Abu Nahl v. Abou Jaoude, 968 F.3d 173

Background:

Plaintiffs (Abu Nahl and Nest Investments), minority shareholders of Lebanese Canadian Bank (LCB), allege LCB management (Abou Jaoude, Hamdoun, Safa) ran a money‑laundering scheme that funneled funds to Hezbollah, enabling terrorist attacks and triggering U.S. sanctions and forfeiture.
In 2011 the U.S. Treasury designated LCB a financial institution of primary money‑laundering concern; LCB liquidated and ultimately forfeited funds in settlement of U.S. forfeiture proceedings, causing the economic loss plaintiffs seek to recover.
Plaintiffs filed an ATS claim: first alleging aiding/abetting failed; after dismissal they sought to amend to allege defendants as primary violators by financing terrorism under the International Convention for the Suppression of the Financing of Terrorism (Art. 2.1(b)).
The district court granted leave to amend, holding the prohibition on financing terrorism is a sufficiently universal, specific, and obligatory international norm to support an ATS claim.
The Second Circuit assumed arguendo that such a norm could, in some circumstances, be actionable under Sosa but reversed: amendment was futile because plaintiffs’ asserted harm (corporate/shareholder economic loss from mismanagement and forfeiture) falls outside the harms the international norm protects.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether prohibition on financing terrorism is an actionable international norm under the ATS	The Convention (Art. 2.1(b)) and widespread state participation show a universal, specific, obligatory norm permitting an ATS cause of action	The norm lacks sufficient universality/specificity; Jesner and separation‑of‑powers concerns counsel against recognizing new ATS causes of action	Court assumed arguendo the norm might be actionable but did not decide the question definitively
Whether plaintiffs’ amended complaint pleads an ATS cause of action based on financing terrorism	The Amended SAC alleges defendants directly financed terrorism via LCB, causing forfeiture and shareholder loss—thus within the norm’s scope	Plaintiffs’ harm is corporate/shareholder economic loss from mismanagement and forfeiture, not the harms (death/serious injury/intimidation) the financing prohibition targets	Held: Amendment futile—economic harms to shareholders are outside the scope of any financing‑terrorism norm
Whether prudential/separation‑of‑powers and foreign‑policy concerns permit recognition here	Enforcement of the norm can be appropriate in some cases; plaintiffs seek vindication of international law	Recognizing ATS claims for corporate mismanagement would intrude on foreign relations, duplicate domestic remedies, and expand ATS beyond mutual‑concern harms	Held: Prudential concerns weigh against recognizing an ATS remedy for these claims
Whether international law imposes individual liability/universal jurisdiction for terrorist financing	Plaintiffs assert treaty and state practice support individual liability	Defendants and concurring judge argue treaties impose obligations on States to criminalize, not to create international crimes with universal jurisdiction over individuals	Held (concurring view): Plaintiffs failed to show terrorist financing is an international crime subject to universal jurisdiction; majority did not rest decision on that ground but agreed claim fails

Key Cases Cited

Sosa v. Alvarez‑Machain, 542 U.S. 692 (framework for recognizing ATS causes of action; caution in creating new norms)
Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018) (emphasizes foreign‑policy and separation‑of‑powers limits on ATS)
Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir.) (ATS jurisdictional limits; use of customary international law proof)
Filartiga v. Pena‑Irala, 630 F.2d 876 (2d Cir.) (foundational ATS decision on evolving international norms)
Abdullahi v. Pfizer, Inc., 562 F.3d 163 (2d Cir.) (standards for specificity and universality of international norms)
IIT v. Vencap, Ltd., 519 F.2d 1001 (2d Cir. 1975) (corporate fraud/looting are domestic matters, not law‑of‑nations violations)
In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 118 (2d Cir.) (discusses terrorism and universal jurisdiction limits)