Boim v. Am. Muslims for Palestine

• Decision Date: 16 August 2021
• Docket Number: No. 20-3233,20-3233
• Citation: 9 F.4th 545
• Parties: Stanley BOIM, individually and as Administrator of the Estate of David Boim, and Joyce Boim, Plaintiffs-Appellants, v. AMERICAN MUSLIMS FOR PALESTINE, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

9 F.4th 545

Stanley BOIM, individually and as Administrator of the Estate of David Boim, and Joyce Boim, Plaintiffs-Appellants,

v.AMERICAN MUSLIMS FOR PALESTINE, et al., Defendants-Appellees.

No. 20-3233

United States Court of Appeals, Seventh Circuit.

Argued May 27, 2021

Decided August 16, 2021

Rehearing and Rehearing En Banc Denied September 14, 2021

Seth Corthell, Daniel I. Schlessinger, Attorneys, Jaszczuk P.C., Chicago, IL, Alyza D. Lewin, Nathan Lewin, Attorneys, Lewin & Lewin, Washington, DC, for Plaintiffs-Appellants.

Christina Jump, Alyssa Fini Morrison, Attorneys, Constitutional Law Center for Muslims in America, Richardson, TX, for Defendants-Appellees.

Gary M. Osen, Attorney, Osen LLC, Hackensack, NJ, for Amicus Curiae Robert Bartlett.

Michael E. Kenneally, Attorney, Morgan, Lewis & Bockius LLP, Washington, DC, for Amicus Curiae Jewish Community Relations Council of the Jewish United Fund of Metropolitan Chicago.

Before Kanne, Scudder, and Kirsch, Circuit Judges.

Scudder, Circuit Judge.

In 1996 David Boim was shot and killed by Hamas terrorists while studying abroad in Israel. His parents later sued several American nonprofit organizations for their role in funding Hamas and secured a $156 million judgment under the federal Anti-Terrorism Act. Those organizations then shuttered, leaving Stanley and Joyce Boim mostly empty handed. So in 2017 they filed a new lawsuit against two different American entities and three individuals, alleging that these new defendants are alter egos of the now-defunct nonprofit organizations and therefore liable for the remainder of the $156 million judgment.

In the new lawsuit, the district court allowed limited jurisdictional discovery, decided the new entities and individuals were not alter egos of the defunct nonprofits, and then dismissed the action for lack of subject matter jurisdiction. This should not have happened, for the district court's finding on the alter ego question constituted a merits determination that went beyond a proper jurisdictional inquiry. Because the Boims’ new lawsuit arises under the Anti-Terrorism Act, the district court possessed federal jurisdiction and should have allowed the case to proceed on the merits, consistent with the ordinary course of civil litigation. We therefore reverse and remand for renewed proceedings.

I

A

The tragic end to David Boim's life marked the beginning of a decades-long effort by his parents to hold those responsible to account. David, a 17-year-old American citizen, was studying in Israel when two Hamas terrorists shot him in the head at a bus stop near Jerusalem in 1996. David's parents responded by suing several United States-based organizations and individuals under the civil liability provision of the Anti-Terrorism Act. See 18 U.S.C. § 2333(a) (1992). This statute creates a federal cause of action by providing any United States national (or his estate, survivors, or heirs) with a right to sue in federal court and to recover treble damages for injuries resulting from an act of international terrorism. See id.

The Boims alleged that the defendant organizations and individuals fundraised for and funneled money to Hamas operatives in the West Bank and Gaza, who in turn used those funds to carry out the attack on David. In that way, the Boims contended, these entities provided material support or resources to terrorism and to a foreign terrorist organization in violation of 18 U.S.C. §§ 2339A and 2339B, and therefore were civilly liable under § 2333(a) for David's killing.

Although the murder occurred overseas, the Boims filed their action in federal court in Chicago because several of the organizational defendants maintained offices in the Northern District of Illinois. The case proceeded to summary judgment, and the district court determined that the evidence compelled a finding that three defendants were liable under § 2333(a) : the Islamic Association for Palestine (which also went by the name American Muslim Society); Holy Land Foundation for Relief and Development; and one individual named Mohammed Abdul Hamid Khalil Salah. A jury convened to assess damages and returned an award for the Boims, holding the defendants jointly and severally liable for $52 million, which the district court then tripled to $156 million under the treble-damages clause Congress included in § 2333(a). The district court entered this judgment in December 2004.

