Chaim KAPLAN, et al., Plaintiffs, v. CENTRAL BANK OF the ISLAMIC REPUBLIC OF IRAN, et al., Defendants.
Civil No. 10-483(RCL).
United States District Court, District of Columbia.
Aug. 20, 2013.
ROYCE C. LAMBERTH, District Judge.
For the foregoing reasons, defendant‘s motion to dismiss plaintiff‘s complaint will be granted in part and denied in part. A separate Order accompanies this Memorandum Opinion.
way. As defendant points out, “[a] claim that arises from and requires interpretation of a [CBA] is preempted by Section 301(a) of the Labor Management Relations Act and must be dismissed for failure to state a claim.” Lawson v. P.E.P.C.O., 721 F.Supp.2d 1, 7 (D.D.C.2010) (citing Bush v. Clark Constr. & Concrete, 267 F.Supp.2d 43, 46 (D.D.C.2003)). Moreover, even if this Court liberally construed plaintiff‘s complaint as stating a claim under
Frank C. Razzano, John Charles Snodgrass, Matthew D. Foster, Pepper Hamilton LLP, Washington, DC, Jeremy D. Frey, Pepper Hamilton, LLP, Philadelphia, PA, for Defendants.
MEMORANDUM OPINION
ROYCE C. LAMBERTH, District Judge.
This action arises out of a series of rocket attacks by Hezbollah on civilians in Israel during a 34-day conflict in 2006 along the border between Israel and Lebanon. Some plaintiffs allegedly suffered injuries in these attacks, others claim to be the family members or personal representatives of the estates of victims. Defendants Bank Saderat Iran (“BSI“) and Bank Saderat, PLC (“BSPLC“) allegedly transmitted funds from defendant Iran to Hezbollah. They moved to dismiss the action. Defs.’ Mot. to Dismiss, Aug. 23, 2010, ECF No. 15. For the reasons given below, the Court will GRANT the motion and dismiss all claims against these two defendants and the associated John Does.1
I. BACKGROUND
A. Factual Background
1. The 2006 Conflict
Between July 12 and August 14, 2006, “Hezbollah fired thousands of rockets and missiles ... at civilians in northern Israel.” Compl. ¶ 56. Plaintiffs are American, Israeli, and Canadian civilians who allege that they suffered injuries caused by these rockets, or who allege that they are the family members or personal representatives of four Israeli civilians killed in these attacks. Id. ¶¶ 2, 4-11, 58-111.
In several public statements, Israeli leaders characterized these attacks as part of a “war” with Lebanon:
On July 12, 2006, describing actions carried out against Israeli Defense Forces on the Lebanese border, Prime Minister Olmert of Israel stated:
This morning‘s events were not a terrorist attack, but the action of a sovereign state that attacked Israel for no reason and without provocation. The Lebanese government, of which Hezbollah is a member, is trying to undermine regional stability. Lebanon is responsible and Lebanon will bear the consequences of its actions.
In response to the question—“is there cause to prepare the nation for war and will you call for an emergency government?“—Prime Minister Olmert responded:
One thing must be understood: This was an act of war without any provocation on the sovereign territory—about which there is no dispute—of the State of Israel. It is absolutely clear to the international community that Israel will respond and that it will respond in an unequivocal fashion that will cause those who started this act of war to bear a very painful and far-reaching responsibility for those actions.
Defs.’ Mem. 4-5, ECF No. 15-1 (quoting Defs.’ Ex. A, Remarks of Prime Minister Ehud Olmert at a Press Conference, Jul. 12, 2006, ECF No. 15-2, available http://www.mfa.gov.il/MFA/Government/
The conflict seems to have begun when Hezbollah militants entered Israeli territory from Lebanon and kidnapped and killed several Israeli soldiers. See Defs.’ Mem. 4 (quoting Israeli Prime Minister Olmert‘s July 12, 2006 response to “actions carried out against Israeli Defense Forces on the Lebanese border“); see also Winograd Commission Final Report ¶ 13 (describing the Israeli government‘s decision “made in the night of July 12th to react (to the kidnapping) with immediate and substantive military action“); Habchy v. Filip, 552 F.3d 911, 911, 913 (8th Cir.2009) (referring to “the the military conflict between Lebanon and Israel in July and August of 2006,” and explaining that, according to a State Department report, “this conflict started when Hezbollah militants entered Israel from Lebanese territory and kidnapped and killed three Israeli soldiers” and then “Israeli military forces entered Lebanese territory in response and instituted a bombing campaign” (emphases added)). As part of the conflict, the Israeli military invaded Lebanon. Defs.’ Mem. 5. The United Nations brokered a cease fire, ending the conflict on August 14, 2006, id. at 5—a date which also marks the conclusion of the rocket attacks at issue in this matter. Defendant states that, during the course of this conflict, Israel lost 119 soldiers and 43 civilians, while between 250 and 500 Hezbollah members died, and more than 1,000 Lebanese civilians were killed. Defs.’ Mem. 5.
