Consent, Jurisdiction, and the Regulation of Terrorism

Abstract

Congress passed the Anti-Terrorism Act (ATA) to enable private claimants to overcome “jurisdictional hurdles” in bringing private actions against the alleged perpetrators of international terror. With the intended targets of the ATA unavailable, the ATA has become a statute about multinational banks. This focus on third-parties has been supported by, and has in turn driven, an expansion of material support and aiding and abetting liability.

In previous work, I predicted that the conflict between diminished personal jurisdiction and the regulatory power of the United States would come to a head in terrorism cases. That has now happened. After Daimler, every pending ATA case against the Palestinian Authority (PA) or the Palestine Liberation Organization (PLO) was dismissed on jurisdictional grounds. Except for one: In Sokolow v. Palestine Liberation Organization, the district court held that the defendants had not met their burden to re-open the judgment on jurisdictional grounds. The United States Court of Appeals for the Second Circuit reversed. Former Solicitor General Ted Olson represented the petitioners pro bono to seeking certiorari from the U.S. Supreme Court. The Court requested the views of the Solicitor General’s office which, after a long delay, recommended against certiorari—a recommendation the Court followed.

In explicit response to the Sokolow case, Congress passed and the President signed into law the Anti-Terrorism Clarification Act (ATCA) on October 3, 2018. The ATCA contains several provisions applicable to long-standing disputes in the private regulation of terrorism, such as a proposal to unfreeze various assets owned to alleged terrorism entities and make them available for seizure by private creditors in terror-related suits.

The most controversial and novel feature of the ATCA speaks to this conflict between personal jurisdiction and regulatory power. The ATCA proposes to create a system of transnational consent jurisdiction. The ATCA states any defendant “shall be deemed to have consented to personal jurisdiction” if, with 120 days of the enactment of the ATCA, it either receives certain types of economic assistance from the United States or operates a facility within the United States while benefitting from a waiver or suspension of the statutory bar to “the PLO or any of its constituent groups” operating such a facility within the United States. Critics of the ATCA were quick to suggest that it was in tension with Daimler and could not withstand constitutional scrutiny.

Although this approach is novel for terrorism, it is not altogether new. In fact, in intra-state consent jurisdiction is a very old idea. Nearly every state has a statute requiring that out-of-state corporations doing business in the state register with the secretary of state. Some of these statutes have been interpreted to confer general jurisdiction or explicitly require it. Drafts of the Foreign Manufacturers Liability and Accountability Act (FMLAA) have been floating around Congress for some time—that bill adopts a similar scheme of state-imposed consent jurisdiction. Contractual consent to jurisdiction has been a mainstay of U.S. commercial and contract law for generations, including in transnational contract law since the U.S. Supreme Court’s landmark decision in Bremen v. Zapata.

This article makes three contributions. First, it charts the conflict between the regulatory scheme established by the ATA and the U.S. Supreme Court’s dramatic restrictions on personal jurisdiction. Second, it questions whether arguments about consent in intra-state disputes can be applied to the transnational sphere. Third, it considers whether Daimler has any impact on the viability of the ATCA by analyzing the essential attributes of general jurisdiction.

Keywords: jurisdiction, terrorism, conflict of laws, transnational law, transnational litigation, private international law, consent, dormant commerce clause, unconstitutional conditions