September v. Kingdom Arabia

• Decision Date: 19 December 2013
• Docket Number: Docket No. 12–1476–cv(CON).,Docket No. 12–1318–cv(L).,Docket No. 12–1441–cv(CON).,Docket No. 12–1519–cv(CON).,Docket No. 12–1350–cv(CON).
• Citation: 741 F.3d 353
• Parties: In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001 (Kingdom of Saudi Arabia et al.) Federal Insurance Company et al., Plaintiffs–Appellants, v. Kingdom of Saudi Arabia, Saudi High Commission for Relief of Bosnia and Herzegovina, Defendants–Appellees.
• Court: U.S. Court of Appeals — Second Circuit

741 F.3d 353

In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001 (Kingdom of Saudi Arabia et al.)

Federal Insurance Company et al., Plaintiffs–Appellants,

v.Kingdom of Saudi Arabia, Saudi High Commission for Relief of Bosnia and Herzegovina, Defendants–Appellees.^*

Docket Nos. 12–1318–cv(L), 12–1350–cv(CON), 12–1441–cv(CON), 12–1476–cv(CON), 12–1477–cv(CON), 12–1519–cv(CON).

United States Court of Appeals,Second Circuit.

Argued: March 20, 2013.

Decided: Dec. 19, 2013.

Stephen A. Cozen (Elliot R. Feldman, Sean P. Carter, Cozen O'Connor, Philadelphia, PA; Ronald L. Motley, Robert T. Haefele, Jodi W. Flowers, Motley Rice LLC, Mount Pleasant, SC; Carter G. Phillips, Richard Klingler, Sidley Austin LLP, Washington, DC; Andrea Bierstein, Hanly Conroy Bierstein Sheridan Fisher & Hayes, LLP, New York, NY; Robert M. Kaplan, Ferber Chan Essner & Coller, LLP, New York, NY; Jerry S. Goldman, Anderson Kill & Olick, P.C., New York, NY; Chris Leonardo, Adams Holcomb LLP, Washington, DC, on the brief), Cozen O'Connor, Philadelphia, PA, for Plaintiffs–Appellants.

Michael K. Kellogg (Gregory G. Rapawy, Brendan J. Crimmins, William J. Rinner, on the brief), Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, for Defendant–Appellee Kingdom of Saudi Arabia.

Lawrence S. Robbins, Roy T. Englert, Jr., Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Washington, DC, for Defendant–Appellee Saudi High Commission for Relief of Bosnia and Herzegovina.

Before: WINTER, CABRANES, and STRAUB, Circuit Judges.

STRAUB, Circuit Judge:

This is a tale of two cases: Doe v. Bin Laden and the case now before us, In re Terrorist Attacks on September 11, 2001 (“ Terrorist Attacks ”). In both cases, the plaintiffs sought damages for injuries or deaths caused by the September 11, 2001 terrorist attacks. In both cases, the plaintiffs sued defendants who argued that they were immune from suit under the Foreign Sovereign Immunities Act. In both cases, the plaintiffs contended that the statute's “tort exception” to sovereign immunity applied.

In Terrorist Attacks, we ruled that the existence of the “terrorism exception” to sovereign immunity precluded the availability of the tort exception when the alleged tort was an act of terrorism. Three years later, in Bin Laden, we overruled that conclusion by “mini-en banc.” We held that even if the tort is an act of terrorism, the tort exception is available when the terrorism exception is inapplicable.

The Terrorist Attacks plaintiffs moved for relief from judgment under Rule 60(b) in order to appeal the District Court's alternative ground for finding sovereign immunity—a ground that we declined to reach in our prior opinion. The District Court (George B. Daniels, Judge ) denied the motion under the impression that we would be able to consider that unreviewed issue on appeal from the denial. But we cannot.

We conclude that this was an error of law and that “extraordinary circumstances” exist warranting relief under Rule 60(b). For this reason, we REVERSE the order denying the Rule 60(b) motion and REMAND to the District Court for further proceedings consistent with this opinion.

BACKGROUND

The factual background of this multi-district litigation has been discussed in detail in several of our opinions. See Terrorist Attacks (Asat Trust Reg. et al.), 714 F.3d 659, 666–73 (2d Cir.2013); Terrorist Attacks III, 538 F.3d 71, 76–79 (2d Cir.2008).¹ Briefly, the plaintiffs “are persons who incurred losses in the September 11, 2001 terrorist attacks: those who suffered personal injuries, the families and 13 representatives of those who died, insurers and property owners.” Terrorist Attacks III, 538 F.3d at 75. The defendants subject to this appeal are the Kingdom of Saudi Arabia (“Kingdom”) and the Saudi High Commission for Relief of Bosnia and Herzegovina (“SHC”).

The issues before us primarily involve the case's procedural history. The Kingdom and the SHC moved to dismiss the claims against them on the ground that they were immune from suit under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1602 et seq.See Terrorist Attacks I, 349 F.Supp.2d at 802–04 (Kingdom); Terrorist Attacks II, 392 F.Supp.2d at 551–53 (SHC).

