The opinion of the court was delivered by: Jack B. Weinstein, Senior United States District Judge
MEMORANDUM AND ORDER GRANTING IN PART MOTION TO AMENDED
This memorandum and order deals with defendant's motion to dismiss on the pleadings, which is granted in part. See Part IV.B, infra. After further discovery, the court will consider defendant's motion for summary judgment. See Scheduling Order, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Aug. 22, 2012), CM/ECF No. 58.
Mati Gill, who possesses American and Israeli citizenship, sues Arab Bank plc (the "Bank"), for money damages. He was wounded in 2008 by gunshots fired from Gaza into Israel. The Islamic Resistance Movement ("Hamas") claimed "credit" for the shooting. Hamas has been officially characterized by the United States government as a "terrorist" organization. See Designation of Foreign Terrorist Organizations, 62 Fed. Reg. 52,650 (Oct. 8, 1997); Exec. Ord. No. 12,947, 60 Fed. Reg. 5079, 5081 (Jan. 25, 1995); see also Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57, 63 (D.D.C. 2002). It is effectively in political and military control of Gaza. See, e.g., Zahren v. Gonzales, 487 F.3d 1039, 1040 (7th Cir. 2007), vacated on reh'g on other grounds sub nom. Zahren v. Holder, 637 F.3d 698 (7th Cir. 2011).
The plaintiff asserts five causes of action. One of these-the first, depending on a theory of aiding and abetting-is dismissed for the reasons stated below. All of the others will require essentially the same proof of unlawful action, state of mind, and causation. See Part III.C.4, infra.
The Bank has moved, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the amended complaint. A number of complex legal arguments have been raised in support of its motion. It is contended principally that:
1. The court lacks subject matter jurisdiction over the case pursuant to the political question doctrine;
2. The plaintiff's claims must be dismissed, pursuant to 18 U.S.C. § 2336(a), since his injuries were suffered during the course of an armed conflict between military forces;
3. Recovery on an aiding-and-abetting theory is precluded; and
4. The plaintiff has failed to adequately allege all of the elements of a claim under the civil remedy provision of the relevant anti-terrorism statute.
See generally Memorandum of Law of Defendant Arab Bank plc in Support of Its Motion to Dismiss the Amended Complaint ("Def Mem."), Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Apr. 9, 2012), CM/ECF No. 21.
The complex factual and legal issues presented preclude disposing of this litigation on defendant's motion directed at the pleadings. See Parts III and IV, infra. Plaintiff's amended complaint, except for his aiding and abetting claim, survives a Rule 12 attack. See Parts III.C.3 and IV.B, infra; see also Part III.C.5, infra. The court has instructed the defendant to file a motion for summary judgment since a factual record is required for a dispositive motion to be properly considered. See June 28, 2012 Hr'g Tr. 35; see also Scheduling Order, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Aug. 22, 2012), CM/ECF No. 58.
Asserted by plaintiff are a variety of claims brought pursuant to the federal anti-terrorism laws. See 18 U.S.C. § 2331 et seq. Courts that have addressed claims brought under the statute providing a civil cause of action to American nationals injured by terrorist acts have referred to it generally as the "ATA." The current version of the applicable civil remedy provision became federal law as part of the Federal Courts Administration Act of 1992. See Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 690 (7th Cir. 2008) (en banc) (Posner, J.); Almog v. Arab Bank, PLC, 471 F. Supp. 2d 257, 265-66 (E.D.N.Y. 2007). The governing statute will be referred to as the "Anti-Terrorism Act" or the "ATA."
The Bank is alleged to have maintained accounts for and provided financial services to Hamas, its leaders, and its affiliates. See Amended Complaint ("Am. Compl.") ¶ 47, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Mar. 9, 2012), CM/ECF No. 17. Plaintiff contends that the Bank's provision of financial support and financial services to Hamas, its supporters, and its associates caused his injury.
A critical aspect of the litigation is the reliance by plaintiff on the oversight of the Bank exercised by the United States government to prevent aid to terrorists. Executive action and the potential recovery in tort of private plaintiffs are complementary. Both support the government's anti-terrorism policy.
The Bank's New York branch assented to the issuance of a consent order in 2005 by the federal government's Office of the Comptroller of the Currency. It was agreed that the New York branch would thenceforth develop policies to ensure compliance with federal banking and anti-terrorism laws-implying, the plaintiff argues, that it had not done so theretofore. The same year, the New York branch agreed to pay a $24 million civil penalty to the federal government without admitting or denying the government's allegations that it had violated federal banking laws by failing to apply an adequate system of internal controls in clearing fund transfers and by failing to conduct independent testing to allow for the timely identification and correction of failures to comply with federal banking law. In assessing the civil penalty the government claimed-and the Bank neither admitted nor denied-that the Bank did not identify and report suspicious transactions involving the possible support of terrorism. See Part II.A.4, infra.
