James OWENS, et al., Plaintiffs, v. BNP PARIBAS S.A., et al., Defendants.
Civil Action No. 15-1945 (JDB)
United States District Court, District of Columbia.
Filed 01/27/2017
In addition to seeking enforcement, Carroll “also prays OFCCP be ordered to promptly and fully disclose all communications, including notes of such, it has had with Vinnell Arabia, with Northrop Grumman, internally within the DOL, and with the EEOC pertaining to Vinnell Arabia.” Compl. ¶ 66. To the extent this lone statement can be construed liberally as a request for records pursuant to the Freedom of Information Act (“FOIA“),
Finally, Carroll asks this Court to direct OFCCP “to immediately recompense Carroll for his costs associated with this lawsuit.” Compl. ¶ 66. Although Congress has provided for recovery of costs following an APA action in some circumstances, see
CONCLUSION
For all of the foregoing reasons, the Court GRANTS Defendant‘s Motion to Dismiss Plaintiff‘s Complaint. An Order consistent with this decision accompanies this Memorandum Opinion.
Alexis L. Collins, Cleary, Gottlieb, Steen & Hamilton, Washington, DC, Avram E. Luft, Carmine D. Boccuzzi, Jr., Jonathan I. Blackman, Lawrence Friedman, Mark S. Grube, Cleary, Gottlieb, Steen & Hamilton, LLP, New York, NY, for Defendant.
MEMORANDUM OPINION
JOHN D. BATES, United States District Judge
Plaintiffs in this case are victims and family members of victims of the 1998 terrorist bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, which killed over two hundred people and injured thousands more. The attacks were carried out by al Qaeda, with
I. BACKGROUND
The following facts are taken from [12] plaintiffs’ amended complaint. The plaintiffs in this case are all U.S. nationals injured in the 1998 embassy bombings, or the estates, heirs, or survivors of U.S. nationals who died as a result of the bombings. Am. Compl. ¶¶ 22-26. Plaintiffs were awarded judgments against Sudan for its role in the bombings in a previous litigation. Am. Compl. ¶¶ 24, 27. The defendants are banks who, according to the complaint, circumvented U.S. sanctions imposed on Sudanese banks and financial institutions by processing financial transactions for these sanctioned entities, thereby enabling Sudan, al Qaeda, and Hezbollah to obtain funds needed to carry out the embassy attacks. Am. Compl. ¶¶ 15-16. All three defendant banks conduct business in the United States or have operations here. BNP Paribas Suisse and BNP North America are both wholly owned subsidiaries of BNP Paribas. Am. Compl. ¶¶ 29-40.
A. SUDAN, AL QAEDA, AND THE EMBASSY BOMBINGS
Sudan was designated as a state-sponsor of terrorism in 1993, and has maintained that designation ever since. Am. Compl. ¶ 47. In 1993, a report produced by the U.S. Department of State noted that Sudan actively harbored international terrorist groups, had close ties to Iran, and frequently provided meeting locations, transit points, and safe havens for “Iran-backed extremist groups.” Am. Compl. ¶ 61. At some point in the early 1990s, Sudan invited al Qaeda, then led by Osama bin Laden, to relocate from Afghanistan to Sudan, and al Qaeda eventually did so. Am. Compl. ¶ 104. Al Qaeda is an international terrorist network founded by bin Laden in the late 1980s, dedicated to rid-
Sudan and al Qaeda allegedly formed a mutually beneficial relationship, in which Sudan provided protection and safe harbor from Western intelligence, and a place for al Qaeda militants to stay, train, and raise funds through various businesses set up in Sudan, and al Qaeda manufactured or provided weapons and other equipment for Sudanese security forces and invested in Sudan‘s economy and infrastructure. Am. Compl. ¶ 104. Members of Sudan‘s ruling political party, the National Islamic Front, also organized travel documents and provided economic aid to al Qaeda while it was operating in Sudan. Am. Compl. ¶ 104. Al Qaeda was present in Sudan in 1997 and 1998 leading up to the embassy bombings, and according to the complaint, received significant financial support from Sudan that enabled al Qaeda to plan and carry out the bombings. Al Qaeda also received financial support from Hezbollah, an Iran-backed terrorist group based in Lebanon that was likewise present in Sudan at the time with the Sudanese government‘s blessing. Am. Compl. ¶¶ 70, 101, 103.