On appeal, we affirmed the judgment against the Islamic Association but reversed as to Holy Land Foundation and Salah. See Boim v. Holy Land Found. for Relief & Dev. , 549 F.3d 685, 701 (7th Cir. 2008) ( Boim III ) (en banc). On remand, the district court again found Holy Land jointly and severally liable under § 2333(a). See Boim v. Quranic Literacy Inst. , No. 00 C 2905, 2012 WL 13171764, at *9 (N.D. Ill. Aug. 31, 2012).

The Boims then turned their focus to enforcing the judgment—an effort that has spawned new litigation and its own jurisdictional complexity.

B

The Boims have had little success collecting their $156 million judgment. Shortly after the district court entered the judgment in 2004, the Islamic Association and Holy Land Foundation claimed they no longer had any assets and announced they were closing. Less than a year later, a new organization named American Muslims for Palestine emerged and then incorporated in 2006. Some of the Islamic Association's former leaders migrated to positions at the new American Muslims for Palestine organization, and the new organization held its first convention in November 2006 at the same location and during the same time of year as the Islamic Association had done in the past. A few years later, American Muslims for Palestine's leaders formed a separate organization called Americans for Justice in Palestine Educational Foundation—but the two legal entities now operate as one and we refer to them jointly as American Muslims for Palestine for the purpose of this opinion.

The Boims—observing these developments and believing American Muslims for Palestine was a mere continuation of the Islamic Association under a new name—reacted with a renewed attempt in 2017 to collect their judgment. Their enforcement efforts progressed along two tracks.

First, the Boims resumed their post-judgment efforts in case no. 00-cv-2905—the original proceeding in which they received the $156 million judgment in the first instance. On May 12, 2017, the Boims filed several motions, including one under Federal Rule of Civil Procedure 25(c) to join the new organization, American Muslims for Palestine (and its affiliate Americans for Justice in Palestine Educational Foundation), and three individuals as judgment debtors responsible for satisfying the $156 million judgment.

Second, on that same day, the Boims filed a new lawsuit in the Northern District of Illinois against American Muslims for Palestine (and its affiliate) and the same three individuals. It is this action—case no. 17-cv-3591—that is the focus of this appeal. The Boims aimed to prove that American Muslims for Palestine is merely a new name for the same terrorism funding enterprise that previously operated under the guise of the Islamic Association, its alternative name American Muslim Society, and Holy Land Foundation. As a result, the Boims contended, the new entity—American Muslims for Palestine—was liable under the Anti-Terrorism Act for the full amount of the prior $156 million judgment. Likewise, the Boims’ new complaint alleged that three individuals were alter egos of the original defendant organizations and these individuals, too, participated in the terrorism-funding conduct leading to David's death.

Two weeks after resuming the litigation in the original proceeding and filing the new lawsuit, the Boims moved to consolidate the two cases before the same district judge. Before any consolidation occurred, however, the district judge presiding over the new lawsuit granted the defendants’ motion to dismiss the complaint under Rule 12(b)(1) for lack of subject matter jurisdiction. But a few months later, the same district court reconsidered its decision, vacated the dismissal, and permitted the Boims to conduct limited jurisdictional discovery on the existence of an alter ego relationship between the new entity and the defunct ones.

After a year of jurisdictional discovery, the Boims filed an amended complaint, narrowing the defendants to two: American Muslims for Palestine (with its affiliate Americans for Justice in Palestine Educational Foundation) and an individual named Rafeeq Jaber. This amended complaint alleged at length how the Islamic Association's leaders, including Jaber, closed the Islamic Association in name only to avoid paying the $156 million owed, plotted a transition to a purportedly new entity, continued the old Islamic Association's activities under the new name American Muslims for Palestine, and attempted to disguise any connection between the defunct and new organizations.

In their amended complaint, the Boims asserted that the new American Muslims for Palestine is one and the same organization as the purportedly defunct Islamic Association and Holy Land Foundation, just with a different name—in other words, it is an alter ego of the original defendant organizations. For that reason, the Boims contended, American Muslims for Palestine is inherently and necessarily linked to the underlying wrongdoing connected to David's death, and therefore is liable under the Anti-Terrorism Act, 18 U.S.C. § 2333(a), and responsible for the unpaid portion of the $156 million judgment. For their part, American Muslims for Palestine and Rafeeq Jaber dispute these allegations and maintain they have no relationship with the Islamic Association or Holy Land.

The Boims’ amended complaint raised two counts against American Muslims for Palestine—one seeking a declaration establishing alter ego identity and liability under the Anti-Terrorism Act for the unpaid judgment, and the other requesting the entry of a...