Justice Sonia Sotomayor denied the Palestinian Authority's emergency bid to block a $655.5 million judgment won by American families of terrorist attack victims, leaving the PA scrambling to protect its finances.
Sotomayor, who oversees emergency matters from the 2nd U.S. Circuit Court of Appeals, rejected the stay application Monday without referring it to the full Supreme Court and without offering any explanation, Newsweek reported. The ruling clears the path for American families who lost loved ones in terrorist bombings and shootings in Jerusalem between 2002 and 2004 to begin collecting on a judgment first handed down more than a decade ago.
The PA and the Palestine Liberation Organization had filed the stay application in late July, warning that enforcement would cripple government services in the West Bank. Sotomayor did not buy it, or at least did not say why she declined.
For the families of Americans killed and wounded in those attacks, the ruling marks the latest turn in a legal fight that has stretched across more than a decade, two acts of Congress, and multiple rounds of appellate litigation. For the PA, it raises the prospect of losing its primary revenue stream at a moment when a World Bank report already describes the authority as mired in "deep fiscal crisis."
The case traces back to a wave of terrorist violence during the Second Intifada. Between 2002 and 2004, shootings and bombings carried out by various Palestinian groups and individuals in and around Jerusalem killed and injured American citizens. A 2002 bombing at Hebrew University in Jerusalem alone killed five Americans.
The broader conflict erupted after then-Israeli opposition leader Ariel Sharon visited the compound housing holy Islamic and Judaic sites in September 2000, accompanied by hundreds of armed officers. Many regard the visit as the trigger for the Second Intifada, though Sharon and his supporters said it affirmed Israel's right of access to the site. More than 1,000 Israelis and 3,000 Palestinians died during the uprising, which ended with a ceasefire agreement at a 2005 summit in Sharm el-Sheikh.
In 2015, a federal court in New York found the PA and PLO liable after a seven-week trial and entered the $655.5 million judgment. But the victory was short-lived. The 2nd Circuit threw out the verdict in 2016, ruling that U.S. courts lacked jurisdiction over the Palestinian entities. The Supreme Court declined to hear an appeal two years later.
That should have been the end of it. Congress had other plans.
In 2019, lawmakers passed the Promoting Security and Justice for Victims of Terrorism Act, a federal statute designed to make it easier for American victims of terrorism to sue the PA and PLO in U.S. courts. The law effectively addressed the jurisdictional gap the 2nd Circuit had identified.
The Supreme Court unanimously upheld the statute in 2025 in Fuld v. Palestine Liberation Organization. That decision, in which not a single justice dissented, set the stage for the 2nd Circuit to revisit the original judgment. In a ruling that surprised observers, the same appellate court that had previously sided with the PA reversed course in March 2026, reinstating the full $655.5 million verdict.
Attorneys for the plaintiffs welcomed the reinstatement. The families said, through comments attributed via The Times of Israel, that the decision would allow "justice to be done."
PA and PLO attorneys saw it differently. In court filings reviewed by Newsweek, they called the reinstatement unprecedented:
"[This] was the first time an American court has ever held that a money judgment made without jurisdiction may be resurrected years after all appeals were exhausted."
They argued the original judgment had become a "nullity", "absolutely void", once the 2nd Circuit tossed it in 2016. Reviving it, they contended, broke new and dangerous legal ground.
The stay application painted a dire picture of what enforcement would mean. The PA argued in its filing that the plaintiffs plan to go after clearance revenues, taxes and customs duties that Israel collects on the PA's behalf under the Oslo Accords. Those revenues represent the PA's primary income source.
The filing warned that seizing those funds would have cascading consequences:
"Immediate enforcement of such a large judgment will destabilize critical government services Petitioners provide in the West Bank, injure innocent citizens, and jeopardize regional security."
The PA's attorneys added that basic functions are already under severe strain:
"The security, sanitation, and school services provided by Petitioners in the West Bank are hanging by a thread."
The financial pressure is real. Israel has suspended the transfer of clearance revenues to the PA. A World Bank report found the PA running a total deficit before grants of $605 million in just the first nine months of 2025. The Hamas attack on Israel on October 7, 2023, and the ensuing war in Gaza have compounded the authority's fiscal problems.
None of that moved Sotomayor to grant the stay. The Supreme Court's liberal wing has drawn attention this term for its public commentary on the Court's role and independence, but in this instance Sotomayor acted without a word of explanation.
Eugene Kontorovich, a law professor and executive director of George Mason University's Center for the Middle East and International Law, told Newsweek by email that collecting on the judgment will be its own challenge:
"The next step would be enforcing the judgment, which would be difficult to do in the United States because the PLO maintains very limited assets here, specifically to avoid having them seized to satisfy judgments by terror victims."
That phrasing is worth pausing on. Kontorovich described the PLO's thin U.S. asset footprint not as accidental but as deliberate, a strategy to keep assets beyond the reach of American courts. The families who won this judgment may hold a $655.5 million piece of paper, but converting it to compensation requires finding assets to seize.
Kontorovich noted one avenue: taking the judgment abroad. "A judgment in the United States can be taken abroad, including to Israel and enforced there," he said. That could put the clearance revenues directly in play, the very funds the PA warned are essential to keeping West Bank services running.
Plaintiffs' attorneys declined to comment on the Monday ruling. Newsweek reached out to the defendants' legal representatives on Tuesday. The PA and PLO's next legal steps remain unclear.
The Supreme Court itself has been a source of unexpected alignments in recent months. Justices have crossed ideological lines on high-profile cases, and the political reaction to Court decisions has been intense on all sides. Sotomayor's terse, unexplained denial here drew no public dissent from her colleagues.
The families behind this lawsuit have now outlasted two rounds of appellate defeat, a Supreme Court pass, and a congressional rewrite of the underlying statute. They won at trial in 2015, lost on appeal in 2016, watched the Supreme Court decline their case in 2018, saw Congress change the law in 2019, watched the Supreme Court unanimously uphold that law in 2025, and saw the 2nd Circuit reinstate their verdict in March 2026. At every point where the legal system closed a door, another one opened.
The PA's argument that enforcement would harm innocent Palestinians in the West Bank raises a genuine policy tension. But the judgment itself exists because Americans died in terrorist attacks, and a federal jury found the PA and PLO liable. Congress wrote a law to ensure those families could pursue accountability. The Supreme Court upheld it without a single dissent. And now the justice assigned to handle the emergency request has declined to stop the judgment from moving forward.
Open questions remain. How will the plaintiffs pursue enforcement against an entity with minimal U.S. assets? Will Israel cooperate if the families seek to enforce the judgment against clearance revenues collected on the PA's behalf? And what happens to West Bank governance if those revenues are redirected to satisfy a court order?
When American citizens are murdered in terrorist attacks and a federal jury holds the perpetrators' sponsors liable, the victims' families deserve more than a decade of jurisdictional runarounds. Congress fixed the law. The courts upheld it. The families earned their judgment. Now it is time to pay it.