B. U.S. SANCTIONS AGAINST SUDAN AND BNPP
Prior to the embassy bombings, but as a result of Sudan‘s designation as a state-sponsor of terrorism, the United States imposed various sanctions against the Sudanese government in the early 1990s. These sanctions included restrictions on U.S. foreign assistance to Sudan, a ban on defense exports and sales, and other financial restrictions. Am. Compl. ¶ 62. In 1997, however, the United States went further, imposing a complete trade embargo on Sudan due to Sudan‘s continued support for terrorism, which made it unlawful to export goods and services, including financial services, to Sudan without a license from the Treasury Department‘s Office of Foreign Assets Control (“OFAC“). Am. Compl. ¶¶ 63-66. All U.S. banks and financial institutions were prohibited from processing financial transactions for the government of Sudan, its agencies, instrumentalities, and controlled entities. Am. Compl. ¶ 66. In addition, by January 1998, all of Sudan‘s national and major commercial banks were designated Specially Designated Nationals (“SDNs“) by OFAC.2 Am. Compl. ¶¶ 67-68.
The complaint alleges that BNPP did not comply with the U.S. sanctions regime against Sudan, and that had it done so, al Qaeda and Hezbollah would not have been able to receive the assistance from Sudan necessary to carry out the embassy bombings. In July 2014, BNPP pled guilty to one count of conspiring to violate the International Emergency Economic Powers Act (“IEEPA“) and the Trading with the Enemy Act (“TWEA“), see
Plaintiffs allege that these sanctions violations arose out of a conspiracy between BNPP and Sudan to move large amounts of money through the U.S. financial system on behalf of al Qaeda and Hezbollah, and that this money was necessary to the planning and perpetration of the U.S. embassy bombings. Plaintiffs allege that BNPP knew that in processing funds for Sudan, some of that money would end up with al Qaeda, and that BNPP therefore intended to provide material support to al Qaeda and Hezbollah in violation of U.S. criminal laws, including
II. DISCUSSION
To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.‘” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This requires a plaintiff to plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The Court must take all allegations in the complaint as true, and draw all reasonable inferences in the plaintiffs’ favor. See Aktieselskabet AF 21. November 2001 v. Fame Jeans, Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). However, “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s] devoid of further factual enhancement,” do not satisfy the pleading standard. Iqbal, 556 U.S. at 678. The Court need not accept legal conclusions or inferences drawn by the plaintiff where those inferences are unsupported by
Here, defendants raise three principal arguments as to why plaintiffs’ complaint fails to state a claim and should be dismissed under Federal Rule of Civil Procedure 12(b)(6). They argue that: (1) the complaint fails to adequately allege that defendants caused plaintiffs’ injuries; (2) plaintiffs’ claims are premised on theories of secondary liability not cognizable under
A. CIVIL LIABILITY UNDER THE ATA
Before discussing the arguments raised in defendants’ motion to dismiss, it is necessary to first briefly outline the statutory framework of the ATA‘s civil liability provision.
