393 F.Supp.3d 261
E.D.N.Y2019Background
- In 2006 David Lelchook was killed by a Hezbollah rocket attack in Israel; plaintiffs are his estate and family members seeking damages.
- Plaintiffs allege Iran controls and funds Hezbollah through banks, and that Bank Saderat PLC (BSPLC) routed roughly $50 million through London to Hezbollah-controlled Lebanese branches between 2001–2006.
- BSPLC’s counsel withdrew; the Clerk entered default against BSPLC and plaintiffs moved for default judgment as to liability.
- Plaintiffs plead (1) primary ATA liability and secondary aiding-and-abetting liability under the Anti‑Terrorism Act (including JASTA), (2) negligence and aiding-and-abetting under Israeli law (Civil Wrongs Ordinance), and (3) intentional infliction of emotional distress under Massachusetts law.
- The court treated well‑pleaded factual allegations as admitted by default but independently analyzed whether they established legal liability.
- The court found BSPLC liable on all pleaded theories and referred the issue of damages to the magistrate judge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BSPLC committed an "act of international terrorism" under 18 U.S.C. § 2331(1) (primary ATA) | BSPLC’s provision of $50M to a known terrorist organization is an act dangerous to human life and was intended to intimidate/coerce civilians/governments | (Defaulted) implicitly challenged nexus/definition; general defense waived but court must assess legal sufficiency | Court held BSPLC’s conduct qualifies as an act of international terrorism and is primarily liable under the ATA |
| Whether BSPLC is liable under JASTA as an aider and abettor (secondary ATA liability) | BSPLC knowingly provided substantial assistance to Hezbollah, was generally aware of its role, and its assistance was substantial | (Defaulted) raised no active argument; court still applies Halberstam framework | Court held BSPLC knowingly and substantially assisted Hezbollah and is liable under JASTA aiding/abetting provision |
| Whether BSPLC is negligent under Israeli Civil Wrongs Ordinance §35 | BSPLC owed a duty and breached it by knowingly funding Hezbollah, foreseeably causing terrorist attacks and injury to plaintiffs | (Defaulted) no active defense; court must assess duty/causation under Israeli law | Court held BSPLC owed a duty, breached it, and is liable for negligence under Israeli law |
| Whether BSPLC aided and abetted liability under Israeli law (CWO §12) | BSPLC joined/assisted Hezbollah’s wrongful acts and therefore is liable under §12 | (Defaulted) same as above | Court held BSPLC liable under Israeli aiding/abetting statute |
| Whether BSPLC is liable for intentional infliction of emotional distress under Massachusetts law | BSPLC should have known funding Hezbollah would cause severe emotional distress to victims’ families and its conduct was extreme/outrageous | (Defaulted) no defense presented; court must apply Massachusetts IIED standard | Court held BSPLC’s conduct was extreme and outrageous and liable for IIED under Massachusetts law |
Key Cases Cited
- Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61 (2d Cir.) (district court may require proof of necessary facts after entry of default)
- Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir.) (scope of ATA liability and effect of JASTA)
- Miller v. Arab Bank, PLC, 372 F. Supp. 3d 33 (E.D.N.Y.) (banking services that facilitate terrorism can constitute acts dangerous to human life)
- Halberstam v. Welch, 705 F.2d 472 (D.C. Cir.) (framework for civil aiding-and-abetting: wrongful act, general awareness, knowing and substantial assistance)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir.) (proximate‑cause/foreseeability analysis in tort causation)
- Wultz v. Islamic Republic of Iran, 755 F. Supp. 2d 1 (D.D.C.) (application of Israeli Civil Wrongs Ordinance, duty and foreseeability)
- Roman v. Trustees of Tufts Coll., 461 Mass. 707 (Mass.) (Massachusetts standard for intentional infliction of emotional distress)