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Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

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DENNIS JACOBS, joined by JOSÉ A. CABRANES, REENA RAGGI, and DEBRA

ANN LIVINGSTON, Circuit Judges, concurring in the denial of rehearing in

banc.

I concur in the denial of in banc review of this case; rehearing would serve

no purpose remotely commensurate with the effort it would entail.

The panel opinion grudgingly rejects plaintiffs’ claim as barred by our

decision in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010)

(“Kiobel I”), which held that customary international law, as enforced by the

Alien Tort Statute (“ATS”), does not regulate corporate conduct.  The panel

opinion goes on to attack Kiobel I, and says it is constrained unhappily to follow

it.  Hence the in banc poll initiated by the panel itself.

Although the seven other judges who voted against in banc review do not

necessarily endorse Kiobel I (or reach the merits of it), there is consensus that

intervening developments obviate any need to go in banc.   

*   *   *

Back in 2011, this Court rejected in banc review of this issue.  See Kiobel v.

Royal Dutch Petroleum Co., 642 F.3d 379, 380 (2d Cir. 2011).  The Supreme Court

took up the case, but (after oral argument) required briefing on an alternative

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ground: whether the ATS has extraterritorial effect.  The Supreme Court then

held that it does not. Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659, 1669

(2013) (“Kiobel II”).

Since the population of cases dismissible under Kiobel I is largely

coextensive with those dismissible under Kiobel II, several conclusions follow:

!  The principle of Kiobel I has been largely overtaken, and its importance

for outcomes has been sharply eroded.  See Flomo v. Firestone Nat’l

Rubber Co., LLC, 643 F.3d 1013, 1025 (7th Cir. 2011) (Posner, J.) (“Deny

extraterritorial application, and the statute would be superfluous . . . .”).

!  This present appeal was subject to two easy (alternative) dispositions:

affirm on the basis of Kiobel I (without lamentation) or remand for the

district court to consider the case under Kiobel II.  See Kiobel II, 133 S.Ct. at

1669.  

!  There is no reason to consider or reconsider Kiobel I in banc in this  

appeal.

*   *   *

This appeal could have been straightforwardly decided under Kiobel II,

which held that the presumption against extraterritoriality can be displaced only

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if the “claims touch[ed] and concern[ed] the territory of the United States”; that

they must do so with “sufficient force”; and that “mere corporate presence” (for

example) is not enough.  Id.  Kiobel II emphasizes that this must be a high

hurdle, given the danger of judicial meddling in the affairs of foreign countries:

[T]he danger of unwarranted judicial interference in the conduct of

foreign policy is magnified in the context of the ATS, because the

question is not what Congress has done but instead what courts may

do . . . These concerns, which are implicated in any case arising

under the ATS, are all the more pressing when the question is

whether a cause of action under the ATS reaches conduct within the

territory of another sovereign . . . The principles underlying the

presumption against extraterritoriality thus constrain courts

exercising their power under the ATS.  

Id. at 1664‐65.  

In this case, the underlying offense against the law of nations is terrorism

against citizens of Israel by four Palestinian terrorist groups.  Arab Bank, PLC,

which is headquartered in Jordan, is named as defendant because funds allegedly

passed through its branches to other countries for distribution to terrorists.

The only contact with the United States mentioned in the Arab Bank

opinion is that terrorist groups used branches of Arab Bank in a score of

countries (including a single U.S. branch, in Manhattan) for, among other

ordinary transactions, the conversion of funds from one currency to another.  See

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In re Arab Bank, PLC Alien Tort Statute Litig., 808 F.3d 144, 149‐50 (2d Cir. 2015)

(“Arab Bank then created individual bank accounts . . . often routing the transfers

through its New York branch in order to convert Saudi currency into Israeli

currency.”).  The New York branch is not differentiated in any way from Arab

Bank’s numerous other branches.  This is no more than the “mere corporate

presence” that is insufficient to displace the presumption against

extraterritoriality.  Kiobel II, 133 S.Ct. at 1669.

In the (unlikely) event that plaintiffs could somehow plead around Kiobel

II, they would face a separate formidable barrier: the mens rea requirement.  See

Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244, 259 (2d Cir.

2009).  As the panel opinion emphasizes, plaintiffs do allege knowledge.  See

Arab Bank, 808 F.3d at 150 (“According to the plaintiffs, Arab Bank knew that the

donations were being collected for terrorist attacks . . . Again, responsible officials

at Arab Bank purportedly knew that the accounts of these various organizations

and individuals were being used to fund the suicide bombings and other attacks

sponsored by the terrorist organizations.”) (emphasis added).  However, the

standard “for aiding and abetting liability in ATS actions is purpose rather than

knowledge alone.”  Presbyterian Church, 582 F.3d at 259.

