Owens v. Taliban
| Decision Date | 24 February 2023 |
| Docket Number | 22-CV-1949 (VEC) |
| Parties | JAMES OWENS, et al., Plaintiffs, v. TALIBAN a/k/a ISLAMIC EMIRATE OF AFGHANISTAN, Defendant. |
| Court | U.S. District Court — Southern District of New York |
On August 7, 1998, al-Qaeda killed more than 200 people and injured thousands in terrorist attacks on the U.S. embassies in Dar es Salaam, Tanzania and Nairobi, Kenya (the “Embassy Bombings”). Although al-Qaeda was responsible for the attack, several countries and groups provided assistance that made the attacks possible, including Iran, Sudan, and, allegedly, the Taliban, a fundamentalist Islamic organization that then controlled, and now again controls, Afghanistan.
In 2021, approximately 20 years after being ousted from Afghanistan, the Taliban effectively reseized control of Afghanistan, after which it laid claim to funds held by the Afghan central bank at the Federal Reserve Bank of New York (the “N.Y. Fed”). In February 2022, President Joseph R. Biden issued an Executive Order blocking the transfer of those funds. See Executive Order, Dkt 6-1. The Executive Order prompted approximately 200 surviving victims, estates of victims who did not survive, and family members of the victims of the Embassy Bombings, both domestic and foreign, to sue the Taliban for its alleged role in the attack. See generally Compl., Dkt. 7. To preserve their chance of collecting a future judgment, they filed an ex parte emergency motion seeking pre-judgment attachment of the funds, which the Court granted on March 21, 2022. See Orders, Dkts. 33, 38. Plaintiffs now seek to confirm the Court's pre-judgment attachment order. See Pls. Not. of Mot., Dkt. 47. For the following reasons, Plaintiffs' motion is DENIED.
BACKGROUND[1]
In 1996, after being expelled from Sudan, al-Qaeda and its leader, Osama bin Laden, relocated to Afghanistan, where the Taliban had recently emerged as a fundamentalist movement that was attempting to take over Afghanistan. Once in Afghanistan, al-Qaeda allegedly began to receive support from the Taliban in the form of, among other things, weapons training, facilities, and protection. See 9/11 Commission Report, Dkt. 6-6, at 66; L.A. Times Article, Dkt. 6-8, at 3. While he was allegedly being protected by the Taliban, bin Laden declared war on the United States in a 1996 fatwa; he reiterated that declaration in February 1998. See bin Laden 1996 Fatwa, Dkt. 6-9; bin Laden 1998 Fatwa, Dkt. 6-10, at 2. Eventually, bin Laden and al-Qaeda orchestrated the attacks on two U.S. embassies in the summer of 1998, killing hundreds and injuring thousands. See History Report, Dkt. 6-12, at 2.
Horrific in their own right, the 1998 bombings were a harbinger of what was to come. In 2000, al-Qaeda attacked the USS Cole, killing 17 sailors and injuring approximately 40 other crew members. Then, on September 11, 2001, al-Qaeda attacked the World Trade Center and the Pentagon, an attack with far-reaching domestic and international consequences. See generally N.Y. Times Article, Dkt. 6-20. The Taliban was pushed from power in Afghanistan when North Atlantic Treaty Organization (“NATO”) forces, led by the United States, invaded the country. Id. Although a fragile democracy was formed, Afghanistan was rocked by insurgent attacks from the Taliban for years. Eventually, in the summer of 2021, NATO allies and the United States withdrew their troops from the country, and the Taliban retook control. Id. Although no country has recognized it as an official, legitimate government, the Taliban currently controls Afghanistan. ICCT Article, Dkt. 6-21, at 1. In that capacity, the Taliban laid claim to the roughly $7 billion in assets held by Afghanistan's central bank, Da Afghanistan Bank (“DAB”), at the N.Y. Fed. See N.Y. Times Article, Dkt. 6-22, at 2.
Since taking control of Afghanistan, the Taliban has installed its own officials at DAB, controlled DAB's decision-making, established a committee to replace Afghanistan's central banking laws with traditional Islamic banking, and eliminated (or, at a minimum, seriously compromised) DAB's anti-money laundering and anti-terrorism financing efforts. See Piatetsky Decl., Dkt. 50, ¶¶ 46-72, 82-108; Templeton Decl., Dkt. 51, ¶¶ 40-61; Zerden Decl., Dkt. 49-5, ¶¶ 54-139, 144-79. Foreign governments and organizations have avoided transacting with DAB due to its affiliation with the Taliban. See Piatetsky Decl. ¶¶ 73-81; Zerden Decl. ¶¶ 140-43.