2. Hezbollah
Hezbollah is both a terrorist organization and “a political party in Lebanon.” Pls.’ Opp‘n 3; see also Defs.’ Mem. 1 n. 1, 4 & 7. Since its establishment in 1982, it has “been controlled, funded and operated by Iran,” which has used it to carry out “thousands of terrorist attacks against American and Israeli targets, in which hundreds of innocent victims have been murdered and thousands more maimed.”
3. Allegations that Defendants Funded Hezbollah
Plaintiffs allege that “[b]etween 2001 and 2006, the defendants herein [including BSI and BSPLC] provided Hezbollah with over $50 million in financial support ... with the specific intent and purpose of facilitating, enabling and causing Hezbollah to carry out terrorist attacks against American and Israeli targets in order to advance Iran‘s Policy and Goals.” Id. ¶ 35; see also id. ¶ 40 (alleging that defendants, including BSI and BSPLC, provided “massive financial support to Hezbollah, and thereby aided and abetted Hezbollah, all with the specific intention of causing and facilitating the commission of acts of extrajudicial killing and international terrorism” and did so “with actual knowledge that Hezbollah had killed and injured numerous U.S. and other civilians in terrorist attacks and with the knowledge and specific intent that additional U.S. and other innocent civilians would be killed and/or injured as a result....“). Specifically, plaintiffs claim that BSI received Iranian funds from defendant Central Bank of Iran (“CBI“) transferred those funds to BSPLC in London who then transferred them to “accounts controlled by Hezbollah in branches of defendant BSI in Beirut, from which Hezbollah then withdrew these funds.” Id. ¶ 36. In support of this account, plaintiffs point to an October, 2007 U.S. Treasury Department “Fact Sheet,” which states that “from 2001 to 2006, Bank Saderat transferred $50 million from the Central Bank of Iran through its subsidiary in London to its branch in Beirut for the benefit of Hezbollah fronts in Lebanon that support acts of violence.” U.S. Department of the Treasury, Fact Sheet, Oct. 25, 2007, Pls.’ Ex. A, ECF No. 3 (cited at Compl. ¶ 37).
4. The Defendants
Defendant Iran is a foreign state and has been continuously designated as a state-sponsor of terrorism pursuant to
Defendant CBI is the central bank of Iran, and is wholly owned by Iran. Compl. ¶ 14.
Defendant BSI is “an international financial institution headquartered in Iran.” Defs.’ Mem. 2. The Complaint states that Iran owns “over 90% of the shares” of BSI. Compl. ¶ 15. Defendants dispute this, insist that BSI is a “non-government-owned bank,” and that the bank was privatized in 2009, leaving only 49% if its shares with the Iranian government. Defs.’ Mem. 30-31.
Defendant BSPLC is “a bank incorporated in England and Wales and is a wholly owned subsidiary of BSI.” Defs.’ Mem. 3.
B. Procedural Background
Plaintiffs filed this action in 2010. In addition to BSI and BSPLC, plaintiffs also named as defendants the Islamic Republic of Iran and the Central Bank of Iran, as well as a host of “John Does.” The complaint asserts the following four types of claims:
- Foreign Sovereign Immunities Act‘s (“FSIA“) state-sponsor of terrorism,
28 U.S.C. 1605A(c) , claims by the American plaintiffs against Iran, CBI, and BSI (but not BSPLC), Compl. ¶¶ 117-26 (Counts I & II); - Anti-Terrorism Act (“ATA“),
18 U.S.C. § 2333(a) , claims by the American plaintiffs against BSPLC (but not BSI), Compl. ¶¶ 127-45 (Counts III & IV); Alien Tort Statute (“ATS“), 28 U.S.C. § 1350 , claims by the non-American plaintiffs against BSI and BSPLC, Compl. ¶¶ 146-153 (Count V); and- Israeli Tort claims by all plaintiffs against BSI and BSPLC, Compl. ¶¶ 154-73 (Counts VI & VII).
BSI and BSPLC filed the instant motion to dismiss in August of 2010. Defs.’ Mot., ECF No. 15. The case was reassigned by consent from Judge Roberts to the undersigned in June 2013. ECF No. 38.
II. SUBJECT MATTER JURISDICTION
BSI and BSPLC challenge this Court‘s subject matter jurisdiction over the entire complaint on three grounds: political question, standing, and the Act of State doctrine.3 See Defs.’ Mem. 3-16; Defs.’ Reply 3-5. This Court may advance to consider the merits only if it finds jurisdiction. See Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 94 (1998) (rejecting the doctrine of “hypothetical jurisdiction“—whereby a court could skip over jurisdictional questions to consider the merits of a case—as “beyond the bounds of authorized judicial action” and stating that it “offends fundamental principles of separation of powers.“).
A. Plaintiffs’ Claims Do Not Present a Non-Justiciable Political Question
BSI and BSPLC argue that the case presents a non-justiciable political question because, if the action proceeds, the Court “will have to decide whether the attacks complained of by plaintiffs were acts of war, as the Israeli government described them, or were instead acts of terrorism, as the complaint seeks to characterize them“—a determination that would risk interfering with American foreign policy. Defs.’ Mem. 5, 3-10; see also Defs.’ Reply 3-4. The Court rejects this argument.
