Kaplan v. Central Bank of the Islamic Republic of Iran

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
CHAIM KAPLAN, et al. )
)
Plaintiffs, )
)
v. ) Civil No. 10-483 (RCL)
)
CENTRAL BANK OF THE ISLAMIC )
REPUBLIC OF IRAN, et al. )
)
Defendants. )
)
MEMORANDUM OPINION
This action arises out of a series of rocket attacks by Hezbollah on civilians in Israel
during a 34-day conflict in 2006 along the border between Israel and Lebanon. Some plaintiffs
allegedly suffered injuries in these attacks, others claim to be the family members or personal
representatives of the estates of victims. Defendants Bank Saderat Iran (“BSI”) and Bank
Saderat, PLC (“BSPLC”) allegedly transmitted funds from defendant Iran to Hezbollah. They
moved to dismiss the action. Defs.’s Mot. to Dismiss, Aug. 23, 2010, ECF No. 15. For the
reasons given below, the Court will GRANT the motion and dismiss all claims against these two
defendants and the associated John Does. 1
1
Other defendants are the Islamic Republic of Iran, the Central Bank of Iran, and associated John Does.
I. BACKGROUND
A. Factual Background
1. The 2006 Conflict
Between July 12 and August 14, 2006, “Hezbollah fired thousands of rockets and
missiles . . . at civilians in northern Israel.” Compl. ¶ 56. Plaintiffs are American, Israeli, and
Canadian civilians who allege that they suffered injuries caused by these rockets, or who allege
that they are the family members or personal representatives of four Israeli civilians killed in
these attacks. Id. ¶¶ 2, 4–11, 58–111.
In several public statements, Israeli leaders characterized these attacks as part of a “war”
with Lebanon:
On July 12, 2006, describing actions carried out against Israeli Defense Forces on
the Lebanese border, Prime Minister Olmert of Israel stated:
This morning’s events were not a terrorist attack, but the action of
a sovereign state that attacked Israel for no reason and without
provocation. The Lebanese government, of which Hizbullah is a
member, is trying to undermine regional stability. Lebanon is
responsible and Lebanon will bear the consequences of its actions.
In response to the question—“is there cause to prepare the nation for war and will
you call for an emergency government?”—Prime Minister Olmert responded:
One thing must be understood: This was an act of war without any
provocation on the sovereign territory—about which there is no
dispute—of the State of Israel. It is absolutely clear to the
international community that Israel will respond and that it will
respond in an unequivocal fashion that will cause those who started
this act of war to bear a very painful and far-reaching
responsibility for those actions.
Defs.’ Mem. 4–5, ECF No. 15-1 (quoting Defs.’ Ex. A, Remarks of Prime Minister Ehud Olmert
at a Press Conference, Jul. 12, 2006, ECF No. 15-2, available
http://www.mfa.gov.il/MFA/Government/Communiques/2006/PM+Olmert+-
2
+Lebanon+is+responsible+and+will+bear+the+consequences+12-Jul-2006.htm) (emphasis
added); see also Defs.’ Mem. 1 n.1, 4–6 (cataloguing Israeli governmental statements); Pls.’
Opp’n 4–6, ECF No. 20 (acknowledging these statements). In addition, the Final Report of an
Israeli governmental commission’s investigation into the conflict concluded that “Israel initiated
a long war, which ended without clear military victory.” Defs.’ Mem. 5 (quoting Winograd
Commission Final Report ¶ 11, Jan. 30, 2008, Defs.’ Ex. C, available at:
http://www.cfr.org/publication/15385/winograd_commission_final_report.html, ECF No. 15-4)
(emphasis added). 2
The conflict seems to have begun when Hezbollah militants entered Israeli territory from
Lebanon and kidnapped and killed several Israeli soldiers. See Defs.’ Mem. 4 (quoting Israeli
Prime Minister Olmert’s July 12, 2006 response to “actions carried out against Israeli Defense
Forces on the Lebanese border”); see also Winograd Commission Final Report ¶ 13 (describing
the Israeli government’s decision “made in the night of July 12th to react (to the kidnapping)
with immediate and substantive military action”); Habchy v. Filip, 552 F.3d 911, 913 (8th Cir.
2009) (referring to the “the military conflict between Lebanon and Israel in July and August of
2006,” and explaining that, according to a State Department report, “this conflict started when
Hizballah militants entered Israel from Lebanese territory and kidnapped and killed three Israeli
soldiers” and then “Israeli military forces entered Lebanese territory in response and instituted a
2
The Court pauses to note that other courts’ discussions of these events reflect some terminological inconsistency as
to both the nature of the conflict and the identity of the parties to it. See, e.g., Mekhael v. Mukasey, 509 F.3d 326,
327 (7th Cir. 2007) (Posner, J.) (referring in passing to “the war between Israel and Hezbollah that began on July 12,
2006” (emphases added)); Delki v. Attorney Gen. of U.S., 380 F. App’x 222, 223 (3d Cir. 2010) (noting that an
asylum petitioner “explained that a war broke out between Israel and Lebanon in mid-2006” (emphases added));
Bassam v. Holder, 338 F. App’x 507, 510 (6th Cir. 2009) (referring to “the 2006 conflict between Israel and
Lebanon” (emphases added)); Habchy v. Filip, 552 F.3d 911, 913 (8th Cir. 2009) (referring to the “the military
conflict between Lebanon and Israel in July and August of 2006,” and explaining that, according to a State
Department report, “this conflict started when Hizballah militants entered Israel from Lebanese territory and
kidnapped and killed three Israeli soldiers” and then “Israeli military forces entered Lebanese territory in response
and instituted a bombing campaign” (emphases added)); Qassas v. Daylight Donut Flour Co., LLC, 09-cv-0663,
2010 WL 2365472 (N.D. Okla. June 10, 2010) (referring to the “Israel-Hezbollah War” of 2006 (emphasis added)).
3
bombing campaign” (emphases added)). As part of the conflict, the Israeli military invaded
Lebanon. Defs.’ Mem. 5. The United Nations brokered a cease fire, ending the conflict on
August 14, 2006, id. at 5—a date which also marks the conclusion of the rocket attacks at issue
in this matter. Defendant states that, during the course of this conflict, Israel lost 119 soldiers
and 43 civilians, while between 250 and 500 Hezbollah members died, and more than 1,000
Lebanese civilians were killed. Defs.’ Mem. 5.
2. Hezbollah
Hezbollah is both a terrorist organization and “a political party in Lebanon.” Pls.’ Opp’n
3; see also Defs.’ Mem. 1 n.1, 4 & 7. Since its establishment in 1982, it has “been controlled,
funded and operated by Iran,” which has used it to carry out “thousands of terrorist attacks
against American and Israeli targets, in which hundreds of innocent victims have been murdered
and thousands more maimed.” Compl. ¶ 29; see also id. ¶¶ 30–33 (detailing Hezbollah’s
terrorist activities).
3. Allegations that Defendants Funded Hezbollah
Plaintiffs allege that “[b]etween 2001 and 2006, the defendants herein [including BSI and
BSPLC] provided Hezbollah with over $50 million in financial support . . . with the specific
intent and purpose of facilitating, enabling and causing Hezbollah to carry out terrorist attacks
against American and Israeli targets in order to advance Iran’s Policy and Goals.” Id. ¶ 35; see
also id. ¶ 40 (alleging that defendants, including BSI and BSPLC, provided “massive financial
support to Hezbollah, and thereby aided and abetted Hezbollah, all with the specific intention of
causing and facilitating the commission of acts of extrajudicial killing and international
terrorism” and did so “with actual knowledge that Hezbollah had killed and injured numerous
U.S. and other civilians in terrorist attacks and with the knowledge and specific intent that
4
additional U.S. and other innocent civilians would be killed and/or injured as a result . . . .”).
