Bonacasa v. Standard Chartered PLC
| Decision Date | 07 March 2023 |
| Docket Number | 22 Civ. 3320 |
| Parties | DIANA BONACASA, VINCENT BONACASA RAQUEL BONACASA, BARBARA ROSENDAHL, JEFFREY MUNCY, GILBERT RUSSELL, ABIGAIL RUSSELL, SARAH RUSSELL, NOEMI RUSSELL, BENJAMIN RUSSELL, NATHANAEL RUSSEL, DEBBIE WILLIAMS, and CHELSEA MANGANO, Plaintiffs, v. STANDARD CHARTERED PLC and STANDARD CHARTERED BANK, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs bring this action pursuant to the Anti-Terrorism Act (“ATA”), as amended by the Justice Against Sponsors of Terrorism Act (“JASTA”), alleging that Standard Chartered PLC (“SC PLC”)-through its subsidiary, Standard Chartered Bank (“SCB”) (together with S.C. PLC, “Standard Chartered”)-aided and abetted al-Qaeda by providing banking services to the Fatima Group (“Fatima”) a Pakistani fertilizer company that purportedly supplied al-Qaeda with materials used to make improvised explosive devices (“IEDs”). Doc. 1. Diana Bonacasa, Vincent Bonacasa, Raquel Bonacasa, Barbara Rosendal, Jeffrey Muncy Gilbert Russel, Abigail Russel, Sarah Russel, Noemi Russel Benjamin Russel, Nathaniel Russel, Debbie Williams, and Chelsea Mangano are family members of service members killed by such explosive devices in Afghanistan between 2013 and 2015.
Pending before the court is Standard Chartered's motion to dismiss the complaint for lack of personal jurisdiction and for failure to state a claim. Doc. 20. For the reasons set forth below, Standard Chartered's motion is GRANTED in part and DENIED in part.
In the early 2000s, during the American war in Afghanistan, members of al-Qaeda attacked U.S. service members to drive them out of Afghanistan.[2] ¶¶ 45, 52. To that end, al-Qaeda established bomb-making factories in the Federally-Administered Tribal Areas of Pakistan, where the Pakistani Taliban would manufacture explosives for al-Qaeda and the al-Qaeda Terror Syndicate.[3] ¶¶ 55, 109. The IED was one type of bomb these factories produced. ¶ 55. The main explosive ingredient in the vast majority of IEDs at that time was calcium ammonium nitrate (“CAN”), which is used in agricultural fertilizers.[4] ¶¶ 96, 101. These CANbased IEDs were responsible for about ninety percent of American IED casualties in Afghanistan. ¶ 125.
In 2010, Afghanistan banned the importation, production, transportation, use, sale, and storage of CAN. ¶ 103. In 2011, Pakistan also adopted a policy to prevent the smuggling of CAN into Afghanistan, which included a counter-IED public awareness campaign, training, and strengthened legislation. ¶¶ 106-07. But the flow of CAN into Afghanistan did not stop.[5] ¶¶ 109-111. Around this time, news organizations began to take notice of this problem. On September 1, 2011, for example, the Associated Press published an article, noting that the “main in gradient in most of the homemade bombs [used by the Syndicate] . . . is fertilizer produced by a single company in Pakistan,” with one plant alone producing enough CAN “fertilizer for at least 140,000 bombs” in a single year. ¶ 141.
In August 2011, the U.S. government began working to limit the access of al-Qaeda and its allies to CAN. ¶ 126. Fatima, a Pakistani fertilizer company, supplied al-Qaeda with almost all of its CAN. ¶ 127. That month, United States Army Lieutenant General Michael Barbero discussed al-Qaeda's use of CAN with Fawad Mukhtar, Fatima's Chairman, on the phone. ¶ 127. The two met in Virginia later in 2011, where General Barbero told Chairman Mukhtar that the CAN fertilizer from Fatima's plants was responsible for most U.S. service member deaths from IEDs in Afghanistan. ¶ 129. Fatima agreed to add dye to its fertilizer-so that U.S. officials could more easily detect and seize CAN being smuggled across the Afghan border-and to stop selling CAN to dealers near the Afghanistan-Pakistan border. ¶ 130. But Fatima never added dyes to its fertilizer. ¶¶ 130-31. After giving a tour of one of its factories to U.S. officials, Fatima cut off contact with the U.S. government, directing it to communicate with Fatima through the Pakistani Foreign Ministry. ¶ 131.
