Joshua Atchley v. Astrazeneca UK Limited ( 2022 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 21, 2021 Decided January 4, 2022
No. 20-7077
JOSHUA ATCHLEY, ET AL.,
APPELLANTS
v.
ASTRAZENECA UK LIMITED, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-02136)
Joshua D. Branson argued the cause for appellants. With
him on the briefs were David C. Frederick and Andrew E.
Goldsmith.
Michael J. Miller and Stephen I. Vladeck were on the brief
for amici curiae Law Professors in support of appellants.
Jeffrey R. White was on the brief for amicus curiae The
American Association for Justice in support of appellants.
Tejinder Singh was on the brief for amici curiae 44 Former
Military Officers, Intelligence Officials, and Analysts in
support of appellants.
2
Michael A. Petrino and Jonathan E. Missner were on the
brief for amici curiae Eight United States Senators in support
of appellants.
Mazin A. Sbaiti was on the brief for amicus curiae Iraq
Anti-Corruption Experts in support of appellants.
Kannon K. Shanmugam argued the cause for appellees.
With him on the brief were Neil H. MacBride, Paul S. Mishkin,
Beth S. Brinkmann, John E. Hall, David M. Zionts, Patrick J.
Carome, David W. Bowker, Leon T. Kenworthy, John B.
Bellinger, III, John David Cella, Robert Reeves Anderson, Lisa
S. Blatt, Christopher N. Manning, Melissa B. Collins, Brian T.
Gilmore, Jeh C. Johnson, Stacie M. Fahsel, and Jessica S.
Carey. Alex Young K. Oh entered an appearance.
Tara S. Morrissey, Paul Lettow, Andrew J. Pincus, Robert
W. Hamburg, and James C. Stansel were on the brief for amici
curiae The Chamber of Commerce of the United States of
America and the Pharmaceutical Research and Manufacturers
of America in support of appellees.
Michael J. Edney and Mark C. Savignac were on the brief
for amici curiae Iraq Reconstruction Experts, et al. in support
of appellees.
Timothy P. Harkness, Linda H. Martin, Kimberly H.
Zelnick, David Y. Livshiz, Scott A. Eisman, Altin H. Sila,
Nathan A. Hembree, and Noelle L. Williams were on the brief
for amici curiae Charity & Security Network and InterAction:
The American Council for Voluntary International Action, Inc.
in support of appellees.
3
Before: PILLARD and WILKINS, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge PILLARD.
PILLARD, Circuit Judge: The known terrorist group Jaysh
al-Mahdi injured or killed hundreds of United States service
members and civilians as part of its years-long campaign to
harm Americans and drive the United States’ military presence
out of Iraq. Plaintiffs are victims of those attacks and the
victims’ family members. In the period leading up to and
during the attacks on plaintiffs, Jaysh al-Mahdi openly
controlled Iraq’s Ministry of Health (Ministry) and used it as a
vehicle for terrorist activity. “Due largely to its 2005-era
control of the Ministry,” plaintiffs contend, “Jaysh al-Mahdi
became the deadliest terrorist group in the country. It
massacred thousands of people, including Plaintiffs and their
family members.” Appellants Br. 2. Plaintiffs claim
defendants, large medical supply and manufacturing
companies, knowingly gave substantial support to the attacks
against them in violation of the Anti-Terrorism Act (ATA or
Act), as amended by the Justice Against Sponsors of Terrorism
Act (JASTA), and state law. They allege that defendants,
aware of Jaysh al-Mahdi’s command of the Ministry, secured
lucrative medical-supply contracts with the Ministry by giving
corrupt payments and valuable gifts to Jaysh al-Mahdi.
Plaintiffs identify two ways in which they say defendants’
dealings most vividly provided illegal support to the terrorist
acts that harmed them. First, defendants used local agents to
deliver cash kickbacks to the terrorists who gave them
business. Second, defendants delivered extra, off-the-books
batches of valuable medical goods that Jaysh al-Mahdi
monetized on the black market to fund its operations, and also
used as cash equivalents to pay terrorist fighters. Critically, on
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the facts plaintiffs allege, defendants undoubtedly had the
degree of awareness that our precedent requires regarding the
connection between their payments and gifts and the terrorist
violence. Defendants’ agents finalized contracts at in-person
meetings at the Ministry, where Jaysh al-Mahdi weaponry,
fighters, propaganda, and other indicia made clear who was in
charge. And contemporaneous reports in mainstream media of
the terrorists’ control of the Ministry provided notice of the
stakes of doing business with that entity. “Yet Defendants
wanted to profit off the Ministry,” plaintiffs assert, “and they
were willing to pay terrorists for the opportunity.” Appellants
Br. 3.
The district court held that the complaint failed to state
claims for either direct or secondary (aiding-and-abetting)
liability under the ATA, and that it lacked personal jurisdiction
over six foreign defendants.
We reverse on three points of law and remand the balance
of the issues to be addressed by the district court consistent
with our opinion. First, plaintiffs plead facts that suffice to
support their aiding-and-abetting claim at the motion-to-
dismiss stage. The complaint plausibly alleges that Hezbollah,
a designated Foreign Terrorist Organization, planned or
authorized the relevant attacks as required under the JASTA.
It describes how Hezbollah helped establish Jaysh al-Mahdi in
Iraq, then recruited, trained, and equipped Jaysh al-Mahdi’s
fighters with the intent that it carry out attacks to extirpate the
American presence. And plaintiffs allege that defendants
knowingly provided substantial assistance to Jaysh al-Mahdi—
most clearly through their corrupt provision of free goods and
cash bribes to do business with a Ministry completely overrun
by Jaysh al-Mahdi. Aware of Jaysh al-Mahdi’s ongoing
terrorist operations, defendants allegedly secured lucrative
medical-supply contracts by giving the organization millions
5
of dollars of cash and cash-equivalents over a period of many
years. Those allegations, which must be accepted as true at this
motion-to-dismiss stage, support an inference that defendants
aided and abetted acts of international terrorism.
Second, with respect to the direct liability claim, plaintiffs
have adequately pleaded that defendants’ payments to Jaysh al-
Mahdi proximately caused plaintiffs’ injuries. The complaint
describes how Jaysh al-Mahdi controlled the Ministry and used
it as a terrorist headquarters. Accepting those allegations,
defendants’ dealings with the Ministry were equivalent to
dealing with the terrorist organization directly. The Ministry
was therefore not an independent intermediary that broke the
chain of causation, but a front for Jaysh al-Mahdi. With
causation adequately alleged, the adequacy of the allegations
of other direct-liability requisites remains open on remand.
Finally, the district court’s personal jurisdiction analysis
was unduly restrictive. The foreign supplier defendants’ direct,
valuable, and ongoing sourcing of medical supplies and drugs
for the Iraqi Ministry from their affiliated manufacturers in the
United States amounts to robust contact with the U.S. forum
through which the foreign defendants purposefully availed
themselves of the benefits of doing business here. The question
is whether plaintiffs’ claims arose out of or related to those
contacts. We hold that they did. The foreign supplier
defendants worked closely with their manufacturer affiliates in
the United States to bring to market in Iraq U.S. drugs and
medical supplies. They did so through the very bribes and gifts
that plaintiffs allege materially supported terrorist acts against
them, including through defendants’ provision of extra, U.S.-
manufactured goods on top of contract quantities. The
resultant medical supply contracts with the Ministry were both
the outlet for the U.S.-origin goods and the vehicle for Jaysh
al-Mahdi’s terrorist fundraising. The relationship between
6
plaintiffs’ claims and the foreign defendants’ forum contacts
supports the court’s exercise of personal jurisdiction.
BACKGROUND
On review of an order granting a motion to dismiss for
failure to state a claim, we must assume the truth of facts
plausibly alleged in plaintiffs’ Third Amended Complaint and
draw all reasonable inferences in plaintiffs’ favor. See Owens
v. BNP Paribas, S.A. (Owens IV), 897 F.3d 266, 272 (D.C. Cir.
2018). Doing so permits us to establish governing propositions
of law—a step that precedes either party’s opportunity to
obtain discovery and test the evidence in the adversarial
process. Even when we do not individually describe them as
allegations, all of the facts on which we rely are from the
complaint, and are therefore assumed true at this stage of the
litigation. As is always the case in this procedural posture, we
recognize that defendants plan to dispute many of the facts
alleged, and plaintiffs cannot ultimately prevail unless they can
support their allegations with evidence.
Plaintiffs allege that Iraq’s Ministry of Health and
Kimadia, the Ministry’s state-owned import company, have a
long history dating back to the Saddam Hussein era of
corrupting Iraq’s medical-goods procurement process.
Plaintiffs cast the involvement of defendants in that past
corruption as an instructive precursor to defendants’
involvement in events giving rise to this case. From 2000-
2003, Kimadia obtained kickbacks on medical-goods contracts
it awarded to international medical goods purveyors under the
United Nations “Oil-for-Food” program. That program was a
humanitarian exception to sanctions on Iraq that allowed the
country to sell some of its oil for the limited purpose of
purchasing essential food and medical supplies for its people.
Kimadia exploited the exception, circumventing the program’s
7
limits by extracting a 10% cash kickback from humanitarian-
goods suppliers. And Kimadia required suppliers to provide
free medical goods—typically 10% in excess of the underlying
contract quantities. Most of the defendants here (or their
predecessors or affiliates) participated in that scheme. An
extensive, independent, U.N.-commissioned inquiry led by
Paul Volcker, former Chairman of the U.S. Federal Reserve,
concluded that the scheme illegally funneled more than $1.5
billion to the Saddam Hussein regime.
In 2003, the United States invaded Iraq. Even before the
invasion, Hezbollah—a Lebanese group designated as a
Foreign Terrorist Organization under U.S. law since 1997—
planned to undermine the expected U.S. presence. From April
2003, Hezbollah’s “chief terrorist mastermind, Imad
Mugniyeh,” collaborated with the powerful Shiite cleric
Muqtada al-Sadr to establish Jaysh al-Mahdi as a fighting force
in Iraq to violently expel the Americans. Third Am. Compl.
¶ 56. As Jaysh al-Mahdi took root and grew, Hezbollah
recruited, trained, and armed its fighters. It was Hezbollah that
provided Jaysh al-Mahdi with explosively formed penetrators
and trained the group’s fighters how to use them. Recognized
as a signature Hezbollah tool, explosively formed penetrators
(Penetrators) are a sophisticated and highly destructive weapon
that Jaysh al-Mahdi used in many of the terrorist attacks on the
plaintiffs in this case. 1
Sadr modeled his movement in Iraq, the “Sadrist Trend,”
on Hezbollah. Each group had a political wing and a terrorist
wing. In each, the two wings were closely connected, sharing
funding and leadership. Jaysh al-Mahdi, the terrorist wing of
1
The odd nomenclature refers to projectiles formed by the explosive
force of the blast that fires them toward their targets. As their name
suggests, they are used to penetrate protective structures such as
armored vehicles. See Third Am. Compl. ¶ 341.
8
the Sadrist Trend, was a deadly force in Iraq. Its attacks likely
killed over five hundred Americans and injured many more.
By July 2007, General David Petraeus concluded that Jaysh al-
Mahdi was “more of a hindrance to long-term security in Iraq”
than was al-Qaeda in Iraq. Third Am. Compl. ¶ 62 (quoting
MICHAEL R. GORDON & GEN. BERNARD E. TRAINOR, THE
ENDGAME: THE INSIDE STORY OF THE STRUGGLE FOR IRAQ,
FROM GEORGE W. BUSH TO BARACK OBAMA 422 (1st ed.
2012)).
In the immediate aftermath of the fall of Saddam Hussein
and close on the heels of the abuses of the Oil-for-Food
program, the Sadrists set their sights on the Iraqi Ministry of
Health as a source of power and funding. The United States
tried unsuccessfully in 2003 and 2004, before the resumption
of full sovereign authority by the Iraqis, to abolish Kimadia and
replace it with a transparent, market-based procurement system
for the Ministry of Health. Instead, in early 2004, Sadrists
began assuming key positions throughout the Ministry and
purging employees disloyal to them. Jaysh al-Mahdi’s
influence thus spread throughout the Ministry. According to
one Ministry insider, at the height of the group’s control, the
agency employed an estimated 70,000 Jaysh al-Mahdi
members. In 2005, after Sadrists won enough seats in the
parliamentary election, Jaysh al-Mahdi solidified full control
over the Ministry.