Specifically, plaintiffs claim that BSI received Iranian funds from defendant Central Bank of Iran
(“CBI”) transferred those funds to BSPLC in London who then transferred them to “accounts
controlled by Hezbollah in branches of defendant BSI in Beirut, from which Hezbollah then
withdrew these funds.” Id. ¶ 36. In support of this account, plaintiffs point to an October, 2007
U.S. Treasury Department “Fact Sheet,” which states that “from 2001 to 2006, Bank Saderat
transferred $50 million from the Central Bank of Iran through its subsidiary in London to its
branch in Beirut for the benefit of Hizballah fronts in Lebanon that support acts of violence.”
U.S. Department of the Treasury, Fact Sheet, Oct. 25, 2007, Pls.’ Ex. A, ECF No. 3 (cited at
Compl. ¶ 37).
4. The Defendants
Defendant Iran is a foreign state and has been continuously designated as a state-sponsor
of terrorism pursuant to section 6(j) of the Export Administration Act of 1979, 50 U.S.C. §
2405(j) since 1984. Compl. ¶ 13.
Defendant CBI is the central bank of Iran, and is wholly owned by Iran. Compl. ¶ 14.
Defendant BSI is “an international financial institution headquartered in Iran.” Defs.’
Mem. 2. The Complaint states that Iran owns “over 90% of the shares” of BSI. Compl. ¶ 15.
Defendants dispute this, insist that BSI is a “non-government-owned bank,” and that the bank
was privatized in 2009, leaving only 49% if its shares with the Iranian government. Defs.’ Mem.
30–31.
Defendant BSPLC is “a bank incorporated in England and Wales and is a wholly owned
subsidiary of BSI.” Defs.’ Mem. 3.
5
B. Procedural Background
Plaintiffs filed this action in 2010. In addition to BSI and BSPLC, plaintiffs also named
as defendants the Islamic Republic of Iran and the Central Bank of Iran, as well as a host of
“John Does.” The complaint asserts the following four types of claims:
1. Foreign Sovereign Immunities Act’s (“FSIA”) state-sponsor of terrorism, 28 U.S.C.
1605A(c), claims by the American plaintiffs against Iran, CBI, and BSI (but not
BSPLC), Compl. ¶¶ 117–26 (Counts I & II);
2. Anti-Terrorism Act (“ATA”), 18 U.S.C. § 2333(a), claims by the American plaintiffs
against BSPLC (but not BSI), Compl. ¶¶ 127–45 (Counts III & IV);
3. Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, claims by the non-American plaintiffs
against BSI and BSPLC, Compl. ¶¶ 146–153 (Count V); and
4. Israeli Tort claims by all plaintiffs against BSI and BSPLC, Compl. ¶¶ 154–73
(Counts VI & VII).
BSI and BSPLC filed the instant motion to dismiss in August of 2010. Defs.’ Mot., ECF No. 15.
The case was reassigned by consent from Judge Roberts to the undersigned in June 2013. ECF
No. 38.
II. SUBJECT MATTER JURISDICTION
BSI and BSPLC challenge this Court’s subject matter jurisdiction over the entire
complaint on three grounds: political question, standing, and the Act of State doctrine. 3 See
Defs.’ Mem. 3–16; Defs.’ Reply 3–5. This Court may advance to consider the merits only if it
finds jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998) (rejecting
the doctrine of “hypothetical jurisdiction”—whereby a court could skip over jurisdictional
questions to consider the merits of a case—as “beyond the bounds of authorized judicial action “
and stating that it “offends fundamental principles of separation of powers.”).
3
Defendants also assert other, narrower grounds for lack of subject matter jurisdiction over particular claims, which
are addressed below.
6
A. Plaintiffs’ Claims Do Not Present a Non-Justiciable Political Question
BSI and BSPLC argue that the case presents a non-justiciable political question because,
if the action proceeds, the Court “will have to decide whether the attacks complained of by
plaintiffs were acts of war, as the Israeli government described them, or were instead acts of
terrorism, as the complaint seeks to characterize them”—a determination that would risk
interfering with American foreign policy. Defs.’ Mem. 5, 3–10; see also Defs.’ Reply 3–4. The
Court rejects this argument.
In Baker v. Carr, the Supreme Court explained that a case should be dismissed as a non-
justiciable political question if any one of the following six factors is present:
[1] a textually demonstrable constitutional commitment of the issue to a
coordinate political department;
[2] . . . a lack of judicially discoverable and manageable standards for resolving it;
[3] . . . the impossibility of deciding without an initial policy determination of a
kind clearly for nonjudicial discretion;
[4] . . . the impossibility of a court’s undertaking independent resolution without
expressing lack of the respect due coordinate branches of government;
[5] . . . an unusual need for unquestioning adherence to a political decision
already made; or
[6] the potentiality of embarrassment from multifarious pronouncements by
various departments on one question.
369 U.S. 186, 217 (1962). The doctrine has been criticized as “amorphous,” Morgan v. United
States, 801 F.2d 445, 447 (D.C. Cir. 1986) (Scalia, J.), “not fully defined,” Conyers v. Reagan,
765 F.2d 1124, 1126–27 (D.C. Cir. 1985) (Tamm, J.); and “murky and unsettled.” Tel-Oren v.
Libyan Arab Republic, 726 F.2d 774, 803 n.8 (D.C. Cir. 1984) (Bork, J., concurring). Happily,
the Supreme Court has provided some recent guidance in a case which, like the present one,
implicated sensitive issues of American foreign policy. See Zivotofsky ex rel. Zivotofsky v.
Clinton, 132 S. Ct. 1421, 1423 (2012).
7
Zivotofsky addressed a conflict between section 214 of the Foreign Relations
Authorization Act, Fiscal Year 2003, Pub. L. No. 107-228, 116 Stat. 1350 (2002), which
provided that U.S. Passports of citizens born in Jerusalem would indicate the place of birth as
Israel, and the official U.S. State Department policy directing passport officials to record such
individuals’ place of birth only as Jerusalem. 132 S. Ct. at 1425. But neither the District Court
nor the D.C. Circuit reached the core question of the case—whether the statute “impermissibly
intrudes upon Presidential powers under the Constitution.” Id. at 1428. Instead, both lower
courts found that the case “involve[d] a political question because deciding [the] claim would
force the Judicial Branch to interfere with the President’s exercise of constitutional power
committed to him alone.” Id. at 1427.
The Supreme Court reversed. Because the plaintiff did “not ask the courts to determine
whether Jerusalem is the capital of Israel” but only “whether he may vindicate his statutory right
. . . to choose to have Israel recorded on his passport as his place of birth,” there was no political
question bar to jurisdiction. Id. The Court explained that the federal courts were “not being
asked to supplant a foreign policy decision of the political branches with the courts’ own
unmoored determination of what United States policy toward Jerusalem should be” but rather to
engage in the “familiar judicial exercise” of determining whether the statute is constitutional. Id.Such determinations fall squarely within the province of the judiciary. Thus, there was no
“textually demonstrable constitutional commitment” to the President preventing the Court from
taking jurisdiction. Id. at 1428. Nor was there a lack of “judicially discoverable and manageable
standards” to resolve the case, as “both sides offer[ed] detailed legal arguments regarding
whether [the provision wa]s constitutional in light of powers committed to the Executive, and
whether Congress’s own powers with respect to passports must be weighed in analyzing the
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question.” Id. at 1429. True, the resolution of the case “demand[ed] careful examination of the
textual, structural, and historical evidence put forward by the parties regarding the nature of the
statute and of the passport and recognition powers,” but, the Court held, “[t]his is what courts
do.” Id. at 1430.