Integration of the ATA's criminal provisions with its civil remedy and the national executive's administrative system is central to a unified federal anti-terrorism policy, one aspect of which is the cutting off of funding to terrorists threatening American citizens' safety. It is not yet clear what probative force, if any, the defendant's consent agreement with-and its payment of a penalty to-the government has. For example, can it be assumed that pre-agreement, there was aid by the Bank, directly or indirectly, to terrorists? Can it be assumed that post-agreement, aid to terrorists-if any-ceased?
The parties will address these and related issues in their briefs on defendant's motion for summary judgment. They shall advise the court whether they believe it would be desirable to request the assistance of the United States Attorney for the Eastern District of New York in determining the views of the United States government with respect to the defendant's alleged provision of assistance to terrorist organizations and individual terrorists, particularly Hamas and its affiliates, prior to the time of the shooting.
Two statutory provisions are critical in this litigation. The first is 18 U.S.C. § 2333, granting federal district courts jurisdiction to hear a terrorism case of this kind brought by an American national. It provides in relevant part:
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(a) (emphasis added). The statutory terms "national of the United States" and "international terrorism" are terms of art. See id. § 2331. They are discussed in Part III.C.1, infra.
Unsettled is the question of what elements a plaintiff is required to plead and prove to succeed on a section 2333(a) claim. Raised by the civil remedy provision are a variety of serious interpretive questions. See generally Abecassis v. Wyatt, 704 F. Supp. 2d 623, 656-66 (S.D. Tex. 2010) (collecting cases and summarizing the different approaches applied by courts).
The issues raised in this case require the consideration of a congery of complex, interrelated vectors: a form of contributing cause, involving the alleged provision of assistance to Hamas before the shooting, as well as the amount and character of the aid allegedly provided, and its timing-a penny placed in a Hamas collection box many years before an attack would appear to be insufficient, but what more in the way of causation, if anything, is required under the statute is not clear, see United States v. Nelson, 277 F.3d 164, 186 (2d Cir. 2002) (noting that "[c]ausation is one of the most famously complicated concepts in language and in law. . . . [T]he modern law of torts employs at least three concepts of cause: 'cause-in-fact' or 'but for' cause, 'proximate' or 'legal' cause, and 'causal link' or 'causal tendency'" (citation omitted)); Part
III.C.4.c, infra; proximate cause, that is, how the strength of the government's policy in providing for liability of those on the periphery in time, space, and influence-both with regard to the injury-creating actor and Hamas' policy and acts possibly involving American nationals- bears on the interpretation of the statute, and its application to particular facts; the state of mind of a defendant sufficient for a finding of liability-does it include strict liability, negligence, recklessness, knowledge, or a higher showing of intent, and must it be connected to knowledge or intent that an American national might be injured by a probable act of Hamas; and probative force-what the probative value, if any, is of evidence allegedly showing possible assistance to Hamas, discounted by multiple levels of hypotheses linking the defendant's actions to the injury of an American national. See, e.g., John H. Mansfield & Margaret A. Berger et al., Evidence: Cases and Materials 2-15 (9th ed. 1997) (effect of confluence of steps of proof and probability of hypotheses in a chain of proof); see also Parts IV.E and V.E, infra.
Less than obvious on the statute's face is whether it provides for "secondary" liability- i.e., recovery for "aiding and abetting" a substantive violation of the ATA, or for conspiracy to commit a substantive violation of that statute. See Part III.C.3, infra.
As is explained below, this court concludes that section 2333(a) does not provide for aiding-and-abetting liability. See id. But other channels for proving civil liability may provide plaintiffs much of the benefit of the "aiding and abetting" criminal concept. The elements of the ATA cause of action, as they are described in this memorandum and order, are congruent with general tort-law principles. The federal civil remedy, in many cases, and by virtue of the federal material support statutes, provides a civil analog to section 2 of the federal criminal code; that section makes an aider and abettor of a federal crime liable as a principal. See 18 U.S.C. § 2; see also Parts III.C.3 and III.C.4, infra. As indicated in the discussion of section 2333(a)'s provision of treble damages, however, an ATA claim based on theory of strict liability or of negligence is not available to the plaintiff. See Part III.C.4.b, infra.