Jaysh al-Mahdi used the Ministry as a front and
headquarters for its campaign of terrorist violence. For
example, the organization converted the nation’s public
hospitals “into terrorist bases where Sunnis were abducted,
tortured, and murdered.” Third Am. Compl. ¶ 3. The
Ministry’s ambulances transported terrorist “death squads”
around Baghdad. Id. And the Deputy Ministry of Health used
the Ministry’s Facilities Protection Service to torture and kill
9
Sadr’s enemies. Id. Jaysh al-Mahdi’s dominance was obvious
to anyone physically present at Ministry headquarters: “Death
to America” slogans adorned the halls, Jaysh al-Mahdi fighters
freely roamed while Americans could not safely enter, and
Jaysh al-Mahdi’s flag flew at the entrance. Plaintiffs contend
that the Ministry “functioned more as a terrorist apparatus than
a health organization” during the relevant time period. Id.Sadrist control over the Ministry and Kimadia “was at its apex
from late 2004 through 2008,” during which time “there was
no meaningful distinction between the” Ministry and Jaysh al-
Mahdi. Id. ¶ 104. In 2008, a different political party assumed
control of the Ministry, but Jaysh al-Mahdi kept “de facto
control” of the Ministry’s contracting process until at least
2013. Id.
Jaysh al-Mahdi used its control of the Ministry to obtain
financing for its terrorist activities by extracting bribes from
defendants in the medical-goods procurement process.
Between 2004 and 2013, defendants allegedly made corrupt
payments in both cash and goods to Jaysh al-Mahdi, following
the methods for currying favor already familiar from corrupt
dealings with Kimadia under the Oil-for-Food program. First,
defendants made cash bribes (called “commissions”) to Jaysh
al-Mahdi in order to obtain lucrative Kimadia contracts. These
“commissions” were typically 20% of any contract price. “The
Sadrists extracted their ‘commissions’ from foreign medical-
goods companies by using their leverage over multiple points
of the transaction lifecycle.” Third Am. Compl. ¶ 145. Second,
defendants gave the Ministry extra batches of drugs and
medical devices for free on top of the quantities Kimadia paid
for. Free goods packaged alongside the paid goods, but which
nobody expected to appear in the Ministry’s inventory, were
readily available to Jaysh al-Mahdi to sell on the black market.
10
Each corrupt transaction relied on at least two corporate
entities: a manufacturer of the relevant goods and its affiliated
supplier that transacted with Kimadia. Defendants include
both groups (as well as one parent company). The
manufacturer defendants are AstraZeneca Pharmaceuticals LP;
GE Healthcare USA Holding LLC; GE Medical Systems
Information Technologies, Inc.; Ethicon, Inc.; Ethicon Endo-
Surgery, LLC; Janssen Ortho LLC; Ortho Biologics LLC;
Pfizer Pharmaceuticals LLC; Pharmacia & Upjohn Company
LLC; Genentech, Inc.; and Hoffmann-La Roche Inc. The
supplier defendants are AstraZeneca UK Limited; GE Medical
Systems Information Technologies GmbH; Johnson & Johnson
(Middle East) Inc.; Cilag GmbH International; Janssen
Pharmaceutica N.V.; Pfizer Inc.; Wyeth Pharmaceuticals Inc.;
Pfizer Enterprises SARL; and F. Hoffmann-La Roche Ltd. The
parent company defendant is Johnson & Johnson, which
oversaw and supervised the scheme by which its subsidiaries
gave to Jaysh al-Mahdi. There are therefore twenty-one
defendants from five corporate families—AstraZeneca, GE
Healthcare, Johnson & Johnson, Pfizer, and Roche.
The stream of bribes and free goods helped finance Jaysh
al-Mahdi’s terrorist attacks on Americans, including plaintiffs.
Indeed, because Jaysh al-Mahdi fighters were sometimes even
paid in drugs that they then sold for cash on the black market,
some U.S. government personnel in Iraq referred to the
organization as “The Pill Army.” Third Am. Compl. ¶ 9.
Defendants were allegedly aware that their payments were
being used to fund Jaysh al-Mahdi and its terrorist activities.
Defendants’ local agents, often called “Scientific Bureaus,”
finalized their contracts at the Ministry headquarters
surrounded by terrorist propaganda and other indicia of Jaysh
al-Mahdi’s control. Id. ¶¶ 148-49, 180. And, as sophisticated
global businesses, defendants had corporate security and
compliance operations keeping them abreast of risks in the
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markets they serve. As part of those efforts, plaintiffs plausibly
allege, defendants would have become aware of frequent
mainstream media reports describing Sadr’s control of the
Ministry and use of that position for support of terrorist attacks
against Americans.
The complaint draws on many contemporaneous public
accounts. For example, a 2005 New York Times article
explained that “Sadr, the rebellious Shiite cleric who led two
armed uprisings against the American occupation,” benefited
“from the new cabinet lineup” since “the health minister . . .
belong[ed] to Mr. Sadr’s political movement.” 2 The Guardian
reported that “[m]ost of the security guards in the morgue and
the ministry are affiliated to [Sadr’s] militia, the Mahdi army,
one of the militias thought to be behind the sectarian killing
going on in their neighbourhoods.” 3 And CBS News, relying
on a U.S. intelligence report, announced that “[h]ospitals have
become command and control centers for the Mahdi Army
militia,” the “militia is keeping hostages inside some hospitals,
where they are tortured and executed,” and “[t]hey’re using
ambulances to transport hostages and illegal weapons, and
even to help their fighters escape from U.S. forces.” 4 The
media highlighted Sadr’s use of the Ministry’s revenue stream
to fund attacks. For example, NBC News reported that
“[s]upplies and medicine . . . have been siphoned off and sold
elsewhere for profit because of corruption in the Iraqi Ministry
2
Third Am. Compl. ¶ 183 (quoting Robert F. Worth, The Struggle
for Iraq: Politics; Iraq’s Assembly Accepts Cabinet Despite Tension,
N.Y. TIMES (Apr. 29, 2005)) (formatting altered).
3
Third Am. Compl. ¶ 183 (quoting Ghaith Abdul-Ahad, Inside
Iraq’s Hidden War, GUARDIAN (May 19, 2006)) (formatting
altered).
4
Third Am. Compl. ¶ 87 (quoting Melissa McNamara, CBS: Death
Squads in Iraqi Hospitals, CBS NEWS (Oct. 4, 2006)) (formatting
altered).
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of Health,” which was “in the ‘grip’ of the Mahdi Army, the
anti-American militia run by the Shiite cleric Muqtada al-
Sadr.” 5
Plaintiffs each assert two primary-liability and two
secondary-liability claims under the Act, as well as a variety of
state-law claims arising from the same conduct. Plaintiffs’
Third Amended Complaint (at issue here) elaborates their
claims in unusual detail. The complaint on behalf of hundreds
of victims and their families is 588 pages long. It provides
context and spells out connections relevant to the extraordinary
events it describes. And it does so with reference to hundreds
of identified sources. The allegations
are based on an extensive investigation drawing on a
broad array of public and non-public information,
including evidence obtained from more than 12
Confidential Witnesses with direct and indirect
knowledge of the alleged facts; public and non-
public reports, contracts, and emails; U.S. diplomatic
and military cables (as published by WikiLeaks);
Iraqi market data and regulations; public statements
by U.S. and Iraqi government officials; English- and
Arabic-language press reports; and Plaintiffs’ own
recollections.
Third Am. Compl. ¶ 41.
As noted above, the district court dismissed plaintiffs’
claims in full and dismissed the foreign defendants for lack of
personal jurisdiction. The court dismissed plaintiffs’ direct
liability claims by treating the Ministry of Health as an
5
Third Am. Compl. ¶ 183 (quoting Aram Roston & Lisa Myers,
‘Untouchable’ Corruption in Iraqi Ministries, NBC NEWS (July 30,
2007)) (formatting altered).
13
independent intermediary breaking the chain of proximate
causation between defendants’ payments and Jaysh al-Mahdi’s
attacks on plaintiffs. The court dismissed plaintiffs’ secondary,
aiding-and-abetting claims for two reasons. First, it held that
no designated Foreign Terrorist Organization committed,
authorized, or planned most of the relevant attacks, as required
by the statute, because Jaysh al-Mahdi was never so
designated. The court rejected allegations that Jaysh al-Mahdi
acted as a proxy for the designated terrorist organization
Hezbollah by characterizing Hezbollah’s involvement as only
“[g]eneral support or encouragement” to Jaysh al-Mahdi.
Atchley v. AstraZeneca UK Ltd., 474 F. Supp. 3d 194, 211
(D.D.C. 2020). It treated aiding-and-abetting liability as
limited to cases in which the designated organization “itself had
a significant role” in the particular attacks and read the
complaint not to allege such a role. Id. at 212 (emphasis in
original). Second, despite its express acknowledgment of
allegations that “defendants knowingly provided medical
goods to the Ministry for economic gain and were aware those
goods would be used by [Jaysh al-Mahdi] to support terrorist
attacks,” id. at 213, the court held that plaintiffs did not
adequately allege the requisite substantial assistance to Jaysh
al-Mahdi, id. at 214.
The district court also held that the complaint failed to
allege the suit-related contacts between the foreign defendants
and the United States that are constitutionally required to
empower the court to assert specific—or claim-linked—
personal jurisdiction over them. Finally, because the court
dismissed plaintiffs’ federal law claims, it declined pendent
jurisdiction over plaintiffs’ state law claims.
Plaintiffs timely appealed.
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DISCUSSION
We review de novo the district court’s dismissal of the
amended complaint for failure to state a claim, Owens IV, 897
F.3d at 272, and for lack of personal jurisdiction, Livnat v.
Palestinian Auth., 851 F.3d 45, 48 (D.C. Cir. 2017). We
assume the truth of plaintiffs’ factual allegations and draw all
reasonable inferences in plaintiffs’ favor. Although we would
typically begin with personal jurisdiction as the antecedent
question, we instead first consider whether the complaint states
a claim because the personal jurisdiction issue applies to only
six of the twenty-one defendants, and because consideration of
claim-linked jurisdiction benefits from an understanding of
plaintiffs’ claims.
I. Anti-Terrorism Act Claims
The ATA recognizes a private right of action in tort for
United States nationals injured by acts of international
terrorism. It authorizes victims of terrorism to recover against
anyone shown to have played a primary (direct) or secondary
(aiding-and-abetting) role.
Plaintiffs assert both types of liability against defendants.
Needless to say, plaintiffs do not allege that the defendant drug
companies directly maimed or killed plaintiffs; the claim is that
the companies funded and otherwise substantially assisted
those who did. Specifically, plaintiffs contend that defendants
sold their drugs and medical supplies in Iraq by bribing the
Iraqi Ministry of Health and sweetening their deals with extra
goods free of charge during a period when Jaysh al-Mahdi was
known to have commandeered the Ministry and was using it as
a base for terrorist attacks. They allege defendants’ corrupt
payments substantially and predictably aided Jaysh al-Mahdi.
And plaintiffs were among the avowed targets of Jaysh al-
15
Mahdi’s notorious terrorist campaign to intimidate Americans
and drive U.S. forces out of Iraq.
The ATA as originally enacted authorized suit by “[a]ny
national of the United States injured in his or her person,
property, or business by reason of an act of international
terrorism.” 18 U.S.C. § 2333(a). As relevant here, the “by
reason of” language in the statute requires “some causal
connection between the act of international terrorism and the
U.S. national’s injury.” Owens IV, 897 F.3d at 270. The statute
made no explicit reference to tort liability for aiders and
abettors. See id. at 277. Some courts, including this one,
interpreted that silence as barring such liability, applying a
general presumption that Congress does not intend aiding-
abetting liability without expressly saying so. See, e.g., id. at
278; Rothstein v. UBS AG, 708 F.3d 82, 97 (2d Cir. 2013).
In 2016, Congress amended the ATA in the Justice
Against Sponsors of Terrorism Act to spell out a cause of
action against anyone who knowingly provides substantial
assistance to acts of international terrorism. 18 U.S.C.
§ 2333(d). The JASTA’s express objective is
to provide civil litigants with the broadest possible
basis, consistent with the Constitution of the United
States, to seek relief against persons, entities, and
foreign countries, wherever acting and wherever they
may be found, that have provided material support,
directly or indirectly, to foreign organizations or
persons that engage in terrorist activities against the
United States.
JASTA, Pub. L. No. 114-222, § 2(b), 130 Stat. 852, 853 (2016)
(Amendment). The statute names our decision in Halberstam
v. Welch, 705 F.2d 472 (D.C. Cir. 1983), as providing the
“proper legal framework for how such liability should
16
function.” Amendment § 2(a)(5). But even as it cast a wide
net, Congress included an element for secondary liability not
required for primary liability under the ATA: Aiding-and-
abetting liability under the JASTA is confined to injuries in
which a designated Foreign Terrorist Organization,
denominated as such under U.S. law, played a specified role.
See 18 U.S.C. § 2333(d).
We hold that plaintiffs sufficiently allege secondary
liability. And, because the district court erred in dismissing the
direct liability claims on an erroneous theory of proximate
causation, we also reverse that holding and remand for further
consideration of whether plaintiffs otherwise adequately plead
direct liability.
A. Secondary Liability
Secondary liability for aiding and abetting “reaches
persons who do not engage in the proscribed activities at all,
but who give a degree of aid to those who do.” Cent. Bank of
Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S.
