Washington (CNN)The Supreme Court on Wednesday took up a question it has struggled with but never resolved: Can corporations be sued in US courts for human rights abuses that occurred abroad?
Terrorism victims seek Supreme Court blessing to sue multinational corporations
The case pits human rights groups and victims of terrorism against multinational corporations that argue they should not be sued in US courts, especially because the allegations lack the necessary nexus to the United States.
In court, the justices seemed closely divided on the issue with the conservatives peppering a lawyer for victims of terrorism with questions suggesting the justices did not think such suits should be allowed to go forward.
The court dodged the corporate liability question back in 2013, but are now taking up a case brought by some 6,000 foreign citizens who were victims of terrorist attacks and seek to sue the Arab Bank, the largest bank in Jordan.
Chief Justice John Roberts worried about the international implications or "foreign entanglements" of allowing such suits to go forward.
"Where else in the world would this type of action be brought against a corporation or almost really against anyone?" he asked.
Justice Samuel Alito had a similar concern about the impact on foreign policy. "Should we, in effect, balance the international repercussions of deciding this issue one way or the other?" he asked.
Justice Anthony Kennedy was more difficult to read, but at one point he expressed concern that if the court were to rule in favor of the victims it would be imposing new norms on corporations when there may not be an international consensus on the issue.
Lawyers for the victims alleged the bank "knowingly and willingly" used its New York branch to transfer millions of US dollars that were used to finance terrorist attacks.
The attacks occurred between 1995 and 2005 in Israel, the West Bank and Gaza.
The victims do not claim the bank was involved in the planning of the attacks, only the processing of financial transactions.
At the center of the case is the scope of the Alien Tort Statute, a 1789 law passed during the First Congress.
It says that "the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."
The law was passed to address certain violations, including piracy and the infringements on the rights of ambassadors. It lay mostly dormant for years until human rights groups turned to it in the 1980s and began work to broaden its scope.
The victims seek to invoke the law and hold the Arab Bank accountable for providing "a range of financial services to terrorists and terrorist front groups posing as charities" and for allegedly funneling dollars through the New York branch to compensate the terrorists' family for the attacks.
"While some of these clients had not yet been placed on terrorist watch lists when they opened their accounts, the Bank has admitted that it processed 282 fund transfers -- a total amount of $2,563,275 -- for individuals that (the) United States had designated at the time of the transfers as terrorist(s)," Jeffrey Fisher, a lawyer for the victims, wrote in court papers.
"When corporate activity violates the law of nations, imposing liability directly upon the corporation serves those objectives," Fisher said.
But lawyers for the bank argue that the plaintiffs in the case have "no direct connection" to the United States.
"The defendant is a foreign bank, a cornerstone of the Jordanian economy that the United States government has labeled a constructive partner in fighting terrorist financing," Paul Clement, a lawyer for the bank, argued in briefs.
Instead of suing in courts in Israel, Clement argued, the victims sued "only a single foreign corporation, seeking to recover 100% of their injuries plus punitive damages from respondents alone."
He says that the bank is "deeply committed to fighting to secure terrorism" and that the litigation has already "generated diplomatic friction" between the United States and Jordan.
"The notion that a 1789 jurisdictional statute authorizes this extraordinary effort to recover from a foreign bank for foreign injuries allegedly traceable to foreign transactions that were heavily regulated by multiple countries -- an effort that has caused substantial diplomatic tension -- beggars all belief," Clement wrote.
"With just four exceptions involving computer or human error (out of approximately 500,000 transactions the branch processed annually) none of the identified transactions involved designated terrorists" he said.
The Justice Department has filed a brief in the case in support of neither party. It argues that the Supreme Court should vacate the decision below that went in favor of the bank, because it rested on the "mistaken premise that a federal common-law claim" under the Alien Tort Statute can never be brought against a corporation.
But government lawyers believe the lower court should take another look at the question of whether the claims in the case at hand present "a sufficient connection to the United States."
If the court follows the administration's advice, it may decide it does not have the case to rule definitively on corporate liability.
The DOJ argues that the "only domestic connection" in the case is the alleged routing of foreign transactions through the New York bank, and that circumstance alone is not sufficient to trigger scrutiny under the 1789 law.
And the government notes that the "unwarranted continuation" of the case could be detrimental to foreign policy concerns and diplomatic relations.
"Jordan regularly conducts air missions over Iraq and Syria, cooperates with measures to thwart the financing of terrorist activities, and plays a critical role in international efforts to stem the flow of foreign terrorist fighters," the DOJ argued.