In re Terrorist Attacks On September 11, 2001

• Citation: 538 F.3d 71
• Decision Date: 14 August 2008
• Docket Number: Docket No. 06-0319-cv(L).
• Parties: In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

538 F.3d 71

In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001.

Docket No. 06-0319-cv(L).

United States Court of Appeals, Second Circuit.

Argued: January 18, 2008.

Decided: August 14, 2008.

James P. Kreindler, Kreindler & Kreindler LLP, New York, N.Y. (Mark S. Moller, Justin T. Green, Blanca I. Rodriguez, Andrew J. Maloney, III, of counsel, Vincent I. Parrett, on the brief), for the Ashton Plaintiffs-Appellants.

Stephen A. Cozen, Cozen O'Connor, Philadelphia, PA (Elliott R. Feldman, Sean P. Carter, of counsel, Stephen B. Burbank, Philadelphia, PA, on the brief), for Plaintiffs-Appellants Federal Insurance Company, Pacific Employers Insurance Company and Vigilant Insurance Company.

Andrea Bierstein, Hanly Conroy Bierstein Sheridan Fisher & Hayes LLP, New York, N.Y. (Ronald L. Motley, Jodi W. Flowers, Michael Elsner, Justin B. Kaplan, Motley Rice LLC, Mt. Pleasant, SC, of counsel, Paul Hanly, Jr., Jayne Conroy, Hanly Conroy Bierstein Sheridan Fisher & Hayes LLP, on the brief), for the Burnett and World Trade Center Properties and Euro Brokers Plaintiffs-Appellants.

Robert M. Kaplan, Ferber Chan Essner & Coller, LLP, New York, NY, for Plaintiffs-Appellants Continental Casualty Company, Transcontinental Insurance Company, Transportation Insurance Company, Valley Forge Insurance Company, National Fire Insurance Company of Hartford and American Casualty Company of Reading, Pennsylvania.

Jerry S. Goldman, Law Offices of Jerry S. Goldman & Associates, P.C., New York, NY, (Frederick J. Salek, on the brief), for the O'Neill Plaintiffs-Appellants.

David H. Fromm, Brown Gavalas & Fromm LLP, New York, N.Y. (Frank J. Rubino, on the brief), for Plaintiff-Appellant New York Marine and General Insurance Company.

Kenneth L. Adams, Dickstein Shapiro LLP, Washington, DC (Christopher T. Leonardo, on the brief), for Plaintiffs-Appellants Cantor Fitzgerald & Co. and Port Authority of New York and New Jersey.

Michael K. Kellogg, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, DC (Mark C. Hansen, Colin S. Stretch, Kelly P. Dunbar, on the brief), for Defendants-Appellees the Kingdom of Saudi Arabia and His Royal Highness Prince Turki al-Faisal bin Abdulaziz al-Saud.

Lawrence S. Robbins, Robbins, Russell, Englert, Orseck & Untereiner LLP, Washington, DC (Roy T. Englert, Jr., Alison C. Barnes, Rachel S. Li Wai Suen, on the brief), for Defendant-Appellee the Saudi High Commission.

William H. Jeffress, JR., Baker Botts LLP, Washington, DC (Jeffrey A. Lamken, Christopher R. Cooper, Sara E. Kropf, Jamie S. Kilberg, Allyson N. Ho, on the brief), for Defendants-Appellees His Royal Highness Prince Salman bin Abdulaziz al-Saud,

His Royal Highness Crown Prince Sultan bin Abdulaziz al-Saud, His Royal Highness Prince Naif bin Abdulaziz al-Saud.

Louis R. Cohen, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC (Shirley C. Woodward, Tracey C. Allen, Douglas F. Curtis, David Bowker, on the brief), for Defendant-Appellee His Royal Highness Prince Mohamed al Faisal al Saud.

Before JACOBS, Chief Judge, CABRANES, Circuit Judge, VITALIANO, District Judge.^*

DENNIS JACOBS, Chief Judge:

The plaintiffs-appellants are persons who incurred losses in the September 11, 2001 terrorist attacks: those who suffered personal injuries, the families and representatives of those who died, insurers and property owners. They have brought tort claims against hundreds of parties: foreign governments, charitable entities, and individuals alleged to have provided financial and logistical support to al Qaeda in the runup to the attacks. Plaintiffs take this appeal from a partial final judgment entered on January 10, 2006 in the United States District Court for the Southern District of New York (Casey, J.), dismissing their claims against twelve of the numerous 32 defendants. They have appealed that judgment with respect to seven of the dismissed defendants: the Kingdom of Saudi Arabia ("the Kingdom"), four Saudi princes ("Four Princes"), a Saudi banker ("Mohamed"), and the Saudi High Commission for Relief to Bosnia and Herzegovina ("SHC"). We have jurisdiction over their appeals pursuant to 28 U.S.C. § 1291.