Discerning the intent element required by the statute becomes complicated by the meaning of “international terrorism,” which is described in a lengthy definition as activities that:
(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-
- to intimidate or coerce a civilian population;
- to influence the policy of a government by intimidation or coercion; or
- 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
Of relevance here, the plaintiffs in this case allege that BNPP‘s conduct violated the “material support” provisions of the ATA:
The parties here raise two issues of statutory interpretation relevant to the motion to dismiss. First, they disagree as to whether
1. Aiding and Abetting Liability
Much ink has already been spilled on the question of secondary liability under the ATA. It is important to recognize that the concept of aiding and abetting under the ATA is distinct from any secondary liability that may be incorporated into
Section 2333 itself is silent on this issue, and there is no general civil aiding and abetting statute that could be read to impose secondary liability, as exists in the criminal context through
Both the Second and Seventh Circuits have concluded that, because Congress did not specifically provide for aiding and abetting liability in the ATA, aiding and abetting liability is not available, relying on the Supreme Court‘s decision in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994). See Rothstein, 708 F.3d at 97 (citing Central Bank); Boim III, 549 F.3d at 689 (same). In Central Bank, the Supreme Court held that, despite the “extensive scheme of civil
The Supreme Court rejected the argument that “Congress legislated with an understanding of general principles of tort law,” and therefore Congress must have “intended to include aiding and abetting liability” in the Securities Exchange Act, pointing out that “Congress has not enacted a general civil aiding and abetting statute.” Id. at 180-82 (internal quotation marks omitted). Instead, Congress has taken “a statute-by-statute approach to civil aiding and abetting liability.” Id. at 182. Therefore, when Congress enacts a private damages action, “there is no general presumption that the plaintiff may also sue aiders and abettors.” Id.; see also Stoneridge Inv. Partners, LLC v. Scientific-Atlantic, Inc., 552 U.S. 148, 158 (2008) (reaffirming Central Bank). Applying these principles to the ATA, the Second Circuit concluded in Rothstein: “We doubt that Congress, having included in the ATA several express provisions with respect to aiding and abetting in connection with the criminal provisions, can have intended
Those courts that have found aiding and abetting liability under the ATA—several of which have subsequently reversed course—have distinguished Central Bank on essentially two main grounds, which plaintiffs echo here. See Pl.‘s Resp. to Mot. to Dismiss [ECF No. 27] at 14-16. First, they argue that Central Bank was limited to implied rights of action like
These arguments in favor of civil aiding and abetting liability are ultimately unpersuasive. To begin with, as several courts have recognized, Central Bank‘s reasoning was not dependent on any unique feature of implied rights of action, or of the securities laws more generally. See, e.g., Central Bank, 511 U.S. at 199-201 (Stevens, J., dissenting) (criticizing the
The Supreme Court in Central Bank, moreover, rejected arguments similar to those raised here by the plaintiffs regarding congressional intent to impose broad liability in light of general principles of American tort law. The Court was clear that “[p]olicy considerations cannot override our interpretation of the text and structure of the Act.” Id. at 188. The Court also found that “it is far from clear that Congress ... would have decided that the statutory purposes would be furthered by the imposition of private aider and abettor liability.” Id. at 189-90. Here as well, the legislative history of the ATA is ambiguous at best and does not reflect a consensus as to how broadly the civil liability provision should be interpreted. Some proponents of the bill, for example, appeared to suggest that the civil liability provision would cover negligent conduct, despite the treble damages provision, which is usually an indication of an intentional tort. See Antiterrorism Act of 1990: Hearing on S.2465 Before the Subcomm. on Courts and Admin. Practice (“Hearing on S.2465“), 101st Cong. 136 (1992) (statement of Joseph A. Morris, former general counsel of the U.S. Info. Agency and the U.S. Office of Pers. Mgmt.) (“The tort law system has similar rules where liability attaches to those who knowingly or negligently make it possible for some actor grievously to injure somebody else. As
The ATA removes the jurisdictional hurdles in the courts confronting victims and it empowers victims with all the
weapons available in civil litigation, including: subpoenas for financial records, banking information, and shipping receipts—this bill provides victims with the tools necessary to find terrorists’ assets and seize them.
137 Cong. Rec. S4,511 (daily ed. Apr. 16, 1991) (statement of Sen. Grassley). In its entirety, then, the statement appears to refer principally to weapons of civil discovery, rather than to civil theories of secondary liability.