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*   *   *

It is thus evident that the Arab Bank panel opinion steered deliberately into

controversy.  That impression is confirmed by the slender pretexts advanced by

the panel for refusing to consider extraterritoriality.  

The panel considers it “unwise to decide the difficult and sensitive issue of

whether the clearing of foreign dollar‐denominated payments [in simpler terms,

money] through a branch in New York could, under these circumstances,

displace the presumption against the extraterritorial application of the ATS . . . .”

Arab Bank, 808 F.3d at 158.1

  But it would have been simpler to remand for the

district court to decide that easy question (as other circuit courts are doing) than

to go in banc to decide a question that produced dueling opinions in Kiobel I.  It

is as though Sisyphus, seeing the hill, elected to push upward instead of just

going around.  

The panel decision notes that Kiobel II was “not the focus of either the

district court’s decision or the briefing on appeal.”  Id.  But this need not boggle

judicial ingenuity: the panel could have remanded in light of Kiobel II, or it could

     1 This is a kind of transaction that can be done at an automated airport kiosk.

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have asked for supplemental briefing.  It is not recommended appellate craft to

avoid so easy a disposition and instead strain to revisit Circuit precedent in banc.

*   *   *

The circuit split that so worries the Arab Bank panel is illusory.  The panel

opinion conjures up a circuit split from these cases:  

!  Two of the decisions pre‐date Kiobel II; so those panels did not

have the option of dismissal or remand on the ground of

extraterritoriality.  See Flomo, 643 F.3d at 1021 (issued almost two

years before Kiobel II); Romero v. Drummond Co., Inc., 552 F.3d

1303, 1315 (11th Cir. 2008) (issued more than four years before

Kiobel II).  

!  The rest were decided on the basis of Kiobel II.  See Doe I v.

Nestle USA, Inc., 766 F.3d 1013, 1027‐28 (9th Cir. 2014) (“We decline

to resolve the extraterritoriality issue, and instead remand to allow

the plaintiffs to amend their complaint in light of Kiobel II . . . It is

common practice to allow plaintiffs to amend their pleadings to

accommodate changes in the law . . . .”); Doe VIII v. Exxon Mobil

Corp., 527 F. App’x 7 (D.C. Cir. 2013) (“[I]n light of intervening

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changes in governing law regarding the extraterritorial reach of the

Alien Tort Statute, see [Kiobel II], . . . the Alien Tort Statute claims

[are] remanded to the District Court for further consideration.”).  

!  As to Al Shimari v. CACI Premier Tech., Inc., 758 F.3d 516, 530

(4th Cir. 2014), cited by the Arab Bank panel as “see also”: the case

was decided solely on the basis of Kiobel II: “[P]laintiffs’ ATS claims

‘touch and concern’ the territory of the United States with sufficient

force to displace the presumption against extraterritorial application

. . . .”.

All this is by way of saying that this appeal is insufficiently important or

consequential to warrant review in banc.

*   *   *

In sum, the panel’s angst in having to follow Kiobel I  was self‐inflicted.

The appeal could have been resolved under Kiobel II; if the problem was lack of

briefing, briefing could have been ordered; if finding the right answer under

Kiobel II was a strain on the panel, it could have remanded; if the easiest course

was to follow a precedent that the panel dislikes, it could have done what

appellate judges must frequently do: swallow hard.  The one course that makes

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no sense is to force difficulties, reel off dicta criticizing our precedent, and seek in

banc consideration of a doctrine that now has sharply reduced application.

Going in banc on this would do nothing but supply catnip for law clerks looking

to teach.

A further consideration: Kiobel I was sharply contested within the panel;

there was friction, heat and light in the Kiobel I panel opinions, and over panel

rehearing and the (defeated) 2011 in banc initiative.  There is even less reason

now than then to reconsider in banc an issue so highly charged.  More to the

point, the Supreme Court will have two vigorous Second Circuit opinions to

consider if that Court decides one day to revisit a question that will rarely again

be asked.

In this Circuit, a case may one day arise that cannot be disposed of under

Kiobel II, at a time when a circuit split has opened, and when the prospect looms

of many such cases.  If and when that comes to pass, it may be worth our time to

consider the issue in banc.  That time may never come; it has certainly not

arrived.

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