In Baker v. Carr, the Supreme Court explained that a case should be dismissed as a nonjusticiable political question if any one of the following six factors is present:
[1] a textually demonstrable constitutional commitment of the issue to a coordinate political department;
[2] a lack of judicially discoverable and manageable standards for resolving it;
[3] the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion;
[4] the impossibility of a court‘s undertaking independent resolution without expressing lack of the respect due coordinate branches of government;
[5] an unusual need for unquestioning adherence to a political decision already made; or
[6] the potentiality of embarrassment from multifarious pronouncements by various departments on one question.
Id. at 217. The doctrine has been criticized as “amorphous,” Morgan v. United States, 801 F.2d 445, 447 (D.C.Cir.1986) (Scalia, J.), “not fully defined,” Conyers v. Reagan, 765 F.2d 1124, 1126-27 (D.C.Cir.1985) (Tamm, J.); and “murky and unsettled.” Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 803 n. 8 (D.C.Cir.1984) (Bork, J., concurring). Happily, the Supreme Court has provided some recent guidance in a case which, like the present
Zivotofsky addressed a conflict between section 214 of the Foreign Relations Authorization Act, Fiscal Year 2003, Pub. L. No. 107-228, 116 Stat. 1350 (2002), which provided that U.S. Passports of citizens born in Jerusalem would indicate the place of birth as Israel, and the official U.S. State Department policy directing passport officials to record such individuals’ place of birth only as Jerusalem. 132 S.Ct. at 1425. But neither the District Court nor the D.C. Circuit reached the core question of the case—whether the statute “impermissibly intrudes upon Presidential powers under the Constitution.” Id. at 1428. Instead, both lower courts found that the case “involve[d] a political question because deciding [the] claim would force the Judicial Branch to interfere with the President‘s exercise of constitutional power committed to him alone.” Id. at 1427.
The Supreme Court reversed. Because the plaintiff did “not ask the courts to determine whether Jerusalem is the capital of Israel” but only “whether he may vindicate his statutory right ... to choose to have Israel recorded on his passport as his place of birth,” there was no political question bar to jurisdiction. Id. The Court explained that the federal courts were “not being asked to supplant a foreign policy decision of the political branches with the courts’ own unmoored determination of what United States policy toward Jerusalem should be” but rather to engage in the “familiar judicial exercise” of determining whether the statute is constitutional. Id. Such determinations fall squarely within the province of the judiciary. Thus, there was no “textually demonstrable constitutional commitment” to the President preventing the Court from taking jurisdiction. Id. at 1428. Nor was there a lack of “judicially discoverable and manageable standards” to resolve the case, as “both sides offer[ed] detailed legal arguments regarding whether [the provision wa]s constitutional in light of powers committed to the Executive, and whether Congress‘s own powers with respect to passports must be weighed in analyzing the question.” Id. at 1429. True, the resolution of the case “demand[ed] careful examination of the textual, structural, and historical evidence put forward by the parties regarding the nature of the statute and of the passport and recognition powers,” but, the Court held, “[t]his is what courts do.” Id. at 1430.
Under these principles, the present case does not present a non justiciable political question. As in Zivitofsky, the plaintiffs in this action do not ask the Court to “supplant a foreign policy decision of the political branches with the courts’ own unmoored determination” of whether the rocket attacks at issue here were examples of “war” or “terrorism,” see id. at 1427, but rather seek relief under several federal statutes authorizing recovery for specific conduct. Drawing a clean line between “war” and “terrorism” may be a difficult and sensitive political issue. Fortunately, it is one that Congress has completed—leaving it to the Court to apply their definition. The Court must only decide whether the rocket attacks qualify as “war” or “terrorism” as those terms are defined under the legal frameworks plaintiffs invoke. For instance, plaintiffs’ cause of action under the ATA will depend on whether the underlying actions meet the statutory definitions of “an act of international terrorism” or an “act of war” at
B. Plaintiffs Have Article III Standing
BSI and BSPLC also move to dismiss the complaint for lack of Article III standing. They argue that plaintiffs’ injuries are “too attenuated from any alleged act or omission” by the banks and therefore are not “fairly traceable” to their financial activities. Defs.’ Mem. 14; see also Defs.’ Reply 4-5. The Court rejects this argument.