In this context, bear in mind that tort and crime were at one time "merged in the old trespass form of action," W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 8, at 37 (5th ed. 1984). The concept of "transferred intent" may have an impact on the developing section 2333(a) tort, so that an intent to help Hamas in shooting an Israeli citizen could be transformed into an intent to assist in shooting Americans. See, e.g., id. at 37-39; see also Victor E. Schwartz et al., Prosser, Wade, and Schwartz's Torts 28-29 (10th ed. 2000). But see Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 725 (7th Cir. 2008) (en banc) (Wood, J., concurring in part and dissenting in part). Imputed culpability based on vicarious liability may draw a third party (in this case, the Bank) into liability for the act of a terrorist organization. See Restatement (Third) of Torts: Apportionment of Liability § 7, at 69 cmt. j (2000) (noting that "the party who committed the tortious acts . . . and the party to whom liability is imputed are treated as a single unit for the assignment of responsibility"). The concept of "persons acting in concert" may also have a bearing on the Bank's civil liability. See id. § 15. In some circumstances, an organization like the Bank might be thought of as having a principal-agent relationship with a terrorist group; if a provider of financial services were deemed the principal and the terrorist organization its agent, the financier might bear responsibility for the terrorist group's reasonably foreseeable tortious actions even if the group acted primarily on its own initiative. See id. § 13; see also id. § A18, cmt. b. A civil conspiracy theory might also be used to tie a third party to the primary actor's liability. See W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 46, at 322-24. These matters need consideration as the ambit of the new ATA tort is developed.
Current tort-law concepts might take up much of the slack left by the elimination of aiding and abetting as a basis for section 2333(a) liability. See Part III.C.3, infra. The details of civil and criminal concepts may provide different conceptual and practical problems. While the logic of the Supreme Court's leading case regarding federal tort statutes and implicit aiding and abetting liability arguably suggests that all forms of secondary liability are disallowed when they are not explicitly provided for in a statute's text, see Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994) (discussed in Part III.C.3, infra), these questions are currently open in the ATA context. But cf. Evan H. Caminker, Precedent and Prediction, 73 Tex. L. Rev. 1, 6 (1994) (arguing that "[w]hen an inferior court confronts strongly probative predictive data concerning its superior court's likely future ruling, the inferior court generally may employ the proxy model [and rule in a fashion consistent with its prediction of how the superior court would rule]"). The extent to which the law will develop in spelling out the boundaries of the new section 2333(a) tort is unresolved. Given that section 2333(a) provides to plaintiffs injured by acts of terrorism a highly unusual private cause of action-one that is tied expressly to the criminal law, see Part III.C.1, infra-and the fact that the ATA's definitional provision suggests that recovery on some theory (or theories) of secondary liability may be available, see 18 U.S.C. § 2331(1)(A) (noting that "the term 'international terrorism means activities that . . . involve violent acts or acts dangerous to human life" (emphasis added)), wariness in extending the reasoning of Central Bank to circumscribe ATA liability seems warranted, especially in ruling on a motion to dismiss directed at the pleadings.
The second provision of the ATA necessitating substantial consideration requires the court to determine whether plaintiff's injury was caused by an "act of war" as defined by the statute. 18 U.S.C. § 2336 states in relevant part that:
No action shall be maintained under section 2333 of this title for injury or loss by reason of an act of war.
18 U.S.C. § 2336(a) (emphasis added).
The term "act of war" is defined at some length. See id. § 2331(4). But the federal courts differ with respect to the exception's meaning and applicability in terrorism cases. See Part III.C.5, infra.
A factual issue, closely related to the causation question raised by the interpretation of 18 U.S.C. § 2333, requires consideration: how will the plaintiff be able to prove that it was a Hamas gunman who shot him, as he alleges, and how will the shooting be connected to the defendant? See Order, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Apr. 18, 2012), CM/ECF No. 23. The evidentiary issues implicated by these questions are touched upon in Parts IV.E and V.E, infra.
Much of the relevant law is unsettled. Cases similar to the instant one have been treated with a wide variety of analyses with varying results. See, e.g., Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 687-98 (7th Cir. 2008) (en banc) (Posner, J.) (concluding that the ATA does not provide for secondary liability, and discussing at length the elements of a claim against an alleged primary violator in case in which plaintiff's decedent holding American and Israeli citizenship was shot and killed in Israel); Boim v. Quranic Literacy Inst., 291 F.3d 1000, 1008-21 (7th Cir. 2002) (first panel opinion) (concluding that the mere provision of funds to a terrorist group is insufficient to violate the ATA, and that the ATA allows for claims based on theory of secondary liability), overruled in part sub nom. by Boim v. Holy Land Found. for Relief & Dev., 549 F.3d at 685 (en banc); Rothstein v. UBS AG, 772 F. Supp. 2d 511, 513-18 (S.D.N.Y. 2011) (determining that individuals injured-and survivors of individuals who were killed-by terrorist attacks in Israel lacked standing to sue a bank that had allegedly assisted Iran in providing financial support to Hamas); Wultz v. Islamic Republic of Iran, 755 F. Supp. 2d 1, 40-57 (D.D.C. 2010) (discussing the elements of an ATA claim generally, and concluding that the ATA allows for claims premised on theory of secondary liability); Abecassis v. Wyatt, 704 F. Supp. 2d 623, 656-66 (S.D. Tex. 2010) (summarizing the federal courts' disagreements regarding the ATA's civil remedy provision, and concluding that plaintiffs who alleged that defendant companies had illegally purchased oil from Iraq-and that the funds were used by Iraq's government to finance terrorism-had failed to sufficiently plead scienter); Almog v. Arab Bank, PLC, 471 F. Supp. 2d 257, 266-69 (E.D.N.Y. 2007) (describing generally elements of ATA civil claim); Stutts v. De Dietrich Group, No. 03-CV-4058, 2006 WL 1867060, at *2-6 (E.D.N.Y. June 30, 2006) (granting motion to dismiss made by banks accused of violating the ATA by providing letters of credit to corporations that sold chemical weapons manufacturing equipment to Iraq, because provision of letters of credit was not international terrorism and for failure to sufficiently allege proximate cause); Estate of Klieman v. Palestinian Auth., 424 F. Supp. 2d 153, 162-67 (D.D.C. 2006) (refusing to dismiss ATA claims on basis of act of war exception); Biton v. Palestinian Interim Self-Gov't Auth., 412 F. Supp. 2d 1, 6-11 (D.D.C. 2005) (concluding that school bus bombing was not an act of war for purposes of ATA since an attack on children was clear violation of the laws of war); Linde v. Arab Bank, PLC, 384 F. Supp. 2d 571, 580-90 (E.D.N.Y. 2005) (discussing elements of civil ATA claim and concluding that the ATA permits claims premised on secondary liability).
