WASHINGTON -- The Supreme Court ruled Tuesday that an Arab bank cannot be held liable for a decade of terrorist attacks against Israel under an obscure 1789 law, handing a victory to foreign corporations accused of terrorism or human rights violations.
Justice Anthony Kennedy, joined by the court's four other conservative justices, said only Congress can make such a decision. The ruling was 5-4.
"Judicial deference requires that any imposition of corporate liability on foreign corporations for violations of international law must be determined in the first instance by the political branches of the government," Kennedy said.
Justice Sonia Sotomayor dissented and was joined by the court's three other liberal justices. The decision, she said, "absolves corporations from responsibility under the Alien Tort Statute for conscience-shocking behavior."
"Immunizing corporations that violate human rights from liability ... undermines the system of accountability for law-of-nations violations that the First Congress endeavored to impose," she said.
The decision was a blow to some 6,000 foreign victims, including survivors and relatives, of suicide bombings and other attacks in Israel and the Palestinian Territories from 1996 to 2005.
Many of those victims claimed that Jordan-based Arab Bank used a New York branch to help finance terrorists from Hamas and other groups and to funnel martyr's payments to the families of suicide bombers.
Their challenge cited the Alien Tort Statute, passed by the first U.S. Congress nearly 230 years ago, which gives U.S. courts jurisdiction over crimes committed overseas "in violation of the law of nations or a treaty of the United States."
American victims of 22 Middle East terrorist attacks won a jury verdict in 2014 under a different law not available to foreign citizens. But a federal appeals court threw out that verdict in February, triggering a settlement agreement with some victims instead.
During oral argument in October, some justices questioned whether corporations can be liable at all under the statute. Others wondered whether the terrorist attacks had a sufficient connection to the United States. Still others worried about causing friction with international allies.
Chief Justice John Roberts said the law was passed to avoid "foreign entanglements," not add to them. Justice Samuel Alito said a ruling for the victims could lead to more lawsuits raising foreign policy concerns. Justice Neil Gorsuch said lawmakers in 1789 meant for the statute to be directed only at U.S. defendants.
The U.S. Court of Appeals for the 2nd Circuit, based in New York, ruled in 2015 that the centuries-old law cannot be used against corporations.
The bank, which operates in nearly 30 countries, contended in court papers that it is not responsible for attacks on "foreign plaintiffs seeking relief against a foreign defendant for injuries caused by foreign actors on foreign soil."
On Tuesday, it issued a statement asserting that "there is no basis to hold corporations liable under international law."
The Justice Department took a compromise position during the litigation, arguing that the case "has been a source of international friction," assistant solicitor general Brian Fletcher said during oral argument.
Yossi Zur, an Israel who lost his 16-year-old son Asaf to a bus bombing that killed 17 people, told USA TODAY last year that financing terrorism "is as bad as pulling the trigger or exploding the bomb.
"Our view is that terror is a long chain of evil," he said. "Financing terrorism is the most important link in the chain, because without money there wouldn't be any terrorism."