Rothstein v. UBS AG
708 F.3d 82
| 2d Cir. | 2013Background
- Plaintiffs appeal from dismissal of ATA claim against UBS for lack of standing and failure to state a claim.
- District court dismissed FAC (2009) for lack of proximate causation; held standing failed and Count One insufficient.
- Rothstein I held standing failed due to an attenuated causal chain; proximate causation not pled.
- After remand, Rothstein III and HLP discussions did not alter standing; court retained threshold on causation.
- On appeal, court finds Article III standing but affirm dismissal for failure to state a claim under the ATA.
- Court permits consideration of sufficiency of the complaint as a legal question on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have Article III standing | Plaintiffs allege UBS transfers increased Iran’s cash, enabling Hamas/Hezbollah; injuries traceable. | Injury not proximately caused; chain too attenuated and speculative. | Plaintiffs have standing; however, pleading fails to show proximate causation. |
| Whether § 2333(a) requires proximate causation for ATA claims | Less-than-proximate cause suffices under ATA to deter terrorism. | § 2333(a) requires proximate causation; not a mere traceability. | Proximate causation required; not satisfied by the FAC. |
| Whether the complaint adequately pleads aiding-and-abetting liability under § 2333(a) | UBS aided and abetted by transferring funds. | § 2333(a) silent on aiding and abetting; not plausibly alleged. | Court rejects aiding-and-abetting theory under § 2333(a) due to silence and lack of mens rea. |
| Whether Count Two (international-law claims) was preempted by ATA | Count Two should proceed as incorporated federal common law. | ATA preempts customary international-law claims when combined with ATA claims. | Count Two preempted; district court’s dismissal affirmed on that basis. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires injury, traceability, redressability)
- Allen v. Wright, 468 U.S. 737 (1984) (standing requires injury that is fairly traceable to defendant)
- Twombly, 550 U.S. 544 (2007) (pleading must show plausible claim, not mere speculation)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard requires plausible claims)
- Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992) (‘by reason of’ private rights often requires proximate causation)
- Holmes v. Holmes, 503 U.S. 258 (1992) (see above)
- Bennett v. Spear, 520 U.S. 154 (1997) (distinguishes traceability from proximate causation)
- American Electric Power Co. v. Connecticut, 582 F.3d 309 (2009) (discusses causation standards in standing context)
- Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164 (1994) (aiding and abetting liability not implied by silence)
- Liriano v. Hobart Corp., 170 F.3d 264 (1999) (per se liability concepts misapplied to causation)