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Kashef v. BNP Paribas SA

United States District Court, S.D. New York

March 30, 2018

Entesar Osman Kashef et al., Plaintiffs,
v.
BNP Paribas SA et al, Defendants.

          MEMORANDUM OPINION AND ORDER

          ALISON J. NATHAN, DISTRICT JUDGE

         This putative class action case arises out of atrocities committed by the Government of Sudan against its citizens between 1997 and 2009. Victims of the Sudanese government's human rights abuses bring a variety of state law claims against BNP Paribas S.A. and its subsidiaries and branches alleging that the bank funded the Government of Sudan and assisted the government in circumventing U.S. economic sanctions, allowing the Government of Sudan to continue its genocidal campaign against the people of Sudan. The Defendants have moved to dismiss the Plaintiffs' Second Amended Complaint on all claims. For the reasons that follow, the motion to dismiss is granted in its entirety.

         I. Background

         The Court assumes the parties' familiarity with the facts in this litigation. In short, Plaintiffs were victims of horrific human rights abuses undertaken by the Government of Sudan between 1997 and 2009, including "beatings, maiming, sexual assault, rape, infection with HIV, loss of property, displacement from their homes, and watching family members be killed." Second Amended Complaint ("SAC"), Dkt. No. 49, ¶ 24; see also SAC ¶¶ 30-50 (outlining specific abuses suffered by each representative Plaintiff). The Defendants are BNP Paribas S.A., a French financial institution, as well as several of its branches and subsidiaries, as well as individual defendants working for the bank (collectively "BNPP").

         Between 1992 and 1997, in response to the Government of Sudan's human rights abuses against its own people, the United States government took a series of steps aimed at stemming the abuses, including formal condemnation, designation as a state sponsor of terrorism, and eventually economic sanctions. SAC ¶¶ 85-89. In 2002, Congress passed the Sudan Peace Act, again condemning the ongoing atrocities in the Sudan and requiring the President to implement additional sanctions. SAC ¶¶ 90-92. Additional legislation and executive orders implemented further sanctions between 2004 and 2006. SAC ¶¶ 93-97.

         Beginning in 1997 and continuing through 2007, BNPP became the primary bank of the Government of Sudan, through which it accessed U.S. financial markets and circumvented U.S. sanctions. SAC ¶¶ 102-14. BNPP created several schemes to avoid the sanctions, including removing information from financial documents identifying that a Sudanese entity was one of the parties involved in the financial transaction, SAC ¶ 111, and using satellite banks in the United States through which to funnel money, SAC ¶¶ 112-13. According to the Second Amended Complaint, Sudan's access to U.S. financial markets was critical to funding the Government, including its continued atrocities against its people. SAC ¶¶ 115-51.

         BNPP's actions were investigated by numerous state and federal agencies in the United States, and in 2014, BNPP pled guilty to conspiring to violate the laws of the United States in connection with circumventing U.S. sanctions on behalf of Sudan, Iran, and Cuba. SAC ¶¶ 191-98. BNPP also pled guilty to falsifying business records and conspiracy under New York law. S AC ¶¶ 199-201.

         Following the criminal actions against BNPP, the Plaintiffs initiated the present action on April 29, 2016 by filing its initial complaint. Complaint, Dkt. No. 1. On January 20, 2017, the Plaintiffs filed their Second Amended Complaint. See SAC. In it, Plaintiffs bring twenty state-law claims on which they seek to hold BNPP liable. The Plaintiffs allege that BNPP is liable for negligence per se (Counts 1 and 2), conspiracy to commit battery (Count 3), aiding and abetting battery (Count 4), conspiracy to commit battery in performance of a public duty or authority (Count 5), aiding and abetting battery in performance of a public duty or authority (Count 6), conspiracy to commit assault (Count 7), aiding and abetting assault (Count 8), conspiracy to commit false arrest and false imprisonment (Count 9), aiding and abetting false arrest and false imprisonment (Count 10), conspiracy to commit conversion - wrongful taking (Count 11), aiding and abetting conversion - wrongful taking (Count 12), conspiracy to commit conversion -wrongful detention, use, or disposal (Count 13), aiding and abetting conversion - wrongful detention, use, or disposal (Count 14), intentional infliction of emotional distress (Count 15), negligent infliction of emotional distress (Count 16), commercial bad faith (Count 17), unjust enrichment (Count 18), conspiracy to commit wrongful death (Count 19), and aiding and abetting wrongful death (Count 20). On March 21, 2017, the Defendants moved to dismiss the Second Amended Complaint in its entirety. Dkt. No. 65.

         II. Legal Standard

         "To survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient 'to raise a right to relief above the speculative level.'" ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "[A] plaintiffs obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (second alteration in original). The complaint's factual allegations must be sufficient to "nudge" the plaintiffs claims "from conceivable to plausible." Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. In ruling on a motion to dismiss, the facts alleged in the operative complaint are to be taken as true and all inferences must be drawn in the plaintiffs favor. Lattanzio v. Deloitte & Touche LLP, 476 F.3d 147, 151 (2d Cir. 2007).

