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SMITH v. ISLAMIC EMIRATE OF AFGHANISTAN

May 9, 2003

RAYMOND ANTHONY SMITH, AS ADMINISTRATOR OF THE ESTATE OF GEORGE ERIC SMITH, DECEASED; AND KATHERINE SOULAS, IN HER OWN RIGHT, ON BEHALF OF HER MINOR CHILDREN, AND AS EXECUTRIX OF THE ESTATE OF TIMOTHY SOULAS, DECEASED PLAINTIFFS,
v.
THE ISLAMIC EMIRATE OF AFGHANISTAN, THE TALIBAN, AL QAIDA/ISLAMIC ARMY, SHIEKH USAMAH BIN-MUHAMMAD BIN-LADEN A/K/A OSAMA BIN LADEN, SADDAM HUSSEIN, THE REPUBLIC OF IRAQ DEFENDANTS



The opinion of the court was delivered by: Harold Baer, Jr., District Judge.

OPINION AND ORDER

I. BACKGROUND

On November 14, 2001, Raymond Anthony Smith, the administrator of the estate of his brother George Eric Smith, brought suit against the Islamic Emirate of Afghanistan, the Taliban, al Qaeda, and Sheikh Usamah Bin-Muhammad Bin-Laden also known as Osama bin Laden, seeking damages for George Smith's death in the events of Sept. 11, 2001. On November 15, 2001, Jane Doe,*fn1 executrix of the estate of Timothy Soulas, brought a separate suit against these same defendants. Plaintiffs effected service on the Taliban and the Islamic Emirate of Afghanistan through personal service on Ambassador Abdul Salaam Zaeef and on the other defendants through service by publication in Afghani and Pakistani newspapers and several television stations.*fn2 I concluded that this service met minimal due process requirements. By order of January 23, 2003, the Court consolidated the two cases, designating Smith v. Islamic Emirate of Afghanistan, 01 Civ. 10132, as the lead case.

With the Court's permission, plaintiffs amended the consolidated complaint on June 10, 2002, to add Saddam Hussein and the Republic of Iraq as defendants. The summons and complaint was served upon the Republic of Iraq via the U.S. State Department's Director of Special Consular Services, U.S. Department of State, who in turn transmitted the documents to the Ministry of Foreign Affairs of the Republic of Iraq. None of the defendants has appeared and consequently the Court granted a default judgment against Saddam Hussein on February 21, 2003, and against all other defendants (including Iraq) on December 23, 2002. I held an inquest on February 28, 2003.

The lawsuit evolved from the extraordinary events of September 11, 2001. Not surprisingly, it raises several novel issues of law, including some of first impression.

II. LIABILITY

A. Al Qaeda defendants

Plaintiffs are proceeding against the non-sovereign defendants — i.e., the "al Qaeda defendants"*fn3 — under traditional tort principles and pursuant to the Antiterrorism Act of 1991 ("the ATA"), which provides that "Any national of the United States injured in his or her person, property, or business 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.

As an initial matter, it is not self-evident that the events of September 11 fall within the statute's definition of "international terrorism." Specifically, the statute defines "international terrorism" in contradistinction to "domestic terrorism."*fn4 The main difference is that domestic terrorism involves acts that "occur primarily within the territorial jurisdiction of the United States," while international terrorism involves acts that "occur primarily outside the territorial jurisdiction of the United States, or transcend[s] national boundaries in terms of the means by which they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum." The acts of September 11 clearly "occurred primarily" in the United States — indeed, they occurred entirely in the United States: airplanes owned and operated by U.S. carriers took off from U.S. airports and were in route to U.S. destinations when they were hijacked and crashed into U.S. landmarks. However, acts of international terrorism also encompass acts that "transcend national boundaries in terms of the means by which they are accomplished . . . or the locale in which their perpetrators operate." Arguably, this broad provision includes the case at bar, which was carried out by foreign nationals who apparently received their orders and funding and some training from foreign sources.*fn5 Although mindful that an expansive interpretation of "international terrorism" might render "domestic terrorism" superfluous, I conclude that these facts fall within the statute's definition of "international terrorism" and thus plaintiffs have pled a valid cause of action against the al Qaeda defendants.

1. Default under Fed.R.Civ.P. 55

In general, a default judgment establishes the defendant's liability. See, e.g., Cablevision Systems v. Radienovic, 2002 U.S. Dist Lexis 16604, *8-9 (S.D.N.Y. Aug. 28, 2002). Accordingly, the failure of the al Qaeda defendants to appear concludes the liability phase as against them and only a determination of damages remains. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65-66 (2d Cir. 1981). Although not necessary for liability, nevertheless the plaintiffs offered evidence of Osama bin Laden's involvement in terrorism in general and in the hijackings of the planes that hit and destroyed the World Trade Center on September 11th. In addition to the videotape in which bin Laden relates to a cleric how he planned to destroy the World Trade Center, plaintiffs pointed to bin Laden's fatwah, or holy war, of February 23, 1998, against the United States as well as other acts of terrorism against the United States linked or attributed to bin Laden, including the bombing of the Khobar Towers in Dhahran, Saudi Arabia, in June 1996; the bombings of the U.S. embassies in Dares Salaam, Tanzania, and Nairobi, Kenya in August 1998; and the bombing of the USS Cole in Yemen in October 2000.