The chief issue on appeal is the scope of foreign sovereign immunity. The Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1330, 1602-1611 ("FSIA"), grants foreign sovereigns immunity from suit in the United States subject to enumerated exceptions. We conclude that the FSIA protects the appellees—most obviously, the Kingdom itself. First, we hold that the FSIA applies to individual officials of foreign governments in their official capacities, and therefore to the Four Princes. Second, we affirm the district court's conclusion that the SHC is an "agency or instrumentality" of the Kingdom, to which the FSIA likewise applies.

Further, we conclude that none of the FSIA's exceptions applies. The plaintiffs' claims do not come within the statutory exception for state-sponsored terrorist acts, 28 U.S.C. § 1605A ("Terrorism Exception"), because the Kingdom has not been designated a state sponsor of terrorism by the United States. As to the exception for personal injury or death caused by a foreign sovereign's tortious act, id. § 1605(a)(5) ("Torts Exception"), we decline to characterize plaintiffs' claims—expressly predicated on a state-sponsored terrorist act—as sounding in tort. Nor do the plaintiffs' claims come within the statutory exception for a foreign sovereign's commercial activity, id. § 1605(a)(2) ("Commercial Activities Exception"), because the defendants' specific alleged conduct—supporting Muslim charities that promote and underwrite terrorism—is not conduct in trade, traffic or commerce.

Accordingly, we agree with the district court that it lacked subject matter jurisdiction over the claims against the Kingdom, the Four Princes in their official capacities, and the SHC. We likewise affirm the district court's dismissal of the claims against the Four Princes (in their personal capacities) and Mohamed for want of personal jurisdiction, and the denial of the plaintiffs' motions for jurisdictional discovery.

BACKGROUND

The complaints vary somewhat in their details, but they share a core allegation: the defendants played a critical role in the September 11 attacks by funding Muslim charities that, in turn, funded al Qaeda. Since "there would not be a trigger to pull or a bomb to blow up without the resources to acquire such tools of terrorism and to bankroll the persons who actually commit the violence," Boim v. Quranic Literacy Inst., 291 F.3d 1000, 1021 (7th Cir.2002), plaintiffs argue that the defendants should be held liable for the consequences of their material support for al Qaeda. The complaints, which we accept as true at the pleading stage, Garb v. Republic of Poland, 440 F.3d 579, 581 (2d Cir.2006), allege the facts set forth below.

The SHC²

The SHC was formed in 1993 by decree of King Fahd (who was then President of the Council of Ministers, the Kingdom's highest governing body), apparently to support Bosnian Muslims displaced by civil war. The SHC acted as "a fully integrated component of al Qa[e]da's logistical and financial support infrastructure." In the early 1990s, al Qaeda fighters began infiltrating Bosnia disguised as SHC relief workers. The SHC has funneled millions of dollars to al Qaeda, evidenced by investigators' inability "to account for nearly $41 million" in SHC donations. In an October 2001 raid of the SHC's Sarajevo offices, U.S. government officials found computer hard drives containing photos of the World Trade Center, the U.S. embassies in Kenya and Tanzania, and the U.S.S. Cole (all targets of terrorist attacks); documents about pesticides and crop dusters; photos and maps of Washington, D.C. (with prominent government buildings marked); and instructions for fabricating U.S. State Department badges. After the raid, the Bosnian Financial Police reported that peacekeeping forces "confiscated some documentation for which it can be claimed with certainty that it does not belong in the scope of work of a humanitarian organization."

Similar allegations have been lodged against numerous other Muslim charities. Although those claims are not raised in this appeal, the allegations about the charities provide the necessary background for the issues here. The summary allegation is as follows:

Ostensible charitable organizations, and in particular, Islamic charities under the control of the Kingdom of Saudi Arabia, have played a singularly important role in al Qa[e]da's development and pursuit of its perverse ambitions. These "charities" have served as the primary vehicle for raising, laundering and distributing funds on behalf of al Qa[e]da from its inception. In addition, these charities have provided arms, false travel documentation, physical assets and logistical support to al Qa[e]da.

These allegations include a wealth of detail (conscientiously cited to published and unpublished sources) that, if true, reflect close working arrangements between ostensible charities and terrorist networks, including al Qaeda. The United States government has listed several of the charities (or their branch offices) as "Specifically Designated Global Terrorists," and has taken steps to shut down their operations.

The Kingdom of Saudi Arabia³

The Kingdom contributed to the terrorist-linked charities described above and closely monitored their relief efforts abroad, with the express knowledge that those charities were funneling the Kingdom's funds to al Qaeda. According to the Federal Insurance Plaintiffs, the Kingdom exercises complete oversight and control over the charities, making the charities alter-egos and agents whose deeds can be imputed to the Kingdom.

The Four Princes⁴

The Four Princes are: His Royal Highness Prince Salman bin Abdulaziz al-Saud ("Prince Salman"), His Royal Highness Crown Prince Sultan bin Abdulaziz al-Saud ("Prince Sultan"), His Royal Highness Prince Naif bin Abdulaziz...