164, 176 (1994). As relevant here, the ATA as amended by the
JASTA provides for secondary liability against “any person
who aids and abets, by knowingly providing substantial
assistance” to “an act of international terrorism.” 18 U.S.C.
§ 2333(d)(2). Aiding-and-abetting liability is confined to “an
injury arising from an act of international terrorism committed,
planned, or authorized by an organization that had been
designated as a foreign terrorist organization under section 219
of the Immigration and Nationality Act (8 U.S.C. 1189).” Id.Plaintiffs thus need to plead three statutory elements: (1)
an injury arising from an act of international terrorism; (2) that
the act was committed, planned, or authorized by a designated
Foreign Terrorist Organization; and (3) that defendants aided
or abetted an act of international terrorism by knowingly
17
providing substantial assistance. As discussed below,
Halberstam, in turn, spells out three elements that establish the
referenced aiding or abetting—wrongful acts, general
awareness, and substantial assistance—and further guides our
consideration by reference to six “substantial assistance”
factors. See 705 F.2d at 487-88.
Within the three statutory elements, defendants do not
contest the allegations that plaintiffs each suffered injury from
an act of international terrorism. They dispute the second and
third elements: whether plaintiffs allege that Hezbollah
“committed, planned, or authorized” those acts, and that
defendants’ corrupt payments to Jaysh al-Mahdi substantially
assisted those attacks.
i. Plaintiffs allege that Jaysh al-Mahdi’s terrorist
attacks were “committed, planned, or
authorized by” Hezbollah
Secondary liability under the ATA is confined to injuries
arising from acts of terrorism “committed, planned, or
authorized by” a designated Foreign Terrorist Organization, 18
U.S.C. § 2333(d)(2), which is a special designation made by
the Secretary of State under the Immigration and Nationality
Act, 8 U.S.C. § 1189. In many ATA cases, it is not disputed
that the challenged acts were committed by a Foreign Terrorist
Organization formally designated as such under U.S. law. See,
e.g., Honickman v. BLOM Bank SAL, 6 F.4th 487, 490-91 (2d
Cir. 2021) (Hamas); Kaplan v. Lebanese Canadian Bank, SAL,
999 F.3d 842, 848 (2d Cir. 2021) (Hezbollah). Even while the
United States knew of Jaysh al-Mahdi as a terrorist actor,
however, it did not designate it as a Foreign Terrorist
Organization. Plaintiffs contend that was due to “a concern
among some U.S. policymakers about the best way to influence
Sadr,” and “caution against overly antagonizing his followers”
18
in order to “preserv[e] flexibility for members of the U.S.
government to engage with the Sadrists if and when doing so
would serve the national interest.” Third Am. Compl. ¶ 355.
Defendants acknowledge that a joint Hezbollah–Jaysh al-
Mahdi cell allegedly committed twenty-two of the attacks at
issue here, injuring thirty-five of the direct victims in this case.
The parties debate whether allegations that one of those attacks
sparked a weeks-long battle that harmed an additional fifty-
eight victims suffice to establish the requisite involvement of
Hezbollah. For most of the attacks at issue, however, plaintiffs
allege they were committed by Jaysh al-Mahdi with Hezbollah
more in the background; as to the plaintiffs injured by those
attacks, the first claim of secondary liability (Count One)
depends on the allegations that Hezbollah planned or
authorized the attacks even as Jaysh al-Mahdi fighters were the
direct perpetrators. Plaintiffs’ alternative theory (in Count
Two) is that Jaysh al-Mahdi and Hezbollah created a RICO
enterprise or campaign that functioned as the “act” of
international terrorism that defendants aided. We do not
directly address plaintiffs’ RICO theory, which seeks the same
relief, in view of our remand on the more straightforward
aiding-and-abetting claim.
In evaluating allegations of Hezbollah’s involvement in
attacks it did not also commit, we must consider what Congress
meant by requiring that a Foreign Terrorist Organization
“planned” or “authorized” the relevant acts of international
terrorism. Plaintiffs contend that to “plan” includes “to arrange
the parts of: [to] design.” Appellants Br. at 42 (quoting Plan,
Merriam-Webster, https://www.merriam-webster.com/
dictionary/plan (capitalization altered)). And they assert that
to “authorize” means “to endorse, empower, justify, or permit”
another’s acts through “some recognized or proper authority
(such as custom, evidence, personal right, or regulating
19
power).” Id. at 44 (quoting Authorize, Merriam-Webster,
https://www.merriam-webster.com/diction-ary/authorize).
Defendants offer no contrary reading of those terms; instead,
they focus on their contention that Jaysh al-Mahdi “on its own”
committed “more than 90% of the attacks at issue.” Appellees
Br. at 41.
Our analysis is informed by Congress’s statutory findings
in light of the realities of modern terrorism. Congress called
on U.S. courts to provide litigants with the “broadest possible
basis” for relief under the JASTA, reaching anyone who
provides support, whether “directly or indirectly.”
Amendment § 2(b). To that end, the statutory text is not
confined to acts of international terrorism “committed” by
designated Foreign Terrorist Organizations, but also reaches
those committed by someone else if they were “planned” or
“authorized” by a designated group. It is well known that
terrorist organizations, and Hezbollah in particular, often
operate by proxy. See Third Am. Compl. ¶ 360 (explaining that
“Hezbollah has coordinated terrorist attacks around the world
primarily by acting through terrorist proxies”); Amicus Br. of
44 Former Military Officers, Intelligence Officials, and
Analysts at 20 (explaining that “[m]any designated
Organizations, including . . . Hezbollah, use proxies to attack
Americans”). Congress thereby provided for aiding-and-
abetting liability under the JASTA for those who aid or abet
attacks in cases in which a designated terrorist group stands
behind the fighters who pull the trigger or detonate the device.
Decisions in other ATA cases support aiding-and-abetting
liability on the facts alleged here. In cases with facts like those
before us, courts have held the requirement met. The district
court in Bartlett v. Société Générale de Banque Au Liban SAL
held that, where “third party paramilitary groups” committed
the acts that harmed the plaintiffs, allegations that “Hezbollah
20
trained the Iraqi militias, . . . controlled and directed those
militias, . . . planned the Attacks, . . . and designed and
emplaced the weapons used in the Attacks” sufficed to
establish the Foreign Terrorist Organization’s role for purposes
of aiding-and-abetting liability. No. 19-CV-00007, 2020 WL
7089448, at *8 (E.D.N.Y. Nov. 25, 2020) (internal quotation
marks and citation omitted). Similarly, in Freeman v. HSBC
Holdings PLC, 413 F. Supp. 3d 67, 96-97 (E.D.N.Y. 2019), the
attacks themselves were carried out by an undesignated
terrorist group. The court held that allegations that “describe
Hezbollah as deeply involved in supporting and coordinating
an extensive campaign of terrorist activity against American
citizens in Iraq” permitted a reasonable inference “that a
designated FTO, namely Hezbollah, was responsible for
committing, planning, or, at the very least, authorizing the
attacks that injured Plaintiffs.” Id. at 97. In a situation
markedly different from this case, in contrast, courts have held
that the Pulse Night Club shooting by a “self-radicalized”
individual allegedly inspired in part by “online content” from
ISIS involved only a “tenuous connection” to ISIS insufficient
to show the attack was “committed, planned, or authorized” by
the Foreign Terrorist Organization. Crosby v. Twitter, Inc., 921
F.3d 617, 626 (6th Cir. 2019); see Colon v. Twitter, Inc., 14
F.4th 1213, 1222-23 (11th Cir. 2021) (same); see also Gonzalez
v. Google LLC, 2 F.4th 871, 911-12 (9th Cir. 2021) (same for
the San Bernardino attack).
Plaintiffs plausibly allege that Hezbollah both planned and
authorized the attacks against them. The complaint describes
in detail how Hezbollah acted through Jaysh al-Mahdi with the
specific goal of harming Americans in Iraq. Hezbollah had
been closely involved with Jaysh al-Mahdi since its founding.
The chief terrorist mastermind of Hezbollah, Imad Mugniyeh,
worked with Sadr to found Jaysh al-Mahdi with the shared goal
of killing Americans and driving U.S. forces out of Iraq. As
21
early as January 2004, Hezbollah sent nearly 800 agents to Iraq
to direct Jaysh al-Mahdi’s terrorist campaign. Mugniyeh
continued to supervise Jaysh al-Mahdi’s campaign until his
death in 2008, at which time he was replaced by other
Hezbollah operatives. Plaintiffs identify by name numerous
senior Hezbollah operatives who helped supervise Jaysh al-
Mahdi’s attacks. And the U.S. Treasury Department in 2009
“formally recognized the links between Hezbollah and Jaysh
al-Mahdi when it designated [a] Jaysh al-Mahdi
commander . . . as a Specially Designated Global Terrorist,”
noting that Hezbollah prepared Jaysh al-Mahdi to fight
Coalition Forces. Third Am. Compl. ¶ 375. The Department
did so again in 2012 when it found that Hezbollah helped form,
train, and advise militants in Jaysh al-Mahdi. Id. ¶ 376.
Jaysh al-Mahdi itself proclaimed its identification with
Hezbollah: Sadr declared that he was “Hezbollah’s ‘striking
arm in Iraq,’” 6 and publicly acknowledged Jaysh al-Mahdi’s
“formal links with Hizbollah.” 7 Jaysh al-Mahdi fighters
marched under Hezbollah flags, waved Hezbollah banners at
demonstrations, and shouted chants including “Mahdi Army
and Hezbollah are one” 8 and “we are Hezbollah.” 9
6
Third Am. Compl. ¶ 371 (quoting Wire, Iraqi Cleric Calls for
Alliance with Hezbollah, Hamas, BUFFALO NEWS (Apr. 2, 2004),
http://buffalonews.com/2004/04/02/iraqi-cleric-calls-for-alliance-
with-hezbollah-hamas/).
7
Third Am. Compl. ¶ 371 (quoting Nizar Latif & Phil Sands, Mehdi
Fighters ‘Trained by Hizbollah in Lebanon’, INDEPENDENT (Aug.
20, 2007)).
8
Third Am. Compl. ¶ 373 (quoting Iraq’s Shia March for Hezbollah,
AL-JAZEERA (Aug. 4, 2006), www.aljazeera.com/archive/
2006/08/200849131615702691.html).
9
Third Am. Compl. ¶¶ 15, 373.
22
Hezbollah’s alleged involvement in planning the attacks
that injured and killed plaintiffs was deep and far reaching. Its
provision of weaponry, training, and knowledge to Jaysh al-
Mahdi with the intent of harming Americans in Iraq constituted
a “plan.” Hezbollah brought Jaysh al-Mahdi recruits to Iran
and Lebanon and trained them to use their methods against
American forces in Iraq. The training covered the use of basic
weapons, improvised explosive devices, Penetrators, rockets,
and more. Hezbollah spelled out in a “planning guide” how
Jaysh al-Mahdi fighters should deploy the training and
weaponry it provided. Third Am. Compl. ¶¶ 399, 402. The
complaint also draws geographical connections between
Hezbollah’s presence and the attacks at issue in this case,
detailing that Hezbollah coordinated with Jaysh al-Mahdi
terrorists in specific locations where plaintiffs were injured or
killed.
Hezbollah’s planning role was particularly evident in
attacks using Penetrators. Penetrators used in Iraq during this
period were “exclusively associated with” Hezbollah. Third
Am. Compl. ¶ 395 (quoting Minute, Deputy Chief of
Assessments Staff to Sir Nigel Sheinwald, Iraq: Lebanese
Training including manuscript comment Blair (May 3, 2007)).
Hezbollah planned the Penetrator attacks by giving assistance
to Jaysh al-Mahdi regarding Penetrator design, helping Jaysh
al-Mahdi manufacture those weapons, teaching Jaysh al-Mahdi
fighters how to use them, identifying specific target locations
in Iraq, and sending senior Hezbollah terrorists to coordinate
the Penetrator attacks. In other words, Hezbollah did not just
provide deadly Penetrators, it then “instructed Jaysh al-Mahdi
to use [Penetrators] against American soldiers” and taught
them how to do so. Id. ¶ 395. The complaint explains the
tactics for other types of attacks as well, linking them to
corresponding Hezbollah training and direction. Plaintiffs’
23
allegations readily meet the minimum required to plead that
Hezbollah “planned” the attacks.
The allegations that Hezbollah exerted religious, personal,
and operational authority over Jaysh al-Mahdi show that it
“authorized” the attacks as well. Hezbollah asserted religious
authority over Jaysh al-Mahdi fighters by, for example, issuing
a fatwa declaring a religious duty to attack Americans in Iraq.
It exerted personal authority over Sadr, who openly aligned
himself with Hezbollah. And Hezbollah exercised its
command over Jaysh al-Mahdi by training and directing its
fighters, who swore fealty to Hezbollah. Those allegations are
legally sufficient at this stage to support the contention that
Hezbollah authorized the attacks.