Congress primarily accomplished two objects in enacting section 2333(a) and the accompanying civil remedy provisions. First, it explicitly granted exclusive jurisdiction to federal district courts in certain terrorism cases. See 18 U.S.C. §§ 2333(a), 2338. Second, it constructed a new federal substantive tort, requiring, according to the common law tradition, the fashioning by courts of the contours of this new addition to plaintiffs' anti-terrorism arsenal. The new tort is essentially a subspecies of the common-law tort of battery. It is supplemented principally by the material support provisions of federal criminal law. In the context of the ATA, then, tort and criminal law have become closely intertwined; this is consistent with their historic roots. See Oliver Wendell Holmes, Jr., The Common Law 39 (1881) (noting that the appeal, one of the earliest forms of a private legal action in Europe, "may be said to have had a criminal as well as a civil aspect"); see also Julius Goebel, Jr., Cases and Materials on the Development of Legal Institutions 62-82 (1946) (describing the development of criminal and tort law in Norman and English jurisprudence).
The confluence of complicated governing legal doctrines affecting this country's anti-terrorism policy requires courts to tread carefully in making both procedural and substantive determinations in civil cases such as the instant one. The statutory and common-law right of the individual to recovery in tort must not be underestimated. See, e.g., John C.P. Goldberg & Benjamin C. Zipursky, Rights and Responsibility in the Law of Torts, in Rights and Private Law 251, 262 (Donal Nolan & Andrew Robertson eds., 2012). It is necessary, under the statute, to shape individual tort rights to fit into the comprehensive existing legal framework governing this country's struggle against terrorism, particularly when recovery is sought as a result of terrorist violence affecting American nationals who are abroad.
This country is now involved in a world-wide battle with a range of enemies, spanning from those organized on the largest scale, supported by nations, to individuals motivated by egocentric hatred. The resulting struggle has led to the development of new military techniques, new concepts of criminal law projected abroad, and new civil tort liability problems, both procedural and substantive. In applying general tort law theory to requite injured individuals' damages, as is illustrated in this case, new wine must be carefully poured into old civil litigation bottles.
For the reasons indicated below, defendant's motion to dismiss the complaint is granted in part and denied in part.
II. Factual Allegations and Procedural History
A. Factual Allegations in Amended Complaint
1. April 2008 Attack on Plaintiff
A citizen of the United States and of Israel, plaintiff was employed in the spring of 2008 as an aide to Avi Dichter, Israel's then minister of public security. See Am. Compl. ¶ 6-7; see also Matar v. Dichter, 563 F.3d 9, 11 (2d Cir. 2009) (noting that Dichter formerly served as "director of the Israeli Security Agency . . ., one of that country's main security and intelligence services"). In early April 2008, the minister, joined by the plaintiff, led a delegation of foreign visitors on a tour of Israel. See Am. Compl. ¶ 8.
The delegation stopped at an observation point in Israel overlooking Gaza, one of the two territorial units that comprise the Palestinian proto-state. See id. Shots fired at the party from Gaza wounded the plaintiff, who crawled to safety. See id. ¶¶ 9-10.
Shortly after the attack, a speaker purporting to represent Hamas took "credit" on the internet and via other media for the shooting. Responsibility for the assault was also taken by another Palestinian terrorist group. See id. ¶¶ 11-12. It is alleged by the plaintiff that the Israeli government eventually learned that a Hamas-affiliated group had carried out the attack at Hamas' direction. See id. ¶¶ 14-15.