Under these principles, the present case does not present a non-justiciable political
question. As in Zivitofsky, the plaintiffs in this action do not ask the Court to “supplant a foreign
policy decision of the political branches with the courts’ own unmoored determination” of
whether the rocket attacks at issue here were examples of “war” or “terrorism,” see id. at 1427,
but rather seek relief under several federal statutes authorizing recovery for specific conduct.
Drawing a clean line between “war” and “terrorism” may be a difficult and sensitive political
issue. Fortunately, it is one that Congress has completed—leaving it to the Court to apply their
definition. The Court must only decide whether the rocket attacks qualify as “war” or
“terrorism” as those terms are defined under the legal frameworks plaintiffs invoke. For
instance, plaintiffs’ cause of action under the ATA will depend on whether the underlying
actions meet the statutory definitions of “an act of international terrorism” or an “act of war” at
18 U.S.C. § 2331. And plaintiffs’ cause of action under the FSIA will depend on whether the
killings qualify as an “extrajudicial killing” as defined by 28 U.S.C. § 1605A(h)(7). Far from
any “textually demonstrable constitutional commitment” of this determination to another branch,
the task of applying these definitions to specific circumstances has been directly delegated to the
courts under the aforementioned statutes. Nor, for the same reason, is there an absence of
“manageable standards” to decide the case. The Court will only have to engage in the “familiar
judicial exercise” of interpreting the applicable statutory provisions and decide whether each one
permits plaintiffs to move forward with their action based on the particular facts alleged. See
9
Zivotofsky, 132 S. Ct. at 1429. And, as in Zivotofsky, the Court will be guided in this exercise by
the “detailed legal arguments” provided by both sides on these questions. See id. at 1429.
Accordingly, the Court finds that this action does not present a non-justiciable political question.
B. Plaintiffs Have Article III Standing
BSI and BSPLC also move to dismiss the complaint for lack of Article III standing.
They argue that plaintiffs’ injuries are “too attenuated from any alleged act or omission” by the
banks and therefore are not “fairly traceable” to their financial activities. Defs.’ Mem. 14; see
also Defs.’ Reply 4–5. The Court rejects this argument.
Article III of the Constitution limits federal courts’ jurisdiction to certain “Cases” and
“Controversies.” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1146 (2013). “One element of
the case-or-controversy requirement is that plaintiffs must establish that they have standing to
sue.” Id. (quotations omitted). The requirements of Article III standing are familiar:
First, the plaintiff must have suffered an injury in fact—an invasion of a legally
protected interest which is (a) concrete and particularized, and (b) actual or
imminent, not conjectural or hypothetical. Second, there must be a causal
connection between the injury and the conduct complained of—the injury has to
be fairly traceable to the challenged action of the defendant, and not the result of
the independent action of some third party not before the court. Third, it must be
likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision.
United States v. Windsor, 2013 WL 3196928, at *7 (U.S. June 26, 2013) (quotations, citations,
and modifications omitted). The plaintiffs, as the party invoking federal jurisdiction, bear the
burden of establishing these three elements. Devlin v. Scardelletti, 536 U.S. 1, 6–7 (2002).
When ruling on a motion to dismiss under Rule 12(b)(1) for lack of standing, courts “must
accept as true all material allegations of the complaint, drawing all reasonable inferences from
those allegations in plaintiffs’ favor, and presuming that general allegations embrace those
10
specific facts that are necessary to support the claim.” 4 LaRoque v. Holder, 650 F.3d 777, 785
(D.C. Cir. 2011) (internal citations and quotations omitted).
To satisfy the “fairly traceable” requirement, the “line of causation” between the illegal
conduct and injury must not be “too attenuated.” Allen v. Wright, 468 U.S. 737, 752 (1984).
While “[t]he fact that the harm to [plaintiffs] may have resulted indirectly does not in itself
preclude standing . . . , it may make it substantially more difficult to meet the minimum
requirement of Art. III: to establish that, in fact, the asserted injury was the consequence of the
defendants’ actions . . . .” Warth v. Seldin, 422 U.S. 490, 504–05 (1975). The D.C. Circuit has
translated the requirement into a single question: “did the [defendant]’s actions materially
increase the probability of injury”? Huddy v. FCC, 236 F.3d 720, 722 (D.C. Cir. 2001).
4
This language is drawn from the second sentence of the following paragraph:
We review de novo the district court’s dismissal for lack of standing and failure to state a claim
upon which relief can be granted. . . . At this stage of the litigation, we “must accept as true all
material allegations of the complaint,” drawing all reasonable inferences from those allegations in
plaintiffs’ favor, Warth [v. Seldin], 422 U.S. [490,] 501 [(1975)], and “presum[ing] that general
allegations embrace those specific facts that are necessary to support the claim,” Lujan [v.
Defenders of Wildlife], 504 U.S. [555,] 561 [(1992)]. And in assessing plaintiffs’ standing, we
must assume they will prevail on the merits of their constitutional claims.
LaRoque v. Holder, 650 F.3d 777, 785 (D.C. Cir. 2011) (Tatel, J.). It might be argued that the language from the
second sentence quoted in the body of this opinion concerns only 12(b)(6) motions, not 12(b)(1) motions since the
introductory sentence mentions both types of motions and the key language is followed by a sentence that expressly
concerns only 12(b)(1) motions. On the other hand, the second sentence is punctuated with quotations and citations
to two of the Supreme Court’s pivotal cases on standing. In addition, if this were intended as a statement of the
12(b)(6) standard, it would be an odd one—making no mention of the heightened “plausibility” standard imposed by
the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007). While “[s]ome district and circuit courts have begun to apply the ‘plausibility standard’ [from] for factual
allegations in all motions to dismiss, including motions to dismiss for lack of subject matter jurisdiction,” the D.C.
Circuit has apparently not done so. 5B Fed. Prac. & Proc. Civ. § 1350 & n.51.1 (3d ed.) (collecting cases from the
Second, Third, Fifth, and Eighth Circuits).
Accordingly, the Court will treat this second sentence as the standard for evaluating plaintiff’s allegations
in 12(b)(1) motions. In any event, the issue is not outcome determinative here, since plaintiffs’ core jurisdictional
allegations would be sufficient under even the heightened “plausibility” pleading standard.
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2. Victim Standing To Sue Financial Institutions For Funding Terrorist
Groups
There appears to be no binding precedent addressing the Article III standing of terror-
victims to sue a financial institution for providing funds to the responsible terrorist group.
However, several other courts have ruled on the issue.
In Rothstein v. UBS AG, the Second Circuit held that plaintiffs—victims and family
members of victims of Hamas and Hezbollah terror-attacks in Israel between 1997 and 2006—
had standing to sue the bank UBS based on plausible allegations that
Iran provided Hamas and Hizbollah with hundreds of millions of dollars to fund
terrorist attacks; that Iran conditioned that funding on agreement by those
organizations to conduct terrorist attacks on Israel and its residents; . . . that the
bombings and rocket attacks between July 1997 and July 2006, in which plaintiffs
and/or their family members were injured, were conducted by Hizbollah or
Hamas; . . . that Hizbollah and Hamas needed large sums of money to fund their
operations; that those organizations, by reason of their nature and the existence of
counterterrorism sanctions, could not freely use normal banking services such as
checks or wire transfers; . . . that U.S. currency is a universally accepted form of
payment; . . [and] that between 1996 and 2004, in violation of United States laws,
UBS provided Iran with hundreds of millions of dollars in cash . . . .
708 F.3d 82, 87 (2d Cir. 2013). The court emphasized that the “fairly traceable” causation
standard is lower than the “proximate cause” standard of tort liability, 5 and held that, accordingly
the fact that Iran also obtained U.S. currency from other sources during this period did not
deprive plaintiffs of standing to sue. Id. at 91–92 (citing Massachusetts v. EPA, 549 U.S. 497,
524 (2007)).