On February 11, 2022, President Biden, via Executive Order, froze DAB's assets being held by the N.Y. Fed. The President subsequently authorized approximately half the balance to be transferred out of the United States to be used on behalf of the people of Afghanistan. That left approximately half in the United States, “subject to ongoing litigation by U.S. victims of terrorism.” White House Fact Sheet, Dkt. 6-25; see also Executive Order.[2] President Biden's order set off a race among creditors and would-be creditors of the Taliban to attach the funds.
Among the terrorism victims seeking to lay claim to those funds are victims of the September 11, 2001, terrorist attacks (the “September 11 Attacks”) - many of whom (the “9/11 Victim Creditors”) have been engaged in a complex set of lawsuits filed years ago in this District - who wish to levy writs of execution on the $2.1 billion in frozen funds still in the United States. See Order, In Re: Terrorist Attacks on September 11, 2001, No. 03-MD-01570, Dkt. 7717 (S.D.N.Y. Mar. 2, 2022) (lifting stays on writs of execution for two sets of plaintiffs in cases related to the September 11 Attacks); Order, Smith v. Islamic Emirate of Afg., No. 01-CV-10132 (LAK), Dkt. 48 ().[3] The 9/11 Victim Creditors commenced turnover proceedings.[4] On February 21, 2023, Judge George Daniels denied their turnover motions. See In Re: Terrorist Attacks on September 11, 2001, No. 03-MD-01570 (GBD) (SN), 2023 WL 2138691 (S.D.N.Y. Feb. 21, 2023). Judge Daniels concluded that DAB is immune from jurisdiction and immune from attachment and execution under the Foreign Sovereign Immunities Act (the “FSIA”). In a nutshell, he concluded that DAB is the central bank of Afghanistan and no exception to sovereign immunity applies; the Terrorism Risk Insurance Act of 2002 (the “TRIA”) does not nullify DAB's immunity; and the Court is constitutionally restrained from finding that the Taliban is entitled to DAB's assets under the TRIA. Id.
In part because of the 9/11 Victim Creditors, this case was filed with an ex parte emergency motion for pre-judgment attachment. Pls. Mem., Dkt. 48, at 1-2.[5] Although Plaintiffs seek to confirm pre-judgment attachment of Taliban assets in the amount of approximately $4.[6] billion plus pre-judgment interest (the “Funds”), with respect to the funds located at the N.Y. Fed, they seek to attach only their expected compensatory damages, in the amount of approximately $1.4 billion plus pre-judgment interest (i.e., the amount of the funds that have not already been attached by others). Id. at 9 & n.6.
After the Court granted Plaintiffs' pre-judgment attachment motion, see Orders, Dkts. 33, 38, on April 21, 2022, the U.S. Marshal Service levied upon the Funds, see McGill Decl., Dkt. 49, ¶¶ 3-6; Process Receipt & Return, Dkt. 49-1.6 Plaintiffs timely moved to confirm their prejudgment attachment on May 2, 2022. See Pls. Not. of Mot. As a non-party garnishee in this case, and without taking a position on Plaintiffs' motion, the N.Y. Fed responded to the motion to offer its views on relevant FSIA provisions. In its submission, the N.Y. Fed noted “that in other proceedings against the Taliban where this issue is being litigated, the United States has stated that DAB ‘is an agency or instrumentality of the State of Afghanistan under the FSIA's definitions and is to be treated as a “foreign state” for purposes of the FSIA.'” See N.Y. Fed Response, Dkt. 61, at 8. In their reply, Plaintiffs argue that the Court may, but need not, address the FSIA at this stage of the proceeding, and that the FSIA does not pose an obstacle to confirmation. See Pls. Reply, Dkt. 63, at 2-3. The Court invited the Government to submit a statement of interest setting forth its position on the extent to which the FSIA precludes confirmation of the Court's attachment order. See Order, Dkt. 80. In response, the Government opined that the FSIA precludes confirmation because DAB's assets are immune from attachment. See Gov't Statement, Dkt. 81.
On July 15, 2022, Plaintiffs filed a proposed order to show cause why default judgment should not be entered against the Taliban, a supporting declaration, and a proposed default judgment order. See Proposed Order to Show Cause, Dkt. 75; Proposed Default Judgment
Order, Dkt. 76. To date, the Court has not entered judgment against the Taliban.
The standard for confirming an attachment order is the same as that for granting an ex parte order of attachment in the first instance.[7] See Nippon Em-Trans Co. v. Emo-Trans Inc., 744 F.Supp. 1215, 1234 (E.D.N.Y. 1990). Upon careful consideration of the applicability of the FSIA, the Court has concluded that the attachment order should not have been granted in the first instance and will, therefore, not be confirmed. As the central bank of Afghanistan, DAB is immune from execution.
A foreign state is immune from attachment of its assets in the United States, subject to certain exceptions. The FSIA addresses two distinct types of immunity: jurisdictional and execution. See Walters v. Indust. & Comm. Bank of China, Ltd., 651 F.3d 280, 286-88 (2d Cir. 2011) (discussing the ...
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