Article III of the Constitution limits federal courts’ jurisdiction to certain “Cases” and “Controversies.” Clapper v. Amnesty Int‘l USA, — U.S. —, 133 S.Ct. 1138, 1146 (2013). “One element of the case-or-controversy requirement is that plaintiffs must establish that they have standing to sue.” Id. (quotations omitted). The requirements of Article III standing are familiar:
First, the plaintiff must have suffered an injury in fact—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
United States v. Windsor, — U.S. —, 133 S.Ct. 2675, 2685-86 (2013) (quotations, citations, and modifications omitted). The plaintiffs, as the party invoking federal jurisdiction, bear the burden of establishing these three elements. Devlin v. Scardelletti, 536 U.S. 1, 6-7, 122 S.Ct. 2005, 153 L.Ed.2d 27 (2002). When ruling on a motion to dismiss under Rule 12(b)(1) for lack of standing, courts “must accept as true all material allegations of the complaint, drawing all reasonable inferences from those allegations in plaintiffs’ favor, and presuming that general allegations embrace those specific facts that are necessary to support the claim.”4
To satisfy the “fairly traceable” requirement, the “line of causation” between the illegal conduct and injury must not be “too attenuated.” Allen v. Wright, 468 U.S. 737, 752 (1984). While “[t]he fact that the harm to [plaintiffs] may have resulted indirectly does not in itself preclude standing ..., it may make it substantially more difficult to meet the minimum requirement of Art. III: to establish that, in fact, the asserted injury was the consequence of the defendants’ actions....” Warth v. Seldin, 422 U.S. 490, 504-05 (1975). The D.C. Circuit has translated the requirement into a single question: “did the [defendant]‘s actions materially increase the probability of injury“? Huddy v. FCC, 236 F.3d 720, 722 (D.C.Cir.2001).
1. Victim Standing To Sue Financial Institutions For Funding Terrorist Groups
There appears to be no binding precedent addressing the Article III standing of terror-victims to sue a financial institution for providing funds to the responsible terrorist group. However, several other courts have ruled on the issue.
In Rothstein v. UBS AG, the Second Circuit held that plaintiffs—victims and family members of victims of Hamas and Hezbollah terror-attacks in Israel between 1997 and 2006—had standing to sue the bank UBS based on plausible allegations that
Iran provided Hamas and Hezbollah with hundreds of millions of dollars to fund terrorist attacks; that Iran conditioned that funding on agreement by those organizations to conduct terrorist attacks on Israel and its residents; ... that the bombings and rocket attacks between July 1997 and July 2006, in which plaintiffs and/or their family members were injured, were conducted by Hezbollah or Hamas; ... that Hezbollah and Hamas needed large sums of money to fund their operations; that those organizations, by reason of their nature and the existence of counterterrorism sanctions, could not freely use normal banking services such as checks or wire transfers; ... that U.S. currency is a universally accepted form of payment;.. [and] that between 1996 and 2004, in violation of United States laws, UBS provided Iran with hundreds of millions of dollars in cash....
708 F.3d 82, 87 (2d Cir.2013). The court emphasized that the “fairly traceable” causation standard is lower than the “proximate cause” standard of tort liability, and held that, accordingly the fact that Iran also obtained U.S. currency from other sources during this period did not deprive plaintiffs of standing to sue. Id. at 91-92 (citing Massachusetts v. EPA, 549 U.S. 497, 524 (2007)).
In Wultz v. Islamic Republic of Iran, this Court found that plaintiffs—family members of a terror-attack victim—had standing to sue the Bank of China based on allegations that for three years preceding the attack the bank had “executed dozens of dollar wire transfers for the [terrorist group responsible], totaling several million dollars“; the transfers “were initiated by the [group‘s] leadership and were executed by and through [the bank‘s] branches in the United States“; the transferred moneys were “received into accounts owned by officers and agents of the [terrorist organization] and used for the purpose of planning, preparing for, and executing terrorist attacks“; that “Israeli officials ... informed China, which informed BOC, that the transfers were enabling the terrorist activities of the [terrorist group]“; that the group in question was subject to “strict economic sanctions programs imposed by the United States” which were followed by most financial institutions and which, if “universally enforced,” would “severely restrict[]” the group‘s ability to conduct its activities; and that the transfers at issue were “necessary for planning preparing and carrying out the attack for which relief is sought.” 755 F.Supp.2d 1, 18, 21-23 (D.D.C.2010).
2. Analysis
Under these principles, plaintiffs have alleged facts sufficient to establish standing. Plaintiffs allege that, during the relevant time period, Iran funded and controlled Hezbollah, Compl. ¶ 29, used Hezbollah to conduct terrorist attacks against civilians in Israel, including the attacks that injured and killed plaintiffs and their family members, id. at ¶ 56, and used BSI (90% Iranian-owned) and BSPLC (wholly owned by BSI) to transfer over $50 million to Hezbollah, id. at ¶¶ 35-36. Plaintiffs rely on a 2007 U.S. Treasury Department “Fact Sheet,” which supports the last of these allegations. Id. at ¶ 37. These allegations are sufficient to show that BSI and BSPLC “materially increase[d] the probability of [plaintiffs‘] injury” by funneling substantial funds from a state sponsor of terror to a known terrorist group. See Huddy, 236 F.3d at 722.