5
In fact, several circuits have explicitly recognized that the “fairly traceable” requirement is less demanding that the
tort law concept of “proximate” cause. See, e.g., Barbour v. Haley, 471 F.3d 1222, 1226 (11th Cir. 2006); Lerner v.
Fleet Bank, N.A., 318 F.3d 113, 122 n.8 (2d Cir. 2003); Natural Res. Def. Council, Inc. v. Watkins, 954 F.2d 974,
980 n.7 (4th Cir. 1992); Pub. Interest Research Grp. of New Jersey, Inc. v. Powell Duffryn Terminals Inc., 913 F.2d
64, 72 (3d Cir. 1990). The D.C. Circuit has apparently not done so, but several district judges in this circuit have
adopted this view. See, e.g., Flaherty v. Bryson, 850 F. Supp. 2d 38, 50 (D.D.C. 2012) (Kessler, J.); Nat’l Treasury
Employees Union v. Whipple, 636 F. Supp. 2d 63, 73 (D.D.C. 2009) (Roberts, J.); Nader v. The Democratic Nat.
Comm., 555 F. Supp. 2d 137, 149–50 (D.D.C. 2008) (Urbina, J.) aff'd on other grounds, 567 F.3d 692 (D.C. Cir.
2009); N. Carolina Fisheries Ass’n, Inc. v. Gutierrez, 518 F. Supp. 2d 62, 83 (D.D.C. 2007) (Bates, J.).
12
In Wultz v. Islamic Republic of Iran, this Court found that plaintiffs—family members of
a terror-attack victim—had standing to sue the Bank of China based on allegations that for three
years preceding the attack the bank had “executed dozens of dollar wire transfers for the
[terrorist group responsible], totaling several million dollars”; the transfers “were initiated by the
[group’s] leadership . . . and were executed by and through [the bank’s] branches in the United
States”; the transferred moneys were “received into accounts owned by officers and agents of the
[terrorist organization] and used for the purpose of planning, preparing for, and executing
terrorist attacks”; that “Israeli officials . . . informed China, which informed BOC, that the
transfers were enabling the terrorist activities of the [terrorist group]”; that the group in question
was subject to “strict economic sanctions programs imposed by the United States” which were
followed by most financial institutions and which, if “universally enforced,” would “severely
restrict[]” the group’s ability to conduct its activities; and that the transfers at issue were
“necessary for planning preparing and carrying out the attack for which relief is sought.” 755 F.
Supp. 2d 1, 18, 21–23 (D.D.C. 2010).
3. Analysis
Under these principles, plaintiffs have alleged facts sufficient to establish standing.
Plaintiffs allege that, during the relevant time period, Iran funded and controlled Hezbollah,
Compl. ¶ 29, used Hezbollah to conduct terrorist attacks against civilians in Israel, including the
attacks that injured and killed plaintiffs and their family members, id. at ¶ 56, and used BSI (90%
Iranian-owned) and BSPLC (wholly owned by BSI) to transfer over $50 million to Hezbollah, id.
at ¶ 35–36. Plaintiffs rely on a 2007 U.S. Treasury Department “Fact Sheet,” which supports the
last of these allegations. Id. at ¶ 37. These allegations are sufficient to show that BSI and
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BSPLC “materially increase[d] the probability of [plaintiffs’] injury” by funneling substantial
funds from a state sponsor of terror to a known terrorist group. See Huddy, 236 F.3d at 722.
Defendants protest that plaintiffs’ injuries are “far more closely tied to acts of
unidentified third parties—without whose ‘independent action’ plaintiffs would not have been
injured, namely, those who allegedly planned and carried out the attacks.” Def.’s Mem. 16. But,
an indirect causal chain may still be a valid causal chain for standing purposes. See Warth, 422
U.S. at 504–05 (“[t]he fact that the harm to [plaintiffs] may have resulted indirectly does not in
itself preclude standing”). Moreover, plaintiffs’ allegations (which, at this stage, this Court must
“accept as true,” LaRoque, 650 F.3d at 785), are that the “third party” actions here (i.e.
Hezbollah’s rocket attacks) are not really “independent” at all from the fund transfers, but rather
the transfers were completed by BSI and BSPLC in furtherance of Iran’s agenda to promote
Hezbollah’s terror attacks on Israel. Compl. ¶ 35. This claim is supported by plaintiffs’
allegations that Iran created, funded and controlled Hezbollah and used that organization to
commit terror attacks against Israel; that BSI was (or is) 90% owned by Iran; and that BSPLC
was wholly owned by BSI. “[D]rawing all reasonable inferences from those allegations in
plaintiffs’ favor,” as this Court is obliged to do at this stage, see LaRoque, 650 F.3d at 785, the
Court finds that plaintiffs have met their burden to establish standing.
Notably, plaintiffs’ allegations here seem to provide an even stronger causal chain than
that approved by the Second Circuit in Rothstein, where the defendant bank was accused only of
making illegal financial transfers, not of being in any deeper way enmeshed in the terrorist
purposes of the beneficiaries of those transfers. See Rothstein, 708 F.3d at 87. Rather, plaintiffs’
causal chain is like the one found sufficient by this Court in Wultz, where this Court emphasized
that the defendant bank had actual knowledge that the funds transfer would benefit a terrorist
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entity. 755 F. Supp. 2d at 18. Because plaintiffs’ allegations are sufficient to establish a “line of
causation” between the conduct by BSI and BSPLC and their injuries that is not “too attenuated,”
they have standing to bring these claims against BSI and BSPLC. See Allen, 468 U.S. at 752.
C. The Act of State Doctrine Does Not Apply
BSI and BSPLC also argue that plaintiffs’ claims are barred under the Act of State
Doctrine. Defs.’ Mem. 10–14; see also Defs.’ Reply 3–4. The Court rejects this argument.
1. Legal Standard
“The act of state doctrine ‘precludes the courts of this country from inquiring into the
validity of the public acts a recognized foreign sovereign power committed within its own
territory.’” McKesson Corp. v. Islamic Republic of Iran, 672 F.3d 1066, 1073 (D.C. Cir. 2012)
cert. denied, 133 S. Ct. 1582 (U.S. 2013) (quoting Banco Nacional de Cuba v. Sabbatino, 376
U.S. 398, 401 (1964)). The doctrine applies when “the relief sought or the defense interposed
would [require] a court in the United States to declare invalid the official act of a foreign
sovereign performed within its own territory.” W.S. Kirkpatrick & Co., Inc. v. Environmental
Tectonics Corp., 493 U.S. 400, 405 (1990). “Act of state issues only arise when a court must
decide—that is, when the outcome of the case turns upon—the effect of official action by a
foreign sovereign.” Id. at 406. “When it applies, the doctrine serves as a ‘rule of decision for the
courts of this country,’ which requires courts to deem valid the acts of foreign sovereigns taken
within their own jurisdictions.” McKesson Corp., 672 F.3d at 1066 (quoting Kirkpatrick, 493
U.S. at 406, 09).
2. Analysis
Defendants invoke the Act of State doctrine because, they claim, “[f]or plaintiffs’ claims
to succeed, the Court will be required to determine the validity of Israel’s contention that a state
15
of war (namely, the Second Lebanon War) existed at the time of the attacks described in the
complaint” or whether those acts were instead “solely . . . act[s] of terrorism by Hezbollah.”
Defs.’ Mem. 10–14; see also Defs.’ Reply 3–4.