In short, the legislative history of the ATA provides little concrete insight into the precise scope of liability contemplated in the civil liability provision. The statutory text is the clearest indicator of the statute‘s meaning, and the text here is silent as to civil aiding and abetting liability. It is also noteworthy that the criminal provisions of the ATA refer specifically to some forms of secondary liability—some, but not all. Sections 2339A, B, and C, for example, all impose liability for attempt and conspiracy, see
The Court therefore concludes that the now-previous version of the ATA applicable to this case does not provide for civil aiding and abetting liability under
2. Causation
The parties also dispute causation. Section 2333 requires that a plaintiff be injured “by reason of” an act of international terrorism. Defendants argue that this language requires proximate cause, because that is how the phrase “by reason of” has been interpreted in other statutes. Mot. to Dismiss at 11-12. They define proximate cause as requiring a “direct” connection between defendants’ conduct and plaintiffs’ injuries. Mot. to Dismiss at 11-12 (quoting Rothstein, 708 F.3d at 91 (“Central to the notion of proximate cause is the idea that a person is not liable to all those who may have been injured by his conduct, but only to those with respect to whom his acts were a substantial factor in the sequence of responsible causation and whose injury was reasonably foreseeable or anticipated as a natural consequence.“)); Siegel v. SEC, 592 F.3d 147, 159 (D.C. Cir. 2010) (“Proximate causation ... is normally understood to require a direct relation between conduct alleged and injury asserted.“)). Plaintiffs agree that proximate cause is required, but argue for a looser definition of the term than that adopted by the Second Circuit in Rothstein and urged by defendants here, in order to be consistent with Congress‘s intent to impose broad liability. Plaintiffs instead urge that it is sufficient if their injury was a “reasonably foreseeable result of” defendants’ conduct. Pls. Resp. at 8-9 (quoting Boim I, 291 F.3d at 1012; Wultz, 755 F.Supp.2d at 53 (harm to plaintiffs “might have reasonably been anticipated as a natural consequence of the defendant‘s actions“)).
In Rothstein, the Second Circuit explained that “the ‘by reason of’ language has a well-understood meaning, as Congress [has] used it in creating private rights of action under RICO [Racketeer Influenced & Corrupt Organizations Act] and the antitrust laws, and it [has] historically been interpreted as requiring proof of proximate cause.” Rothstein, 708 F.3d at 95. This language requires “a showing that the defendant‘s violation not only was a ‘but for’ cause of [the] injury, but was the proximate cause as well.” Id. (quoting Holmes v. Sec. Inv‘r Protection Corp., 503 U.S. 258, 267-68 (1992) (interpreting same language in RICO)). The Rothstein court rejected plaintiffs’ allegations that the bank UBS‘s actions in processing transactions for Iran, a state-sponsor of terrorism, were a proximate cause of the plaintiffs’ injuries, because the plaintiffs had failed to allege that UBS was a participant in the attacks that injured the plaintiffs, that it provided money to a terrorist organization, or that the money UBS had processed for Iran had been given to Hamas or Hezbollah. Id. at 97.
According to the plaintiffs here, the Rothstein court erred in adopting the interpretation of the “by reason of” language used by the Supreme Court in Holmes. Instead, they point to the Supreme Court‘s decision in CSX Transportation, Inc. v. McBride, 564 U.S. 685, 688 (2011), which held that a statutory provision in the Federal Employers Liability Act did not incorporate traditional proximate cause standards and instead only required a plaintiff to show a lesser standard of causation. Plaintiffs argue that CSX Transportation stands for the proposition that, when Congress uses “less legalistic language” of causation, “and the legislative purpose is to loosen constraints on recovery, there is little reason for courts to hark back to stock, judge-made proximate cause formulations.” Pls. Resp. at 6 (quoting CSX Transp., 564 U.S. at 702-03). Accordingly, plaintiffs argue that a looser standard of recovery is appropriate under the ATA as well.