Defendants protest that plaintiffs’ injuries are “far more closely tied to acts of unidentified third parties—without whose ‘independent action’ plaintiffs would not have been injured, namely, those who allegedly planned and carried out the attacks.” Defs.’ Mem. 16. But, an indirect causal chain may still be a valid causal chain for standing purposes. See Warth, 422 U.S. at 504-05 (“[t]he fact that the harm to [plaintiffs] may have resulted indirectly does not in itself preclude standing“). Moreover, plaintiffs’ allegations (which, at this stage, this Court must “accept as true,” LaRoque, 650 F.3d at 785), are that the “third party” actions here (i.e. Hezbollah‘s rocket attacks) are not really “independent” at all from the fund transfers, but rather the transfers were completed by BSI and BSPLC in furtherance of Iran‘s agenda to promote Hezbollah‘s terror attacks on Israel. Compl. ¶ 35. This claim is supported by plaintiffs’ allegations that Iran created, funded and controlled Hezbollah and used that organization to commit terror attacks against Israel; that BSI was (or is) 90% owned by Iran; and that BSPLC was wholly owned by BSI. “[D]rawing all reasonable inferences from those allegations in plaintiffs’ favor,” as this Court is obliged to do at this stage, see LaRoque, 650 F.3d at 785, the Court finds that plaintiffs have met their burden to establish standing.
Notably, plaintiffs’ allegations here seem to provide an even stronger causal chain than that approved by the Second Circuit in Rothstein, where the defendant bank was accused only of making illegal financial transfers, not of being in any deeper way enmeshed in the terrorist purposes of the beneficiaries of those transfers. See Rothstein, 708 F.3d at 87. Rather, plaintiffs’ causal chain is like the one found sufficient by this Court in Wultz, where this Court emphasized that the defendant bank had actual knowledge that the funds transfer would benefit a terrorist entity. 755 F.Supp.2d at 18. Because plaintiffs’ allegations are sufficient to establish a “line of causation” between the conduct by BSI and BSPLC and their injuries that is not “too attenuated,” they have standing to bring these claims against BSI and BSPLC. See Allen, 468 U.S. at 752.
C. The Act of State Doctrine Does Not Apply
BSI and BSPLC also argue that plaintiffs’ claims are barred under the Act of State Doctrine. Defs.’ Mem. 10-14; see also Defs.’ Reply 3-4. The Court rejects this argument.
1. Legal Standard
“The act of state doctrine ‘precludes the courts of this country from inquiring into the validity of the public acts a recognized foreign sovereign power committed within its own territory.‘” McKesson Corp. v. Islamic Republic of Iran, 672 F.3d 1066, 1073 (D.C.Cir.2012) (quoting Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964)). The doctrine applies when “the relief sought or the defense interposed would [require] a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory.” W.S. Kirkpatrick & Co., Inc. v. Environmental Tectonics Corp., 493 U.S. 400, 405 (1990). “Act of state issues only arise when a court must decide—that is, when the outcome of the case turns upon—the effect of official action by a foreign sovereign.” Id. at 406. “When it applies, the doctrine serves as a ‘rule of decision for the courts of this country,’ which requires courts to deem valid the acts of foreign sovereigns taken within their own jurisdictions.” McKesson Corp.,
2. Analysis
Defendants invoke the Act of State doctrine because, they claim, “[f]or plaintiffs’ claims to succeed, the Court will be required to determine the validity of Israel‘s contention that a state of war (namely, the Second Lebanon War) existed at the time of the attacks described in the complaint” or whether those acts were instead “solely act[s] of terrorism by Hezbollah.” Defs.’ Mem. 10-14; see also Defs.’ Reply 3-4.
This is incorrect. Even if the Israeli government‘s statements characterizing the rocket attacks as “war” are construed as “public acts a recognized foreign sovereign power committed within its own territory,” McKesson, 672 F.3d at 1073, the Act of State doctrine does not apply here because the court need not really “inquire into the validity” of those statements. Id. Plaintiffs’ claims depend, in part, on whether the rocket attacks fit into specific legal definitions of “terrorism” or “war.” Cf. Defs.’ Mem. 11–12 (“[P]laintiffs are asking the Court to determine whether these killings resulted from terrorism or war.“). The Court may resolve these legal questions without addressing the “validity” of the Israeli statements which, despite using some of the same terms, did not sound in any of the legal frameworks plaintiffs invoke here. See McKesson, 672 F.3d at 1073. Contrary to defendants’ mischaracterization, a finding that the rocket attacks fit into, say, the ATA‘s definition of “international terrorism” would not “overrule” the Israeli description of the attacks as “war” because these statements did not purport to rely on that specific legal definition. See Defs.’ Mem. 12.
Defendants’ cases are not to the contrary. In Saltany v. Reagan, the late Judge Thomas Penfield Jackson found that the Act of State doctrine barred a claim against the United Kingdom based on that government‘s decision to “allow its territory to be utilized by [the United States] ... to mount a military operation against [Libya].” 702 F.Supp. 319, 320 (D.D.C.1988) aff‘d in part, rev‘d in part, 886 F.2d 438 (D.C.Cir.1989) (discussed at Defs.’ Mem. 12-13). And, in Roe v. Unocal Corp., then-district judge Richard Paez found that the Act of State doctrine barred an action based on an alleged collaboration between the Burmese Military and a private company. 70 F.Supp.2d 1073 (C.D.Cal.1999) (discussed at Defs.’ Mem. 13-14). While the Saltany claim would have turned on the legality of the UK‘s decision, and the Unocal claims would have turned on the legality of the Burmese Military‘s actions and orders, the present claims do not turn on the legality of any Israeli actions, and instead, turn only on questions that the Israeli government has never purported to address: whether the rocket attacks qualify under certain legal definitions. Accordingly, the Act of State doctrine does not apply.