In 2012, U.S. officials again attempted to convince Fatima to implement CAN-preventative measures, such as using dye, but Fatima refused to do so. ¶ 132; see also ¶ 143 () ¶¶ 144-45 ().[6] On December 13, 2012, General Barbero testified before the U.S. Senate Committee on Foreign Relations, explaining that “no progress or minimal progress” had been made with Fatima, despite continued efforts on part of U.S. officials. ¶ 143; Doc. 22-2 at 15.[7] American requests continued into May 2013, when Fatima told U.S. officials that it was working on a new fertilizer formula that would make it harder for insurgents to turn its CAN fertilizer into explosives. ¶¶ 135-36. But Fatima's production of CAN fertilizer continued.
SC PLC is an international bank based in London with more than 1,700 branches across 60 countries. ¶ 28. SCB is a wholly owned subsidiary of S.C. PLC, with a principal place of business is in London, England. ¶ 29. SCB was Fatima's “major banker” during this time. ¶¶ 139-140. SCB provided Fatima with various day-to-day banking services, such as dollar clearing, export financing, and foreign exchange services through SCB's New York branch; approximately $195 billion are processed daily through the New York branch, which is the overwhelming majority of SCB's transactions. ¶¶ 31, 153. SCB and Standard Chartered Pakistan Ltd. (“SCB Pakistan”), a wholly-owned subsidiary of SCB, also provided substantial project financing to Fatima, whose best-selling product by volume was CAN. ¶¶ 152-53. For instance, SCB provided Fatima with a $22 million “specially structured” loan to remove CAN production bottlenecks. ¶¶ 154-55. In addition, SCB Pakistan provided Fatima with other loans and investments that amounted to millions of dollars. ¶¶ 156-57.
In January 2013, after unsuccessfully pressing Fatima to address the CAN issue, General Barbero and other officials met with SCB senior executives at SCB's New York office. ¶ 148; see Doc. 22-3 at 3.[8] U.S. officials sought to warn Standard Chartered that Fatima was supplying the Taliban with materials used to make IEDs. Id. Specifically, U.S. officials informed Standard Chartered that Fatima supplied the Taliban with vast quantities of CAN fertilizer, which was used in approximately 80% of the IEDs used against American service members in Afghanistan. ¶ 149. U.S. officials also told Standard Chartered that Fatima was unresponsive to U.S. efforts to curtail CAN availability and that it repeatedly refused to cooperate with American authorities. Id. U.S. officials presented Standard Chartered with a map of Fatima's plants and photographs, which included “bags of [CAN] fertilizer seized . . . from Taliban (including Haqqani Network) terrorists.”[9] Id. U.S. officials urged Standard Chartered to stop providing financial services- including foreign exchange and export financing services through its New York branch-to Fatima and for Standard Chartered to end their relationship. Id. Such efforts proved “utterly useless,” as General Barbero said, and Standard Chartered continued to provide financial services to Fatima. Doc. 22-3 at 3. Barbero said that Standard Chartered “enabled” the Syndicate, “or at least looked the other way” when “presented with the evidence” of its role in furthering terrorism. Id.
Between July 2013 and December 2015, Plaintiffs' family members-U.S. servicemen Louis Bonacasa, Michael Cinco, Kurt Muncy, Jonam Russell, and Keith Williams-were killed by IEDs in Afghanistan. ¶¶ 180-81, 188-89, 194, 198, 207. In July 2013, Muncy was killed with a planted IED and Russell was killed by a suicide bomber. ¶¶ 194, 198. Williams was killed a year later, in July 2014, when he was riding in a U.S. military vehicle as it drove over an IED. ¶ 207. Bonacasa and Cinco were killed in December 2015. ¶¶ 182, 189. They were conducting human intelligence operations when a suicide bomber on a motorcycle approached their team. ¶ 180. Bonacasa moved in between himself and the bomber in an attempt to shield his team members from harm. ¶ 181. But the bomber detonated the explosives, killing them. ¶¶ 182, 189.
Plaintiffs filed the instant action on April 22, 2022: they seek (1) judgment against Standard Chartered under the ATA, 18 U.S.C. § 2333; (2) an award of the maximum amount of compensatory damages, and treble any compensatory damages awarded under the ATA; (3) attorney's fees and costs incurred in this action; and (4) prejudgment interest. Doc. 1. On May 17, 2022, the parties sent a joint letter to the Court, asking the Court to adopt their proposed deadline for Standard Chartered's response to the complaint, provide deadlines in the filing of pre-motion letters, and ratify that Standard Chartered had waived the service of process. Doc. 9. The Court adopted the proposed order on May 18, 2022. Doc. 10. Pending before the Court is Standard Chartered's August 3, 2022 motion to dismiss the complaint in its entirety for lack of jurisdiction or failure to state a claim. Doc. 20.
“In order to survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists.” Eades v. Kennedy, PC Law Offices, 799 F.3d 161, 167-68 (2d Cir. 2015) (...
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