Those and many similar allegations of close integration
and allegiance suffice to plausibly plead that Hezbollah
planned and authorized Jaysh al-Mahdi’s challenged attacks.
ii. Plaintiffs allege defendants aided and abetted
Jaysh al-Mahdi’s attacks against plaintiffs by
“knowingly providing substantial assistance”
to those acts
We next address whether plaintiffs’ allegations support
their claim that defendants may be liable for “aid[ing] and
abet[ting], by knowingly providing substantial assistance” to
“act[s] of international terrorism.” 18 U.S.C. § 2333(d)(2).
In enacting the JASTA, Congress expressly embraced the
aiding-and-abetting analysis in Halberstam v. Welch—a
unanimous opinion by Judge Wald, joined by Judges Scalia,
and Bork—as providing “the proper legal framework for how
[aiding-and-abetting] liability should function” under the Act.
Amendment § 2(a)(5). Halberstam sustained Linda
Hamilton’s civil liability for aiding and abetting Bernard
24
Welch’s murder of Michael Halberstam during Welch’s
burglary of Halberstam’s home. 705 F.2d at 474. Hamilton
was not even aware that Welch, her romantic partner, was
going to burglarize Halberstam, much less murder him, nor was
she present at the crime scene. Id. at 475-76, 487-88. It
sufficed that she was a “passive but compliant partner” who
lived with Welch during his extensive series of lucrative
burglaries, id. at 474-75; assisted him in his “business” with
back-office tasks like bookkeeping, inventory, and banking, id.
at 475, 487; and benefited from the ill-gotten gains, id. at 487.
Hamilton never did anything violent. Id. at 475-76, 488. But
Welch’s evening absences and access to significant funds
despite the couple’s lack of typical employment would have
suggested to Hamilton that Welch “was involved in some kind
of personal property crime at night.” Id. at 488. She knew
“something illegal was afoot.” Id. at 486. In sum, under the
circumstances, Hamilton’s office tasks constituted substantial
assistance, and she had the requisite “general awareness of her
role in a continuing criminal enterprise.” Id. at 488. Since
“violence” is a “foreseeable risk” of that enterprise, we
sustained Hamilton’s liability as an aider and abettor to the
murder. Id.Halberstam sets out three elements of aiding-and-abetting
liability:
(1) the party whom the defendant aids must perform
a wrongful act that causes an injury;
(2) the defendant must be generally aware of his role
as part of an overall illegal or tortious activity at the
time that he provides the assistance;
(3) the defendant must knowingly and substantially
assist the principal violation.
25
705 F.2d at 477. Halberstam further identifies six factors
bearing on the third, substantial-assistance element, considered
below. Id. at 483-84.
As to the first element, there is no dispute on this appeal
that wrongful acts caused plaintiffs’ injuries. Defendants argue
that plaintiffs inadequately plead the second and third
requirements, and the district court based its dismissal on its
determination that plaintiffs fail to plead substantial assistance
to acts of international terrorism under the third requirement.
a. The Halberstam Elements
With no challenge before us to the first Halberstam
element, we proceed to consider general awareness and
substantial assistance. We conclude that plaintiffs have
plausibly alleged both elements.
1. General Awareness
Halberstam explains that a “defendant must be generally
aware of his role as part of an overall illegal or tortious activity
at the time he provides the assistance.” 705 F.2d at 487-88.
Under the ATA, “a defendant may be liable for aiding and
abetting an act of terrorism if it was generally aware of its role
in an ‘overall illegal activity’ from which an ‘act of
international terrorism’ was a foreseeable risk.” Kaplan, 999
F.3d at 860 (quoting Halberstam, 705 F.2d at 488). There is
no specific intent requirement. Id. at 863. Whether a
defendant’s support “suffices to establish general awareness is
a fact-intensive inquiry.” Id. at 860. And Halberstam’s use of
“generally” as a modifier for “aware” imparts “a connotation
of something less than full, or fully focused, recognition.” Id.
at 863. Thus, a “defendant need not be generally aware of its
role in the specific act that caused the plaintiff’s injury; instead,
it must be generally aware of its role in an overall illegal
26
activity from which the act that caused the plaintiff’s injury was
foreseeable.” Honickman, 6 F.4th at 496 (emphasis in original)
(citing Halberstam, 705 F.2d at 477, 488).
In considering whether plaintiffs have plausibly alleged
defendants’ general awareness of their role in the overall illegal
activity, we bear in mind the challenges of establishing a
defendant’s state of mind without the benefit of discovery. “A
complaint is allowed to contain general allegations as to a
defendant’s knowledge.” Kaplan, 999 F.3d at 864. At the
same time, discovery into a party’s state of mind is intrusive
and should not proceed based on bare, conclusory allegations.
What plaintiffs must plead are “allegations of the facts or
events they claim give rise to an inference” that defendants
acted with the requisite mental state. Id. Plaintiffs have met
that burden here.
The complaint plausibly alleges that defendants were
aware of reports extensively documenting both Jaysh al-
Mahdi’s domination of the Ministry and its mission to engage
in terrorist acts. For example, the media reported in April 2005
that the health minister was a devotee of Sadr’s movement even
as Sadr led armed rebellions against American troops. Cf.
Kaplan, 999 F.3d at 864-65 (sustaining awareness allegations
based on Hezbollah’s statements in “press conferences and
news media interviews”). Other reports highlighted Jaysh al-
Mahdi’s abuse of the Ministry’s resources. Defendants would
have been aware of such reports because each defendant had a
corporate security group that would have tracked them as part
of its due diligence. See id. at 865 (highlighting that banks’
due diligence would uncover public reporting). Defendants
also sent their agents into the Ministry to finalize deals on their
behalf. Inside the Ministry, armed terrorist fighters circulated
openly and anyone who entered could see Jaysh al-Mahdi’s
distinctive flag, weapons, Sadr posters, and “Death to
27
America” slogans on display. Yet, in dealing with the
notoriously corrupt Ministry under the control of a terrorist
group, defendants facilitated their transactions with bribes and
structured them to include free goods of great value in funding
terrorist acts.
Those allegations support an inference that defendants
were generally aware they were engaged in illegal activity. In
Halberstam, Linda Hamilton’s back-office work supported her
liability for murder because she had reason to suspect her
partner was involved in nighttime property crimes, and the fact
that she performed her otherwise-innocuous services for him
“in an unusual way under unusual circumstances for a long
period of time” suggested her general awareness of illegality.
705 F.2d at 487. Here, the corrupt provision of free goods and
cash bribes to an entity defendants knew was engaged in anti-
American acts of terrorism and was using its takeover of the
Ministry to fund and facilitate those terrorist acts supports the
inference that they were generally aware of their role in activity
foreseeably lending support to acts of international terrorism.
Cf. Siegel v. HSBC N. Am. Holdings, Inc., 933 F.3d 217, 224
(2d Cir. 2019) (rejecting aiding-and-abetting claim against
defendant bank that provided financial services to Saudi bank
with known links to terrorism where plaintiffs “failed to allege
that [defendant bank] was aware that by providing banking
services” it was supporting a terrorist organization, “much less
assuming a role in [its] violent activities”). We next weigh the
six “substantial assistance” factors.
2. Knowing and Substantial Assistance
For the third aiding-and-abetting element—whether the
defendant “knowingly and substantially assist[ed] the principal
violation,” 705 F.2d at 477—Halberstam identifies six factors
to weigh: (i) the nature of the act assisted, (ii) the amount and
28
kind of assistance, (iii) the defendants’ presence at the time of
the tort, (iv) the defendants’ relationship to the tortious actor,
(v) the defendants’ state of mind, and (vi) the duration of
assistance, id. at 483-84. No factor alone is dispositive, and the
weight of each varies with the circumstances of the particular
claim. What is required is that, on balance, the relevant
considerations show that defendants substantially assisted the
acts of terrorism. See, e.g., Halberstam, 705 F.2d at 483-84,
488.
Here, the “knowledge component . . . requires that the
defendant ‘know[]’ that it is providing ‘assistance,’ 18 U.S.C.
§ 2333(d)(2)—whether directly to the FTO or indirectly
through an intermediary.” Kaplan, 999 F.3d at 863-64
(alteration in original). “If the defendant knowingly—and not
innocently or inadvertently—gave assistance, directly or
indirectly, and if that assistance was substantial,” then the
“knowing and substantial assistance” element of aiding and
abetting is sufficiently established. Id. at 864. Defendants do
not argue that their provision of cash and free goods was in any
way accidental, so the assistance was given knowingly. We
next weigh the six “substantial assistance” factors.
i. Nature of the act assisted. The nature of the act
assisted “dictates what aid might matter, i.e., be substantial.”
Halberstam, 705 F.2d at 484. The nature of the act assisted in
Halberstam was the burglary enterprise, and Hamilton’s “aid
in transforming large quantities of stolen goods into
‘legitimate’ wealth” was “indisputably important” to it. Id. at
488. Here, the acts assisted are Jaysh al-Mahdi’s violent
terrorizing, maiming, and killing of U.S. nationals in Iraq.
“Financial support is ‘indisputably important’ to the operation
of a terrorist organization, and any money provided to the
organization may aid its unlawful goals.” See Gonzalez, 2
F.4th at 905 (quoting Halberstam, 705 F.2d at 488). We further
29
explained in Halberstam that, in assessing the “nature of the
act” criterion, “a court might also apply a proportionality test
to particularly bad or opprobrious acts, i.e., a defendant’s
responsibility for the same amount of assistance increases with
the blameworthiness of the tortious act or the seriousness of the
foreseeable consequences.” 705 F.2d at 484 n.13. The
extraordinary blameworthiness of Jaysh al-Mahdi’s terrorist
attacks increases the responsibility of persons acting as
defendants allegedly did. In relation to such vicious acts, even
“relatively trivial” aid could count as substantial. Id. This
factor supports substantiality.
ii. Amount and kind of assistance. We next consider the
“amount and kind of assistance given [to] the wrongdoer.”
Halberstam, 705 F.2d at 484 (formatting modified). In
Halberstam, the court held that, “although the amount of
assistance Hamilton gave Welch may not have been
overwhelming as to any given burglary in the five-year life of
this criminal operation, it added up over time to an essential
part of the pattern.” Id. at 488 (formatting modified). Here,
the complaint alleges that defendants gave Jaysh al-Mahdi at
least several million dollars per year in cash or goods over a
period of years. Cf. Siegel, 933 F.3d at 225 (lack of allegations
that terrorist group ever received funds defendant bank
provided to Saudi bank weighed against “substantial
assistance”).
We reject the contention that assistance must be shown to
have been indispensable to the injurious acts for this factor to
weigh in support of liability. According to defendants, because
Iran provided a substantial part of Jaysh al-Mahdi’s funding
and weapons, any aid from defendants was immaterial. That is
incorrect. Nothing in the JASTA suggests Congress intended
secondary liability to extend only to the top funder of a terrorist
action. As alleged, defendants’ actions were a considerable
30
source of funding that helped the organization commit multiple
terrorist acts. Because defendants’ alleged assistance was at
least significant, this factor supports substantiality.
iii. Presence at the time of the tortious conduct. In
Halberstam, Linda Hamilton was “not present at the time of the
murder or even at the time of any burglary,” but because “the
success of the tortious enterprise clearly required expeditious
and unsuspicious disposal of the goods,” we nonetheless
concluded that “Hamilton’s role in that side of the business was
substantial.” 705 F.2d at 488 (formatting modified). Like
Hamilton, these defendants were not physically present at the
attacks on plaintiffs. This factor cuts against counting
defendants’ supply of cash and goods to Jaysh al-Mahdi as
substantial assistance.
iv. Relationship. The fourth factor asks about defendants’
“relation to the tortious actor.” Halberstam, 705 F.2d at 488(formatting modified). In Halberstam, we identified this factor
as calling for consideration of whether the abettor’s “position
of authority [gives] greater force to his power of suggestion.”
Id. at 484. We gave this factor “a low priority in our calculus”
in that case after “a careful balancing” because Hamilton’s
romantic relationship with the tortfeasor made us “wary of
finding a housemate civilly liable on the basis of normal
spousal support activities.” Id. at 488. Unlike in Halberstam,
there is no special relationship here between defendants and the
principal tortfeasors that would give us pause before
recognizing liability. We treat this factor as neither supporting
nor detracting from substantiality.
v. State of mind. This factor favors aiding-and-abetting
liability because defendants’ assistance was knowingly
provided with a general awareness that it supported the terrorist
acts of a notoriously violent terrorist organization that had
31
overrun the Ministry of Health. See Halberstam, 705 F.2d at
477, 488. Hamilton’s “knowing” assistance “evidence[d] a
deliberate long-term intention to participate in an ongoing
illicit enterprise” of “some type of personal property crime at
night.” Id. at 488. That sufficed to support her aiding-and-
abetting liability for the murder, because violence is a “natural
and foreseeable consequence” of such property crimes. Id. To
be sure, this factor more powerfully supports aiding-and-
abetting liability of defendants who share the same goals as the
principal or specifically intend the principal’s tort, but such
intent is not required. See Linde v. Arab Bank, PLC, 882 F.3d
314, 329 & n.10 (2d Cir. 2018). Knowledge of one’s own
actions and general awareness of their foreseeable results, not
specific intent, are all that is required.
