Kaplan v. Central Bank of the Islamic Republic of Iran
2013 U.S. Dist. LEXIS 117528
| D.D.C. | 2013Background
- Plaintiffs are civilians (U.S., Israeli, Canadian) injured or family members of victims of Hezbollah rocket attacks during the 34‑day 2006 Israel–Lebanon conflict (July 12–Aug 14, 2006).
- Plaintiffs allege Iran funded and controlled Hezbollah and that defendants Bank Saderat Iran (BSI) and Bank Saderat PLC (BSPLC) funneled over $50 million from Iran (via Central Bank of Iran and BSI/BSPLC transfers) to Hezbollah accounts, enabling the attacks.
- Claims pleaded: FSIA (state‑sponsor terrorism) against Iran, CBI and BSI; ATA (Anti‑Terrorism Act) against BSPLC; ATS claims by non‑U.S. plaintiffs against BSI/BSPLC; Israeli tort claims against BSI/BSPLC.
- BSI and BSPLC moved to dismiss on jurisdictional and merits grounds (political question, standing, act‑of‑state, indispensable parties, Rule 12(b)(6)).
- Court dismissed all claims against BSI and BSPLC: FSIA claims against BSI for lack of instrumentality status at time of suit, ATA claims against BSPLC as barred by the ATA "act of war" exclusion, ATS claims for lack of extraterritorial reach, and declined supplemental jurisdiction over Israeli law claims. Plaintiffs were ordered to serve Iran and CBI via diplomatic channels.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Political question / justiciability | Plaintiffs seek statutory remedies; courts can apply statutory definitions of "terrorism" vs "war." | Deciding whether attacks were "war" or "terrorism" is a political foreign‑policy question. | No political‑question bar; courts apply statutory definitions (Zivotofsky guidance). |
| Article III standing | Alleged transfers materially increased probability of injury; Treasury Fact Sheet supports transfers; BSI/BSPLC ownership links to Iran. | Causal chain is too attenuated; intervening acts by Hezbollah break traceability. | Plaintiffs have standing; allegations suffice to show actions materially increased risk of injury. |
| Act‑of‑State / indispensable parties | N/A (plaintiffs argue legal definitions control). | Court would have to adjudicate validity of Israeli government characterization of events; Israel/Lebanon are indispensable. | Act‑of‑State and indispensable‑party arguments fail: court need not invalidate Israeli statements; Israel/Lebanon not indispensable. |
| ATA (act‑of‑war exclusion) | Attacks were international terrorism enabling ATA claims. | Attacks occurred in course of armed conflict/war and thus fall within §2331(4) act‑of‑war exclusion. | ATA claims dismissed: the 2006 hostilities constituted "armed conflict" and Hezbollah acted as a "military force" under §2331(4)(C), so §2336 bars recovery. |
| FSIA instrumentality status | BSI is an instrumentality of Iran; FSIA claims appropriate. | Iran no longer held majority ownership of BSI at time suit filed (post‑2009 privatization); BSI not an instrumentality. | FSIA claims against BSI dismissed: instrumentality status is assessed at filing and BSI lacked majority state ownership then. |
| ATS extraterritoriality | ATS applies to grave violations of law of nations; U.S. victims among plaintiffs. | Attacks occurred abroad and do not sufficiently "touch and concern" the U.S. to overcome Kiobel presumption. | ATS claims by non‑U.S. plaintiffs dismissed for lack of subject matter jurisdiction under Kiobel (no sufficient U.S. nexus). |
Key Cases Cited
- Baker v. Carr, 369 U.S. 186 (political question framework)
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (jurisdictional threshold rule)
- Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (ATS extraterritoriality presumption)
- Dole Food Co. v. Patrickson, 538 U.S. 468 (FSIA instrumentality status assessed at time of suit)
- Zivotofsky ex rel. Zivotofsky v. Clinton, U.S. (applying judicial review to statutory claims implicating foreign policy) (court relied on the Supreme Court's reasoning in Zivotofsky)
- Allen v. Wright, 468 U.S. 737 (standing causation / attenuation principles)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir.) (bank‑funding causation and standing in terrorism funding context)