enabled the funding of terrorism.

The justices voted 5-4 in favor of the Jordan-based Arab Bank in a suit by Israeli victims of Palestinian terrorism in Judea, Samaria and Gaza from 1995 through 2005. The victims claimed that the bank helped finance the attacks. The victims had tried to use the 18th-century Alien Tort Statute to hold the bank accountable for its role.

“As demonstrated by this litigation, foreign corporate defendants create unique problems. And courts are not well suited to make the required policy judgments that are implicated by corporate liability in cases like this one,” Justice Anthony Kennedy wrote for the majority.

The decision continues the court’s paring back a three-decade-old strategy by lawyers to use civil suits to pursue individuals who may be responsible for torture and other atrocities, as well as companies with operations in countries with poor records in the area of human rights.

Victims in the case alleged that the bank, through the involvement of its New York branch, knowingly distributed millions of dollars to finance suicide bombings and make “martyrdom” payments to reward the families of terrorists who killed civilians.

The bank denied the allegations and argued that allowing the victims’ claims to go forward would interfere with US foreign policy and lead to diplomatic friction. Kennedy noted that friction in his opinion, writing, “For 13 years, this litigation has ’caused significant diplomatic tensions’ with Jordan, a critical ally in one of the world’s most sensitive regions.”

The Alien Tort Statute, adopted in part to deal with piracy claims, went unused for most of American history until rights lawyers dusted it off beginning in the late 1970s. The Supreme Court cautiously endorsed the use of the law in 2004, but left unanswered precisely who could be held liable and in what circumstances.

In 2013, the justices ruled that people or entities sued under the Alien Tort Statute must have a real connection to the United States. The court declined to decide whether businesses could be sued.

Justice Sonia Sotomayor wrote in a dissent for herself and three colleagues that the majority’s decision “absolves corporations from responsibility” under the Alien Tort Statute for “conscience-shocking behavior.”