Roeder v. J.P. Morgan Chase & Co.

• Decision Date: 26 February 2021
• Docket Number: 20-cv-2400 (LJL)
• Citation: 523 F.Supp.3d 601
• Parties: David M. ROEDER, Susanne A. Roeder, Rodney Sickmann, Don Cooke, and Mark Schaefer, individually and on behalf of a class of similarly situated individuals, Plaintiffs, v. J.P. MORGAN CHASE & CO., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

523 F.Supp.3d 601

David M. ROEDER, Susanne A. Roeder, Rodney Sickmann, Don Cooke, and Mark Schaefer, individually and on behalf of a class of similarly situated individuals, Plaintiffs,

v.J.P. MORGAN CHASE & CO., et al., Defendants.

20-cv-2400 (LJL)

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

Signed February 26, 2021

Robert K. Moir, Terrance G. Reed, Vernon Thomas Lankford, Lankford & Reed PLLC, Alexandria, VA, Scott Gilmore, Walter Kelley, Hausfeld LLP, Washington, DC, Brent William Landau, Hausfeld LLP, Philadelphia, PA, for Plaintiffs.

James Ellis Brandt, Latham & Watkins LLP, New York, NY, Roman Martinez, Reema Shah, Latham & Watkins LLP, Washington, DC, William J. Trach, Michael Fagan Houlihan, Latham & Watkins LLP, Boston, MA, for Defendants.

OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge:

Defendants J.P. Morgan Chase & Co., and JP Morgan Chase Bank, N.A. (collectively, "Chase" or "Defendants"), move, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss the amended class action complaint against them.

For the following reasons, the motion to dismiss is granted.

BACKGROUND

On November 4, 1979, a group of armed Iranian militants scaled the wall of the American Embassy compound in Tehran, Iran, capturing the Embassy and taking 63 American citizens as hostages. Dkt. No. 1 ("Complaint" or "AC") ¶ 55. Shortly thereafter, U.S. Charge d'affaires Bruce Laingen and two other Americans were seized at the Iranian Foreign ministry. Id. For the next 444 days, 52 of the 66 Americans continued to be held as hostages.¹ Id. The hostage takers, who were supported by the provisional government of Iran, demanded that the United States turn over the Shah of Iran ("Shah") as the price for the release of the hostages. Id. ¶ 56. The Shah was then in the United States for medical treatment.² Id. ¶¶ 52, 54. The Americans remained hostage until January 20, 1981. They were released on the date of Ronald Reagan's inauguration as President. Id. ¶¶ 78, 113. Throughout their long captivity, the hostages were blindfolded, tortured, taunted, and threatened with death. Id. ¶ 57. The impact on family members was also horrific. See, e.g. , id. ¶¶ 62, 69.

This lawsuit seeks to recover from Chase for damages incurred as a result of the seizure of the hostages and their delayed release. Plaintiffs include three former hostages: David M. Roeder, who was Assistant Air Force Attache when he was taken hostage; Rodney Sickmann, an enlisted Marine serving at the American Embassy in Tehran when he was taken hostage; and Don Cooke, a Consular Officer at the American Embassy in Tehran when he was taken hostage. They also include David M. Roeder's spouse, Susanne Roeder, and Mark Schaefer, son of hostage Colonel Thomas E. Schaefer, the American Defense and Air Attache at the American Embassy in Tehran when he was taken hostage. Id. ¶¶ 12-16. Plaintiffs bring this action on behalf of themselves and as representatives of a class of all Americans taken hostage from the American Embassy in Tehran or from the Iranian Foreign Ministry in 1979, including the hostages’ estates and successors, the hostages’ immediate family members at the time, and the estates and successors of those immediate family members. Id. ¶ 91.

The persons alleged to have engaged in the conduct forming the basis of the Complaint include David Rockefeller, who served as President of Chase Manhattan Bank (a predecessor of J.P. Morgan Chase & Co.) from 1960 to 1968 and Chairman and CEO of Chase Manhattan Corporation from 1969 to 1981 and Joseph Verner Reed, who served as Vice President of Chase Manhattan Corporation and Assistant to Rockefeller from 1963 to 1981. Id. ¶¶ 17-18, 113. Other persons also allegedly involved included Henry Kissinger, who had previously served as National Security Advisor and Secretary of State of the United States and, as pertinent here, was Chairman of Chase's Board of Advisers in 1979; John J. McCloy, former Chairman of Chase Manhattan Bank and lawyer to the Shah and Chase Manhattan Corporation; Robert F. Armao, a public relations agent for the Shah; and Benjamin H. Kean, Joseph Reed's personal physician. Id. ¶ 41.