III. ISRAEL AND LEBANON ARE NOT INDISPENSABLE PARTIES
BSI and BSPLC also move to dismiss the complaint under
This argument fails for the same reason the Political Question and Act of State arguments failed: while the Court will have to determine whether the rocket attacks were “terrorism” or “war” under the various specific legal frameworks plaintiffs invoke here, these determinations do not directly implicate the Israeli statements, which did not invoke the legal frameworks plaintiffs rely on here. Israel and Lebanon are not indispensable parties.
IV. PLAINTIFFS’ FOREIGN SOVEREIGN IMMUNITIES ACT CLAIMS FAIL
The American plaintiffs assert claims under the updated state-sponsor of terrorism provision of the Foreign Sovereign Immunities Act against Iran, CBI and BSI (not BSPLC). Compl. ¶¶ 117-35 (Counts I & II). BSI moves to dismiss these claims against it under
A. Legal Standard
The FSIA provides a cause of action for money damages that nationals of the United States may bring against “foreign state” sponsors of terror for “personal injury or death caused by,” inter alia, “extrajudicial killing[s]”7 or “the provision of material support or resources for such an act.”8
B. Analysis
Defendants claim that Iran has owned less than half of BSI‘s shares since 2009—well before the present lawsuit was filed. Defs.’ Mem. 30-31. Plaintiffs do not contest this claim. Pls.’ Opp‘n 15 (noting defendants’ argument and conceding that “[i]f BSI is not an agency or instrumentality of Iran ... then the FSIA claims against BSI would indeed need to be dismissed.“). Thus, the Court agrees with defendants. Under Dole Food‘s interpretation of
V. PLAINTIFFS’ CLAIMS UNDER THE ANTI-TERRORISM ACT FAIL
The American plaintiffs assert claims under the ATA,
A. Legal Standard
The ATA provides that “[a]ny national of the United States injured in his or her person ... by reason of an act of international terrorism, or his or her estate, survivors, or heirs, may sue therefor in any appropriate district court of the United States and shall recover threefold the damages he or she sustains and the cost of the suit, including attorney‘s fees.”
(A) involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State;
(B) appear to be intended—
(i) to intimidate or coerce a civilian population;
(ii) to influence the policy of a government by intimidation or coercion; or
(iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and
(C) occur primarily outside the territorial jurisdiction of the United States, or transcend national boundaries in terms of the means by which they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum.
The statute leaves open several procedural and substantive issues on which there is apparently no binding circuit precedent.
1. Procedural Issues
There is some confusion as to where the “act of war” exclusion,
The Court need not resolve this procedural question. First, the distinction between an affirmative defense and an element of the claim is not significant. Because the defendants argue that the allegations contained in the complaint are sufficient to satisfy the exception, it would not make any difference on the present motion to dismiss whether the Court were to treat the exception as an affirmative defense or as an element. See Jones v. Bock, 549 U.S. 199, 215 (2007) (“Whether a particular ground for opposing a claim may be the basis for dismissal for failure to state a claim depends on whether the allegations in the complaint suffice to establish that ground, not on the nature of the ground in the abstract.“).
Second, the distinction between an element of the claim and a jurisdictional bar might be more significant. The heightened “plausibility” standard of Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) applies to the former, but, while “[s]ome district and circuit courts have [also] begun to apply [this standard] for factual allegations in motions to dismiss for lack of subject matter jurisdiction,” 5B Fed. Prac. & Proc. Civ. § 1350 & n. 51.1 (3d ed.), the D.C. Circuit has apparently not done so. See LaRoque v. Holder, 650 F.3d 777, 785 (D.C.Cir.2011) (discussed supra note 193). As discussed below, the Court finds that even under the looser standard under 12(b)(1), plaintiffs’ ATA claims fail. Accordingly, it need not decide whether the act of war exclusion is jurisdictional or part of the claim.
2. Substantive Issues
Defendants do not specify which subsection(s) of
Subsection (B) applies the act of war exception to acts “occurring in the course of ... armed conflict ... between ... nations.”
