Fed. Ins. Co. v. Qaida (In re Terrorist Attacks on September 11, 2001), 03–MDL–1570 (GBD).

• Decision Date: 29 September 2015
• Docket Number: No. 03–MDL–1570 (GBD).,03–MDL–1570 (GBD).
• Citation: 134 F.Supp.3d 774
• Parties: In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001. Federal Insurance Co., et al. v. al Qaida, et al., 03–cv–6978 Vigilant Insurance Co., et al. v. Kingdom of Saudi Arabia, et al., 03–cv–8591 Pacific Employers Insurance, et al. v. Kingdom of Saudi Arabia, et al., 04–cv–7216 Thomas Burnett, Sr., et al. v. Al Baraka Inv. & Dev. Corp., et al., 03–cv–9849 Euro Brokers Inc., et al. v. Al Baraka, et al., 04–cv–7279 Kathleen Ashton, et al. v. al Qaeda Islamic Army, et al., 02–cv–6977 Estate of John P. O'Neill, Sr., et al. v. Kingdom of Saudi Arabia, et al., 04–cv–1922 Continental Casualty Co., et al. v. al Qaeda, et al., 04–cv–5970 Cantor Fitzgerald Assocs. v. Akida Inv. Co., 04–cv–7065.
• Court: U.S. District Court — Southern District of New York

134 F.Supp.3d 774

In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001.

Federal Insurance Co., et al. v. al Qaida, et al., 03–cv–6978 Vigilant Insurance Co., et al. v. Kingdom of Saudi Arabia, et al., 03–cv–8591 Pacific Employers Insurance, et al. v. Kingdom of Saudi Arabia, et al., 04–cv–7216 Thomas Burnett, Sr., et al. v. Al Baraka Inv. & Dev. Corp., et al., 03–cv–9849 Euro Brokers Inc., et al. v. Al Baraka, et al., 04–cv–7279 Kathleen Ashton, et al. v. al Qaeda Islamic Army, et al., 02–cv–6977 Estate of John P. O'Neill, Sr., et al. v. Kingdom of Saudi Arabia, et al., 04–cv–1922 Continental Casualty Co., et al. v. al Qaeda, et al., 04–cv–5970 Cantor Fitzgerald Assocs. v. Akida Inv. Co., 04–cv–7065.

No. 03–MDL–1570 (GBD).

United States District Court, S.D. New York.

Signed Sept. 29, 2015.

134 F.Supp.3d 777

Sean Carter, Scott Tarbutton, Cozen O'Connor, Philadephia, PA, for Plaintiffs.

Michael K. Kellogg, Greg Rapaway, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, Roy T. Englert, Jr., Robbins, Russell, Englert, Orseck, Untereiner & Sauber, LLP, Washington, DC, for Defendants.

OPINION

GEORGE B. DANIELS, District Judge:

This case involves claims by families and estates of the victims of the September 11, 2001 terrorist attacks, individuals injured by the attacks, and various commercial entities that incurred damages and losses as a result of the attacks. The moving defendants are the Kingdom of Saudi Arabia ("Saudi Arabia") and the Saudi High Commission for Relief of Bosnia & Herzegovina ("SHC") (collectively, "Defendants"). Plaintiffs allege that agents and employees of the Saudi government bear responsibility for the September 11, 2001 attacks because they directly and knowingly assisted the hijackers and plotters who carried out the attacks. They allege further that al Qaeda's development into a terrorist organization was fueled principally by financial and operational support from Saudi government "da'awa organizations" (described by Defendants as "charities"), including the SHC.

Defendants move this Court to dismiss Plaintiffs' Complaint for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), on the basis that Defendants are immune from suit under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1602 et seq. (See Defendants' Motion, (ECF No. 2893); Defendants' Memorandum in Support ("Defs.' Mem."), (ECF No. 2894).) Plaintiffs oppose Defendants' motion to dismiss and separately move to file a 587–paragraph consolidated amended pleading of facts and evidence in support of their claims against Defendants (the "Averment of Facts").¹ (See Plaintiffs' Motion ("Pls.' Mot."), (ECF 2891).) The issue before this Court is whether the noncommercial tort exception to the FSIA strips Defendants of their sovereign immunity. The noncommercial tort exception provides an exception to FSIA immunity when money damages are sought against a foreign state

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or its instrumentalities "for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment." 28 U.S.C. § 1605(a)(5).

Defendants' motion to dismiss is GRANTED. Plaintiffs' motion to file the Averment of Facts is DENIED as futile.

I. PROCEDURAL HISTORY

Saudi Arabia and the SHC previously filed motions to dismiss this action in 2004, claiming, inter alia, immunity from the jurisdiction of the United States pursuant to the FSIA. Plaintiffs argued that the FSIA's noncommercial tort exception, 28 U.S.C. § 1605(a)(5), applied to the actions of Defendants, and that, therefore, Defendants lacked jurisdictional immunity. In response, Defendants argued that the noncommercial tort exception was inapplicable for at least three reasons: (1) "[P]laintiffs failed to allege that the ‘entire tort’ occurred in the United States"; (2) "the ‘discretionary function’ exclusion to the FSIA's noncommercial tort exception applied," see id. § 1605(a)(5)(A) ; and (3) "[P]laintiffs did not plead the necessary causation." In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 109, 112 (2d Cir.2013) ("In re Terrorist Attacks (SJRC) " ).