2. History of Bank and of Hamas
A brief summary of the plaintiff's contentions regarding the Bank's background and that of Hamas provides helpful context in analyzing the critical factual issues regarding their alleged relationship.
Defendant is a chartered Jordanian bank; its headquarters are located in that country and its common stock is publicly traded on the Amman stock exchange. See id. ¶ 17. It is owned and controlled by the shareholders of Arab Bank Group, a Jordanian holding company. See id. The Bank owns, controls, and operates branches and offices worldwide. Several of these outposts are located in Palestinian Authority-controlled territories. See id. The Bank has an office located in the State of New York; it is registered to conduct business in this state and does so. See id.
Plaintiff claims that the Bank and the holding company-which is alleged to own the majority of the Bank's stock-are controlled by members of the Shoman family. See id. ¶¶ 17, 19. It is contended that the family has a long history of hostility towards both the United States and Israel. See id. ¶¶ 31-33. The late A.H. Shoman, the family's patriarch and the founder of the Bank, allegedly expressed publicly his animus towards the United States for its support of Israel. See id. ¶¶ 30-33. His son, A.M. Shoman, served as chairman of the Bank from 2000 until his death in 2005; he is alleged to have personally played an important role in collecting funds that were to be distributed to the families of suicide bombers associated with Hamas and its affiliates. See id. ¶¶ 19, 34-37.
Hamas is said to be organized into two parts. The first component is essentially a political party. It provides social services to the residents of the Palestinian territories. The second is a paramilitary wing. It is responsible for suicide bombings, shootings, and rocket attacks designed to pressure Israel politically, and, ultimately, to destroy that country as a Jewish state. See id. ¶¶ 21-23, 26.
It is alleged that Hamas' two components work in concert. See id. ¶ 23. Plaintiff contends that money ostensibly contributed to Hamas' social services and charitable organizations eventually inures to the benefit of the paramilitary apparatus. See id. ¶¶ 24-25. Funds held by Hamas' charitable and social organizations allegedly are used to recruit those willing to carry out attacks and to provide them with training and equipment. See id. ¶ 25. It is claimed that Hamas' civil side provides salaries for the organization's paramilitary operatives and leadership. See id.
It is contended that Hamas is responsible for many attacks since September 2000 targeting civilians in Israel. See id. ¶ 29. As already pointed out, the United States government has determined that Hamas and at least some of its associated civil affiliates are terrorist organizations. See id. ¶ 28; see also Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57, 63-64 (D.D.C. 2002) (describing the administrative process by which it was determined that Hamas is a terrorist group).
3. Defendant's Provision of Support to Hamas
The lion's share of plaintiff's amended complaint is devoted to providing details regarding the Bank's alleged provision of banking services directly and indirectly to Hamas. These services are alleged to have supported that organization's terrorist activities.
Plaintiff contends that defendant "knowingly supported terrorists and terrorist organizations in two ways. First, it provided (and continues to provide) financial services- including account services and funds transfers-to Hamas organizations and Hamas leaders. Second, it administered the distribution of 'martyrs' payments' to families of suicide bombers as well as [the families of] Hamas terrorists held in Israeli or Palestinian custody." Plaintiff's Memorandum of Law in Opposition to Defendant Arab Bank PLC's Motion to Dismiss the Amended Complaint 10-11, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. May 21, 2012), CM/ECF No. 31. It is asserted that the Bank's second course of action encouraged potential suicide bombers and Hamas terrorists to attack, since they knew that their families would be provided for in the event of their detention or death.
The voluminous allegations can be broken down into categories for purposes of analysis. It is contended that:
1. The Bank beginning in the late 1990s knowingly maintained accounts for-and accepted wire transfers on behalf of-Hamas (or its proxies), well-known Hamas leaders, and other Hamas operatives, despite the facts that (1) Hamas was named as a beneficiary of wire transfers made, (2) the United States government determined that some individual account holders to whom transfers were made were Hamas-affiliated terrorists, and (3) some account holders to whom transfers were made were prominent members of the paramilitary side of Hamas. See Am. Compl. ¶¶ 48-112.
2. Defendant maintained accounts for and provide financial services to individual terrorists and terrorist front organizations affiliated with Hamas, despite the facts that:
a. The United States government determined in 1995 that Hamas was a terrorist organization, see id. ¶¶ 117-120;
b. The government of the Palestinian territories shut down in 1997 the Palestinian-territory-based offices of sixteen Hamas-affiliated organizations, including that of the Texas-based Holy Land Foundation for Relief and Development (the "Holy Land Foundation"), to which the Bank provided banking services, see id. ¶¶ 121;
c. The United States government determined in 2001 that the Holy Land Foundation was a terrorist organization and later indicted it in the United States District Court for the Northern District of Texas for providing material support to terrorism, see id. ¶¶ 122-23, 150-51;
d. The German government in 2002 closed the German offices of the Al Aqsa Foundation, a European organization to which the defendant is alleged to have provided banking services, on the ground that it was a Hamas front, see id. ¶¶ 124-27; and
e. The United States government determined in 2003 that a number of the Hamas-related organizations and individuals to whom the Bank provided financial services were connected to terrorism. See id. ¶¶ 130-38.