This is incorrect. Even if the Israeli government’s statements characterizing the rocket
attacks as “war” are construed as “public acts a recognized foreign sovereign power committed
within its own territory,” McKesson, 672 F.3d at 1073, the Act of State doctrine does not apply
here because the court need not really “inquire into the validity” of those statements. Id.Plaintiffs’ claims depend, in part, on whether the rocket attacks fit into specific legal definitions
of “terrorism” or “war.” Cf. Defs.’ Mem. 11–12 (“[P]laintiffs are asking the Court to determine
whether these killings resulted from terrorism or war.”). The Court may resolve these legal
questions without addressing the “validity” of the Israeli statements which, despite using some of
the same terms, did not sound in any of the legal frameworks plaintiffs invoke here. See
McKesson, 672 F.3d at 1073. Contrary to defendants’ mischaracterization, a finding that the
rocket attacks fit into, say, the ATA’s definition of “international terrorism” would not
“overrule” the Israeli description of the attacks as “war” because these statements did not purport
to rely on that specific legal definition. See Defs.’ Mem. 12.
Defendants’ cases are not to the contrary. In Saltany v. Reagan, the late Judge Thomas
Penfield Jackson found that the Act of State doctrine barred a claim against the United Kingdom
based on that government’s decision to “allow its territory to be utilized by [the United States] . .
. to mount a military operation against [Libya].” 702 F. Supp. 319, 320 (D.D.C. 1988) aff’d in
part, rev’d in part, 886 F.2d 438 (D.C. Cir. 1989) (discussed at Defs.’ Mem. 12–13). And, in
Roe v. Unocal Corp., then-district judge Richard Paez found that the Act of State doctrine barred
an action based on an alleged collaboration between the Burmese Military and a private
16
company. 70 F. Supp. 2d 1073 (C.D. Cal. 1999) (discussed at Defs.’ Mem. 13–14). While the
Saltany claim would have turned on the legality of the UK’s decision, and the Unocal claims
would have turned on the legality of the Burmese Military’s actions and orders, the present
claims do not turn on the legality of any Israeli actions, and instead, turn only on questions that
the Israeli government has never purported to address: whether the rocket attacks qualify under
certain legal definitions. Accordingly, the Act of State doctrine does not apply.
III. ISRAEL AND LEBANON ARE NOT INDISPENSABLE PARTIES
BSI and BSPLC also move to dismiss the complaint under Federal Rule of Civil
Procedure 12(b)(7) for failure to join Israel and Lebanon as “indispensable parties.” Defs.’
Mem. 29; Defs.’ Reply 12. BSI and BSPLC argue that because the Court “would have to find as
a matter of fact that plaintiffs were injured by acts of terrorism,” rather than what the Israeli
government has termed a “war” with Lebanon, “[b]oth Israel and Lebanon . . . have an interest in
the subject matter of this litigation, i.e., whether a state of war existed or not.” Defs.’ Mem. 29;
see also Defs.’ Reply 12 (“Because this case involves claims relating to military attacks that
resulted in civilian casualties during a war between two sovereign states, Israel and Lebanon, it
invariably and squarely implicates their interest in the outcome of the litigation.”).
This argument fails for the same reason the Political Question and Act of State arguments
failed: while the Court will have to determine whether the rocket attacks were “terrorism” or
“war” under the various specific legal frameworks plaintiffs invoke here, these determinations do
not directly implicate the Israeli statements, which did not invoke the legal frameworks plaintiffs
rely on here. Israel and Lebanon are not indispensable parties.
17
IV. PLAINTIFFS’ FOREIGN SOVEREIGN IMMUNITIES ACT CLAIMS FAIL
The American plaintiffs assert claims under the updated state-sponsor of terrorism
provision of the Foreign Sovereign Immunities Act against Iran, CBI and BSI (not BSPLC).
Compl. ¶¶ 117–35 (Counts I & II). BSI moves to dismiss these claims against it under Federal
Rule of Civil Procedure 12(b)(6). The Court grants the motion and dismisses the claims against
BSI. It does not address the claims against CBI or Iran.
A. Legal Standard
The FSIA provides a cause of action for money damages that nationals of the United
States 6 may bring against “foreign state” sponsors of terror for “personal injury or death caused
by,” inter alia, “extrajudicial killing[s]” 7 or “the provision of material support or resources for
such an act.” 8 28 U.S.C. § 1605A(c). Under the FSIA, a “foreign state” includes “an agency or
instrumentality of a foreign state,” which is a “separate legal person . . . a majority of whose . . .
ownership interest is owned by a foreign state or political subdivision thereof.” 28 U.S.C. §
1603(a) & (b). “[I]nstrumentality status [is] determined at the time suit is filed,” rather than at the
time of the alleged incident. Dole Food Co. v. Patrickson, 538 U.S. 468, 478 (2003).
B. Analysis
Defendants claim that Iran has owned less than half of BSI’s shares since 2009—well
before the present lawsuit was filed. Defs.’ Mem. 30–31. Plaintiffs do not contest this claim.
6
Or members of the armed forces, government employees, government contractors, and their legal representatives. §
1605A(c)(1)-(4).
7
The FSIA authorizes suits for, inter alia, “extrajudicial killing[s]”—a term which is defined as excluding “any such
killing that, under international law, is lawfully carried out under the authority of a foreign nation.” § 1605A(h)(7)
(incorporating definition of the term from section 3 of the Torture Victim Protection Act of 1991, 28 U.S.C. § 1350note). If and when plaintiffs move for default judgment against CBI and Iran on this claim, they will have to show
that the deaths that resulted from the rocket attacks violated the international law of war.
8
The statute limits liability to cases in which the act is performed, or the support is provided “by an official,
employee, or agent of such foreign state while acting within the scope of his or her office, employment, or agency.”
§ 1605A(c).
18
Pls.’ Opp’n 15 (noting defendants’ argument and conceding that “[i]f BSI is not an agency or
instrumentality of Iran . . . then the FSIA claims against BSI would indeed need to be
dismissed.”). Thus, the Court agrees with defendants. Under Dole Food’s interpretation of §
1603(b), BSI is not an “agency or instrumentality” because it was not majority-owned by a
foreign state at the time the suit was filed. Accordingly, plaintiffs’ FSIA claims against BSI will
be dismissed.
V. PLAINTIFFS’ CLAIMS UNDER THE ANTI-TERRORISM ACT FAIL
The American plaintiffs assert claims under the ATA, 18 U.S.C. § 2333(a), against
BSPLC (not BSI). Compl. ¶¶ 127–45 (Counts III & IV). Defendants move to dismiss these
claims under Federal Rule of Civil Procedure 12(b)(6). The Court grants the motion and
dismisses the claims.
A. Legal Standard
The ATA provides that “[a]ny national of the United States injured in his or her person . .
. by reason of an act of international terrorism, or his or her estate, survivors, or heirs, may sue
therefor in any appropriate district court of the United States and shall recover threefold the
damages he or she sustains and the cost of the suit, including attorney’s fees.” 18 U.S.C. §
2333(a) (emphasis added). However, “[n]o action shall be maintained . . . for injury or loss by
reason of an act of war.” Id. § 2336(a) (emphasis added). “Act[s] of international terrorism”
(A) involve violent acts or acts dangerous to human life that are a violation of the
criminal laws of the United States or of any State, or that would be a criminal
violation if committed within the jurisdiction of the United States or of any State;
(B) appear to be intended--
(i) to intimidate or coerce a civilian population;
(ii) to influence the policy of a government by intimidation or coercion; or
(iii) to affect the conduct of a government by mass destruction,
assassination, or kidnapping; and
(C) occur primarily outside the territorial jurisdiction of the United States, or
transcend national boundaries in terms of the means by which they are
19
accomplished, the persons they appear intended to intimidate or coerce, or the
locale in which their perpetrators operate or seek asylum.
§ 2331(1). An “act of war” is defined as “any act occurring in the course of . . . (B) armed
conflict, whether or not war has been declared, between two or more nations; or (C) armed
conflict between military forces of any origin.” § 2331(4).