The District Court concluded that both the Kingdom and the SHC fell within the statutory definition of “foreign states” which under the statute are generally “immune from the jurisdiction of the courts of the United States.” 28 U.S.C. § 1604; see Terrorist Attacks I, 349 F.Supp.2d at 802 (Kingdom); Terrorist Attacks II, 392 F.Supp.2d at 553 (SHC).

There are, however, exceptions to this immunity, including a “terrorism exception” and a “tort exception.” See28 U.S.C. §§ 1605(a)(5), 1605A. But the statute gets more complicated. There is a “discretionary function limitation” on the tort exception: the tort exception does not apply to claims based on the performance of, or failure to perform, a discretionary function. 28 U.S.C. § 1605(a)(5)(A).

The District Court concluded that the plaintiffs' claims fell within the discretionary function limitation, and it dismissed the claims against the Kingdom and the SHC. Terrorist Attacks I, 349 F.Supp.2d at 803–04 (Kingdom); Terrorist Attacks II, 392 F.Supp.2d at 555 (SHC). In doing so, the court also concluded that jurisdictional discovery was unnecessary. Terrorist Attacks I, 349 F.Supp.2d at 804 (Kingdom); Terrorist Attacks II, 392 F.Supp.2d at 555 (concluding that the SHC provided undisputed evidence establishing that the discretionary function limitation applied).

The plaintiffs appealed, and we affirmed the District Court's decision, but on different grounds. Terrorist Attacks III, 538 F.3d at 86–90. We concluded that where claims are based on acts of terrorism, only the terrorism exception—and not the tort exception—could be used to lift the statute's protection of foreign states. Id. at 90. Because we ruled that the tort exception was not available to the plaintiffs, we never reached the issue of whether the discretionary function limitation on the tort exception applied. Id. at 90 n. 15.

After Terrorist Attacks III, we reversed course in Doe v. Bin Laden, 663 F.3d 64 (2d Cir.2011) (per curiam). There, the plaintiff sued Afghanistan, among other defendants, for the death of his wife in the September 11 attacks. Id. at 65. He also argued that the defendant was not immune from suit based on the tort exception. Id. For a time, Bin Laden was not centralized as part of the Terrorist Attacks multi-district litigation. During this period, the District Court for the District of Columbia concluded that the terrorism exception did not preclude use of the tort exception for claims based on acts of terrorism. Doe v. Bin Laden, 580 F.Supp.2d 93, 97 (D.D.C.2008). It reached this decision only a month and a half before our opposite conclusion in Terrorist Attacks III.Bin Laden was later transferred to the Southern District of New York for centralization with Terrorist Attacks, and the appeal pending before the Court of Appeals for the District of Columbia was transferred to us. See Bin Laden, 663 F.3d at 66.

On appeal in Bin Laden, we overruled our conclusion in Terrorist Attacks III that where the alleged tort is an act of terrorism, the tort exception is inapplicable. Bin Laden, 663 F.3d at 70. This was done by a procedure we have called “mini-en banc.” Id. at n. 10. Recognizing that its holding was inconsistent with Terrorist Attacks III, the Bin Laden panel circulated its opinion to the members of the Terrorist Attacks III panel and all the other active judges on the Court. Id. No judge objected to the issuance of the Bin Laden opinion. Id.

The Bin Laden decision led to inconsistent results for September 11 attack victims. Our final word to the Bin Laden plaintiff was that the tort exception was available to him and that the parties should proceed with jurisdictional discovery. Our final word to the Terrorist Attacks plaintiffs was that the tort exception was unavailable and that their lawsuit against Saudi Arabia and the SHC could not go forward.

This put the Terrorist Attacks plaintiffs in an awkward, if not impossible bind. The reasoning behind our decision in their case had been overruled. But we never reviewed the District Court's reason for reaching the same result—that the discretionary function limitation applied. Trying to find a mechanism to enable us to review the discretionary function issue, the plaintiffs moved for relief from judgment under Rule 60(b). The District Court denied the motion, concluding that opening the judgment was not necessary to allow us to consider the merits of the District Court's prior application of the discretionary function limitation. This timely appeal followed.

DISCUSSION

Rule 60(b)(6) provides that a District Court “may relieve a party or its legal representative from a final judgment, order, or proceeding” for “any ... reason that justifies relief.” “It is a grand reservoir of equitable power to do justice in a particular case. But that reservoir is not bottomless. Recognizing Rule 60(b)(6)'s potentially sweeping reach, courts require the party seeking to avail itself of the Rule to demonstrate that ‘extraordinary circumstances' warrant relief.” Stevens v. Miller, 676 F.3d 62, 67 (2d Cir.2012) (internal citation and quotation marks omitted).

“We review a district court's decision on a Rule 60(b) motion for abuse of discretion. A court abuses its discretion when (1) its decision rests on an error of law or a clearly erroneous factual finding; or (2) cannot be found within the range of permissible decisions.” Johnson v. Univ. of Rochester Med. Ctr., 642 F.3d 121, 125 (2d Cir.2011) (per curiam) (internal citation omitted).

The District Court did not recognize the plaintiffs' inability to seek review of the discretionary function limitation issue. It concluded that on appeal from its denial of the Rule 60(b) motion, we could reach the underlying merits of the decision to apply that limitation....