In Prosecution of Turkish Bank, the Supreme Court Issues a Mixed Ruling
WASHINGTON — The Supreme Court issued a mixed decision on Wednesday over whether the federal government may prosecute a state-owned bank in Turkey on charges that it had helped Iran evade sanctions imposed by the United States.
The court rejected the bank’s main arguments, based on federal laws that the bank said prohibited prosecutions of foreign nations and the companies they control. But it sent the case back to an appeals court for further consideration of another potential defense, drawing criticism from two dissenting justices for failing to issue a definitive ruling.
The case involved what a 2019 indictment called a multiyear scheme by the bank, known as Halkbank, to launder billions of dollars of Iranian oil and natural gas proceeds. It strained relations between the United States and Turkey, and it prompted top Justice Department officials in the Trump administration to try to disrupt the prosecution.
Justice Brett M. Kavanaugh, writing for seven justices, rejected the bank’s primary argument: that the Foreign Sovereign Immunities Act of 1976, which generally forbids civil suits seeking money from companies owned by foreign governments, also prohibits criminal prosecutions.
“We now hold that the F.S.I.A. does not grant immunity to foreign states or their instrumentalities in criminal proceedings,” Justice Kavanaugh wrote, adding: “Congress enacted a comprehensive scheme governing claims of immunity in civil actions against foreign states and their instrumentalities. That scheme does not cover criminal cases.”
Understand the U.S. Supreme Court’s Term
A race to the right. After a series of judicial bombshells in June that included eliminating the right to abortion, a Supreme Court dominated by conservatives returned to the bench in October — and there are few signs that the court’s rightward shift is slowing. Here’s a closer look at the term:
Affirmative action. The marquee cases of the term are challenges to the race-conscious admissions programs at Harvard and the University of North Carolina. While the court has repeatedly upheld affirmative-action programs, a six-justice conservative supermajority may put more than 40 years of precedent at risk.
Voting rights. The role race may play in government decision-making also figures in a case that is a challenge under the Voting Rights Act to an Alabama electoral map that a lower court had said diluted the power of Black voters. The case is a major new test of the Voting Rights Act in a court that has gradually limited the law’s reach in other contexts.
Discrimination against gay couples. The justices heard an appeal from a web designer who objects to providing services for same-sex marriages in a case that pits claims of religious freedom against laws banning discrimination based on sexual orientation. The court last considered the issue in 2018 in a similar dispute, but failed to yield a definitive ruling.
Tech companies’ legal shield. The court is reviewing a sweeping law that prevents tech companies such as Facebook and Google from being held responsible for the content posted on their site. The case could have potentially seismic ramifications for social media platforms and alter the very structure of the internet.
Student loan cancellation challenges. The justices heard arguments about President Biden’s plan to forgive an estimated $400 billion in federal student loan debt. Conservative states have called the plan an abuse of executive authority. The court is exploring whether the states are even entitled to sue.
The alternative, he wrote, would be deeply problematic.
“On Halkbank’s view, a purely commercial business that is directly and majority-owned by a foreign state could engage in criminal conduct affecting U.S. citizens and threatening U.S. national security while facing no criminal accountability at all in U.S. courts,” he wrote. “Nothing in the F.S.I.A. supports that result.”
But Justice Kavanaugh left the bank with a sliver of hope, saying that the federal appeals court in New York had not adequately considered whether immunity from prosecution was available under longstanding common-law principles unrelated to the 1976 law.
When the case was argued in January, Lisa S. Blatt, a lawyer for the bank, stressed that history. “There just never has been a criminal prosecution of a sovereign or its instrumentality anywhere,” she said, adding, “The world has been around for, like, 7,000 years, and no country has ever tried another country.”
In the bank’s Supreme Court brief, Ms. Blatt wrote that conflicts between nations are settled by diplomacy or war and not in criminal trials.
“President Madison did not indict Great Britain for arson for torching the White House in 1814,” she wrote. “President Roosevelt responded to Pearl Harbor by unleashing the full might of the American military against Japan, not a phalanx of prosecutors.”
More on the U.S. Supreme Court
- Medication Abortion: Justice Samuel Alito issued an order temporarily ensuring that a common abortion pill would remain widely available while the court considered whether to grant the Biden administration’s emergency request to preserve the F.D.A.’s approval of the drug.
- Uncomfortable Revelations: Justice Clarence Thomas has long raised eyebrows over questions of conflicts of interest, in part because of his wife’s political activism. Recent reports by ProPublica have cast his relationship with a real estate magnate under particular scrutiny.
- Religious Freedom: A Supreme Court case about Sabbath and Sunday deliveries for Postal Service workers has the potential to affect countless workplaces and could require many employers to make major changes to accommodate religious workers.
Justice Kavanaugh wrote that the appeals court should take a fresh look at the question of what the common law had to say about criminal prosecutions of foreign nations.
Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan, Amy Coney Barrett and Ketanji Brown Jackson joined Justice Kavanaugh’s opinion in the case, Turkiye Halk Bankasi A.S. v. United States, No. 21-1450.
Justice Neil M. Gorsuch, joined by Justice Samuel A. Alito Jr., issued a partial dissent. He said the 1976 law governs the dispute and that it applies to both civil and criminal cases but does not stand in the way of prosecutions like the one at issue given an exception in the law for commercial activities.
Justice Gorsuch faulted the court for its failure to issue a clear ruling, saying the court’s decision “leaves litigants and our lower court colleagues with an unenviable task, both in this case and others sure to emerge.” He added that “many thorny questions lie down the ‘common law’ path, and the court fails to supply guidance on how to resolve any of them.”
He said the court should have simply let the prosecution proceed.
“Today’s decision overcomplicates the law for no good reason,” Justice Gorsuch wrote.
