Atchley v. Astrazeneca UK Ltd., Civil Case No. 17-2136 (RJL)

• Decision Date: 17 July 2020
• Docket Number: Civil Case No. 17-2136 (RJL)
• Citation: 474 F.Supp.3d 194
• Parties: Joshua ATCHLEY et al., Plaintiffs, v. ASTRAZENECA UK LIMITED, et al., Defendants.
• Court: U.S. District Court — District of Columbia

474 F.Supp.3d 194

Joshua ATCHLEY et al., Plaintiffs,

v.ASTRAZENECA UK LIMITED, et al., Defendants.

Civil Case No. 17-2136 (RJL)

United States District Court, District of Columbia.

Filed July 17, 2020

Andrew Edward Goldsmith, David Charles Frederick, Joshua Daniel Branson, Matthew M. Duffy, Thomas Graham Schultz, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Ryan R. Sparacino, Sparacino PLLC, Washington, DC, for Plaintiffs.

Kenneth Leonard Wainstein, Neil Harvey MacBride, Davis Polk & Wardwell LLP, Washington, DC, Paul S. Mishkin, Pro Hac Vice, Davis Polk & Wardwell LLP, New York, NY, for Defendants AstraZeneca UK Limited, AstraZeneca Pharmaceuticals LP.

David J. Weiner, John B. Bellinger, III, Robert Adam DeRise, Arnold & Porter Kaye Scholer LLP, Washington, DC, Robert Reeves Anderson, Arnold & Porter Kaye Scholer LLP, Denver, CO, for Defendants GE Healthcare USA Holding LLC, GE Medical Systems Information Technologies, Inc., GE Medical Systems Information Technologies GmbH.

Alex Young K. Oh, Kannon K. Shanmugam, Jeh Charles Johnson, Pro Hac Vice, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC, John F. Baughman, Pro Hac Vice, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, for Defendants Johnson & Johnson, Cilag Gmbh International, Ethicon Endo-Surgery, LLC, Ethicon, Inc., Janssen Ortho LLC, Janssen Pharmaceutica N.V., Johnson & Johnson (Middle East) Inc., Ortho Biologics LLC.

Brian T. Gilmore, Christopher Nicholas Manning, Joseph G. Petrosinelli, Williams & Connolly LLP, Washington, DC, Melissa B. Collins, Williams & Connolly LLP, Washingtin, DC, for Defendants Pfizer Inc., Pfizer Enterprises Sarl, Pfizer Pharmaceuticals LLC, Pharmacia & Upjohn Company LLC, Wyeth Pharmaceuticals Inc.

Beth Susan Brinkmann, David M. Zionts, John Edward Hall, Covington & Burling, LLP, Washington, DC, for Defendant F. Hoffmann-LA Roche Ltd.

David W. Bowker, Patrick Joseph Carome, Carl J. Nichols, Wilmer Cutler Pickering Hale & Dorr LLP, Washington, DC, for Defendants Genentech, Inc., Hoffmann-LA Roche Inc.

John B. Bellinger, III, Arnold & Porter Kaye Scholer LLP, Washington, DC, for Defendants Foreign Defendants, Domestic Defendants.

MEMORANDUM OPINION

[Dkt. ## 128, 130]

RICHARD J. LEON, United States District Judge Plaintiffs in this suit are American service members, civilians, and their families who were murdered or wounded

by terrorist attacks in Iraq between 2005 and 2011. They bring this suit against numerous pharmaceutical and medical equipment companies, some foreign and some domestic (collectively, "defendants"), alleging those companies knowingly financed the terrorist attacks that harmed them and are therefore liable under the Anti-Terrorism Act ("ATA") and various state laws. All defendants move to dismiss, arguing that plaintiffs’ complaint fails to state a claim under the ATA.¹

See Defs.’ Mot. to Dismiss ("Defs.’ Mot.") [Dkt. # 128]. The foreign defendants move to dismiss for lack of personal jurisdiction.²

See Foreign Defs.’ Mot. to Dismiss for Lack of Personal Jurisdiction ("Defs.’ Juris. Mot.") [Dkt. #130].

While I deeply sympathize with plaintiffs for the losses they have endured, losses for which this country will be forever indebted, I cannot conclude that the law provides the relief plaintiffs seek in this case. Accordingly, and after due consideration of the briefing, oral argument, the relevant law, the entire record, and for the reasons stated below, foreign defendants’ Motion to Dismiss for lack of personal jurisdiction and defendants’ Motion to Dismiss for lack of subject-matter jurisdiction are GRANTED .

BACKGROUND

In March 2003, the United States and Coalition armed forces invaded Iraq and removed Saddam Hussein from power. See Third Am. Compl. ("TAC") ¶ 54 [Dkt. # 124]. Following his removal, U.S., Coalition, and Iraqi military forces worked to rebuild Iraq while also engaged in years of armed conflict against various armed insurgent forces, including a group named Jaysh al-Mahdi ("JAM"). See id. ¶¶ 54, 55, 59-61, 333; Defs.’ Mot. at 4. JAM functioned as the terrorist arm of the Iraqi Sadrists, a political group that was hostile to the United States. Id. ¶¶ 56, 58-59. JAM was also supported by the terrorist group Hezbollah, which sought to undermine the United States’ efforts in Iraq and provided JAM with training, supplies, and recruits. Id. ¶¶ 56, 62, 357.