Plaintiffs’ reliance on CSX Transportation is frankly puzzling. It dealt with entirely different language of causation than is at issue in the ATA; the statute there required plaintiffs to show that their injuries “result[ed] in whole or in part from” defendants’ negligence. CSX Transp., 564 U.S. at 688. Holmes, in contrast, dealt with the same “by reason of” language used in the ATA, albeit in a different statute, RICO. The Court in Holmes relied on its previous interpretations of this same language in the antitrust statutes to conclude that Congress “used the same words, and we can only assume it intended them to have the same meaning that courts had already given them.” 503 U.S. at 268. Likewise, the Second Circuit in Rothstein reached the same conclusion with respect to the same language used in the ATA: if “Congress had intended to allow recovery upon a showing lower than proximate cause, we think it either would have so stated expressly or would at least have chosen language that had not commonly been interpreted to require proximate cause for the prior 100 years.” Rothstein, 708 F.3d at 95. Contrary to what plaintiffs appear to suggest in their response, see Pls. Resp. at 6, CSX Transportation in fact makes no reference to the “by reason of” standard when referring to “less legalistic language” that should be interpreted as requiring a lower standard of causation. This case therefore provides no reason to call into question the holding of Holmes or Roth-
Most courts that have addressed the causation requirement under the ATA have likewise agreed that proximate cause is required. See, e.g., Boim III, 549 F.3d at 691-98; Wultz, 755 F.Supp.2d at 53; Credit Lyonnais, 2006 WL 2862704, at *17-18; Burnett, 274 F.Supp.2d at 105. Plaintiffs seem to contend, however, that the Rothstein court adopted a more stringent definition of probable cause under the ATA, requiring a “substantial” or “direct” connection between defendants’ conduct and plaintiffs’ injuries, whereas other courts have stated that a plaintiff‘s harm need only be a foreseeable or reasonably anticipated result of a defendant‘s conduct. See, e.g., Boim I, 291 F.3d at 1012; Wultz, 755 F.Supp.2d at 53 (harm to plaintiffs “might have reasonably been anticipated as a natural consequence of the defendant‘s actions“). But this Court finds nothing to support this contention in the Second Circuit‘s opinion. See, e.g., Rothstein, 708 F.3d at 91 (defining proximate cause as requiring that a plaintiffs’ injury be “reasonably foreseeable or anticipated as a natural consequence” (quotations marks and citations omitted)). To the extent that court stressed the need for a closer connection between the defendants and the plaintiffs’ injuries, it is important to remember that Rothstein, unlike most ATA cases, involved actors who were not directly connected to any terrorist organization or to agents of a terrorist organization. Typically, ATA cases brought against banks deal with those who were processing transactions for a terrorist organization or a terrorist front, the nature of the organization dealing with the bank therefore making it foreseeable that the funds processed would likely be used for acts of terrorist violence. In contrast, the bank defendants in Rothstein had dealt with a truly independent intermediary: Iran. The Rothstein defendants, like the bank defendants here, were thus one step further removed from the acts that caused the plaintiffs’ injuries, separated by a sovereign state that was not simply a funnel to provide money to terrorists, but that may well have used the funds processed for any number of legitimate purposes. Without a more concrete connection to indicate that Iran did or was likely to use the money defendants processed to fund terrorist acts, plaintiffs’ injuries were not necessarily a “natural” consequence of defendants’ conduct. Thus, Rothstein merely reflects the application of the ATA‘s proximate cause standard to a different set of facts, not, as plaintiffs here contend, the application of an entirely different legal standard.