The statute leaves open several procedural and substantive issues on which there is
apparently no binding circuit precedent.
1. Procedural Issues
There is some confusion as to where the “act of war” exclusion, § 2336, fits in the
procedural posture of a case. Courts have variously treated it as (1) a bar to subject matter
jurisdiction; (2) a definition of an element of the claim; and (3) an affirmative defense. Compare
Estate of Klieman v. Palestinian Auth., 424 F. Supp. 2d 153, 162–63 (D.D.C. 2006) (Friedman,
J.) (treating § 2336 as a jurisdictional bar), and Biton v. Palestinian Interim Self-Gov’t Auth., 412
F. Supp. 2d 1, 7 (D.D.C. 2005) (Collyer, J.) (same), with Stutts v. De Dietrich Grp., 03-cv-4058,
2006 WL 1867060 (E.D.N.Y. June 30, 2006) (treating § 2336 as defining an element of the
claim), with Sokolow v. Palestine Liberation Org., 583 F. Supp. 2d 451, 458–59 (S.D.N.Y. 2008)
(declining to decide whether § 2336 is a jurisdictional bar or an element), and with Gill v. Arab
Bank, PLC, 893 F. Supp. 2d 474, 508 (E.D.N.Y. 2012) (Weinstein, J.) (treating § 2336 as an
affirmative defense), and Morris v. Khadr, 415 F. Supp. 2d 1323, 1334 (D. Utah 2006) (“[T]he
burden should fall on [defendant] to prove that his associates were a military force if he wishes
to invoke this ATA exclusion.”). Defendants are similarly unclear on this front, stating only that
plaintiffs’ claims “are barred” under the ATA’s act of war exclusion. Defs.’ Mem. 35; see also
Defs.’ Reply 13 (same). Plaintiffs adopt the same language. Pls.’ Opp’n 15–16.
20
The Court need not resolve this procedural question. First, the distinction between an
affirmative defense and an element of the claim is not significant. Because the defendants argue
that the allegations contained in the complaint are sufficient to satisfy the exception, it would not
make any difference on the present motion to dismiss whether the Court were to treat the
exception as an affirmative defense or as an element. See Jones v. Bock, 549 U.S. 199, 215
(2007) (“Whether a particular ground for opposing a claim may be the basis for dismissal for
failure to state a claim depends on whether the allegations in the complaint suffice to establish
that ground, not on the nature of the ground in the abstract.”).
Second, the distinction between an element of the claim and a jurisdictional bar might be
more significant. The heightened “plausibility” standard of Ashcroft v. Iqbal, 556 U.S. 662(2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) applies to the former, but, while
“[s]ome district and circuit courts have [also] begun to apply [this standard] for factual
allegations in . . . motions to dismiss for lack of subject matter jurisdiction,” 5B Fed. Prac. &
Proc. Civ. § 1350 & n.51.1 (3d ed.), the D.C. Circuit has apparently not done so. See LaRoque
v. Holder, 650 F.3d 777, 785 (D.C. Cir. 2011) (discussed supra note 4). As discussed below, the
Court finds that even under the looser standard under 12(b)(1), plaintiffs’ ATA claims fail.
Accordingly, it need not decide whether the act of war exclusion is jurisdictional or part of the
claim.
2. Substantive Issues
Defendants do not specify which subsection(s) of § 2331(4) they rely on. Defs.’ Mem.
35. As discussed below, the Court finds that subsections (B) and (C) are both relevant.
Subsection (B) applies the act of war exception to acts “occurring in the course of . . .
armed conflict . . . between . . . nations.” § 2331(4)(B). Subsection (C) applies the exception to
21
acts “occurring in the course of . . . armed conflict between military forces of any origin.” §
2331(4)(C).
The phrase “in the course of” poses some difficulty. Some judges in this district have
interpreted this phrase as incorporating sub rosa the “established norms of warfare and armed
conflict under international law.” Klieman, 424 F. Supp. 2d at 166 (Friedman, J.) (“[A]n act that
violates established norms of warfare and armed conflict under international law is not an act
occurring in the course of armed conflict.”); see also Biton, 412 F. Supp. 2d at 10–11 (Collyer,
J.) (because an attack targeted children who are “not proper targets of war,” the attack “did not
occur ‘during [sic] the course of’ an armed conflict as a matter of law”). Such a move is
appealing as it provides significant guidance in an otherwise open-ended statutory regime: any
act that violates the international laws of war does not qualify for the exception. Unfortunately,
such a move is not justified here: Congress knows how to invoke international law and the law of
war, having done so explicitly in some of the other statutes relied on by plaintiffs in this case.
See, e.g., FSIA, 28 U.S.C. § 1605A(h)(7) (incorporating a definition of “extrajudicial killing”
from the Torture Victim Protection Act of 1991 that expressly excludes “any such killing that,
under international law, is lawfully carried out under the authority of a foreign nation.”); see also
Gill, 893 F. Supp. 2d at 514 (making the same point, and collecting additional examples). It
declined to do so in this provision, and the Court should not step in to do so. This Court declines
to follow Judges Friedman and Collyer by importing wholesale the international law of war into
the statute by way of the phrase “in the course of.”
The undefined terms “military forces” and “armed conflict” of subsection (C) also pose
difficulties. Because subsection (B) already covers all armed conflict between nations, the term
must include non-national forces—or it would be rendered mere “surplusage.” See, e.g., Antonin
22
Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174–79 (2012)
(discussing the “Surplusage Canon”: “If possible, every word and every provision is to be given
effect . . . None should be ignored. None should needlessly be given an interpretation that causes
it to duplicate another provision or to have no consequence.”); see also Gill, 893 F. Supp. 2d at
512 (reaching the same conclusion regarding subsection (C)); Weiss v. Arab Bank, PLC, 2007
WL 4565060, *5 (E.D.N.Y. Dec. 21, 2007) (“[S]ubection (C) extends the ‘act of war’ exclusion
to armed conflicts between military forces that are not the military forces of recognized
nations.”); but see Morris, 415 F. Supp. 2d at 1334 (noting that “military” is conventionally
defined as the armed forces “of a nation,” and concluding that al Qaeda did not qualify as a
“military force” because it “is not a ‘nation’”). But subsection (C) must not be read so broadly
as to encompass all of the acts that otherwise qualify as “international terrorism” under §
2331(1); doing so would entirely eviscerate § 2333(a), which provides a cause of action for
victims of such acts. See Scalia & Garner, Reading Law, at 63 (discussing the following
“presumption against ineffectiveness”: “A textually permissible interpretation that furthers rather
than obstructs the document’s purpose should be favored.”). In sum, subsection (C) may exclude
some, but cannot exclude all, acts by non-national groups that otherwise form the basis for a
valid claim under the ATA: i.e. “violent” acts that “appear to be intended to intimidate or coerce
a civilian population; to influence the policy of a government by intimidation or coercion; or to
affect the conduct of a government by mass destruction . . . .” § 2331(1).
3. Past Applications
While there is no binding circuit precedent interpreting the act of war exemption, several
judges, in and outside of this circuit, have decided cases interpreting this provision.
23
Several judges have found that attacks on civilians in Israel by Palestinian terrorist
groups were not covered by the act of war exemption. In Biton, Judge Collyer considered a
November 2000 bus bombing in a former Israeli settlement in the Gaza Strip that was alleged to
be part of the “al-Aqsa Intifada,” “a series of violent demonstrations and clashes between
Palestinians and Israeli Defense Forces that ensued following . . . Ariel Sharon’s controversial
visit to the Temple Mount . . . in Jerusalem in September 2000.” 412 F. Supp. 2d at 3. She
concluded that this bombing was not an “act of war” because the bus contained “only children
and teachers” and “children are not the proper targets of war.” 9 412 F. Supp. 2d at 10.