The district court itself acknowledged plaintiffs’
allegations that “defendants knowingly provided medical
goods to the Ministry for economic gain and were aware those
goods would be used by [Jaysh al-Mahdi] to support terrorist
attacks.” Atchley, 474 F. Supp. 3d at 213. That
acknowledgement alone required the court to find this factor
supported plaintiffs’ claim. This is especially so because
Halberstam held that the “particularly offensive nature of an
underlying offense might also factor in the fifth criterion, the
‘state of mind’ of the defendant.” 705 F.2d at 484 n.13.
Defendants’ alleged awareness that, by bribing the Ministry,
they were funding an entity’s terrorist attacks on Americans in
Iraq drives home the substantial character of their aid.
The district court instead counted this factor against
plaintiffs by erroneously discerning a “one in spirit”
requirement in Halberstam: It thought the claim fell short
because the “allegations do not even suggest defendants were
‘one in spirit’ with [Jaysh al-Mahdi’s] desire to kill American
citizens in Iraq or that defendants intended to help [Jaysh al-
32
Mahdi] succeed in doing so.” 474 F. Supp. 3d at 213. That
was error. See Amicus Br. of Law Professors at 27-29.
Congress did not limit secondary liability to those who are
“one in spirit” with terrorists, or who substantially assist
terrorism with a specific desire to advance terroristic outcomes.
A specific intent, or “one in spirit,” requirement is contrary to
Halberstam as incorporated into the JASTA. The reference to
“one in spirit” appears in Halberstam in a description of
another case in which the “defendant’s abusive cheering of the
battery showed he was one in spirit with the assaulter[,]”
adding factual support to the secondary liability in that case.
705 F.2d at 484 (citing Rael v. Cadena, 93 N.M. 684, 604 P.2d
822 (1979)). We upheld Hamilton’s liability, however, even
though she knew nothing about the murder so she could not
have specifically intended it; it sufficed that she was generally
aware of Welch’s campaign of property crimes, which
foreseeably posed a risk of such violence. Id. at 488. Aiding-
and-abetting liability reaches actors like Linda Hamilton, who
may seek only financial gain but pursue it with a general
awareness of aiding some type of tort or crime. For their part,
defendants do not press a requirement that aiders be “one in
spirit” with the principal, but suggest that the absence of such
a finding should count in our factor-balancing. Oral Arg. Rec.
1:13:03-1:13:55. We hold that, on balance, defendants’ alleged
state of mind supports substantial assistance.
vi. Duration. Under Halberstam, “[t]he length of time an
alleged aider-abettor has been involved with a tortfeasor almost
certainly affects the quality and extent of their relationship and
probably influences the amount of aid provided as well;
additionally, it may afford evidence of the defendant’s state of
mind.” 705 F.2d at 484. The parties argue over whether the
complaint alleges that defendants’ aid spanned as much as a
decade or as little as four years. Even on defendants’ reading,
33
four years is a significant duration. See id. at 488 (noting that
duration “strongly influenced [the court’s] weighing of
Hamilton’s assistance,” when the scheme lasted five years).
The allegations do not describe a one-off transaction by a firm
unfamiliar with its counterparty, but a set of enduring, carefully
cultivated relationships consisting of scores of transactions
over a period of years. Here, duration leans decidedly in
plaintiffs’ favor.
In sum, assessing the allegations of the complaint under
the Halberstam standard, we hold that they plausibly plead
knowing assistance that was sufficiently “substantial” to state
a secondary liability claim under the JASTA. Plaintiffs have
alleged that defendants’ financial support was important to the
development of Jaysh al-Mahdi, that defendants knowingly
gave significant funding to Jaysh al-Mahdi, and that they did
so over the course of several years with at least general
awareness of their role in Jaysh al-Mahdi’s terrorist activities.
Under Halberstam, that is enough.
b. “Directly or Indirectly”
The district court also faulted the aiding-and-abetting
claim for want of allegations that defendants substantially
assisted Jaysh al-Mahdi “directly.” Atchley, 474 F. Supp. 3d at
213; see also id. at 212 (“But plaintiffs allege that defendants
provided medical goods and devices to the Ministry, not” Jaysh
al-Mahdi). It read the complaint to allege that bribes and gifts
reached Jaysh al-Mahdi only indirectly, through the Ministry.
Id. at 212. And indirect aid, the court thought, cannot support
aiding-and-abetting liability under the Act. Id. at 212-13. That
is doubly wrong.
First, the complaint contradicts the court’s factual premise.
It plausibly alleges that Jaysh al-Mahdi controlled the Ministry.
Bribes and gifts coming into the Ministry under Jaysh al-
34
Mahdi’s command were bribes and gifts to Jaysh al-Mahdi.
The district court misread the complaint insofar as it inferred
that, in their allegedly corrupt dealings with the Ministry of
Health, defendants somehow avoided dealing with the people
in charge there—the Jaysh al-Mahdi terrorists. See Part I-B,
infra.
Second, the court applied an incorrect legal standard. The
statute imposes no directness requirement. In defining
secondary liability in § 2333(d)(2), Congress purposefully
omitted any requirement of “direct” assistance. Its enacted
findings drive home the point, declaring that the JASTA
authorizes claims against defendants who provide “support,
directly or indirectly, to [terrorists].” Amendment § 2(b)
(emphasis added). The bipartisan U.S. Senators’ amicus brief
underscores that judicially engrafting a directness requirement
would undermine the Act by “preclud[ing] liability when a
defendant knowingly aids-and-abets (or conspires with) an
individual terrorist agent, alter ego, or proxy of a terrorist
organization that did not himself or herself commit the acts of
terrorism at issue.” Amicus Br. of Eight United States Senators
at 23-24.
Defendants respond that the Amendment’s preamble
cannot change the statutory text, which in their view “plainly
requires that the defendant ‘aid and abet’ the ‘person who
committed’ the terrorist act.” Appellees Br. at 45. To the
contrary, the text provides that “liability may be asserted as to
any person who aids and abets, by knowingly providing
substantial assistance, or who conspires with the person who
committed such an act of international terrorism.” 18 U.S.C.
§ 2333(d)(2). It thus applies to both “any person who aids and
abets . . . an act of international terrorism,” and anyone who
“conspires with the person who committed such an act.” Id.;
see also Kaplan, 999 F.3d at 855. Put another way, the JASTA
35
“does not say that for aiding-and-abetting liability to be
imposed a defendant must have given ‘substantial assistance
to’ the principal; it simply says the defendant must have given
‘substantial assistance.’” Kaplan, 999 F.3d at 855. Substantial
assistance to the ultimate deed—whether provided directly or
indirectly—is enough.
Even assuming the textual reference to “the person” who
committed the act were meant to apply to aiding-and-abetting
as well as conspiracy claims, it fails to do what defendants say.
As a practical matter, one can substantially assist “a person”
without doing so directly. Congress’s enacted findings in the
JASTA explain that it had such situations in mind: The statute
provides for secondary liability to account for the fact that
“[s]ome foreign terrorist organizations, acting through
affiliated groups or individuals, raise significant funds outside
of the United States for conduct directed and targeted at the
United States.” Amendment § 2(a)(3) (emphasis added). In
providing that aiding people or entities that raise money they
funnel to terrorist groups may be as off-limits as directly aiding
the groups themselves, Congress anticipated aiding-and-
abetting liability of indirect funders.
In sum, we hold that plaintiffs have stated a secondary
liability claim under the JASTA. They have adequately alleged
that Jaysh al-Mahdi’s terrorist acts against plaintiffs were
committed, planned, or authorized by Hezbollah. They have
also adequately alleged that defendants aided and abetted those
attacks by knowingly providing substantial assistance to Jaysh
al-Mahdi with the general awareness that Jaysh al-Mahdi
committed terrorist attacks, foreseeably including the attacks
against plaintiffs. We next consider plaintiffs’ more
challenging claim that defendants are also directly liable under
the ATA.
36
B. Direct Liability
Plaintiffs separately claim that defendants may be held
directly liable for acts of international terrorism they did not
merely aid, but themselves committed. That claim requires
allegations that plaintiffs, as nationals of the United States,
were “injured in [their] person, property, or business by reason
of an act of international terrorism.” 18 U.S.C. § 2333(a). It is
not contested that plaintiffs are U.S. nationals. The parties
dispute whether plaintiffs allege injury by reason of acts of
international terrorism—i.e., whether defendants’ alleged
financing, 18 U.S.C. § 2339C, and material support, 18 U.S.C.
§ 2339A, of Jaysh al-Mahdi was “international terrorism”
within the meaning of 18 U.S.C. § 2331(1). And they dispute
whether defendants’ conduct proximately caused plaintiffs’
injuries. The district court dismissed the claim for failure to
plead proximate causation without addressing the scope of “act
of international terrorism” under the statute. See Atchley, 474
F. Supp. 3d at 209. We hold that plaintiffs have adequately
alleged proximate causation and remand for the district court
to consider in the first instance whether plaintiffs have also
alleged that defendants themselves committed any acts of
international terrorism within the meaning of the ATA.
To plead proximate causation, plaintiffs must “plausibly
allege (1) that [defendants’] acts were ‘a substantial factor in
the sequence of events’ that led to their injuries and (2) that
those injuries” were “‘reasonably foreseeable or anticipated as
a natural consequence of’ [defendants’] conduct.” Owens IV,
897 F.3d at 273 (formatting modified) (quoting Owens v.
Republic of Sudan (Owens III), 864 F.3d 751, 794 (D.C. Cir.
2017), vacated on other grounds sub nom. Opati v. Republic of
Sudan, 140 S. Ct. 1601 (2020)). Those requirements are met
by allegations of “some reasonable connection between the act
or omission of the defendant and the damage which the plaintiff
37
has suffered.” Owens III, 864 F.3d at 794 (quoting Kilburn v.
Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123,
1128 (D.C. Cir. 2004)). Proximate causation functions to
“eliminate[] the bizarre,” id. (quoting Jerome B. Grubart, Inc.
v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 536 (1995)),
by precluding liability based on an “attenuated” causal link
“more aptly described as mere fortuity,” id. (quoting Paroline
v. United States, 572 U.S. 434, 445 (2014)).
With respect to the first element, allegations that
defendants’ funding substantially assisted Jaysh al-Mahdi’s
terrorist campaign in Iraq suffice to meet the requirement that
defendants’ acts were a “substantial factor” in the events
leading to plaintiffs’ injuries. In Owens III, we upheld a
finding that Sudan had proximately caused two al-Qaeda
bombings of embassies in other countries based on proof that
Sudan had given al-Qaeda substantial assistance that helped it
“grow its membership” and “develop its capabilities.” 864
F.3d at 797. Sudan had supported al-Qaeda through various
forms of in-kind aid. It had afforded “tax exceptions” and
“customs privileges” that “allowed al Qaeda nearly to
monopolize the export of several agricultural commodities,
plowing its profits back into its broader organization.” Id. at
794. Its intelligence service had protected al-Qaeda training
camps from local police investigations. Id. And it had given
indirect financial support by extending the privilege of
investing in a state-owned bank, which allowed al-Qaeda
access to the formal banking system. Id. at 795. We concluded
that, “although Sudan did not directly fund al Qaeda or its
business, the [district] court reasonably concluded its in-kind
assistance had the same practical effect.” Id.
Defendants’ alleged support here was similarly a
substantial factor in plaintiffs’ injuries. They gave both cash
and cash equivalents to the terrorist organization that harmed
38
plaintiffs, which allowed that organization to grow. In fact, the
ability to use the Ministry as a source of funding for Jaysh al-
Mahdi—to funnel financial perks from suppliers like
defendants straight into Jaysh al-Mahdi’s coffers—was a
significant reason Sadr sought to control that agency in the first
place. Plaintiffs’ nonconclusory, detailed allegations describe
the free goods scheme, including percentages of free goods
defendants gave Kimadia on top of contract quantities. They
even identify many individual contracts for specific drugs and
other medical goods with a “free goods” amount specified.
Regarding the cash bribes, the complaint alleges that
defendants routinely paid a 20% bribe on their contracts during
the time period, identifies certain dealings by parties along with
bribe amounts, and describes how the bribes operated at each
phase of the transaction. And the plausibility of these major
global corporations giving such bribes and gifts is bolstered by
allegations that these same companies or their affiliates had
previously participated in essentially the same kind of
corruption during the Oil-for-Food program with different
Ministry leadership using the same basic playbook.
