Second Circuit Exercises “Hypothetical Jurisdiction” To Dismiss Claim Rather than Address Subject Matter Jurisdiction Over Corporation in Alien Tort Statute Claim


Liu Bo Shan v. China Construction Bank Corp., No. 10-2992-cv (2d Cir. 2011)(summary order), reviewed on appeal claims alleging torture against China Construction Bank in alleged violation of the Torture Victim Protection Act, 28 U.S.C. Sec. 1350 note, as well as claims of torture, cruel, inhuman, and degrading treatment and arbitrary detention in China in alleged violation of the Alien Tort Statute, 28 U.S.C. Sec. 1350. The bank asserted that subject matter jurisdiction did not lie based on the Second Circuit’s prior decision in Kiobel v. Royal Dutch Petroleum Co., 620 F.3d 111 (2d Cir. 2010), which held that the district court lacked subject matter jurisdiction to hear an ATS claim against a corporate defendant for violations of customary international law. The Panel refused to reconsider whether Kiobel was rightly or wrongly decided, reiterating the principle that “[i]t is axiomatic that a panel of this court is bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of our Court or by the Supreme Court”. E.g., NML Capital v. Republic of Argentina, 621 F.3d 230 (2d Cir. 2010) (which we posted on here).

Instead, the Court of Appeals stated that, “even if jurisdiction exists, the amended complaint was correctly dismissed for failure to state a claim”. The Court believed it had authority to exercise “hypothetical jurisdiction” where the jurisdiction it was exercising hypothetically was “statutory, not constitutional”. The Court applied that rule as well to a Foreign Sovereign Immunities Defense asserted by the bank.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cadwalader, Wickersham & Taft LLP | Attorney Advertising

Written by:


Cadwalader, Wickersham & Taft LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.