230 F. Supp. 3d 167
S.D.N.Y.2017Background
- Plaintiffs (relatives/representatives of two U.S. citizens killed in Somalia) sued four Dahabshiil hawala entities under the Anti‑Terrorism Act (18 U.S.C. § 2333) alleging they conspired to provide material support to al‑Shabaab, causing the murders.
- The FAC alleges Dahabshiil operates an Africa‑wide hawala network that settles via correspondent accounts and that DTS (London) controls operations/IT; U.S. entities handle U.S. transfers; PVT operates in Somalia.
- Alleged support theories: (1) facilitation via lax AML/KYC policies that allowed transfers to al‑Shabaab; (2) direct payments/hiring of persons tied to terrorist groups. Plaintiffs cite four small U.S. transfers (totaling $950), a U.N. report about Qatar‑to‑Somalia transfers, and regulatory/bank warnings about Dahabshiil.
- Defendants moved to dismiss for lack of personal jurisdiction (for foreign defendants) and failure to state a claim, arguing the FAC lacks plausible allegations of knowing or deliberately indifferent conduct and proximate causation under the ATA/material‑support statutes.
- The Court evaluated ATA elements (unlawful action/material support, mens rea—knowledge or deliberate indifference/willful blindness—and proximate causation) and concluded the FAC fails to plausibly allege that defendants knew or were deliberately indifferent that transfers would support al‑Shabaab.
- Court dismissed the FAC with prejudice, finding allegations (small anonymous transfers, generalized AML shortfalls, disconnected incidents involving employees, and an imprecise U.N. paragraph) insufficient to infer knowing or willfully blind support or a conspiratorial agreement among the named defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs plausibly alleged defendants conspired to provide material support to al‑Shabaab under the ATA and material‑support statutes | FAC alleges a networkwide conspiracy: DTS-directed lax AML/KYC enabled transfers to al‑Shabaab and some direct payments/hirings | FAC merely pleads routine remittance activity, isolated small transfers, regulatory criticism, and disconnected employee misconduct — insufficient to show knowing or deliberately indifferent assistance or an agreement | Dismissed: plaintiffs failed to plausibly allege a conspiracy or that defendants knew or were deliberately indifferent to transfers to al‑Shabaab |
| Whether allegations of lax AML/KYC and bank/regulator actions support mens rea (knowledge/deliberate indifference) | Systemic AML/KYC failures and banking relationships put defendants on notice of misuse risk | Regulatory warnings and business‑risk terminations do not, without transaction‑specific or red‑flag facts, establish knowledge or willful blindness regarding transfers to al‑Shabaab | Dismissed: generalized AML criticisms and loss of correspondent banks insufficient to plead required mens rea |
| Whether specific transfers (four small U.S. transfers and U.N. report) support inference of material support knowledge | The four transfers and U.N. report show Dahabshiil was used to funnel funds to al‑Shabaab | Transfers were small, sent via pseudonyms or to alleged associates; U.N. report lacks branch/amount/timing/linkage to named defendants — too speculative | Dismissed: factual specifics are too scarce to create a plausible inference of knowing support |
| Whether amendment should be allowed | Plaintiffs requested leave to amend in opposition | Defendants opposed; argued prior amendment and fundamental pleading defects | Leave denied: court found further amendment would be futile and dismissed with prejudice |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for complaints)
- In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 118 (2d Cir.) (Section 2333 secondary‑liability issue and pleading standards in ATA context)
- Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685 (7th Cir.) (material‑support statutes create conspiracy/aiding liability relevant to ATA claims)
- Gill v. Arab Bank, PLC, 893 F. Supp. 2d 474 (E.D.N.Y.) (material‑support mens rea and transaction‑specific allegations required)
- Linde v. Arab Bank, PLC, 384 F. Supp. 2d 571 (E.D.N.Y.) (willful blindness/deliberate indifference standard for financial‑services material support)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir.) (proximate causation requirement under § 2333)