The U.S. Supreme Court will soon decide the long-awaited issue of whether corporations can be liable under the Alien Tort Statute (ATS), a statute enacted by the First Congress more than 225 years ago. Earlier this year, the Supreme Court granted a petition for writ of certiorari in Jesner v. Arab Bank, 197 L. Ed. 2d 646 (2017) on whether a corporation—in that case, a leading Jordanian bank—can be subject to liability under the ATS for alleged violations of customary international law. The appeal will be fully briefed by September, and the Supreme Court likely will issue its decision next term.

There has been a circuit split on the issue since at least 2010. The Seventh, Ninth, and the D.C. Circuits have concluded that the ATS allows for corporate liability, while the Second Circuit has held that the statute does not allow for corporate liability. The Supreme Court's opinion in Kiobel v. Royal Dutch Petro., 133 S. Ct. 1659 (2013) only further deepened the split. There, the U.S. Supreme Court initially granted certiorari on the issue of whether a corporation could be held civilly under the ATS, only to rule on another ground, namely, that the ATS claims in that particular case failed under the presumption against extraterritoriality of U.S. law. Since then, some lower courts and commentators have suggested that the Supreme Court implicitly suggested the existence of corporate liability under ATS, while others say the high court did no such thing.

As the disparity between the two views has grown over the last several years, the Supreme Court's decision to take up the issue is timely. However, the Supreme Court's decision, if it diverges from the Second Circuit, likely would open the floodgates to lawsuits against corporations for alleged violations of customary international law, which would lead to profound and unintended consequences.