This story was originally published by the New York Law Journal, an American Lawyer affiliate.
The hopes of plaintiffs who attempted to hold dozens of foreign organizations and individuals responsible for aiding and abetting al Qaeda and Osama bin Laden in the Sept. 11, 2001, terror attacks were dashed Tuesday by the U.S. Court of Appeals for the Second Circuit.
In three separate decisions in multi-district litigation over the attacks, the circuit upheld the dismissal of claims brought against most of the defendants, including the bin Laden family’s construction company, Saudi and Sudanese banks and Islamic charities under the Anti-Terrorism Act, the Alien Tort Statute, the Torture Victim Protection Act and common law tort.
The decisions uphold a series of rulings by U.S. District Judge George Daniels in Manhattan. The panel carved out some exceptions for 12 defendants accused of having more direct involvement with al Qaeda and remanded their cases to Daniels for jurisdictional discovery.
The critical holdings in the three opinions are:
• There was a lack of personal jurisdiction over many defendants under the standard laid out by the circuit in a 2008 ruling in the same multi-district litigation, In re Terrorist Attacks III, which dismissed claims against Saudi princes and bank executives who worked at banks linked to al Qaeda.
• The plaintiffs cannot allege aiding-and-abetting liability under the Anti-Terrorism Act and the plaintiffs did not make the necessary allegation that the actions of the defendants proximately caused their injuries—twin failings under the Second Circuit’s recent decision in Rothstein v. UBS, .
• The plaintiffs’ claims under the Alien Tort Statute had no merit because "no universal norm against ‘terrorism’ existed under customary international law (i.e., the ‘law of nations’) as of September 11, 2001."
• Claims under the Torture Victim Prevention Act fail under U.S. Supreme Court case law, Mohamad v. Palestinian Authority, because the act only imposes liability on natural persons.
The three opinions are grouped under the heading In re Terrorist Attacks of September 11, 2001.
Oral arguments were held on Dec. 4, 2012, and Cabranes, who has been at the center of much of the circuit’s Alien Tort Statute jurisprudence, wrote all three opinions.
In 2011, Daniels dismissed claims against dozens of defendants on a variety of grounds—lack of personal jurisdiction, failure to state a claim upon which relief can be granted and immunity from suit under the Foreign Sovereign Immunities Act. Each appeal decided yesterday involves groupings of defendants who were dismissed for one of those three reasons.
One of the three opinions, in O’Neill v. Saudi Joint Relief Committee, concerned only the Saudi Joint Relief Committee (SJRC) and the Saudi Red Crescent Society (SRC). The circuit held that the alleged "torts" committed by what Cabranes called "purportedly" humanitarian relief organizations established and sponsored by the Kingdom of Saudi Arabia, were not actionable because they occurred outside the United States.
The plaintiffs claimed the groups could be sued under the noncommercial tort exception of the Foreign Sovereign Immunities Act.
But Cabranes said that, for this exception to apply, "the entire tort must be committed in the United States."
Even though the plaintiffs alleged that "the injuries and damage caused by the September 11 attacks in the United States were related to, and a result of, the actions taken by the SJRC and the SRC abroad—namely, allegedly contributing financial and other resources to support Osama bin Laden and al Qaeda," Cabranes said those allegations aren’t enough to strip the two organizations of jurisdictional immunity.
The plaintiffs, he said, did not allege that either organization participated in the 9/11 attacks or "committed any tortuous act in the United States."
In a second opinion, O’Neill v. Asat Trust Reg., the circuit was dealing with 37 defendants dismissed for lack of personal jurisdiction.
The circuit held a failure to plead sufficient facts against 25 of the 37, including Faisal Islamic Bank and other banks, their managers, the Saudi bin Laden Group, five members of the bin Laden family, charities and other individuals. The court found insufficient facts to show the 25 defendants "expressly aimed their allegedly tortuous conduct at the United States."
The guiding case for the circuit was its 2008 decision in In re Terrorist Attacks on September 11, 2001, where the court held that there was no personal jurisdiction over four Saudi princes for causing money to be given to certain Muslim charities, nor was there personal jurisdiction over executives of various private banks that allegedly actively sponsored and supported the al Qaeda movement.
The circuit held that plaintiffs had to show that a defendant "expressly aimed" intentional tortuous acts at residents of the United States and must plead facts showing injuries that "arise out of or relate to those activities."
In Tuesday’s ruling on the 25 defendants for whom no personal jurisdiction was found under In re Terrorist Attacks III, the court said of the Saudi bin Laden group and family members who worked for it that there was "no evidence" that the group provided aid to Osama bin Laden after 1993.
However, the court remanded as to the remaining 12 defendants for jurisdictional discovery, including three officials who worked for charities alleged to be al Qaida front organizations.
Unlike the defendants in Terrorist Attacks III, Cabranes said, the charity official defendants "allegedly controlled and managed some of those ‘charitable organizations’ and, through their positions of control, they allegedly sent financial and other material support directly to al Qaeda when al Qaeda allegedly was known to be targeting the United States."
Another example of a nexus is raised in the case of defendant Saleh Al-Hussayen, whose involvement with the Al Rajhi Bank wouldn’t, alone, be enough to warrant jurisdiction. The picture changes, Cabranes said, when you add allegations that Al-Hussayen traveled to the United States "shortly before" the terror attacks and made the "decision to switch hotels to stay in the same hotel as at least three of the hijackers."
On remand, Cabranes said, discovery will be focused on whether that alleged support was "expressly aimed" at the United States.
In a third set of cases, O’Neill v. Al Rahji Bank, Daniels dismissed claims against five banks.
Cabranes said Rothstein "specifically" rejected Anti-Terrorism Act liability for aiding and abetting and that Congress did not intend to permit recovery under the act "on a showing of less than proximate cause."
In Rothstein, proximate cause was lacking where the plaintiffs claimed UBS provided banking services to Iran, which in turn funded Hamas and Hezbollah with hundreds of millions of dollars to conduct terrorist attacks against Israel.
As in Rothstein, Cabranes ruled Tuesday, "We are also not persuaded that providing routine banking services to organizations and individuals said to be affiliated with al Qaeda, as alleged by plaintiffs, proximately caused the September 11, 2001 attacks or plaintiffs’ injuries."
In rejecting the claim under the Alien Tort Statute, which requires a plaintiff to plead violation of "universal" norms shared by countries around the globe, Cabranes cited United States v. Yousef (2d Cir. 2003).
"We regrettably are no closer now…to an international consensus on the definition of terrorism or even its proscription; the mere existence of the phrase ‘state-sponsored terrorism’ provides the absence of agreement on basic terms among a large number of States that terrorism violates public international law," the court said in Yousef.
Daniels, Cabranes said, was correct to grant the defendants’ motion to dismiss and the court concluded by affirming Daniels on both the Torture Act claims and the claims in common law tort.
Sean Carter of Cozen O’Connor argued the appeals for the plaintiffs on the Foreign Sovereign Immunities Act and failure to state a claim issues.
Michael Kellogg of Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington, D.C., argued for the defendants on sovereign immunity and Christopher Curran of White & Case on failure to state a claim.
Richard Klingler of Sidley Austin argued for the plaintiffs on the personal jurisdiction issues.
James Gauch of Jones Day argued for the defendants.