Similarly, in Klieman, Judge Friedman considered a 2002 attack on an Israeli civilian bus in the
West Bank. 424 F. Supp. 2d at 155–56. Although defendants asserted that there was “ongoing
and daily armed conflict between the Israeli military and Palestinian military forces throughout
the West Bank and Gaza during the relevant period,” and that “the Israeli government
consistently has characterized the fighting as armed conflict,” id. at 163 (quotations and citations
omitted), Judge Friedman declined to decide whether there was “armed conflict between military
forces of any origin,” § 2331(4)(C), during this period. Klieman, 424 F. Supp. 2d at 163.
Instead, he concluded that because the attack targeted a bus containing only civilian non-
combatants, it could not have occurred “in the course of” any such conflict. 10 Id. at 167; see also
Sokolow, 583 F. Supp. 2d at 454–55, 459 (concluding that seven attacks on civilians in Israel
over a three year period, allegedly committed by the Palestinian Liberation Organization did not
qualify for the act of war exemption, notwithstanding defendants’ arguments that “the
persistence of violence, between Israelis and Palestinians in the West Bank and Gaza Strip,
9
As discussed above, the Court rejects Judge Collyer’s reading of the statute as incorporating the international laws
of war.
10
Again, as discussed above, the Court rejects Judge Friedman’s reading of the statute as incorporating the
international laws of war.
24
constitute[d] ‘armed conflict’ under the ATA,” and that “the attacks were not intended as acts of
terrorism” but rather “an attempt to end the illegal occupation of these territories.” (citing Judge
Friedman’s opinion in Klieman, 424 F. Supp. 2d at 167, and Judge Collyer’s opinion in Biton,
412 F. Supp. 2d at 10–11)).
More recently, in Gill, Judge Weinstein considered a 2008 shooting by Hamas gunmen in
Gaza targeting an Israeli government-led delegation at an Israeli observation point. 893 F. Supp.
2d at 484–85. The Judge concluded that subsection (B) (armed conflict between nations) might
be applicable, since Hamas held a majority of seats in the Palestinian legislature, and controlled
Gaza, which “is at least part of a proto-nation.” Id. at 510. But he decided that the issue required
further elaboration and declined to dismiss on that basis, instead elaborating “some of the
questions that would be raised . . . in the context of the Israel-Hamas conflict, treating the
conflict potentially as a war between nations,” including whether the ATA “exempt[s] from the
aegis of the civil remedy provision the actions of a paramilitary group—Hamas—tied to a
nation’s dominant political party.” Id. Judge Weinstein also concluded that subsection (C)
might apply, but only if defendants could demonstrate by a preponderance of the evidence that
“Hamas does not [as a general practice] . . . target civilians to any substantial degree.” 11 Id. at
517.
Other judges have considered the act of war exemption in other contexts. In Stutts, Judge
Glasser considered the detonation of Iraqi chemical weapons by the Coalition forces during the
Gulf War in 1991, which allegedly exposed plaintiffs to toxic agents. 2006 WL 186 7060, at *1.
11
Judge Weinstein’s conclusion rested on the following definition of the term “military” as used in subsection (C),
which he arrived at following a very lengthy review of the ATA’s text, legislative history, and caselaw: “If the
general practice of a group not acting as part of a ‘nation’s’ forces is to take actions that would violate the laws of
war to any substantial degree if they were committed by a nation, then it cannot be said, under section 2331(4)(C), to
be a ‘military’ force covered by the act of war exception to civil recovery.” Gill, 893 F. Supp. 2d at 508-17.
25
Although the detonation took place after a ceasefire was declared, the judge concluded that the
case fit “squarely within the [act of war] exemption.” Id. at *4.
And, in Morris v. Khadr, Judge Cassell considered a 2002 al Qaeda attack on members of
the U.S. Army in Afghanistan. 415 F. Supp. 2d at 1326. The Court raised the act of war
exclusion sua sponte. It raised the possibility that Al Qaeda might be considered a “military
force” under subsection (C), because plaintiffs alleged that Al Qaeda was “headquartered in
Afghanistan and involved a cluster of military ideological camps dedicated to their goal of
establishing a universal Islamic State through the use of violence.” Id. at 1333. But, the court
ultimately rejected this view. First, it distinguished between “military forces” (which, it noted,
are usually defined as affiliated with a nation) and “terrorists,” and finding that “al Qaeda fits
only in the latter” because “they are not a ‘nation.’” 12 Id. at 1334. Second, it noted that “the
burden should fall on [defendant] to prove that his associates were a military force if he wishes
to invoke this ATA exclusion.” 13 Id.B. Analysis: The Rocket Attacks Qualify for the Act of War Exception Under
Subsection (C)
Under these principles, and guided in part by these precedents, the Court finds that the
rocket attacks at issue in the present matter are properly categorized as “act[s] of war” under
subsection 2331(4)(C).
First, the Court must decide whether Israel and Hezbollah were engaged in “armed
conflict” during the summer of 2006, and whether the rocket attacks occurred “in the course of”
this conflict. See § 2331(4). Several features weigh in favor of treating this 34-day conflict as an
“armed conflict” under the statute. Unlike the attacks in Biton, 412 F. Supp. 2d at 3, Klieman,
12
As noted above, the Court believes this argument relies on a misreading of the provision.
13
As noted above, the Court will not resolve the procedural ambiguity here.
26
424 F. Supp. 2d at 163, and Gill, 893 F. Supp. 2d at 484–85, the rocket attacks that form the
subject of plaintiffs’ complaint were neither isolated incidents, nor were they linked together
merely by a common ideology or a longstanding political goal (e.g., the abolition of the state of
Israel). Rather, like the incident in Stutts, which occurred during the Gulf War, 2006 WL 1867060, at *1, the rocket attacks occurred “in the course of” a military conflict that was temporally
limited, discrete, waged between Israel and Lebanon over the course of 34 days during the
summer of 2006, and provoked by a discrete event. This conflict began, apparently, with
Hezbollah crossing into Israel from Lebanon to kidnap and kill Israeli troops. This attack
ultimately provoked the Israeli military’s ground invasion of Lebanon. It concluded with a
United Nations brokered cease fire.
True, Hezbollah is not a national military force. However, this feature does not weigh
against finding “armed conflict” because, as discussed above, the statute’s structure implies that
non-national military forces are capable of engaging in “armed conflict.”
Weighing all of these features of the conflict together, the Court finds that this period of
conflict, which is often referred to as the “Israel-Lebanon War” or the “Second Lebanon War,”
constitutes “armed conflict” under the ATA. 14
Second, and more difficult, is the question of whether Hezbollah qualifies as a non-
national “military force” under subsection (C). Hezbollah is a terrorist group which routinely
targets civilians. But, during this conflict, Hezbollah engaged in sustained combat with a
national military force, initiating an attack on members of that military force, provoking a full-
blown invasion of its base-country (Lebanon) by that military, and, ultimately agreeing to a
14
That the Israeli leadership has referred to this conflict as a “war” on several occasions, See Defs.’ Mem. 1 n.1, 4–
6; Pls.’ Opp’n 4–6, and, that the Final Report of an Israeli governmental commission’s investigation into the conflict
concluded that “Israel initiated a long war, which ended without clear military victory,” Defs.’ Mem. 5 (quoting
Winograd Commission), only further implies that these attacks were part of an “armed conflict.”
27
U.N.-brokered cease fire with that military. Hezbollah is surely an ambiguous entity—a non-
national paramilitary force, a terrorist group, and a part of the Lebanese government—but, in the
context of this case, and this particular conflict, the Court weighs these various factors and
concludes that during the Israel-Lebanon war, Hezbollah was acting as a “military force” for
purposes of subsection (C) of the ATA.