B. The Iraqi defendants

1. Default under 28 U.S.C. § 1608(e): "Evidence satisfactory to the court"
a) Standard of proof required against the Iraqi defendants

The Foreign Sovereign Immunities Act provides that: "No judgment by default shall be entered by a court of the United States or of a State against a foreign state, a political subdivision thereof, or an agency or instrumentality of a foreign state, unless the claimant establishes his claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e) (emphasis added). This standard is identical to the standard for defaults against the United States, Fed.R.Civ.P. 55(e). See Commercial Bank of Kuwait v. Rafidain Bank, 15 F.3d 238, 242 (2d Cir. 1994). Plaintiffs argue that this standard is "less than normally required." Alameda v. Secretary of Health, Education & Welfare, 622 F.2d 1044, 1048 (1st Cir. 1980).

I have not found nor have plaintiffs cited any Second Circuit opinion that expressly decides what "evidence satisfactory to the court" means, in the context either of Rule 55(e) or § 1608(e). Instead, plaintiffs refer to dicta which, they suggest, indicate that this circuit adopts the less-than-normally-required standard articulated by the First Circuit in Alameda. For example, in Marziliano v. Heckler, 728 F.2d 151 (2d Cir. 1984), the Second Circuit noted with favor the First Circuit's Alameda standard. See Marziliano, 728 F.2d at 158 ("Indeed, it has been suggested in the context of this rule that `the quantum and quality of evidence that might satisfy a court can be less than that normally required.'" (quoting Alameda)). However, the Marziliano court also stated that "[o]n the record before us, there is no basis for concluding that the district court was not satisfied with the proof before it, which was of the quantum and quality it would ordinarily receive." Marziliano, 728 F.2d at 158. Further, the only other decision from the Second Circuit on the meaning of "evidence satis factory to the court" omits reference to Alameda and provides no further explication of this standard. See Rafidain Bank, 15 F.3d at 242. Finally, even if the Court adopts this less-than-normally-required standard, it begs the question of normally required when — at an inquest, on the pleadings, at summary judgment, or after a full adversarial proceeding.

The issue appears to have defied definitive resolution largely because in most cases the evidence of the defaulting defendant's liability is quite compelling and thus the matter can be decided without a more concise meaning of "evidence satisfactory to the court." See, e.g., Marziliano, 728 F.2d at 158; Cronin v. Islamic Republic of Iran, 238 F. Supp.2d 222, 224 (D.D.C. 2002) (finding that the facts were established by "clear and convincing evidence, which would have been sufficient to establish a prima-facie case in a contested proceeding"). Nevertheless, two competing views have remerged from the District Court of the District of Columbia, where many § 1608(e) cases are litigated: Several courts have applied — or invoked — a clear-and-convincing-evidence standard. See Unger v. Islamic Republic of Iran, 211 F. Supp.2d 91, 98 (D.D.C. 2002) (citing Weinstein v. Islamic Republic of Iran, 184 F. Supp.2d 13, 16 (D.D.C. 2002); Mousa v. Islamic Republic of Iran, Civ. No. 00-2096, at 2 (D.D.C. Sept. 19, 2001); Eisenfeld v. Islamic Republic of Iran, 172 F. Supp.2d 1, 4, 8 (D.D.C. 2000)). However, the court in Unger v. Islamic Republic of Iran concluded that the proper standard in the context 5 of a default was "the standard for granting judgment as a matter of law under Fed.R.Civ.P. 50(a) — a legally sufficient evidentiary basis for a reasonable jury to find for plaintiff." See Unger, 211 F. Supp.2d at 98 (citing Hill v. Republic of Iraq, 175 F. Supp.2d 36, 38 n. 4 (D.D.C. 2001)).*fn6 (The Unger court did not cite Alameda and Marziliano and instead noted the dearth of case law on the meaning of "evidence satisfactory to the court.")

Plaintiffs make two strong policy-based arguments for why a lesser standard, such as the one espoused in Unger or in Alameda, is appropriate. One of the reasons behind Rule 55 and § 1608 is to protect the public treasury from slow-moving sovereigns — a factor certainly not present here. See Rafidain Bank, 15 F.3d at 242 (quoting Marziliano). Furthermore, if "to the satisfaction of the court" imposes a heavy burden of proof, then sovereigns may be encouraged to default because they can avoid participating in discovery with little down side.*fn7 However, the plaintiffs in the cases discussed supra have apparently not been prejudiced by the lack of access to discovery, nor have the plaintiffs in this most extraordinary case. The matters which plaintiffs seek to prove are identic al to those that our government has sought to uncover and prove. However strong the engine of discovery for uncovering the truth may be, it pales in comparison to the combined resources of the United States law enforcement, military, and intelligence agencies, who have bent every effort to make the case that Saddam Hussein was involved in the September 11 attacks.