The phrase “in the course of” poses some difficulty. Some judges in this district have interpreted this phrase as incorporating sub rosa the “established norms of warfare and armed conflict under international law.” Klieman, 424 F.Supp.2d at 166 (Friedman, J.) (“[A]n act that violates established norms of warfare and armed conflict under international law is not an act occurring in the course of armed conflict.“); see also Biton, 412 F.Supp.2d at 10-11 (Collyer, J.) (because an attack targeted children who are “not proper targets of war,” the attack “did not occur ‘during [sic] the course of an armed conflict as a matter of law“). Such a move is appealing as it provides significant guidance in an otherwise open-ended statutory regime: any act that violates the international laws of war does not qualify for the exception. Unfortunately, such a move is not justified here: Congress knows how to invoke international law and the law of war, having done so explicitly in some of the other statutes relied on by plaintiffs in this case. See, e.g., FSIA,
The undefined terms “military forces” and “armed conflict” of subsection (C) also pose difficulties. Because subsection (B) already covers all armed conflict between nations, the term must include non-national forces—or it would be rendered mere “surplusage.” See, e.g., Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174-79 (2012) (discussing the “Surplusage Canon“: “If possible, every word and every provision is to be given effect ... None should be ignored. None should needlessly be given an interpretation that causes it to duplicate another provision or to have no consequence.“); see also Gill, 893 F.Supp.2d at 512 (reaching the same conclusion regarding subsection (C)); Weiss v. Arab Bank, PLC, 2007 WL 4565060, *5 (E.D.N.Y. Dec. 21, 2007) (“[S]ubection (C) extends the ‘act of war’ exclusion to armed conflicts between military forces that are not the military forces of recognized nations.“); but see Morris, 415 F.Supp.2d at 1334 (noting that “military” is conventionally defined as the armed forces “of a nation,” and concluding that al Qaeda did not qualify as a “military force” because it “is not a ‘nation‘“). But subsection (C) must not be read so broadly as to encompass all of the acts that otherwise qualify as “international terrorism” under
3. Past Applications
While there is no binding circuit precedent interpreting the act of war exemption, several judges, in and outside of this circuit, have decided cases interpreting this provision.
Several judges have found that attacks on civilians in Israel by Palestinian terrorist groups were not covered by the act of war exemption. In Biton, Judge Collyer considered a November 2000 bus bombing in a former Israeli settlement in the Gaza Strip that was alleged to be part of the “al-Aqsa Intifada,” “a series of violent demonstrations and clashes between Palestinians and Israeli Defense Forces that ensued following ... Ariel Sharon‘s controversial visit to the Temple Mount ... in Jerusalem in September 2000.” 412 F.Supp.2d at 3. She concluded that this bombing was not an “act of war” because the bus contained “only children and teachers” and “children are not the proper targets of war.”9 412 F.Supp.2d at 10. Similarly, in
Klieman, Judge Friedman considered a 2002 attack on an Israeli civilian bus in the West Bank. 424 F.Supp.2d at 155-56. Although defendants asserted that there was “ongoing and daily armed conflict between the Israeli military and Palestinian military forces throughout the West Bank and Gaza during the relevant period,” and that “the Israeli government consistently has characterized the fighting as armed conflict,” id. at 163 (quotations and citations omitted), Judge Friedman declined to decide whether there was “armed conflict between military forces of any origin,”
More recently, in Gill, Judge Weinstein considered a 2008 shooting by Hamas gunmen in Gaza targeting an Israeli government-led delegation at an Israeli observation point. 893 F.Supp.2d at 484-85. The Judge concluded that subsection (B) (armed conflict between nations) might be applicable, since Hamas held a majority of seats in the Palestinian legislature, and controlled Gaza, which “is at least part of a proto-nation.” Id. at 510. But he decided that the issue required further elaboration and declined to dismiss on that basis, instead elaborating “some of the questions that would be raised in the context of the Israel-Hamas conflict, treating the conflict potentially as a war between nations,” including whether the ATA “exempt[s] from the aegis of the civil remedy provision the actions of a paramilitary group—Hamas—tied to a nation‘s dominant political party.” Id. Judge Weinstein also concluded that subsection (C) might apply, but only if defendants could demonstrate by a preponderance of the evidence that “Hamas does not [as a general practice] ... target civilians to any substantial degree.”11 Id. at 517.
Other judges have considered the act of war exemption in other contexts. In Stutts, Judge Glasser considered the detonation of Iraqi chemical weapons by the Coalition forces during the Gulf War in 1991, which allegedly exposed plaintiffs to toxic agents. 2006 WL 1867060, at *1. Although the detonation took place after a ceasefire was declared, the judge conclud-
And, in Morris v. Khadr, Judge Cassell considered a 2002 al Qaeda attack on members of the U.S. Army in Afghanistan. 415 F.Supp.2d at 1326. The Court raised the act of war exclusion sua sponte. It raised the possibility that Al Qaeda might be considered a “military force” under subsection (C), because plaintiffs alleged that Al Qaeda was “headquartered in Afghanistan and involved a cluster of military ideological camps dedicated to their goal of establishing a universal Islamic State through the use of violence.” Id. at 1333. But, the court ultimately rejected this view. First, it distinguished between “military forces” (which, it noted, are usually defined as affiliated with a nation) and “terrorists,” and finding that “al Qaeda fits only in the latter” because “they are not a ‘nation.‘”12 Id. at 1334. Second, it noted that “the burden should fall on [defendant] to prove that his associates were a military force if he wishes to invoke this ATA exclusion.”13 Id.
B. Analysis: The Rocket Attacks Qualify for the Act of War Exception Under Subsection (C)
Under these principles, and guided in part by these precedents, the Court finds that the rocket attacks at issue in the present matter are properly categorized as “act[s] of war” under
First, the Court must decide whether Israel and Hezbollah were engaged in “armed conflict” during the summer of 2006, and whether the rocket attacks occurred “in the course of” this conflict. See
True, Hezbollah is not a national military force. However, this feature does not weigh against finding “armed conflict” because, as discussed above, the statute‘s structure implies that non-national military forces are capable of engaging in “armed conflict.”