Treating the Israel-Lebanon war as an “armed conflict” and Hezbollah as a “military
force” for purposes of their actions during this conflict does not upset the basic definitional
principle the Court extrapolated from the statute above; that subsection (C) may exclude some,
but cannot exclude all, acts by non-national groups that otherwise form the basis for a valid
claim under the ATA. For instance, nothing in this holding would shake the conclusions reached
in Biton, 412 F. Supp. 2d at 3, Klieman, 424 F. Supp. 2d at 163, or Gill, 893 F. Supp. 2d at 484–
85. In those cases, defendants had advanced the theory that the attacks were part of a long
struggle between a terrorist group and Israel. And, like the present case, some leaders on both
sides in those cases may have described the struggle as a “war.” But the factors reviewed in the
above discussion are sufficient to comfortably distinguish the present matter from those cases,
and to preserve the availability of ATA for cases like Biton, Klieman, and Gill going forward.
In sum, the rocket attacks meet the ATA’s definition of an “act of war” under §
2331(4)(C), and therefore qualify for the exemption under § 2336. Plaintiffs’ ATA claims are
dismissed.
VI. PLAINTIFFS’ ALIEN TORT STATUTE CLAIMS FAIL
The non-American plaintiffs assert claims against BSI and BSPLC pursuant to the Alien
Tort Statute (“ATS”), 28 U.S.C. § 1350. Compl. ¶¶ 146–53 (Count V). Defendants move to
28
dismiss these claims under Federal Rule of Civil Procedure 12(b)(1) & (6). Defs.’ Mem. 16–22.
The Court grants the motion and dismisses the claims for lack of subject matter jurisdiction.
A. Legal Standard
The ATS provides: “The district courts shall have original jurisdiction of any civil action
by an alien for a tort only, committed in violation of the law of nations or a treaty of the United
States.” 28 U.S.C. § 1350.
In Kiobel v. Royal Dutch Petroleum Co., the Supreme Court held that “the presumption
against extraterritoriality applies to claims under the ATS, and that nothing in the statute rebuts
that presumption.” 133 S. Ct. 1659, 1669 (2013). Thus, an action “seeking relief for violations
of the law of nations occurring outside the United States” will ordinarily be barred, as it was in
that case. Id. at 1669, 1662 (finding barred claims brought by Nigerian nationals against Dutch,
British and Nigerian corporations, based on actions occurring in Nigeria). However, the Court
appeared to leave room for future cases in which the conduct took place outside the United
States, but where “the claims touch and concern the territory of the United States . . . with
sufficient force to displace the presumption against extraterritorial application.” Id.; see also id.
at 1669 (Kennedy, J., concurring) (noting, with approval, that the Court is careful to leave open a
number of significant questions regarding the reach and interpretation of the Alien Tort
Statute”); id. at 1669–70 (Alito, J., concurring) (noting the majority’s “narrow approach,” which
“obviously leaves much unanswered.”). Two judges on this court have noted this opening left in
the Court’s opinion. Mohammadi v. Islamic Republic of Iran, 09-cv-1289, 2013 WL 2370594,
*14–15 (D.D.C. May 31, 2013) (Howell, J.) (“[T]he Supreme Court hinted as to what type of
conduct occurring entirely abroad might confer jurisdiction under the ATS.”); Mwani v. Bin
Laden, 99-cv-125, 2013 WL 2325166, *3 (D.D.C. May 29, 2013) (Facciola, M.J.) (“One could
29
read this as the Court suggesting that, in some limited instances, an act occurring outside the
United States could so obviously touch and concern the territory of the United States that the
presumption against extraterritorial application of the ATS is displaced.”).
For instance, in Mwani, Magistrate Judge Facciola found that Kenyan victims of an
American embassy bombing in Kenya had subject matter jurisdiction under the ATS to pursue
claims against the foreign terrorist group responsible. He reasoned that a terrorist attack that “1)
was plotted in part within the United States, and 2) was directed at a United States Embassy and
its employees” met the Supreme Court’s test of “touching and concerning the United States with
sufficient force” to overcome the presumption against extraterritoriality. 2013 WL 2325166, *4.
B. Analysis
In the present action, the non-American plaintiffs have asserted ATS claims against
foreign defendants for actions that took place in Israel and Lebanon. Under Kiobel, these claims
will only survive if the underlying attacks “touch and concern” the United States “with sufficient
force to displace the presumption against extraterritorial application.” 133 S. Ct. at 1659.
Plaintiffs point to no facts that would support such a finding. Unlike Mwani, where the attack
was planned in the United States and targeted at one of its embassies, here the attacks were
allegedly funded by Iran, launched from Lebanon, and targeted Israel. See 2013 WL 2325166,
*4. True, some of the individuals affected by the attacks are American, but there is no indication
that the attack was specifically targeted at Americans, rather than Israelis. Because these
extraterritorial attacks do not “touch and concern the territory of the United States . . . with
sufficient force to displace the presumption against extraterritorial application [of the ATS],” the
claims are barred. See Kiobel, 133 S. Ct. at 1659.
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VII. THE COURT DECLINES TO EXERCISE SUPPLEMENTAL JURISDICTION
OVER PLAINTIFFS’ ISRAELI TORTS CLAIMS
Finally, plaintiffs also raise claims under Israeli law against both BSI and BSPLC.
Compl. ¶¶ 154–73 (Counts 6 & 7). In the preceding discussion, the Court has dismissed all of
plaintiffs’ federal causes of action against BSI and BSPLC—under the FSIA, the ATA, and the
ATS—leaving only FSIA claims against other defendants (Iran and CBI) and claims against BSI
and BSPLC under foreign law. Principles of comity indicate that these claims under Israeli law
are best addressed by Israeli courts. Moreover, Section 1367 of Title 28 of the U.S. Code
provides that “district courts may decline to exercise supplemental jurisdiction over a claim . . . if
. . . the district court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C.
§ 1367(c)(3). Plaintiffs concede that “if the Court were to find it had no original jurisdiction,
dismissal of the[se] non-federal claims at this early stage of the litigation would be justified.”
Pls.’ Opp’n 10. Because the Court has dismissed all federal claims against BSI and BSPLC, the
Court will decline to exercise supplemental jurisdiction over these remaining Israeli law claims
against these defendants.
VIII. SERVICE ON REMAINING DEFENDANTS
The only remaining claims in this action are under the FSIA against Iran and CBI.
Although the Complaint was filed more than three years ago, plaintiffs still have not served
process on eiether these two (now sole-remaining) defendants. One month ago, after the case
was transferred to the undersigned Judge, plaintiffs attempted, for the second time, to accomplish
this service on these two defendants via mail service pursuant to 28 U.S.C. § 1608(a)(3). See
Certificate of Clerk, June 24, 2013, ECF No. 40; see also Docket Entries, July 8, 2010, ECF Nos.
12 & 13 (showing that the prior attempts at mail service on Iran and CBI were unsuccessful).
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The FSIA provides that “if service cannot be made within 30 days [via mail service]
under paragraph (3)” then plaintiffs in FSIA actions may accomplish service via “diplomatic
channels.” 28 U.S.C. § 1608(a)(4). Because this action has been pending for an extremely long
time with no action, and because several years have elapsed since the Clerk began to attempt
mail service, see Docket Entries, July 8, 2010, ECF Nos. 12 & 13, the Court will now order
plaintiffs to commence service on the remaining defendants via diplomatic channels pursuant to
§ 1608(a)(4) within 21 days of this opinion.
IX. CONCLUSION
All claims against BSI and BSPLC and associated John Does are dismissed and plaintiffs
shall commence service via diplomatic channels on the remaining defendants within 21 days of
this opinion.
An order shall issue with this opinion.
Signed by Royce C. Lamberth, U.S. District Judge, on August 20, 2013.
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