Throughout Saddam's regime and after, Iraq maintained a government-run healthcare system operated by the Iraqi Ministry of Health ("the Ministry" or "MOH") and the Ministry's state-owned import subsidiary, Kimadia. Id. ¶¶ 2, 72. The Ministry was a "sprawling bureaucracy" that employed "every public-sector doctor, pharmacist, nurse, and medical technician in Iraq." Id. ¶ 72. Kimadia was responsible for "importing and distributing" medical goods and had a monopoly over all medical imports in Iraq. Id. ¶¶ 72, 119.

Both the Ministry and Kimadia were openly plagued by corruption and profiteering. Id. ¶¶ 48, 129-30, 173. By late 2004, the Sadrists controlled the Ministry and Kimadia. Id. ¶¶ 10, 63, 66, 68, 69, 70, 71, 73, 104. The Sadrists were linked to JAM, and some Ministry officials and employees were members of JAM. Id. ¶¶ 67, 69, 102, 165. According to plaintiffs, JAM used the Ministry to finance its terrorist activities and had "de facto control over the [Ministry's] contracting process." Id. ¶¶ 104-05. JAM capitalized on the Ministry's "lack of any modern logistics system" and inability to "track[ ] the movement of goods and devices," id. ¶ 107, by "commandeering MOH facilities" and "looting MOH's inventory for profits." Id. ¶ 3.

Beginning in 2004, defendants entered into supply agreements with the Ministry for the shipment of medical goods and equipment into Iraq. Id. ¶¶ 4–6, 128. Those contracts went through the Ministry's procurement process, and they were negotiated and executed at "in-person meetings inside the Ministry's headquarters building in Baghdad." Id. ¶¶ 10, 119, 121. Among other things, the contracts’ terms generally reflected the country of origin of the goods being sold. Id. ¶ 122. According to plaintiffs, suppliers would also "typically ... make the sale pursuant to an irrevocable letter of credit" in order to guarantee suppliers were paid for the goods. Id. ¶¶ 124, 127.

In addition to the medical goods contemplated by the contracts, defendants provided Ministry officials with in-kind drugs and equipment free of charge. Id. ¶¶ 5, 116, 117. In fact, Kimadia's standard bid instructions directed companies to provide extra goods for free as part of their agreements. Id. ¶ 120. Those goods "functioned as cash equivalents in Iraq" because they "possessed high street value" and "could be effectively monetized on regional black markets." Id. ¶ 117. After the contracts were executed, defendants would ship both the contract goods and the free goods to a Kimadia warehouse in Iraq. Id. ¶ 128. After Kimadia transferred the inventory to Ministry warehouses, the goods were "often diverted" by Ministry employees to the black market. Id. On top of the free goods, defendants also made cash payments to Ministry officials through "corrupt local agents." Id. ¶¶ 6, 142, 145.

According to plaintiffs, defendants’ provision of free goods and cash payments to the Ministry financed JAM throughout the period between 2004 and 2013. See id. ¶¶ 7, 13, 167. The Sadrists controlled both the Ministry and Kimadia, which they used to supply JAM with "resources critical to its terrorist operations." Id. ¶ 167. During that time, JAM carried out numerous terrorist attacks, capturing, torturing, and murdering Americans. See, e.g. , id. ¶¶ 14, 333-46, 463, 787, 808. Some of those attacks killed or injured plaintiffs or their relatives. Id. ¶¶ 16, 62, 408-3180.

LEGAL STANDARD

To survive a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), plaintiffs must "establish[ ] a factual basis for the exercise of personal jurisdiction over the defendant[s]."

Crane v. New York Zoological Soc. , 894 F.2d 454, 456 (D.C. Cir. 1990). Although "factual discrepancies appearing in the record must be resolved in favor of the plaintiff," id. , the Court "need not accept inferences drawn by plaintiffs if such inferences are unsupported by the facts," Livnat v. Palestinian Auth. , 851 F.3d 45, 57 (D.C. Cir. 2017) (internal quotation marks omitted). "Mere conclusions or ‘bare allegation[s]’ do not constitute the prima facie case for jurisdiction that this standard requires." Fawzi v. Al Jazeera Media Network , 273 F. Supp. 3d 182, 186 (D.D.C. 2017) (quoting Livnat , 851 F.3d at 57 ).

On a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1), plaintiffs again bear the burden of establishing jurisdiction. See Lujan v. Defs. of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). If a plaintiff's claims present nonjusticiable political questions, the case must be dismissed for lack of subject-matter jurisdiction under Rule 12(b)(1). See Schlesinger v. Reservists Comm. to Stop the War , 418 U.S. 208, 215, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974) ; Al-Tamimi v. Adelson , 916 F.3d 1, 7-8 (D.C. Cir. 2019). In making that assessment, a court must "assume the truth of all material factual allegations in the complaint and construe the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged." Am. Nat'l Ins. Co. v. FDIC , 642 F.3d 1137, 1139 (D.C. Cir. 2011) (internal quotation marks omitted).

To survive a motion to dismiss under Federal Rule of Civil Procedure 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.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Again, I must accept as true all factual allegations in the...