Kaplan v. Cent. Bank of the Islamic Republic of Iran
896 F.3d 501
D.C. Cir.2018Background
- In summer 2006 Hezbollah launched a 34-day rocket campaign into northern Israel; plaintiffs (American, Israeli, Canadian) sued Hezbollah and two foreign banks (Bank Saderat Iran and Bank Saderat PLC) for injuries from the attacks.
- Plaintiffs brought Anti‑Terrorism Act (ATA) claims against Hezbollah and Bank Saderat PLC; Alien Tort Statute (ATS) claims against the Banks (non‑U.S. plaintiffs); and FSIA claims against state actors (Iran, North Korea) and related tort claims.
- District court dismissed ATA claims under the ATA’s "act‑of‑war" exception and dismissed ATS claims on extraterritoriality grounds; later entered default judgment against Iran and North Korea on FSIA claims.
- Plaintiffs appealed; appellate court addressed jurisdictional timeliness issues (Rule 54(b)) and whether the district court should have decided personal jurisdiction before reaching ATA/ATS issues.
- Court held ATA dismissal must be vacated and remanded because the act‑of‑war exception is a merits issue and the district court should have resolved personal jurisdiction first; ATS dismissal affirmed based on Jesner’s ruling that foreign corporations cannot be defendants under the ATS.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appeal was timely/final under Rule 54(b) | Plaintiffs: appeal timely because district court contemplated further proceedings against unserved defendants, so earlier orders were not final | Banks: August 2013 dismissal was final and appeal untimely; Amicus: Hezbollah appeal premature | Court: district court’s 2013 order was not final because it contemplated further proceedings; appeal timely |
| Whether a court must resolve personal jurisdiction before deciding ATA/ATS issues | Plaintiffs: court must confirm personal jurisdiction before deciding merits (Steel Co./Sinochem) | Banks/Amicus: court may resolve some threshold statutory issues first | Court: under Sinochem, personal jurisdiction must be addressed before merits when jurisdiction is contested or not waived |
| Whether ATA’s act‑of‑war exception is jurisdictional or merits/threshold | Plaintiffs: act‑of‑war is merits (limits scope of liability) and requires jurisdictional determination first | Defendants/Amicus: it is jurisdictional/threshold so court could decide it first | Court: act‑of‑war is a merits question (non‑jurisdictional); district court erred by deciding it without first resolving personal jurisdiction; vacated and remanded |
| Whether ATS claims against foreign banks can be dismissed without personal jurisdiction (e.g., on extraterritoriality or corporate‑liability grounds) | Plaintiffs: ATS claims dismissed incorrectly on extraterritoriality; personal jurisdiction should be resolved first | Banks: Jesner bars ATS liability for foreign corporations; alternatively extraterritoriality defeats jurisdiction | Court: may affirm dismissal on Jesner ground because Jesner’s foreign‑corporation bar is a non‑merits threshold basis; ATS dismissal against Banks affirmed |
Key Cases Cited
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) (a court must assure jurisdiction before reaching merits)
- Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422 (2007) (extends Steel Co. priority rule to personal jurisdiction; allows limited exceptions)
- Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018) (Supreme Court: foreign corporations cannot be sued under the ATS)
- Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013) (presumption against extraterritoriality governs ATS; claims must ‘touch and concern’ U.S.)
- Sebelius v. Auburn Regional Medical Center, 568 U.S. 145 (2013) (analytical framework for jurisdictional vs. nonjurisdictional statutory limitations)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (clarifies when statutory limits are jurisdictional)
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010) (text and context inform whether a statutory limitation is jurisdictional)
- Public Citizen v. U.S. Dist. Court for D.C., 486 F.3d 1342 (D.C. Cir. 2007) (discusses threshold non‑merits grounds that may be resolved before jurisdiction)