The complaint also meets the second element of proximate
causation. In view of plaintiffs’ plausible allegations that
defendants bribed Jaysh al-Mahdi with cash and goods,
plaintiffs’ injuries were “reasonably foreseeable or
anticipated” natural consequences of that assistance. Owens
III, 864 F.3d at 794 (quoting Rothstein, 708 F.3d at 91). Jaysh
al-Mahdi was a known terrorist group, led by an anti-American
cleric, estimated to have killed more than five hundred
Americans and injured many others. Providing fungible
resources to a terrorist organization allows it to grow, recruit
and pay members, and obtain weapons and other equipment. It
was reasonably foreseeable that financially fortifying Jaysh al-
Mahdi would lead to the attacks that plaintiffs suffered. The
same was true in Owens III: Sudan’s material support to al-
39
Qaeda foreseeably led to the bombings at issue, because
“Sudan could not help but foresee that al Qaeda would attack
American interests wherever it could find them.” Id. at 798.
Defendants urge dismissal of plaintiffs’ direct liability
claims on the ground that the Ministry was an independent
intermediary that defeated proximate causation. They draw
support from cases in which assistance to a state sponsor of
terrorism fell short of proximately causing harms committed by
terrorists the state supported. In both Owens IV and Rothstein,
for example, plaintiffs claimed that defendant banks aided
terrorists by extending valuable banking privileges to
sovereign states (Sudan and Iran, respectively). Owens IV, 897
F.3d at 268-69; Rothstein, 708 F.3d at 84-85. But proximate
causation was lacking in Owens IV because the plaintiffs did
not “allege that any currency processed by BNPP for Sudan”
was “in fact sent to al Qaeda,” nor that such aid from Sudan
was necessary to the embassy bombings. 897 F.3d at 276. The
same was true of the relationship between the bank and Iran in
Rothstein. 708 F.3d at 97; see Kemper v. Deutsche Bank AG,
911 F.3d 383, 392-94 (7th Cir. 2018) (similar for Deutsche
Bank AG and Iran).
The role of the Ministry of Health in this case is markedly
different from that of the “independent intermediary” states—
Sudan and Iran—in the prior cases. A sovereign state has
“many legitimate agencies, operations, and programs to fund”
so, even if the state is known to prop up terrorists, we cannot
presume that aid to such a state finds its way into terrorist
hands. Owens IV, 897 F.3d at 276 (quoting Rothstein, 708 F.3d
at 97). But plaintiffs do not allege that defendants aided an
autonomous nation with many functions and priorities. Rather,
they allege that defendants gave to a single agency that had
been overtaken by terrorists.
40
The complaint extensively details Jaysh al-Mahdi’s
control over the Ministry, and references multiple reports to
that effect by people on the ground in Iraq. The Ministry, on
plaintiffs’ account, was not an independent intermediary
because it was thoroughly dominated by Jaysh al-Mahdi and
“functioned more as a terrorist apparatus than a health
organization.” Third Am. Compl. ¶ 3. By early 2005, Sadr,
the Jaysh al-Mahdi leader, had officially taken over the
Ministry and placed his operatives at every level of its
leadership. Jaysh al-Mahdi’s command of the Ministry
encompassed Kimadia, the Ministry’s procurement arm with
which defendants dealt. The group placed Sadrists in
leadership roles throughout Kimadia, including as Director
General. At the height of Sadrist control, the Ministry
employed about 70,000 Jaysh al-Mahdi members and largely
purged Sunnis and unaligned technocrats, even killing or
running out doctors who were not loyal. Under Jaysh al-
Mahdi, “[p]ublic hospitals were converted into terrorist bases
where Sunnis were abducted, tortured, and murdered.” Id.
Ministry “ambulances transported Jaysh al-Mahdi death
squads around Baghdad,” and “terrorists openly patrolled the
halls of [the Ministry] headquarters.” Id. Hakim al-Zamili,
Deputy Minister of Health and Jaysh al-Mahdi commander,
even launched attacks from the roof of the Ministry
headquarters. Recognizing proximate causation here is a far
cry from holding the causation requirement met by non-
governmental organizations “providing assistance to a non-
sanctioned organization if the aid is later stolen, diverted, or
extorted by groups that engage in terrorism.” Amicus Br. of
Charity & Security Network and InterAction: The American
Council for Voluntary International Action, Inc. at 4-5; see also
id. at 19-20.
Defendants’ arguments to the contrary rest on an
untenably skeptical reading of the complaint that
41
impermissibly draws inferences against plaintiffs. They ask us
to infer that Jaysh al-Mahdi actually did not control the
Ministry. They do so by picking out allegations that Jaysh al-
Mahdi would “loot,” “steal,” and “divert” supplies from the
Ministry. Appellees Br. at 12-13, 27 (complaint citations
omitted). Defendants say those references imply that the
Ministry was an independent entity to which defendants sent
their goods and equipment, and that Jaysh al-Mahdi only later
stepped in to divert them to its own purposes. Id. at 29-30. In
their view, then, their assistance to the Ministry could not have
been a substantial factor in plaintiffs’ injuries. Plaintiffs
respond that words such as “looted” and “stole” in this context
“signify illegality, not independence,” and cite other examples
of alter-ego entities described as “looting” or “stealing” from
an entity with which they are identified. Appellants Reply at 5
(citations omitted). It remains open to defendants to seek to
substantiate their narrative at a later stage, but we cannot adopt
it on review of the complaint.
Defendants’ insistence that they provided “life-saving
medical goods” to the Ministry of Health, Appellees Br. at 9,
not Jaysh al-Mahdi, does not alone defeat proximate causation.
Aid directed to beneficial or legitimate-seeming operations
conducted by a terrorist organization does not attenuate the role
of the aid in causing terrorist acts. For example, in Owens III,
we held that the defendant’s funding to “al Qaeda-affiliated
businesses” that “provided legitimate employment for al Qaeda
operatives” and performed “infrastructure projects,” 864 F.3d
at 783, counted as material support that proximately caused al-
Qaeda’s attacks, id. at 794-98. In Boim v. Holy Land Found.
for Relief & Dev., 549 F.3d 685 (7th Cir. 2008) (en banc), the
Seventh Circuit held that Hamas’s involvement “not only in
terrorism but also in providing health, educational, and other
social welfare services” likewise did not “get [defendants] off
the liability hook.” Id. at 698. It reached that conclusion
42
because of “the fungibility of money” and because “Hamas’s
social welfare activities reinforce its terrorist activities.” Id.The Supreme Court, too, recognizes that “[m]aterial support
meant to promote peaceable, lawful conduct can further
terrorism by foreign groups in multiple ways.” Holder v.
Humanitarian L. Project, 561 U.S. 1, 30 (2010) (citation and
quotation marks omitted). The same is true here. On the facts
alleged in the complaint, the bribes and free goods were aid to
Jaysh al-Mahdi that foreseeably furthered the organization’s
growth and supported its terrorist acts.
What is more, when a defendant aids an intervening
intermediary, the defendant’s position “one step removed”
from the terrorists does not defeat proximate causation so long
as plaintiffs allege “some facts demonstrating a substantial
connection between the defendant and terrorism.” Owens IV,
897 F.3d at 275. In the event that the evidence were to
establish, contrary to the allegations of their complaint, that the
Ministry remained meaningfully independent of Jaysh al-
Mahdi, that would not necessarily defeat causation. The court
would still need to consider whether plaintiffs established the
requisite substantial connection. Owens IV permits them to do
so by, for example, showing that the funds to the Ministry
“actually [were] transferred to [Jaysh al-Mahdi] . . . and aided
in” the terrorist acts. Id. at 276 (first alteration in original)
(quoting In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d
118, 124 (2d Cir. 2013)). Unlike the plaintiffs in Owens IV and
Rothstein, who simply assumed that aid to Sudan or Iran was
aid to the terrorists they supported, plaintiffs here allege and
would be entitled to try to show how the bribes and gifts were
nonetheless substantially connected to Jaysh al-Mahdi’s acts of
terrorism that harmed plaintiffs.
Defendants urge us to take judicial notice of U.S.
government support for the Iraqi Ministry of Health during the
43
period of Sadrist control as a factor that they contend defeats
any inference that defendants’ aid proximately caused harm to
plaintiffs. Defendants assert that, on plaintiffs’ theory, “the
U.S. Government itself proximately caused Jaysh al-Mahdi’s
armed attacks.” Appellees Br. at 32. They insist the
government encouraged private-sector suppliers to support the
Ministry of Health, and that “[t]he Supplier Defendants
answered that call.” Id. at 9. But plaintiffs nowhere allege that
the government either made or encouraged the corrupt
payments to Jaysh al-Mahdi that are the centerpiece of
plaintiffs’ claims. To the contrary, they allege that U.S.
government efforts to bolster health infrastructure for the
benefit of the Iraqi people generally steered clear of the Mahdi-
controlled Ministry. See Third Am. Compl. ¶¶ 76, 113. We
decline defendants’ invitation to take judicial notice of
documents reciting complex facts that appear subject to
dispute. See Appellants Reply Br. at 8-10; see also Hurd v.
District of Columbia, 864 F.3d 671, 686-87 (D.C. Cir. 2017);
cf. Owens IV, 897 F.3d at 273 (“Public records are subject to
judicial notice on a motion to dismiss when referred to in the
complaint and integral to the plaintiff’s claim.”). The precise
nature and context of any U.S. dealings with the Ministry, or
encouragement of others to aid it, remain open to evidentiary
development.
We hold that plaintiffs have alleged that defendants
proximately caused plaintiffs’ injuries, and remand for further
consideration of plaintiffs’ direct liability claims. The district
court on remand will need to reach the issue whether plaintiffs
have alleged that defendants themselves committed “acts of
international terrorism” under the ATA. See Third Am. Compl.
¶¶ 3208-21. That is a legal question, but it was only lightly
briefed on this appeal. Because we must remand in any event,
we decline to decide it in the first instance.
44
C. Manufacturers’ Remoteness Defense
Finally, as to both primary and secondary liability, the
manufacturer defendants argue that they are not liable even if
the supplier defendants are. They contend it was the suppliers
who are alleged to have dealt directly with the Mahdi-
controlled Ministry, and that they as manufacturers were
further removed from the support to Jaysh al-Mahdi that is
alleged to have contributed to plaintiffs’ injuries. And they say
that, given their remoteness, they could not have been tipped
off by the visual cues of Jaysh al-Mahdi’s domination of the
Ministry that plaintiffs allege as one indication of defendants’
awareness of their role in Jaysh al-Mahdi’s terrorist activities.
On this complaint, we cannot dismiss the claims against
the manufacturers on the ground that they were uninvolved
with how their goods were marketed in Iraq. Allegations of
awareness based on media reports apply to all defendants. And
plaintiffs allege that the suppliers acted as the manufacturers’
agents with respect to the Iraqi contracts for their products. The
briefing did not develop the point, but both parties refer to the
Restatement as describing the relevant agency principles. Oral
Arg. Rec. 42:10-42:41, 1:06:57-1:07:50. As a general matter,
“[a]gency is the fiduciary relationship that arises when one
person (a ‘principal’) manifests assent to another person (an
‘agent’) that the agent shall act on the principal’s behalf and
subject to the principal’s control, and the agent manifests assent
or otherwise consents so to act.” Restatement (Third) Of
Agency § 1.01 (2006).
As described in the complaint, each supplier had to
“demonstrate ‘sole and exclusive rights to represent the
manufacturer in the territory of Iraq for all of its products,’ and
each supplier had to procure a ‘letter from the manufacturing
company authorizing the supplier to represent them.’” Third
45
Am. Compl. ¶ 157 (quoting USAID, Pharmaceutical &
Medical Products in Iraq § 6.3.2.1.2, Contract No. 267-C-00-
04-00435-00 (Apr. 17, 2007)) (brackets omitted).
“Manufacturers thus had the right to control the suppliers’
conduct vis-à-vis” the Ministry: “[M]anufacturers could refuse
to authorize specific suppliers to sell in Iraq; could decline to
produce documentation confirming that the suppliers acted on
their behalf in negotiating with [the Ministry]; or could refuse
to fulfill contracts that contained corrupt payments.” Id. “Any
one of those steps,” plaintiffs allege, “which were in the
manufacturer Defendants’ power to control, would have
precluded the corrupt payments at issue.” Id.
The factual allegations describing how the supplier
defendants acted as the manufacturers’ agents in their
interactions with the Ministry and Kimadia under the control
of Jaysh al-Mahdi suffice at the pleading stage to prevent
dismissal of the claims against the manufacturer defendants on
this ground. Development of the factual record, including
review of the specific contracts among defendants spelling out
relevant terms, as well as other evidence of the nature of the
relationships between the manufacturers and their affiliated
suppliers, could materially bear on this issue. Of course, to the
extent factual development could change the nature of the legal
assessment of the relationships among the different types of
defendants, those considerations are not now before us.
II. Personal Jurisdiction
Finally, the foreign supplier defendants challenge the U.S.
federal courts’ constitutional authority to exercise specific
personal jurisdiction over them. They dispute only whether
plaintiffs’ claims “arise out of or relate to” their contacts with
the U.S. forum. We hold that they do.