In 2005, Judge Casey held that Defendants were foreign sovereigns immune from suit. See In re Terrorist Attacks on Sept. 11, 2001, 349 F.Supp.2d 765, 802–04 (S.D.N.Y.2005) ("In re Terrorist Attacks I " ) (Casey, J.) (dismissing claims against Saudi Arabia); In re Terrorist Attacks on Sept. 11, 2001, 392 F.Supp.2d 539, 553 (S.D.N.Y.2005) ("In re Terrorist Attacks II " ) (Casey, J.) (dismissing claims against the SHC).² Specifically, Judge Casey held that the discretionary function exclusion to the noncommercial tort exception applied. "[T]he ‘discretionary function’ exclusion provides that a foreign sovereign retains immunity under the FSIA even if its act or omission is deemed to be tortious if the act is ‘based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion [is] abused.’ " In re Terrorist Attacks (SJRC), 714 F.3d at 112 (citing 28 U.S.C. § 1605(a)(5)(A) ). An order of partial final judgment was entered as to those decisions on January 10, 2006. (See Clerk's Judgment (ECF No. 1594).)

The Second Circuit affirmed the dismissal of the claims asserted against Saudi Arabia and the SHC, but on an alternative basis. In re Terrorist Attacks on September 11, 2001, 538 F.3d 71, 90 (2d Cir.2008) ("In re Terrorist Attacks III " ). The Second Circuit "held that the FSIA's noncommercial tort exception cannot apply to claims based on alleged involvement in terrorist activities, because ‘claims based on terrorism must be brought under the Terrorism Exception, and not under any other FSIA exception.’ " In re Terrorist Attacks (SJRC), 714 F.3d at 113 (quoting In re Terorrist Attacks III, 538 F.3d at 90 ).³ In 2011, however, the Second Circuit

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decided Doe v. Bin Laden, 663 F.3d 64 (2d Cir.2011),⁴ which—through use of the Circuit's "mini-en banc" procedure—partially overruled the judgment in In re Terrorist Attacks III. Id. at 70 n. 10. The Second Circuit in Doe held that "the terrorism exception, rather than limiting the jurisdiction conferred by the noncommercial tort exception, provides an additional basis for jurisdiction." Id. at 70.

Plaintiffs therefore moved this Court for relief from judgment under Federal Rule of Civil Procedure 60(b). This Court denied that motion with the view that the Second Circuit "would be able to consider that unreviewed issue[, application of the discretionary function exclusion,] on appeal from the denial." See In re Terrorist Attacks on Sept. 11, 2001, 741 F.3d 353, 354–55 (2d Cir.2013) ("In re Terrorist Attacks V " ). In 2013, the Second Circuit reversed the order denying the Rule 60(b) motion and remanded this action to this Court for further proceedings consistent with its opinion. Id. at 355, 357 ("We conclude that the circumstances here are ‘extraordinary’ and warrant relief under Rule 60(b)(6)."). The Second Circuit specifically noted that Defendants raised before Judge Casey three independent grounds for dismissal under the FSIA, and "[a]ll [of] these issues may be considered by the District Court on remand." Id. at 359. On June 30, 2014, the Supreme Court denied Defendants' petition for a writ of certiorari seeking review of the In re Terrorist Attacks V decision.

On September 15, 2014, Defendants moved to dismiss, reasserting their three grounds for dismissal under the FSIA. (See Defs.' Mem. at 3–5 (arguing that the noncommercial tort exception does not apply because: (1) Plaintiffs fail to allege that the "entire tort" occurred within the United States; (2) the "discretionary function" exclusion applies; and (3) Plaintiffs do not adequately plead causation).) On the same day, Plaintiffs cross-moved for leave to file the Averment of Facts. This Court heard oral argument on July 30, 2015.

II. STANDARD OF REVIEW

"It is well settled that the only source of subject matter jurisdiction over a foreign sovereign [or its instrumentalities] in the courts of the United States is [the FSIA]." In re Terrorist Attacks (SJRC), 714 F.3d at 114 (quoting Garb v. Republic of Poland, 440 F.3d 579, 581 (2d Cir.2006) ); see also Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) (The FSIA is the "sole basis for obtaining jurisdiction over a foreign state in our courts."). "Once the defendant presents a prima facie case that it is a foreign sovereign [or an instrumentality of a foreign sovereign], the plaintiff has the burden of going forward with evidence showing that, under exceptions to the FSIA, immunity should not be granted, although the ultimate burden of persuasion remains with the alleged foreign sovereign." In re Terrorist Attacks (SJRC), 714 F.3d at 114 (internal quotation marks and citation omitted).

"Determining whether [the plaintiffs] burden is met involves a ‘review [of] the allegations in the complaint, the undisputed

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