Israeli Terror Victims’ $655.5M Suit Could Reach SCOTUS

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By Patrick L. Gregory

A suit in which victims of terror attacks in Israel received a $655.5 million award is likely to grab the U.S. Supreme Court’s attention, scholars told Bloomberg BNA.

Terror victims and their relatives are challenging the U.S. Court of Appeals for the Second Circuit’s decision overturning that judgment against the Palestine Liberation Organization and Palestinian Authority, in Sokolow v. Palestine Liberation Org., U.S., No. 16-1071, response due 5/23/17 .

If the court grants review, Sokolow will join another case involving victims of terrorism in Israel at the high court, Jesner v. Arab Bank, PLC, U.S., No. 16-499, review granted 4/3/17 . Jesner is expected to be argued in the fall but hasn’t been scheduled for argument.

Both cases will likely affect litigation against businesses outside of the terrorism context, Eugene Kontorovich, a professor who teaches international law at Northwestern University law school, Chicago, told Bloomberg BNA by email.

They each involve whether victims of terrorism can sue in federal court.

Human Rights, Regulatory Effects

Both Jesner and Sokolow could have effects beyond terrorism cases, Kontorovich said.

The main relevance of Jesner “will not be for anti-terrorism litigation,” he said.

Rather, it will be “for human rights litigation against multinational businesses alleged to be complicit in abuses abroad” under the Alien Tort Statute, he said.

Sokolow will also be most significant for business litigation, he said.

Its subjective test for when a defendant can be brought into court for acts committed abroad, focused on whether conduct was “expressly aimed” at the U.S., will have a “potentially broad impact in other extraterritorial regulatory contexts, which are becoming more common,” he said.

No Personal Jurisdiction

The Sokolow plaintiffs sued the PLO and Palestinian Authority under the Anti-Terrorism Act for seven terror attacks in Israel between 2001 and 2004.

The act allows U.S. nationals injured by international terrorism to sue in federal court and recover treble damages.

The Second Circuit dismissed the suit because the plaintiffs failed to establish personal jurisdiction, in Waldman v. Palestine Liberation Org.

Personal jurisdiction is the courts’ ability to exercise judicial power over defendants.

Courts can’t exercise such power if doing so would violate a defendant’s due process rights under the U.S. Constitution.

“Specific” personal jurisdiction, which allows defendants to be sued in a forum state if they engage in acts there that give rise to a plaintiff’s claims, wouldn’t satisfy due process here, the court said.

That type of jurisdiction didn’t apply because the attacks weren’t “expressly aimed” at the U.S., the court said.

“General” personal jurisdiction, in which a defendant can be sued in a forum state because its contacts are “so constant and pervasive” that it feels “at home” there, wouldn’t satisfy due process here either, the Second Circuit said.

Though the defendants had an office in Washington and retained a lobbying firm there, those contacts were insufficient for general personal jurisdiction, the court said.

ATA Eviscerated?

The PLO and Palestinian Authority aren’t “persons” and therefore aren’t entitled to due process rights that would prevent them from being sued in the U.S., the Sokolow plaintiffs argue in their petition for review.

“The Court is likely to be very interested” in that argument because the Second Circuit’s ruling “greatly limits, and maybe eviscerates,” the Anti-Terrorism Act, Kontorovich said.

The “whole point of the act is to allow U.S. nationals to sue for conduct that harmed U.S. nationals anywhere around the globe,” Peter S. Margulies, a professor at Roger Williams University law school, Bristol, R.I., told Bloomberg BNA by telephone.

The Second Circuit’s “narrow view of jurisdiction” in Sokolow “defeats that goal,” Margulies, who focuses on law and terrorism, said.

“I think the court is likely to grant” review because “it’s a case that basically eviscerates” the statute, Margulies said.

Margulies was co-counsel on an amicus brief supporting the plaintiffs in Jesner, filed on behalf of Sen. Sheldon Whitehouse (D-R.I.).

Uphill Jesner Battle?

The plaintiffs in Jesner are asking the U.S. Supreme Court to decide whether corporations can be liable under the Alien Tort Statute.

The Second Circuit below ruled that Arab Bank PLC couldn’t be sued under the ATS over terror attacks in Israel, the West Bank and the Gaza Strip, in In re Arab Bank, PLC Alien Tort Statute Litig .

The plaintiffs alleged that the bank, which is headquartered in Jordan, financed and facilitated “the activities of organizations that committed” attacks between 1995 and 2005, the court said.

The ATS gives federal district courts jurisdiction over tort claims brought by an alien for torts “committed in violation of the law of nations or a treaty of” the U.S.

But the statute prohibits corporate liability, the court said.

The Supreme Court’s prior ATS rulings suggest that it’s unlikely to give the law a “broad scope,” and the Jesner plaintiffs therefore “have an uphill battle,” Kontorovich said.

However, the wording of the question presented in Jesner—whether the ATS “categorically forecloses corporate liability”—wasn’t modified by the court’s order granting review.

That “suggests the Court may be open to carving out some special circumstances for corporate liability under the ATS,” Kontorovich said.

The Second Circuit acknowledged that the Supreme Court suggested “that the ATS may allow for corporate liability,” in Kiobel v. Royal Dutch Petroleum Co. , also known as “ Kiobel II.”

The Second Circuit also noted that there was “a growing consensus among our sister circuits to that effect,” but said it was bound by circuit precedent set in Kiobel v. Royal Dutch Petroleum Co. , also known as “ Kiobel I.”

The en banc court declined to rehear Kiobel I by a 10-3 vote.

In doing so, the court missed an opportunity to correct “an opinion which is almost certainly incorrect but continues to maintain a needless circuit split with every other circuit to address” corporate liability under the ATS, Judge Rosemary S. Pooler wrote in dissent, joined by Judges Denny Chin and Susan L. Carney.

Will Jesner Affect Sokolow ?

Margulies said a ruling for the plaintiffs in Jesner could help the Sokolow plaintiffs.

The court “could affirm Congress’s very strongly stated policy providing a remedy for victims of terrorism,” he said.

That “would be an additional basis” in Sokolow for the court to defer “to Congress’s view that actions against terrorist groups or unrecognized governments were vital to deterring international terrorism,” he said.

Theodore B. Olson of Gibson, Dunn & Crutcher LLP, Washington, is representing the petitioners in Sokolow.

Jeffrey L. Fisher of Stanford Law School Supreme Court Litigation Clinic, Stanford, Calif., represents the petitioners in Jesner.

Paul D. Clement of Kirkland & Ellis LLP represents Arab Bank. Attorneys for the bank didn’t respond to a request for comment.

Gassan A. Baloul of Squire Patton Boggs, Washington, represents the Palestine Liberation Organization. He declined to comment.

To contact the reporter on this story: Patrick L. Gregory in Washington at pgregory@bna.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bna.com

For More Information

Sokolow petition available at http://src.bna.com/okZ.

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