Weighing all of these features of the conflict together, the Court finds that this period of conflict, which is often referred to as the “Israel-Lebanon War” or the “Second Lebanon War,” constitutes “armed conflict” under the ATA.14
Treating the Israel-Lebanon war as an “armed conflict” and Hezbollah as a “military force” for purposes of their actions during this conflict does not upset the basic definitional principle the Court extrapolated from the statute above; that subsection (C) may exclude some, but cannot exclude all, acts by non-national groups that otherwise form the basis for a valid claim under the ATA. For instance, nothing in this holding would shake the conclusions reached in Biton, 412 F.Supp.2d at 3, Klieman, 424 F.Supp.2d at 163, or Gill, 893 F.Supp.2d at 484-85. In those cases, defendants had advanced the theory that the attacks were part of a long struggle between a terrorist group and Israel. And, like the present case, some leaders on both sides in those cases may have described the struggle as a “war.” But the factors reviewed in the above discussion are sufficient to comfortably distinguish the present matter from those cases, and to preserve the availability of ATA for cases like Biton, Klieman, and Gill going forward.
In sum, the rocket attacks meet the ATA‘s definition of an “act of war” under
VI. PLAINTIFFS’ ALIEN TORT STATUTE CLAIMS FAIL
The non-American plaintiffs assert claims against BSI and BSPLC pursuant to the Alien Tort Statute (“ATS“),
A. Legal Standard
The ATS provides: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”
In Kiobel v. Royal Dutch Petroleum Co., the Supreme Court held that “the presumption against extraterritoriality applies to claims under the ATS, and that nothing in the statute rebuts that presumption.” — U.S. —, 133 S.Ct. 1659, 1669, 185 L.Ed.2d 671 (2013). Thus, an action “seeking relief for violations of the law of nations occurring outside the United States” will ordinarily be barred, as it was in that case. Id. at 1669, 1662 (finding barred claims brought by Nigerian nationals against Dutch, British and Nigerian corporations, based on actions occurring in
For instance, in Mwani, Magistrate Judge Facciola found that Kenyan victims of an American embassy bombing in Kenya had subject matter jurisdiction under the ATS to pursue claims against the foreign terrorist group responsible. He reasoned that a terrorist attack that “1) was plotted in part within the United States, and 2) was directed at a United States Embassy and its employees” met the Supreme Court‘s test of “touching and concerning the United States with sufficient force” to overcome the presumption against extraterritoriality. 947 F.Supp.2d at 5, 2013 WL 2325166, *4.
B. Analysis
In the present action, the non-American plaintiffs have asserted ATS claims against foreign defendants for actions that took place in Israel and Lebanon. Under Kiobel, these claims will only survive if the underlying attacks “touch and concern” the United States “with sufficient force to displace the presumption against extraterritorial application.” 133 S.Ct. at 1659. Plaintiffs point to no facts that would support such a finding. Unlike Mwani, where the attack was planned in the United States and targeted at one of its embassies, here the attacks were allegedly funded by Iran, launched from Lebanon, and targeted Israel. See 947 F.Supp.2d at 5-6, 2013 WL 2325166, *4. True, some of the individuals affected by the attacks are American, but there is no indication that the attack was specifically targeted at Americans, rather than Israelis. Because these extraterritorial attacks do not “touch and concern the territory of the United States ... with sufficient force to displace the presumption against extraterritorial application [of the ATS],” the claims are barred. See Kiobel, 133 S.Ct. at 1659.
VII. THE COURT DECLINES TO EXERCISE SUPPLEMENTAL JURISDICTION OVER PLAINTIFFS’ ISRAELI TORTS CLAIMS
Finally, plaintiffs also raise claims under Israeli law against both BSI and BSPLC. Compl. ¶¶ 154-73 (Counts 6 & 7). In the preceding discussion, the Court has dismissed all of plaintiffs’ federal causes of action against BSI and BSPLC—under the FSIA, the ATA, and the ATS—leaving only FSIA claims against other
VIII. SERVICE ON REMAINING DEFENDANTS
The only remaining claims in this action are under the FSIA against Iran and CBI. Although the Complaint was filed more than three years ago, plaintiffs still have not served process on either these two (now sole-remaining) defendants. One month ago, after the case was transferred to the undersigned Judge, plaintiffs attempted, for the second time, to accomplish this service on these two defendants via mail service pursuant to
The FSIA provides that “if service cannot be made within 30 days [via mail service] under paragraph (3)” then plaintiffs in FSIA actions may accomplish service via “diplomatic channels.”
IX. CONCLUSION
All claims against BSI and BSPLC and associated John Does are dismissed and plaintiffs shall commence service via diplomatic channels on the remaining defendants within 21 days of this opinion.
An order shall issue with this opinion.
Aboufazl BAYATFSHAR, Plaintiff, v. ARINC, Inc., et al., Defendants.
Civil Action No. 11-450 (RC).
United States District Court, District of Columbia.
Aug. 20, 2013.