Plaintiffs allege that Chase "fomented the seizure of American hostages in Iran and then sabotaged the talks to free them." Id. ¶ 1. The events underlying the allegations begin in January of 1979. See, e.g. , id. ¶¶ 31, 32. That month, Islamic fundamentalists in Iran launched an uprising against the secular monarchy of Mohammad Reza Pahlavi, who was the Shah of Iran and head of the Pahlavi dynasty and who had ruled Iran since 1941. Id. ¶ 31. Faced with an uprising, the Shah left Iran that same month, travelling to Egypt, Morocco, the Bahamas, and Mexico, before arriving in the United States. Id. ¶ 32. The United States initially invited the Shah to the United States in early 1979. Id. ¶¶ 33-34. On February 14, 1979, however, Iranian revolutionaries armed with machine-guns attacked the American Embassy in Tehran, taking hostages before they were later released on the orders of the Iranian revolutionary leader, Ayatollah Khomeini. Id. ¶ 35. The United States thereafter refused to admit the Shah when he requested entry in March 1979. Id. ¶ 36. A declassified cable sent from the State Department by Undersecretary of State for Political Affairs David Newsom reported: "In March and again on April 20 we informed the Shah we had hoped that it would have been possible for him to come to the U.S. However, because of the unsettled security conditions in Iran and our concern for the safety of Americans living in Iran, we reluctantly concluded it was in neither the Shah's interest nor ours for him to come here." Id.

Carter Administration officials requested that Rockefeller convey to the Shah the message that it was not in his interest or in the interest of the United States that the Shah enter the United States but Rockefeller refused to do so. Id. ¶ 37. In or around March 1979, Chase, through Rockefeller and other directors, officers, and agents, entered into an agreement with the Shah to launch "Project Eagle," which Plaintiffs allege was "a covert campaign to employ illegal and unethical means to protect the Shah, secure safe haven for him in the United States, and keep the Pahlavi monarchy on the throne." Id. ¶ 39.

On or around September 28, 1979, Reed informed Undersecretary Newsom that the Shah was critically ill in Mexico. Id. ¶ 48. Secretary of State Cyrus Vance cabled the American Embassy in Tehran to share the news that Rockefeller had sent his personal physician to examine the Shah and that if the Shah's condition were serious, there might be a request that he be admitted to the United States for medical purposes. Id. On or around October 18, 1979, Kean—who had been sent to Mexico to take charge of the Shah's medical care—informed the State Department that the Shah did not have long to live without emergency treatment. Id. ¶ 49. Reed contacted the State Department to urge that the United States admit the Shah for life-saving treatment that he claimed (falsely, it is alleged) was only available in New York. Id. Plaintiffs allege that "[i]n reality, there was no medical necessity for the Shah to come to the United States." Id. Based on those recommendations, United States officials recommended that President Carter admit the Shah on humanitarian grounds. Plaintiffs allege that President Carter expressed agreement with the recommendation, notwithstanding that it was against American interests to do so, in part because he feared that his Administration would be criticized by Henry Kissinger if the Shah died in Mexico and in part because he credited the reports that New York had the only medical facility capable of possibly saving the Shah's life. Id. ¶¶ 50-51. The Shah arrived in New York on the night of October 22, 1979 and was taken to New York Hospital. Id. ¶ 52.

Plaintiffs claim that Chase had a profit motive in campaigning to have the Shah admitted to the United States. Id. ¶¶ 11, 72. They allege:

Chase had financial interests in preserving the Iranian monarchy. It processed billions in dollar-denominated oil revenue for the National Iranian Oil Company. It handled the Shah's family fortune in the Pahlavi Foundation. In 1975, it helped form the International Bank of Iran, in which it owned a 35% share. By 1979, Chase had syndicated more than $1.7 billion in loans for Iranian public projects (the equivalent of about $5.8 billion in 2020). Protecting those business interests meant protecting the Shah.

Id. ¶ 38; see also id. ¶ 40. Project Eagle was an agreement with the Shah and its "immediate goal was to advance the interests of the Phalavi [sic] monarchy by defeating President Carter's foreign policy decisions regarding Iran," such as his earlier decision to deny admission to the Shah. Id. ¶ 40. It "provided financial and logistical support to the Shah, as well as lobbying and public relations as the Shah's propagandists." Id. ¶ 42.³ Plaintiffs further allege that Chase "advanced the Phalavi [sic] monarchy's interests by pressuring through threats, deliberate falsehoods, and other unethical means the United States government to admit the Shah despite being warned that his presence in the United States likely would trigger another and likely more disastrous takeover of the American Embassy in Tehran." Id. ¶ 43. In taking these actions to protect its business interests, Plaintiffs claim that Chase acted as an unregistered foreign agent of the Iranian monarchy under the Foreign Agent Registration Act ("FARA"). Id. ¶ 7.

After the hostages were seized in November 1979, Plaintiffs allege that Chase had a "new goal" of sabotaging the hostage talks because of its "direct financial interest in the outcome of the Hostage Talks." Id. ¶¶ 72, 76; see also id. at 18. On November 14, 1979, President Carter signed Executive Order 12170 freezing all Iranian assets in the United States, including in United States banks, and authorizing banks to use Iranian deposits...