3. The Bank maintained accounts for and provided financial services to Hamas-affiliated charitable organizations located in the Palestinian territories; those organizations, referred to by the plaintiff as Hamas' "agents," see id. ¶ 158, are alleged to have subsequently distributed funds to Hamas and its operatives to support Hamas' paramilitary activities. See id. ¶¶ 157-74. Information readily available to the defendant demonstrated that these organizations were Hamas affiliates. See id. ¶ 159.
4. The Bank provided banking services to the Saudi Committee in Support of the Intifada Al Quds (the "Saudi Committee")-a private charity registered with the Kingdom of Saudi Arabia-so that the committee could covertly provide substantial funding to Hamas for terrorist activities. See id. ¶¶ 175-78. The Saudi Committee, with the help of the defendant and of Hamas front organizations, provided millions of dollars to the families of suicide bombers; money was also provided by way of front organizations to the families of individuals killed by Israeli security forces during the commission or attempted commission of terrorist acts. See id. ¶¶ 179-83. The Saudi Committee paid and transmitted by way of the Bank and Hamas affiliates direct payments to prominent terrorists and their relatives; death benefits were paid directly to the families of suicide bombers and the families of Palestinians killed in violent confrontations with Israeli security forces. See id. ¶¶ 177, 184-96. Both the Saudi Committee and the Hamas-affiliated organizations that ultimately transmitted the funds advertised the availability of Saudi Committee monies in an attempt to induce prospective terrorists into committing violent acts on Hamas' behalf. See id. ¶ 197. The Saudi Committee's financial support is crucially important to Hamas' terrorist activities. See id. ¶ 199.
5. Defendant knowingly provided financial services to the Lebanon-based Al-Shahid Foundation ("Al-Shahid") and to the Gaza-based Al-Ansar Society ("Al-Ansar"); those organizations work in conjunction to pay benefits directly to the families of suicide bombers and Israeli prisoners in order to encourage the continuation of violence against Israeli civilians. See id. ¶¶ 200-01. Al-Shahid transferred money to Al-Ansar; these funds were then distributed to the families by way of the Bank's branches in the Palestinian territories. See id. ¶ 202, 209. Al-Ansar placed advertisements in local newspapers encouraging eligible residents of the Palestinian territories to collect from their local Bank branch funds that were available. See id. ¶ 204. Its website encouraged terrorist acts and provided summaries of the funding that was distributed. See id. ¶¶ 205-10. The website of Al-Shahid also provided lists of payees. See id. ¶ 203. Al-Ansar distributed millions of dollars to the families of suicide bombers and Israeli prisoners. See id. ¶¶ 210-11.
4. Consent Order and the Penalty Paid by Bank's New York Branch
It is undisputed that the New York branch of Arab Bank in 2005 consented to the issuance of an order by the United States' Office of the Comptroller of the Currency, and that in that same year the New York branch agreed to pay a $24 million civil penalty to the United States Department of the Treasury to settle claims asserted against it by the Comptroller of the Currency and the Treasury Department's Financial Crimes Enforcement Network. Compare id.
¶ 17, with Answer to the Amended Complaint ¶ 17, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. July 12, 2012), CM/ECF No. 40.
The allegations in the Financial Crimes Enforcement Network's assessment-which were neither admitted nor denied by the Bank's New York branch-may be useful to the reader in supplementing the allegations in the amended complaint, but they were not relied upon by the court in ruling on the present motion.
It was charged by the Treasury Department that the New York branch of the Bank failed adequately to establish a system of controls to comply with federal banking law. The substance of the government's allegations regarding those allegedly deficient controls and the Bank's possible connection to terrorism is illustrated by the following excerpts from the agreement pursuant to which the New York branch consented to pay the civil penalty:
Arab Bank -- New York failed to implement an adequate system of internal controls to comply with the Bank Secrecy Act and manage the risks of money laundering and terrorist financing involving funds transfers for originators and beneficiaries without accounts at Arab Bank -- New York. Arab Bank -- New York served as a clearing institution for a substantial volume of funds transfers in United States dollars. The Arab Bank Group and a number of correspondent institutions operated in jurisdictions that posed heightened risks of money laundering and terrorist financing. . . . .
