413 F.Supp.3d 67
E.D.N.Y2019Background
- Plaintiffs are U.S. citizens (service members and civilians) injured or killed by terrorist attacks in Iraq (2004–2011); they sued ten banks alleging a long-running conspiracy (beginning ~1987) to evade U.S. sanctions and to facilitate Iran’s access to funds that ultimately supported terrorist groups such as Hezbollah.
- Defendants include major international banks (HSBC group, Barclays, Standard Chartered, RBS, Credit Suisse, Commerzbank) and Iranian Bank Saderat; plaintiffs pleaded claims under the Antiterrorism Act (ATA), 18 U.S.C. § 2333(a), and, after enactment, JASTA’s secondary-liability provision, 18 U.S.C. § 2333(d)(2).
- Magistrate Judge Pollak issued an R&R recommending denial of defendants’ motions to dismiss; the district court (Judge Pamela K. Chen) reviewed de novo, declined to adopt the R&R, and granted defendants’ motions.
- The court held (inter alia) that plaintiffs failed to plead (a) that defendants’ conduct itself qualified as an ‘‘act of international terrorism’’ under 18 U.S.C. § 2331(1) (violence/danger-to-life and apparent terrorist intent), and (b) proximate causation between defendants’ alleged sanction-evasion banking conduct and plaintiffs’ injuries.
- Jurisdictional rulings: court found prima facie specific jurisdiction over Bank Saderat based on alleged directed conduct into New York, but dismissed Commerzbank’s Sixth Claim for lack of personal jurisdiction (no U.S. nexus).
- Result: all seven ATA-based claims dismissed for failure to state a claim (Fed. R. Civ. P. 12(b)(6)); plaintiffs’ JASTA conspiracy theory also rejected for failing to allege direct conspiracy with the FTOs responsible for the attacks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Bank Saderat | Bank Saderat conspired to route USD payments through NY correspondent banks; its acts were aimed at U.S. forum | Walden forecloses jurisdiction based on others’ contacts; no direct NY contacts by Bank Saderat | Plaintiffs made prima facie showing of specific jurisdiction over Bank Saderat based on alleged purposeful direction to NY correspondent accounts |
| Personal jurisdiction over Commerzbank re: Sixth Claim | Claim arises from same nucleus of facts as other conspiracy claims; pendent jurisdiction appropriate | Commerzbank’s alleged conduct (German account transfers) had no U.S. nexus | No personal jurisdiction over Commerzbank for Sixth Claim; Sixth Claim dismissed on jurisdictional grounds |
| Primary liability under § 2333(a) — act of international terrorism (§ 2331(1)) | Defendants’ illegal sanction-evasion and concealment foreseeably and dangerously enabled Iran to fund terrorism; conduct is ‘‘dangerous to human life’’ and appears intended to intimidate/coerce | Business dealings with Iranian governmental/commercial entities (many legitimate) are not inherently violent or terrorist acts; attenuated link | Dismissed: plaintiffs failed to plausibly allege defendants’ own acts met § 2331(1) (danger-to-life + apparent intent) because transactions were with intermediaries, not direct transfers to FTOs |
| Causation under § 2333(a) (proximate cause) | Defendants’ facilitation of funds to Iran proximately led to funding of Hezbollah/IRGC and the attacks | Rothstein and related precedent require a closer, non-attenuated causal chain; plaintiffs’ theory is too remote | Dismissed: plaintiffs did not plead proximate causation (no nonconclusory allegations that funds defendant-processed went to the FTOs that committed the attacks) |
| JASTA § 2333(d)(2) conspiracy (secondary liability) — requirement to conspire with the FTO that committed the act | JASTA allows secondary liability; plaintiffs alleged Hezbollah/IRGC authorized the attacks and defendants conspired with Iranian entities that were part of a hub-and-spoke terror apparatus | Plaintiffs must allege that defendants conspired directly with the person/entity (FTO) that committed/planned/authorized the attacks | Dismissed: although plaintiffs plausibly alleged an FTO (Hezbollah) was involved in the attacks, they failed to allege that any defendant directly conspired with Hezbollah (or that Iranian intermediaries were alleged alter egos of the FTO) |
Key Cases Cited
- Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685 (7th Cir. 2008) (en banc) (material-support conspiracy can, in some circumstances, be treated as primary ATA liability)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (ATA plaintiff must plead proximate causation; mere traceability is insufficient)
- Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir. 2018) (bank’s provision of services to an FTO can satisfy § 2331(1) when link to violent acts and apparent intent is shown)
- Al-Rajhi In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 118 (2d Cir. 2013) (applying Rothstein’s proximate-cause principles)
- Kemper v. Deutsche Bank, 911 F.3d 383 (7th Cir. 2019) (dismissing ATA claims where alleged bank dealings with Iranian governmental entities were too attenuated from terrorism)
- Siegel v. HSBC N. Am. Holdings, Inc., 933 F.3d 217 (2d Cir. 2019) (post-JASTA treatment of aiding-and-abetting/conspiracy theories under ATA)
- Weiss v. Nat’l Westminster Bank, 768 F.3d 202 (2d Cir. 2014) (bank liability where defendant directly maintained accounts for and provided services to an FTO proxy)
- Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983) (conspiracy/agency principles for attributing liability among co-conspirators)
- Walden v. Fiore, 571 U.S. 277 (2014) (specific jurisdiction requires defendant’s own purposeful forum contacts)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (defendant must reasonably anticipate being haled into forum)