         III. Threshold Issues

         A. Act of State Doctrine

         As a preliminary matter, Defendants argue that the Plaintiffs' claims should be dismissed under the act of state doctrine. The Court concludes that the doctrine mandates dismissal of nearly all of the Plaintiffs' claims.

         The act of state doctrine provides that "[e]very sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory." Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 416 (1964) (quoting Underbill v. Hernandez, 168 U.S. 250, 252 (1897)). Under the act of state doctrine, claims against private entities may be barred "[w]hen the causal chain between a defendant's alleged conduct and plaintiffs injury cannot be determined without an inquiry into the motives of the foreign government." O.N.E. Shipping Ltd. v. Flota Mercante Grancolombiana, S.A., 830 F.2d449, 453 (2d Cir. 1987). "The act of state doctrine is not some vague doctrine of abstention but a 'principle of decision binding on federal and state courts alike.'" W.S. Kirkpatrick & Co. v. Envt'l Tectonics Corp., Int'l, 493 U.S. 400, 406 (1990) (quoting Sabbatino, 376 U.S. at 427). In Sabbatino, the Supreme Court established a sliding scale to determine whether a court's intervention in an issue relating to the decision of another sovereign should be dismissed under the act of state doctrine. First, courts consider "the degree of codification or consensus concerning a particular area of international law, " with the understanding that "the greater the degree of codification or consensus . . ., the more appropriate it is for the judiciary to render decisions." 376 U.S. at 428. Second, courts consider how sensitive the issue is likely to be for international relations. "It is also evident that some aspects of international law touch much more sharply on national nerves than do others; the less important the implications of an issue are for our foreign relations, the weaker the justification for exclusivity in the political branches." Id. Finally, "if the government which perpetrated the challenged act of state is no longer in existence, " that will favor judicial intervention. Id.

         "[W]hen it is made to appear that the foreign government has acted in a given way ... the details of such action or the merit of the result cannot be questioned but must be accepted by our courts as a rule for their decision." Konowaloff v. Metro. Museum of Art, 702 F.3d 140, 146 (2d Cir. 2012) (alterations in original) (emphasis added) (quoting Ricaud v. Am. Metal Co., 246 U.S. 304, 309 (1918)). In other words, under the act of state doctrine, "the acts of foreign sovereigns taken within their own jurisdictions shall be deemed valid." Kirkpatrick, 493 U.S. at 409 (emphasis added). Under the doctrine, the Supreme Court has held that courts of the United States "will not examine the validity of a taking of property within its own territory by a foreign sovereign government, extant and recognized by this country at the time of suit, in the absence of a treaty or other unambiguous agreement regarding controlling legal principles." Sabbatino, 376 U.S. at 428; see also Konowaloff, 702 F.3d at 147 ("[T]he lawfulness of the Soviet government's taking of the Painting is precisely what the act of state doctrine bars the United States courts from determining."). The Supreme Court has also applied the act of state doctrine to claims for wrongful arrest when "[t]he acts complained of were the acts of a military commander representing the authority of the revolutionary party as a government, which afterwards succeeded, and was recognized by the United States." Underhill, 168 U.S. at 254. Defendants bear the burden of justifying application of the act of state doctrine. Bigio v. Coca-Cola Co., 239 F.3d 440, 453 (2d Cir. 2000).

         The Court concludes that the act of state doctrine is applicable in this case and bars its consideration of nearly all of Plaintiffs' claims because ruling on them would require the Court to pass judgment on the acts of the Government of Sudan. In Counts 3-14 and 19-20 of the Second Amended Complaint, the Plaintiffs ask the Court to impose secondary liability on BNPP for conspiracy and aiding and abetting of battery, assault, false arrest and false imprisonment, wrongful taking, and wrongful death. See SAC. In order to impose such liability, the Court would be obligated to conclude that the actions of the Government of Sudan, occurring within the then-existing territorial borders of Sudan, against the people of Sudan, amounted to state law violations of the law of battery, assault, false arrest and imprisonment, wrongful taking, and wrongful death. The Court is explicitly barred from ruling on some of these claims under binding precedent. See Sabbatino, 376 U.S. at 428 (holding that the act of state doctrine bars courts from considering claims alleging wrongful takings by a foreign government on foreign soil); Underhill, 168 U.S. at 254 (holding that the act of state doctrine bars courts from considering claims for false arrest when the actions were conducted by military personnel in service to the government). Moreover, to the extent Plaintiffs' claims are predicated on the contention that BNPP facilitated circumvention of U.S. sanctions, those judgments are properly left to the judgment of the Executive Branch rather than the courts. See Sabbatino, 376 U.S. at 467 (recognizing that "the Department of our Government primarily responsible for the formulation of foreign policy and settling these matters on a state-to-state basis is more competent than courts to determine" the appropriate course of action in resolving foreign policy disputes); see also Exec. Order No. 13, 400 ยง 8, 71 Fed. Reg. 25, 483 (Apr. 26, 2006) (stating explicitly that the President's imposition of sanctions against Sudan ...


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