On December 8, the Second Circuit Court of Appeals upheld the dismissal of plaintiffs’ claims in five consolidated cases against Arab Bank, PLC. Plaintiffs in each of the cases alleged that they, or their family members, had been harmed in attacks by terrorist organizations that had received financing, in part, as a result of accounts and transfers arranged by the bank.
Claims in the consolidated cases, In Re: Arab Bank, PLC Alien Tort Statute Litigation, had been brought pursuant to the Alien Tort Statute (“ATS”), the Anti-Terrorism Act, and federal common law. The common law claims were dismissed at an earlier stage in the litigation and that ATA claims were not at issue in the consolidated appeal.
In upholding the dismissal of plaintiffs’ ATS claims, the Second Circuit relied upon its 2010 decision in Kiobel v. Royal Dutch Petroleum (2d Cir. 2010) (“Kiobel I“) in finding that the law of the Circuit still holds that plaintiffs cannot bring claims against corporations pursuant to the ATS. The Court found that the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum (S. Ct. 2013) (“Kiobel II“) had not overruled the Circuit on this issue, as the Supreme Court’s decision was ultimately focused on the issue of extraterritoriality and did not reach the question of corporate liability.
Despite its dismissal of plaintiffs’ claims, the Second Circuit observed that Kiobel II appears “to suggest that the ATS may indeed allow for corporate liability” and that “Kiobel I now appears to swim alone against the tide” of a “growing consensus among our sister circuits” that corporations are proper defendants in ATS cases.
Ultimately, the Court found that, despite its misgivings, “[w]e think that one panel’s overruling of the holding of a case decided by a previous panel is perilous” and “[w]e will leave it to either an en banc sitting of this Court or an eventual Supreme Court review to overrule Kiobel I if, indeed, it is no longer viable.” In effectively calling for further review, the Court certainly signaled its belief that Kiobel I‘s viability in the Second Circuit may be limited.