[D]uring the period from 2000 through 2004, management of an Arab Bank affiliate in the Palestinian Territories received, from regulatory authorities in the Palestinian Territories, orders that focused explicitly on funds transfers to a number of beneficiaries with accounts at members of the Arab Bank Group in the Palestinian Territories. In addition, regulatory authorities in the Palestinian Territories issued circulars containing the names of suspected criminals and ordered institutions holding accounts of the suspected criminals to either freeze the accounts or place the accounts on a watch list. Despite the heightened risk of illicit activity, Arab Bank -- New York failed to implement procedures for obtaining this type of information from other members of the Arab Bank Group, to mitigate the risk and ensure compliance with the Bank Secrecy Act. Assessment of Civil Money Penalty 4-5, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. July 20, 2012), CM/ECF No. 44.
The Treasury Department also asserted that Arab Bank's New York branch failed to report, as required, transactions that might have been connected to terrorism:
The Financial Crimes Enforcement Network has determined that Arab Bank -- New York violated the suspicious transaction reporting requirements of the Bank Secrecy Act and regulations issued pursuant to that Act. .
[D]esignations of individuals and entities as terrorists by the United States Government provide critical information for financial institutions to use in assessing terrorist financing risk. Once a designation occurred, Arab Bank -- New York failed to review recent activity, occurring prior to the designation and associated with the designated entities, to identify potentially suspicious activity. Had such a review been conducted, it would have uncovered originators and beneficiaries -- with possible ties to the designated entities -- that had recently engaged in potentially suspicious activity. Arab Bank -- New York failed to review information in its possession that would have shown it was clearing funds transfers for individuals and entities dealing with subsequently designated terrorists and terrorist organizations, failed to analyze this information, and failed to file suspicious activity reports.
Arab Bank -- New York did not file the majority of its suspicious activity reports referencing terrorist financing until after the Office of Comptroller of the Currency commenced a review of its funds transfer activity in July 2004. An adequate anti-money laundering program would have allowed Arab Bank -- New York to file suspicious activity reports in a timely manner.
Plaintiff initiated this litigation in August 2011. See Complaint, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Aug. 1, 2011), CM/ECF No. 1. The case was assigned by the Clerk of the Court using the normal random selection procedures. Preliminarily, Gill sought: (1) a determination that his case was related to litigation pending before another judge of this court, and (2) a transfer of the case to that judge. See Letter of Aaron Schlanger, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Aug. 25, 2011), CM/ECF No. 8. The Bank opposed the motion. As a matter of internal court procedure regarding the distribution of litigation loads, and with the consent of the judges involved, this case was retained by the judge to whom it had been randomly assigned. See Order, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Feb. 24, 2012), CM/ECF No. 15.
Plaintiff's amended complaint was filed in March of 2012. See Amended Complaint, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Mar. 9, 2012), CM/ECF No. 17. Five claims to support an award of monetary relief are asserted:
1. The Bank aided and abetted Hamas' infliction of serious bodily injuries to plaintiff, in violation of 18 U.S.C. § 2333(a), see Am. Compl. ¶¶ 214-24; see also 18 U.S.C. § 2332;
2. The Bank conspired with Hamas to commit acts of violence and committed overt acts in furtherance of the conspiracy, in violation of 18 U.S.C. §§ 2332(b) and 2333(a), see Am. Compl. ¶¶ 225-32;
3. Defendant provided material support to terrorists in violation of 18 U.S.C. § 2339A, leading to plaintiff's being injured and supporting a monetary award pursuant to 18 U.S.C. § 2333(a), see id. ¶¶ 233-39;
4. By providing financial services to Hamas and its agents, the Bank knowingly materially supported a foreign terrorist organization in violation of 18 U.S.C. § 2339B; it is argued that the defendant's provision of that support led to Gill's injury, supporting an award of damages pursuant to 18 U.S.C. § 2333(a), see id. ¶¶ 240-49; and
5. Defendant violated 18 U.S.C. § 2339C by unlawfully and willfully providing or collecting funds for Hamas with the intention that the funds would be used-or the knowledge that they would be used-to facilitate acts of international terrorism; plaintiff claims that the provision and collection of those funds led to his injury, thereby supporting an award of damages pursuant to 18 U.S.C. § 2333(a). See id. ¶¶ 250-55.
Defendant moved to dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim. Extensive briefs were filed. Oral argument was heard in June of 2012. See June 28, 2012 Hr'g Tr. 1. At the argument, the court informed the parties that they should conduct expedited discovery, and that a motion by defendant for summary judgment should be promptly made. See id. at 35; see also Scheduling Order, Gill v. Arab Bank, PLC, No. 11-CV-3706 (E.D.N.Y. Aug. 22, 2012), CM/ECF No. 58. The parties were instructed that discovery in this case should be coordinated with, and supplemented by, discovery conducted in other terrorism-related cases in this court in which the Bank is a defendant. See June 28, 2012 Hr'g Tr. 36.