Accordingly, the Court concludes that
B. PLAINTIFFS’ ALLEGATIONS
Having resolved the issues of statutory interpretation raised by the parties with respect to causation and aiding and abetting liability, the Court now turns to the
First, as discussed above in Part II.A.1, to the extent that plaintiffs raise a claim for aiding and abetting a violation of the ATA, this claim is dismissed, as
The claims that remain are state law tort claims and ATA claims based on underlying violations of
Even assuming that these facts alone establish that BNPP was illegally processing dollar-denominated transactions for Sudan between 1997 and 1998, this only establishes BNPP‘s connection to Sudan, not a connection to any terrorist group or terrorist activity prior to August 1998—the latter being necessary to show a predicate violation of
Plaintiffs present no facts suggesting that Sudan and defendants ever agreed to provide funds to al Qaeda, and no facts showing that defendants knew what Sudan was doing with the funds BNPP processed. Indeed, the extent to which the arrangement between al Qaeda and Sudan was generally known in 1997-98—i.e., such that defendants could reasonably be charged with knowledge of it—is unclear from the complaint. Nor have plaintiffs alleged facts to show that Sudan was acting on al Qaeda‘s behalf in conducting financial transactions with BNPP. In fact, from plaintiffs’ allegations, it appears that Sudan‘s support to al Qaeda consisted principally of providing safe haven and space to train, and perhaps, assistance with travel documents—it was al Qaeda that appears to have provided cash to Sudan. In other words, plaintiffs present no facts to show that Sudan was using the funds processed by BNPP—or was likely to use any funds provided by BNPP—to support al Qaeda. As the Second Circuit recognized, the fact that money was transferred to or for a state-sponsor of terrorism makes it more likely that the money was used for terrorism than if the transfers had been to a state that was not a sponsor of terrorism. Rothstein, 708 F.3d at 97. “But the fact remains that [Sudan] is a government, and as such it has many legitimate agencies, operations, and programs to fund.” Id. Processing funds for Sudan is not the same as processing funds for a terrorist organization or a terrorist front. “Unlike the fronts ... [Sudan] [is] not merely a funnel of funds to terrorists. [Sudan] [is] a recognized sovereign nation with a variety of responsibilities and pursuing a variety of interests.” Abecassis v. Wyatt, 704 F.Supp.2d 623, 666 (S.D. Tex. 2010). Without more, then, plaintiffs cannot simply equate the transfer of money to Sudan with the transfer of money to al Qaeda. It is not sufficient to merely allege that it was “foreseeable” that if defendants processed transactions for Sudan, Sudan might give some of that money to al Qaeda. Such allegations do not satisfy the scienter element required by
For similar reasons, plaintiffs likewise fail to sufficiently allege that defendants’ conduct was the proximate cause of their injuries. As was true in Rothstein, plaintiffs here present no facts showing, for example, that BNPP provided money to a terrorist group, that the money BNPP processed for Sudan was transferred to al Qaeda, or that Sudan would have been unable to assist al Qaeda without the funds that BNPP processed. Rothstein, 708 F.3d at 97; see also In re Terrorist Attacks on September 11, 2001, 714 F.3d 118, 124-25 (2d Cir. 2013) (plaintiffs failed to allege that bank proximately caused 9/11 attacks by providing routine financial services to charity organizations alleged to provide funds to terrorist groups); Abecassis, 704 F.Supp.2d at 666 (plaintiffs failed to allege that kickbacks given to Iraq proximately caused plaintiffs’ injuries in a Hamas bombing in Israel). Based on plaintiffs’ allegations, there is simply not enough to sustain a sufficiently direct causal connection between defendants’ conduct and the embassy bombings that injured plaintiffs.
As plaintiffs’ complaint currently stands, their allegations amount to a ”post hoc, ergo propter hoc proposition that would mean that any provider of U.S. currency to a state sponsor of terrorism would be strictly liable for injuries subsequently caused by a terrorist organization associated with that state.” Rothstein, 708 F.3d at 96. Section 2333, however, does not impose this kind of liability. Accordingly, because plaintiffs have failed to plausibly allege that the defendant banks had the necessary scienter to support plaintiffs’ ATA claims, and because plaintiffs’ have failed to allege a sufficient causal connection between the banks’ conduct and plaintiffs’ injuries, plaintiffs’ complaint must be dismissed.
III. CONCLUSION
For all these reasons, defendants’ motion to dismiss the complaint will be GRANTED. A separate order dismissing the complaint has been issued concurrently with this opinion.
Philip J. TRIDICO, Plaintiff, v. DISTRICT OF COLUMBIA, Defendant.
Civil Action No. 13-0937 (ESH)
United States District Court, District of Columbia.
Filed 01/30/2017