933 F.3d 217
2d Cir.2019Background
- On November 9, 2005, al‑Qaeda in Iraq (AQI) carried out suicide-bomb attacks in Amman, Jordan; U.S. citizens were killed and injured.
- Plaintiffs are victims or representatives who sued HSBC Bank USA, N.A. and HSBC North America Holdings, Inc. under the Antiterrorism Act as amended by JASTA, alleging aiding-and-abetting liability for providing banking services to Al Rajhi Bank (ARB), which allegedly had links to terrorist organizations including AQI.
- Plaintiffs allege public reports (including a 2012 Senate subcommittee report and prior CIA references) showing ARB’s links to extremist financing and that HSBC knew of those links and helped ARB evade U.S. regulatory detection by stripping payment details.
- HSBC maintained a relationship with ARB for decades but ceased U.S. business with ARB in January 2005, ten months before the November 9 attacks; HSBC also entered a 2012 deferred prosecution agreement admitting AML and sanctions violations.
- Plaintiffs argued the alleged assistance to ARB enabled funds to reach AQI and therefore constituted knowing, substantial assistance to the November 9 attackers; HSBC argued JASTA requires direct support or, at minimum, plaintiffs failed to plead the Halberstam elements.
- The district court dismissed for failure to state a claim; the Second Circuit affirmed, holding plaintiffs did not plausibly plead HSBC’s general awareness of assuming a role in AQI’s violent activity or that HSBC knowingly and substantially assisted the November 9 Attacks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JASTA imposes liability for indirect support through a bank-client relationship | JASTA reaches indirect support; HSBC’s services to ARB that was linked to terrorists suffice | JASTA requires direct support to the terrorist operatives | Court need not decide scope broadly because claim fails on the pleadings; dismissed |
| Whether plaintiffs plausibly alleged "general awareness" (Halberstam element) | HSBC knew ARB supported terrorists and thus was aware it played a role | HSBC only knew allegations about ARB, not that HSBC was assuming a role in AQI’s violent acts | Plaintiffs failed to plead that HSBC was generally aware it was assuming a role in AQI's terrorist activities |
| Whether plaintiffs plausibly alleged "substantial assistance" (Halberstam element) | HSBC provided substantial services and helped conceal transfers, enabling funding to AQI | No non-conclusory allegation that HSBC’s funds reached AQI or that HSBC intended that result; HSBC had ceased relations before the attacks | Plaintiffs failed to allege the Halberstam substantial-assistance factors plausibly |
| Whether length of relationship and DOJ/penalty admissions render pleading sufficient | Multi-decade relationship and DOJ AML admission show substantial assistance and culpable state of mind | Length and DOJ admission do not show HSBC knowingly aided AQI or funds went to AQI; temporal gap undermines causation | Length and DOJ admission alone insufficient to plead aiding-and-abetting liability under JASTA |
Key Cases Cited
- Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983) (framework for civil aiding-and-abetting: wrongful act, general awareness, knowing and substantial assistance)
- Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir. 2018) (distinguishing material-support mens rea from Halberstam general-awareness requirement)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (pleading plausibility standard explained)
- Giunta v. Dingman, 893 F.3d 73 (2d Cir. 2018) (de novo review on Rule 12(b)(6))
- In re Facebook, Inc., Initial Public Offering Derivative Litig., 797 F.3d 148 (2d Cir. 2015) (courts need not accept conclusory allegations)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for complaints)
- Faber v. Metropolitan Life Ins. Co., 648 F.3d 98 (2d Cir. 2011) (conclusory allegations not entitled to presumption of truth)