46
Here is the short explanation why: First, the foreign
supplier defendants deliberately and repeatedly established
ample contacts with the United States. They agreed with U.S.-
based manufacturers to act as their exclusive agents in Iraq.
They then worked closely with the U.S. manufacturers,
including through “cross-functional teams,” Third Am. Compl.
¶¶ 237, 277, 298, to facilitate Iraqi sales and distribution. The
foreign defendants sourced in the U.S. goods they supplied in
Iraq, and specifically the goods they used to sweeten their deals
with the Mahdi-controlled Ministry.
Second, those forum contacts were all squarely related to
plaintiffs’ claims. As described earlier in this opinion, the
provision of free goods and cash bribes to Jaysh al-Mahdi are
at the heart of all of plaintiffs’ claims. Plaintiffs contend that
bribing Jaysh al-Mahdi and giving it free goods violated the
Act by aiding and abetting Jaysh al-Mahdi’s terrorist violence
against U.S. nationals in Iraq. And plaintiffs view the
defendants’ alleged bribery and provision of free goods as
terror financing and material support for Jaysh al-Mahdi’s
violence against plaintiffs—support they contend itself
constituted international terrorism in direct violation of the
ATA.
Putting those two pieces together, it is evident that the
foreign suppliers’ forum contacts relate to plaintiffs’ claims in
multiple ways. The objective of the foreign suppliers’
collaboration with the manufacturers in the United States was
to secure the Iraqi market for the U.S. manufacturers’ products.
The foreign suppliers made the bribes and delivered the free
U.S.-manufactured goods to Jaysh al-Mahdi in Iraq as a means
of doing so. The goods they were accordingly able to sell on
behalf of their U.S.-affiliated manufacturers were U.S.
manufactured and U.S. Food and Drug Administration-
approved products. Plaintiffs even allege that the U.S.
47
provenance of the free goods meant they “carried a high street
value,” Third Am. Compl. ¶ 153, which helped the foreign
supplier defendants clinch those deals. The ATA claims thus
relate closely to the foreign defendants’ U.S. contacts.
Now for the fuller explanation of the court’s specific
personal jurisdiction over the foreign supplier defendants. The
traditional personal jurisdiction analysis asks first whether an
applicable long-arm statute authorizes the court to hear the
case, and second whether doing so comports with due process.
See Mwani v. bin Laden, 417 F.3d 1, 8 (D.C. Cir. 2005).
Neither party addresses the statutory step, which is readily
satisfied. “Where, as here, a claim arises under federal law and,
as the parties agree, a ‘defendant is not subject to jurisdiction
in any state’s court of general jurisdiction,’ Fed. R. Civ. P.
4(k)(2)(A) . . . personal jurisdiction may be asserted
under Rule 4(k)(2),” which is essentially a federal long arm-
statute. Est. of Klieman by & through Kesner v. Palestinian
Auth., 923 F.3d 1115, 1120 (D.C. Cir. 2019), cert. granted,
judgment vacated, 140 S. Ct. 2713 (2020), and opinion
reinstated in relevant part, 820 F. App’x 11 (D.C. Cir. 2020);
see also Livnat, 851 F.3d at 55. “Besides proper service of
process, it requires only that” jurisdiction be consistent with the
United States Constitution and laws. Klieman, 923 F.3d at
1120.
Implicitly accepting that Rule 4(k)(2)(A) applies, the
foreign suppliers assert that the exercise of personal
jurisdiction over them would exceed the constitutionally
permissible reach of any U.S. court. Due process prevents a
court from deciding claims against parties that have not in some
way affiliated themselves with the forum in which the court
presides—typically a state, but in certain cases like this one,
the entire United States. As a constitutional minimum, a
court’s ability to exercise personal jurisdiction over a defendant
48
requires that the defendant “have certain minimum contacts
with [the forum] such that the maintenance of the suit does not
offend ‘traditional notions of fair play and substantial justice.’”
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
The parties agree that, for purposes of assessing specific
jurisdiction over the foreign suppliers, “the relevant forum is
‘the United States as a whole,’” Klieman, 923 F.3d at 1120
(quoting Mwani, 417 F.3d at 11), and that we apply the Due
Process Clause of the Fifth rather than the Fourteenth
Amendment, see Mwani, 417 F.3d at 11. Apart from the scope
of the forum and potential federalism considerations, the Fifth
and Fourteenth Amendment Due Process inquiries are
generally analogous. See Livnat, 851 F.3d at 54-55; but see
Bristol-Myers Squibb Co. v. Super. Ct. of Cal., 137 S. Ct. 1773,
1783-84 (2017) (“[W]e leave open the question whether the
Fifth Amendment imposes the same restrictions [as the
Fourteenth] on the exercise of personal jurisdiction by a federal
court.”).
Courts distinguish between all-purpose “general” personal
jurisdiction and claim-linked “specific” jurisdiction; the
dispute here is limited to whether the court may exercise
specific personal jurisdiction over the six foreign supplier
defendants to adjudicate these plaintiffs’ claims against them. 10
10
The six foreign defendants are AstraZeneca UK Limited, GE
Medical Systems Information Technologies GmbH, Cilag GmbH
International, Janssen Phamaceutica N.V., Pfizer Enterprises SARL,
and F. Hoffman-La Roche Ltd. All of the foreign defendants are
suppliers, not manufacturers. Fifteen other defendants—all of the
manufacturers, one parent company, and three suppliers—have
either their place of incorporation or their principal place of business
(or both) in the United States, and do not dispute personal jurisdiction
here.
49
General personal jurisdiction exists in any forum in which a
defendant is “at home,” such as in a corporate defendant’s
place of incorporation and its principal place of business, and
may be exercised without regard to whether the claims
themselves have any connection to the forum. Ford Motor Co.
v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021).
Plaintiffs do not assert that U.S. courts have general personal
jurisdiction over the foreign defendants. Cf. Daimler AG v.
Bauman, 571 U.S. 117, 137 (2014).
Specific jurisdiction, in contrast, “covers defendants less
intimately connected with a [forum], but only as to a narrower
class of claims.” Ford, 141 S. Ct. at 1024. The “‘essential
foundation’ of specific jurisdiction” is the “relationship among
the defendant, the forum, and the litigation.” Id. at 1028
(quoting Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 414 (1984)). The dispute here is whether that
relationship is “close enough to support specific jurisdiction.”
Id. at 1032.
To recap, plaintiffs must meet three requirements to
establish a basis for the court’s exercise of specific personal
jurisdiction: (1) minimum contacts demonstrating that the
defendant purposefully availed itself of the forum; (2)
relatedness between the contacts and the claim; and (3)
compliance with “fair play and substantial justice.” The first
and third requirements are plainly met here. We review them
only briefly to provide context for the key issue—the
relatedness of the forum contacts to the claims.
To meet the first requirement, a defendant must have
minimum contacts with the forum reflecting “some act by
which [it] purposefully avails itself of the privilege of
conducting activities within the forum.” Ford, 141 S. Ct. at
1024 (alteration in original) (quoting Hanson v. Denckla, 357
50
U.S. 235, 253 (1958)). When the Supreme Court in
International Shoe reformulated personal jurisdiction doctrine
into a minimum-contacts analysis, it “founded specific
jurisdiction on an idea of reciprocity between a defendant and
a State: When (but only when) a company ‘exercises the
privilege of conducting activities within a state’—thus
‘enjoy[ing] the benefits and protection of [its] laws’—the State
may hold the company to account for related misconduct.” Id.
at 1025 (alterations in original) (quoting Int’l Shoe, 326 U.S. at
319). Thus, a defendant must have “deliberately ‘reached out
beyond’ its home—by, for example, ‘exploi[ting] a market’ in
the forum State or entering a contractual relationship centered
there.” Id. (alteration in original) (quoting Walden v. Fiore,
571 U.S. 277, 285 (2014)). In considering whether a
contractual relationship establishes the requisite contacts with
a forum, we follow a realistic approach, not a mechanical test.
See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478-79
(1985). We consider “prior negotiations and contemplated
future consequences, along with the terms of the contract and
the parties’ actual course of dealing.” Id. at 479.
The foreign defendants’ alleged contacts with the United
States suffice to plead purposeful availment. As relevant here,
each of the six foreign supplier defendants reached into the
United States to contract with an affiliated U.S. manufacturer
to be the manufacturer’s exclusive agent in Iraq. Pursuant to
its contract and collaborative relationship with a U.S.
manufacturer, each foreign supplier worked in Iraq to secure
contracts to sell the U.S. manufacturer’s goods there.
Continuously over a period of years, each of the foreign
defendants reached into the United States to source goods
manufactured here to fulfill the Iraqi contracts. Those U.S.
contacts resulted not from anyone else’s “unilateral activity,”
cf. Hanson, 357 U.S. at 253, but from the foreign suppliers’
own course of dealing by which they “purposefully avail[ed]”
51
themselves of the privilege of conducting business in the
forum, id. The foreign suppliers’ forum contacts were
significant and ongoing, as confirmed by the terms of many
contracts that, even in advance of discovery, the complaint
describes. Those contacts fulfill the constitutional requirement
of minimum contacts reflecting purposeful availment of the
U.S. forum.
To meet the third specific-jurisdiction requirement, the
assertion of personal jurisdiction over the objecting defendant
must “comport with ‘fair play and substantial justice.’” Burger
King Corp., 471 U.S. at 476 (quoting Int’l Shoe, 326 U.S. at
320). To determine whether it does, we consider a range of
factors, including the burden on defendants, the forum’s
interests in adjudicating the case, plaintiffs’ interests in
“convenient and effective relief,” and the judicial system’s
interest in the efficient resolution of the controversy. Id. at 477
(quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 292 (1980)).
Considerations of fair play and substantial justice strongly
support the exercise of personal jurisdiction over the foreign
supplier defendants to adjudicate these plaintiffs’ ATA claims.
Defendants—sophisticated international businesses with
established and ongoing ties to their U.S. affiliates—assert no
special burden from defending this matter in the United States.
Cf. Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102,
114 (1987). Nor do they question that plaintiffs and the United
States manifestly have strong interests in the availability of a
U.S. forum for these claims. In amending the ATA, Congress
declared that “wherever [they are] acting and wherever they
may be found,” Amendment § 2(b), entities or individuals that
give material support to acts of terrorism that “threaten the
security of nationals of the United States or the national
security, foreign policy, or economy of the United
52
States . . . should reasonably anticipate being brought to court
in the United States to answer for such activities,” id. § 2(a)(6).
If our courts were closed to plaintiffs’ claims, no other forum
would hold these defendants to account for these ATA
violations.
The nub of the dispute centers on the second specific-
jurisdiction requirement: that plaintiffs’ claims “‘arise out of
or relate to the defendant’s contacts’ with the forum.” Ford,
141 S. Ct. at 1025 (quoting Bristol-Myers, 137 S. Ct. at 1780).
Put another way, “there must be ‘an affiliation between the
forum and the underlying controversy.’” Bristol-Myers, 137 S.
Ct. at 1780 (quoting Goodyear Dunlop Tires Operations, S.A.
v. Brown, 564 U.S. 915, 919 (2011)). Either the claims must
“arise out of” the defendants’ forum contacts, or they must be
related in some other way that is “close enough to support
specific jurisdiction.” Ford, 141 S. Ct. at 1032. One such
example occurs when a defendant uses forum contacts as an
instrument for achieving the wrong alleged. See Licci ex rel.
Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 171 (2d
Cir. 2013). But the forum contacts need not themselves be
unlawful. And the defendants’ forum contacts need not have
caused or given rise to the plaintiffs’ claims. Ford, 141 S. Ct.
at 1026. “That does not mean anything goes”—“the phrase
‘relate to’ incorporates real limits, as it must to adequately
protect defendants foreign to a forum.” Id.
Again, these plaintiffs’ claims center on defendants’
provision of cash bribes and free goods to Jaysh al-Mahdi that
supported terrorist acts against plaintiffs. The claimed ATA-
violating bribes arise from or relate to the foreign suppliers’
U.S. contacts in at least four overlapping ways. We do not
decide whether all four are necessary, nor whether one alone
would suffice. We hold only that the relationships between the
53
plaintiffs’ claims and the foreign defendants’ alleged contacts
with the United States support specific jurisdiction here.
First, the foreign defendants’ collaboration with U.S.
manufacturers to market their American products in Iraq was
why these foreign defendants were interacting with Jaysh al-
Mahdi in the first place, and defendants’ interactions with
Jaysh al-Mahdi form the basis of the claim. The allegations
make clear that a principal reason the foreign defendants were
selling goods in Iraq at all was to capture a business
opportunity beneficial to both the foreign suppliers themselves
and their U.S. manufacturer affiliates. The complaint details
the relationship between the foreign defendants’ forum
contacts and their ATA claims: The foreign supplier
defendants worked with in-forum manufacturers, acting as
those manufacturers’ representatives in Iraq when they
solicited Iraqi bids and fulfilled orders for the manufacturers’
goods to be shipped there. The foreign defendants’ ability to
complete their sales of the U.S. manufacturers’ products in Iraq
thus depended on their forum contacts. The U.S. and foreign
defendants’ cooperative business model benefitted from the
protections of U.S. law. Domestic contract law would have
likely governed interactions between the foreign suppliers and
their U.S. manufacturers, and their businesses benefited from
the protections of U.S. food and drug law, customs and export
law, and intellectual property regime.