A. Motion to Dismiss Standards
1. Lack of Subject Matter Jurisdiction
"Dismissal of a case for lack of subject matter jurisdiction under Rule 12(b)(1) is proper when the district court lacks the statutory or constitutional power to adjudicate it." Ford v. D.C. 37 Union Local 1549, 579 F.3d 187, 188 (2d Cir. 2009) (per curiam) (internal quotation marks omitted).
"In resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) a district court may consider evidence outside the pleadings." Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008). When no evidentiary hearing regarding the court's subject matter jurisdiction has been held, all material facts alleged in the complaint are accepted as true; all reasonable inferences are drawn in the plaintiff's favor. See Sharkey v. Quarantillo, 541 F.3d 75, 83 (2d Cir. 2008).
2. Failure to State a Claim
To survive a motion to dismiss made pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." In re Citigroup ERISA Litig., 662 F.3d 128, 135 (2d Cir. 2011) (internal quotation marks omitted). Determining whether a complaint states a plausible claim for relief is a context-specific task that "requires the reviewing court to draw on its judicial experience and common sense." Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (internal quotation marks omitted).
A court ruling on a 12(b)(6) motion is to "accept as true the facts alleged in the complaint, and may consider documents incorporated by reference in the complaint and documents upon which the complaint relies heavily." In re Citigroup, 662 F.3d at 135 (internal quotation marks omitted). All reasonable inferences are drawn in the plaintiff's favor. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).
B. Political Question Doctrine
The Bank contends that plaintiff's claims must be dismissed because the political question doctrine deprives the court of subject matter jurisdiction. See Def. Mem. 3-25.
Referred to by the Court of Appeals for the Second Circuit as a doctrine of "prudential justiciability," the political question doctrine establishes a "policy of judicial deference to the Executive Branch on questions of foreign policy." Khulumani v. Barclay Nat'l Bank Ltd., 504 F.3d 254, 261 (2d Cir. 2007) (per curiam) (internal quotation marks and bracketing omitted). The doctrine is not one of subject matter jurisdiction. It is one of justiciability. It does not implicate a court's power to adjudicate a dispute; instead, it is concerned with the propriety of a court's doing so. See id. at 291 (Hall, J., concurring); see also Baker v. Carr, 369 U.S. 186, 198-99 (1962).
As a substantive matter, the "political question doctrine excludes from judicial review those controversies which revolve around policy choices and value determinations constitutionally committed for resolution to the halls of Congress or the confines of the Executive Branch." Japan Whaling Ass'n v. Am. Cetacean Soc., 478 U.S. 221, 230 (1986). The doctrine "is essentially a function of the separation of powers, existing to restrain courts from inappropriate interference in the business of the other branches of Government." Nixon v. United States, 506 U.S. 224, 252 (1993) (Souter, J., concurring in the judgment) (internal quotation marks and citation omitted).
"The outlines of the political question doctrine were described and to a large extent defined in Baker v. Carr." Davis v. Bandemer, 478 U.S. 109, 121 (1986). "In Baker, t[he] Court identified six circumstances in which an issue might present a political question." Zivotofsky ex rel. Zivotofsky v. Clinton, 132 S. Ct. 1421, 1431 (2012) (Sotomayor, J., concurring in part and concurring in the judgment). As the Court of Appeals for the Second Circuit has noted, see Kadic v. Karadzic, 70 F.3d 232, 249 (2d Cir. 1995), a "non-justiciable political question would ordinarily involve one or more of the following factors":
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 decision without an initial policy determination of a kind clearly calling for non-judicial discretion;
4. The impossibility of the court's undertaking an independent resolution of the issue without expressing a lack of respect for the coordinate branches of government;
5. An unusual need for unquestioning adherence to a political decision already made; or
6. The potential for embarrassment stemming from numerous pronouncements by various departments of government on one question.
See id. (discussing Baker v. Carr, 369 U.S. 186, 217 (1962)). The court also remarked in Kadic that "[n]ot every case touching foreign relations is non-justiciable, and judges should not reflexively invoke these [the political question and act of state] doctrines to avoid difficult and somewhat sensitive decisions in the context of human rights." Id. (internal quotation marks and citation omitted). Instead, "a preferable approach is to weigh carefully the relevant considerations on a case-by-case basis." Id.
In discussing issues raised by the political question doctrine, it has been stated by the Court of Appeals for this Circuit that, while "no one factor is dispositive," the first Baker question-whether there is a textually demonstrable constitutional commitment of an issue to another branch of government-is of primary importance. See Klinghoffer v. S.N.C. Achille Lauro, 937 F.2d 44, 49 (2d Cir. 1991); see also Vieth v. Jubelirer, 541 U.S. 267, 278 (2004) (plurality opinion) (noting that the Baker "tests are probably listed in descending order of both importance and certainty").
The Court of Appeals for the Second Circuit has been careful to note that "the doctrine is one of political questions, not one of political cases," and it has stated that the "fact that . . . issues . . . arise in a politically charged context" will not suffice to "convert what is essentially an ordinary ...