However, there is a second side to this policy coin — namely the government's interest in comity and reciprocity. Cf. Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82, 88-89 (D.C. Cir. 2002) (discussing the competing considerations with respect to the repeal of sovereign immunity for state-sponsors of terrorism and noting "[e]xecutive branch officials feared that the proposed amendment to FSIA might cause other nations to respond in kind, thus potentially subjecting the American government to suits in foreign countries for actions taken in the United States").

Although Congress intended a heavier burden than the generally accepted burden where the defendant has defaulted, it is not clear how much higher a burden it intended. The reasoning of Ohntrup and Alameda that this burden should not be too onerous is persuasive. On balance, the more appropriate burden to be met by the plaintiff is that stated in Unger, namely "a legally sufficient evidentiary basis for a reasonable jury to find for plaintiff."

b) Evidence to be considered

Although affidavits are generally inadmissible at trial, they may be used in hearings pursuant to § 1608(e). See Hutira v. Islamic Republic of Iran, 211 F. Supp.2d 115, 124 (D.D.C. 2002); see also Rafidain Bank, 15 F.3d at 241 (upholding court's use of and conclusions based on affidavits). Plaintiffs do not contend and I do not find any precedent that permits the Court to suspend the rules of evidence, in particular the rules with respect to hearsay, in an inquest on damages pursuant to § 1608(e). See Hutira, 211 F. Supp.2d at 123-24 (holding that a newspaper article was inadmissible as hearsay in a § 1608(e) hearing on damages). Plaintiffs contend that certain statements, for example one by an Iraqi defector that appeared in a Frontline interview about a terrorist-training facility, are admissible under exceptions to the hearsay rule. As every first-year law student knows, hearsay is an out-of-court unsworn statement offered for the truth of the matter asserted, and hearsay is inadmissible except in certain situations where there are sufficient indicia of trustworthiness. See Fed.R.Evid. 801, 802, 803, 804. Furthermore, while expert witnesses may rely on hearsay evidence to reach their conclusions, such evidence relied upon by the expert is otherwise inadmissible for any substantive purpose unless it is covered by an exception to the hearsay rule. See Fed.R.Evid. 703.*fn8 According to a leading treatise:

[Rule 703] "provides a presumption against disclosure to the jury of information used as the basis of an expert's opinion and not admissible for any substantive purpose, when that information is offered by the proponent of the expert."
. . . If the trial court determines that the underlying information should be disclosed to the jury, the disclosure can only be for that limited purpose [of assisting the jury in evaluating the expert witness's testimony], and the court, on request, should give the jury a limiting instruction informing it that the underlying information must not be used for any substantive purpose.
4 Weinstein's Federal Evidence § 703.05 (quoting Fed.R.Evid. 703 committee note (2000)) (emphasis added).
2. Substantive laws relied on by plaintiffs against Iraq and Saddam Hussein
Plaintiffs bring their claims against Iraq and Saddam Hussein based on two statutes, the Antiterrorism Act of 1991 (18 U.S.C. § 2333) and the Foreign Sovereign Immunities Act (28 U.S.C. § 1605(a)(7)).

a) Antiterrorism Act, 18 U.S.C. § 2333

As discussed supra, 18 U.S.C. § 2333 creates a cause of action for the "estate, survivors, or heirs" of any U.S. national killed by an act of international terrorism. However, 18 U.S.C. § 2337 appears to expressly foreclose an action against Iraq and its leader. This provision of the ATA states: "No action shall be maintained under section 2333 of this title against . . . a foreign state, an agency of a foreign state, or an officer or employee of a foreign state or an agency thereof acting within his or her official capacity or under color of legal authority." Id. § 2337 (emphasis added). Plaintiffs contend that this provision does not apply here because 28 U.S.C. § 1605(a)(7)*fn9 has stripped Iraq and Saddam Hussein of the protection of § 2337. See Pl. Proposed Findings of Fact and Conclusions of Law ¶ 69, at 31. I disagree.

Plaintiffs misses the point.*fn10 The issue is not whether 2337 bars suit against Iraq and Saddam Hussein under FSIA § 1605(a)(7) — it certainly does not — but whether plaintiffs have a cause of action under § 2333, which permits treble damages for civil violations of the ATA. Section 2337 could not be clearer — it prevents suits under § 2333 against foreign states and officers wherein a plaintiff who prevails would be entitled to treble damages. See Cronin, 238 F. Supp.2d at 231 n. 2 ("The problem with invoking [ 18 U.S.C. § 2333(a) against a foreign state] is 18 U.S.C. § 2337 explicitly provides that `no action shall be maintained under section 2333 of this title against . . . a foreign state, an agency of a foreign state, or an officer or ...


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