Hussein v. Dahabshiil Transfer Services Ltd.
705 F. App'x 40
| 2d Cir. | 2017Background
- Plaintiffs are relatives and representatives of Somalis killed by al-Shabaab in 2014 and sued defendants (Dahabshiil entities) under the Anti-Terrorism Act (ATA) for providing material support to al-Shabaab.
- Plaintiffs alleged four money transfers originating in Minnesota were made by defendants on behalf of al-Shabaab.
- Complaint also alleged transfers were sent by third parties using false names or recipients with no public al-Shabaab ties.
- Plaintiffs asserted defendants’ Somali branch employees likely recognized al-Shabaab members in person, supporting scienter.
- District Court dismissed the first amended complaint with prejudice for failure to plausibly plead the required mental state; plaintiffs appealed.
- Second Circuit affirmed, holding allegations were too speculative to infer defendants knew or were deliberately indifferent that funds went to al-Shabaab.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint plausibly pleads defendants knowingly or willfully provided material support to al-Shabaab under the ATA | Transfers originated via defendants and thus defendants must have known they aided al-Shabaab | Transfers were sent by unaffiliated senders who concealed nature via false names/recipients; no plausible basis for defendants’ knowledge | Dismissal affirmed: allegations insufficient to show requisite scienter |
| Whether physical presence of alleged al-Shabaab members at defendants’ Somali branches supports knowledge inference | Employees would have recognized members on sight, showing defendants’ knowledge | Recognition-on-sight is speculative; members may be unknown to employees or public | Court rejected recognition-based inference as speculative and implausible |
| Whether allegations about defendants’ assistance to other terrorist groups (e.g., al‑Qaeda) can support ATA claim for al‑Shabaab | Evidence of aiding other terrorist networks indicates a pattern, supporting scienter for al‑Shabaab transactions | Allegations about other groups do not prove knowledge regarding specific al‑Shabaab transfers | Court held allegations about other groups do not cure lack of specific factual pleading for al‑Shabaab knowledge |
| Whether district court abused discretion by denying leave to amend | Plaintiffs proposed additional factual allegations on appeal (not pled below) that would show notoriety/recognition | Denial proper because proposed amendments (even if considered) would still be speculative and futile | Denial affirmed: amendment would be futile given speculative nature of proposed facts |
Key Cases Cited
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (standard of review for Rule 12(b)(6) dismissal)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Weiss v. Nat’l Westminster Bank PLC, 768 F.3d 202 (2d Cir. 2014) (mental-state requirements for civil ATA claims)
- United States v. George, 386 F.3d 383 (2d Cir. 2004) (discussion of the meaning of "willfully")
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must nudge claims from conceivable to plausible)
- McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184 (2d Cir. 2007) (standard for reviewing denial of leave to amend)
- Panther Partners Inc. v. Ikanos Commc’ns, Inc., 681 F.3d 114 (2d Cir. 2012) (de novo review where denial of leave to amend is based on futility)