Second, “the products to be distributed by [defendants]
were being manufactured” in the forum. St. Jude Med., Inc. v.
Lifecare Int’l, Inc., 250 F.3d 587, 592 (8th Cir. 2001). The
goods the foreign defendants supplied from their U.S. affiliate
manufacturers were, at least in significant part, U.S. goods. For
example, AstraZeneca UK Limited allegedly sold U.S.-
manufactured drugs to the Ministry, including at least
Arimidex (both the active pharmaceutical ingredient (API)
54
manufacturing and drug formulation occurred in Delaware),
and Meronem and Seroquel (the API was made in Delaware for
both). 11 For GE Medical Systems Information Technologies
GmbH, the complaint identifies at least twelve medical-device
contracts it executed with the Sadrist-controlled Ministry, and
it claims that the entity sourced devices from the United States
and certified to Kimadia their U.S. origin. For Cilag GmbH
International and Janssen Pharmaceutica N.V. (the two foreign
suppliers for Johnson & Johnson), the complaint alleges they
sold the Ministry U.S.-manufactured drugs, including Eprex
(U.S. API), Topamax (U.S. API), Leustatin (U.S. API), and
Remicade (U.S. API). The complaint alleges that Pfizer
Enterprises SARL supplied at least two drugs (Depo-Provera
and Solu-Medrol) with U.S. API. And it alleges that
F. Hoffman-La Roche Ltd. supplied several drugs made with
U.S. API, including Avastin, Herceptin, MabThera, Pegasys,
and Xeloda. The complaint also alleges on information and
belief that discovery is likely to uncover other such
transactions.
Third, the primary way in which plaintiffs allege that the
foreign defendants actually violated the ATA was giving Jaysh
al-Mahdi cash bribes and U.S.-manufactured free goods. The
ATA violation was part of how the foreign suppliers secured a
market for U.S.-manufactured products, and the U.S. sourcing
is therefore centrally “related to” plaintiffs’ claims. Contracts
11
“API” is the drug’s “active pharmaceutical ingredient.” The drug
manufacturers often used a two-part manufacturing process. The
first was to make the API, which for many of the drugs was done at
an American facility. Then, either the same U.S. facility or an
affiliate international facility combined the API with other materials
to make the final drug. That second process is called “drug
formulation.” According to the complaint, the API is the most
important part of the drug manufacturing process, the most difficult
as a technical matter, and the step that imparts the most value.
55
for all but one of the specific drugs discussed above indicated
that defendants provided a “free of charge” amount on top of
the quantity of drugs Kimadia actually paid for. And for that
one drug, Topamax, that contract was allegedly obtained with
an “Off-the-Books Payoff.” Third Am. Compl. ¶ 253. The
provision of U.S.-manufactured drugs was, along with the
provision of cash bribes, the very instrumentality the foreign
defendants allegedly used to violate the ATA. A plaintiff’s
cause of action rooted in a defendant’s use of its contacts with
the United States to violate U.S. law surely arises out of or
relates to that plaintiff’s claims.
Fourth, plaintiffs allege that Jaysh al-Mahdi specified that
the U.S. provenance of the medical goods mattered to it. The
complaint alleges that Jaysh al-Mahdi “prioritized obtaining
U.S.-manufactured drugs, which tended to be most valuable on
the black market” and thus more useful in financing acts of
international terrorism. Third Am. Compl. ¶ 122. According
to the complaint, “FDA approval was important” because
“FDA-approved drugs carried a high street value, which made
FDA-approved goods especially attractive for black-market
diversion.” Id. ¶ 153. The supplier defendants accordingly
certified to Kimadia which drugs were American in origin, and
wrote “USA” on the packaging of the U.S.-origin goods. And
each procured U.S. export certificates and FDA approvals for
the drugs at issue. Because the tort here is based in significant
part on bribing and providing free goods to Jaysh al-Mahdi and
thereby funding the terrorist acts that harmed plaintiffs,
plaintiffs’ allegations that the goods’ United States provenance
and labeling increased their black-market price and thus their
value to Jaysh al-Mahdi as terrorism funding sources tie the
claims to the foreign defendants’ U.S. forum contacts.
The issue here is not that U.S. goods happen to be in the
supply chain, as defendants contend. Rather, the complaint
56
alleges coordination between affiliated firms within and
outside the U.S. working together over a long period to supply
products to serve the Iraqi market. Unlike in Bristol-Myers, for
example, here it is “alleged that [the manufacturers] engaged
in relevant acts together with [the distributors] in [the forum].”
137 S. Ct. at 1783. The foreign supplier defendants reached
into the United States to contract with the U.S. manufacturers.
It was those contracts that empowered the foreign suppliers as
the U.S. manufacturers’ agents to market U.S.-developed and
U.S.-produced goods to the Mahdi-controlled Ministry in Iraq.
And the foreign suppliers reached into the United States to
obtain the goods. Cf. Bristol-Myers, 137 S. Ct at 1778 (finding
forum contacts unrelated to claim where neither drug nor its
marketing strategy were developed in the forum, and
defendants “did not manufacture, label, package, or work on
the regulatory approval of the product” there).
In sum, the foreign defendants entered into cooperative
relationships with U.S. manufacturers to sell U.S.-origin drugs
in Iraq; they in fact sold a large volume of U.S. drugs to the
Madhi-controlled Ministry over an extended period of time;
they used the U.S products, along with cash, to bribe Jaysh al-
Mahdi to obtain those contracts; and Jaysh al-Mahdi
particularly desired contracts facilitated with “gifts” of free
U.S. goods as those goods provided more significant financing
for the group’s terrorist objectives. In all these ways, then, the
foreign defendants’ contacts with the United States relate to
plaintiffs’ ATA claims.
The Second Circuit’s analysis in Licci illustrates the
adequacy of this kind of connection between forum contacts
and an ATA claim to support specific jurisdiction. Licci
confirmed the New York district court’s jurisdiction over a
Lebanese bank with no operations, branches, or employees in
the United States, 732 F.3d at 165, to hear ATA claims related
57
to the bank’s “repeated use of [a] correspondent account—and
hence New York’s banking system—as an instrument to
achieve the wrong complained of,” id. at 173. It saw the bank’s
use of the New York-based account as “part of the principal
wrong” at issue, id. at 170, which was the bank’s “repeated,
intentional execution of U.S.-dollar-denominated wire
transfers on behalf of” a financial arm of Hezbollah, id. at 171.
It so held even though the bank could have processed the wire
transfers “through correspondent accounts anywhere in the
world.” Id. The bank’s New York contacts were sufficiently
related to plaintiffs’ claims, including ATA claims, to support
the court’s personal jurisdiction over it. Id.
Like the bank account in Licci, the contracts to sell U.S.
goods in Iraq, and the goods themselves used to bribe Jaysh al-
Mahdi, were “an instrument to achieve the very wrong
alleged.” 732 F.3d at 171. Defendants used the U.S. goods to
fund Jaysh al-Mahdi, giving rise to the ATA claims at issue.
And whereas the money used in Licci to violate the statute
incidentally flowed through the United States, here, the goods
used to violate the ATA originated in the forum and were
specially desired by the terrorist organization because of that
source. In both cases, then, the contacts with the U.S. forum
sufficiently relate to the ATA claim to satisfy due process
requirements.
The Supreme Court’s elaboration in Ford on the
requirement that a claim “arise out of or relate to” the
defendant’s forum contacts also supports our analysis. There,
the Court addressed whether Ford was subject to specific
jurisdiction in Montana and Minnesota for claims arising from
car accidents involving Ford vehicles in each of those forum
states, even though Ford had not designed, manufactured, or
sold the cars at issue in the forum, and it was unilateral action
of others that brought them there. 141 S. Ct. at 1023. Ford
58
contested personal jurisdiction, asserting that its forum
contacts did not cause the plaintiffs’ injuries and so lacked the
requisite relationship to the claim; the harms, after all, would
have been the same even without any of Ford’s identified
forum contacts. Id. at 1026, 1029.
The Supreme Court rejected Ford’s insistence that forum
contacts must have caused the harm on which the claim is based
in order to support specific personal jurisdiction. It instead
reaffirmed the “most common formulation of the rule” for
specific jurisdiction, which requires “that the suit ‘arise out of
or relate to the defendant’s’” forum contacts. Id. at 1026
(emphasis in original) (quoting Bristol-Myers, 137 S. Ct. at
1780). The Court emphasized how that classic phrasing
“contemplates that some relationships will support jurisdiction
without a causal showing.” Id.
Defendants argue that their forum contacts were neither a
but-for nor a proximate cause of the ATA violation. To the
contrary, they were both. As described above, defendants
needed the U.S. contacts in order to work with U.S.
manufacturers to sell U.S. goods through delivering bribes and
free U.S. goods in Iraq. And, as already explained, defendants’
provision of cash and cash-equivalents allegedly proximately
caused plaintiffs’ injuries. In any event, Ford held that, while
forum contacts that cause a claim suffice to show the claim
“arises out of” those contacts, that kind of relationship is not
required for the contacts to “relate to” the claim so as to support
specific jurisdiction. 141 S. Ct. at 1026, 1032.
The district court, ruling without the benefit of the Court’s
decision in Ford, erred in holding that the defendants’ forum
contacts must be the conduct that would subject them to
liability. Even as defendants appropriately disavow the notion
that a forum contact is claim-related “only if it is itself illegal,”
59
Appellees Br. at 66 (quoting Appellants Br. at 53), they assert
the contacts here are “lacking under any standard” because they
are “tangential to Plaintiffs’ claims” based on transactions and
attacks in Iraq. Appellees Br. at 64-65. We cannot agree. The
foreign suppliers’ forum contacts are closely entwined with all
the claims. The point is not just, as defendants say, that “the
goods sold were originally manufactured in the United States.”
Appellees Br. at 65 (quoting Atchley, 474 F. Supp. 3d at 206).
These suppliers worked on behalf of the U.S. manufacturers as
their exclusive representatives in Iraq to secure that market,
bending over backward in embracing corrupt Iraqi terms to
fulfill that role.
Defendants’ remaining arguments are similarly
unpersuasive. They assert that because certain of their Kimadia
contracts identified a country other than the United States as
the source of some goods, Jaysh al-Mahdi could not have
actually cared about the goods’ U.S. origin, making the
Kimadia contracts’ connections to the United States not
relevant to the claim in the way plaintiffs posit. But securing
the Iraqi market for U.S. goods was in fact what the foreign
suppliers were doing in Iraq. For the drugs defendants
characterize as not U.S.-manufactured, plaintiffs allege that
critical active ingredients that determine the drugs’ efficacy
and comprise much of the drugs’ value to Jaysh al-Mahdi were
made in the United States. And they allege that the U.S.
provenance of the drugs or their active ingredients mattered to
Jaysh al-Mahdi.
For the above reasons, we reverse the district court’s grant
of the foreign defendants’ motion to dismiss for lack of
personal jurisdiction.
60
CONCLUSION
The sufficiency of these allegations as such does not
prejudge defendants’ fact-based defenses. It is beyond the
bounds of the motion to dismiss to consider whether plaintiffs
can substantiate their allegations with admissible evidence, or
to assess defendants’ contrary evidence. All we hold is that the
allegations, together with the reasonable inferences to be drawn
from them in plaintiffs’ favor, suffice to state a legally
cognizable claim.
We need not—and do not—decide several issues the
district court itself did not reach. For one, we leave to the
district court to decide in the first instance whether plaintiffs
have alleged an act of international terrorism as required to
plead direct liability. See 18 U.S.C. § 2333(a); § 2331(1). We
also affirm the district court’s discretionary choice not to
resolve on the pleadings defendants’ asserted act-of-war
defense under 18 U.S.C. § 2336(a). See Gill v. Arab Bank,
PLC, 893 F. Supp. 2d 474, 510 (E.D.N.Y. 2012). The statute
would appear to foreclose treating an attack planned or
authorized by a Foreign Terrorist Organization such as
Hezbollah as an “armed conflict between military forces of any
origin” because Congress specifically excluded so-designated
organizations from the definition of “military force.” 18 U.S.C
§ 2331(4), (6). But we are content with the district court’s
inclination to leave that question for resolution on a developed
evidentiary record.
* * *
For the foregoing reasons, we reverse the district court’s
July 17, 2020, order granting defendants’ motion to dismiss for
failure to state a claim and the foreign defendants’ motion to
dismiss for lack of personal jurisdiction, as well as its attendant
61
dismissal of plaintiffs’ state-law claims. We remand for further
proceedings consistent with this opinion.
So ordered.