I quote from the Supreme Court Decision in the case MOHAMAD, INDIVIDUALLY AND FOR ESTATE OF RAHIM, DECEASED, ET AL. v. PALESTINIAN AUTHORITY ET AL. decided April 18, 2012:
While visiting the West Bank, Azzam Rahim, a naturalized UnitedStates citizen, allegedly was arrested by Palestinian Authority intelligence officers, imprisoned, tortured, and ultimately killed. Rahim’s relatives, petitioners here, sued the Palestinian Authority and the Palestine Liberation Organization under the Torture Victim Protection Act of 1991 (TVPA), which authorizes a cause of action against “[a]n individual” for acts of torture and extrajudicial killing committed under authority or color of law of any foreign nation. 106 Stat. 73, note following 28 U. S. C. §1350. The District Court dismissed the suit, concluding, as relevant here, that the TVPA’s authorization of suit against “[a]n individual” extended liability only to natural persons. The United States Court of Appeals for the District of Columbia Circuit affirmed.And further:
JUSTICE SOTOMAYOR delivered the opinion of the Court.And still further:
The Torture Victim Protection Act of 1991 (TVPA orAct), 106 Stat. 73, note following 28 U. S. C. §1350, authorizes a cause of action against “[a]n individual” for actsof torture and extrajudicial killing committed under authority or color of law of any foreign nation. We hold that the term “individual” as used in the Act encompasses only natural persons. Consequently, the Act does not imposeliability against organizations.
The legislative history of the statute, however, makes up for whatever interpretive inadequacies remain after considering language alone. See, e.g., ante, at 9 (describing markup session in which one of the bill’s sponsors proposed an amendment containing the word “individual” to “make it clear” that the statute applied to “individualsand not to corporations”); Hearing on S. 1629 et al. before the Subcommittee on Immigration and Refugee Affairsof the Senate Committee on the Judiciary, 101st Cong., 2d Sess., 65 (1990) (witness explaining to committee that there would be a “problem” with suing an “independent entity or a series of entities that are not governments,” such as the Palestine Liberation Organization); id., at 75 (allaying concerns that there will be a flood of lawsuits“ because of the requirement [in the statute] that an individual has to identify his or her precise torture[r] and theyhave to be both in the United States”); see also ante, at 8– 9 (making clear that petitioners’ citations to the legislative history “do not help their cause”).So the law applies to acts of torture and extrajudicial "committed under authority or color of law of any foreign nation." The suit was brought against the Palestinian Authority and the Palestine Liberation Organization. The decision specifically refers to the fact that the Palestine Liberation Organization is not a foreign nation. It rejects the application on the basis that the suit is not against an individual. It does not reject the case on the basis that the Palestinian Authority is not a sovereign nation.
I found this case based on an article in The Economist which states:
The Foreign Sovereign Immunities Act usually crops up in very different cases. On April 18th, for example, the Supreme Court blocked a Palestinian family in America from using American courts to seek redress from the Palestinian Authority for torture and murder.If the United States Supreme Court accepts the Palestinian Authority as a sovereign state, may we not conclude that it meets the internationally recognized attributes of statehood? But the United States is withholding funds from UNESCO, which admitted Palestine as governed by the Palestinian Authority as a member state, on the basis of a part of the foreign relations appropriations act which states "The United States shall not make any voluntary or assessed contribution - "(1) to any affiliated organization of the United Nations which grants full membership as a state to any organization or group that does not have the internationally recognized attributes of statehood." It seems to me that withholding the funds is not justified by the terms of the law.
See also this post.