In its decision of 28 March 2018 the US District Court for the Southern District of New York denied Saudi Arabia’s motion to dismiss a high-profile lawsuit for its alleged involvement in the September 11 terror attacks, In Re Terrorist Attacks on September 11, 2001 (03-MDL-1570(GBD)) (“the Decision”). In doing so, the Court applied the Justice Against Sponsors of Terrorism Act, 28 USC §1605B (“JASTA”), for the first time since it was passed by the US Congress on 27 September 2016.
The JASTA created, inter alia, a new exception to the Foreign Sovereign Immunity Act, 28 USC §1602 (“FSIA”), to the effect that sovereign immunity under the FSIA is waived:
“in any case in which money damages are sought against a foreign state for physical injury to person or property or death occurring in the United States and caused by –
(1) an act of international terrorism in the United States; and
(2) a tortious act or acts of the foreign state, or of any official, employee, or agent of that foreign state while acting within the scope of his or her office, employment, or agency, regardless of where the tortious act or acts of the foreign state occurred.” (“JASTA exception”)
The Bill generated significant debate both within and outside the US, and whilst under consideration by Congress, Victor Grandaubert warned in a well-reasoned post on this blog that if passed the JASTA would “entrench the isolated and unlawful position of the US in this area”. We take the opportunity of this first application of the Act to provide an update on the recent developments. The post will examine first the Decision, and will then move to address the position of the US in relation to customary international law on sovereign immunity.
Victims and families of victims brought consolidated lawsuits against Saudi Arabia and the Saudi High Commission for Relief in Bosnia and Herzegovina (SHC) alleging liability for:
“financing, sponsoring, conspiring to sponsor, aiding and abetting, or otherwise providing material support to Osama bin Laden and the terrorist organization known as al Qaeda, for the physical destruction, deaths, and injuries suffered as a result of the terrorist attacks on September 11, 2001 (9/11 Attacks)” [at p.2 of the Decision].
Regarding Saudi Arabia, the Plaintiffs argue that it “bears responsibility for the 9/11 Attacks because its agents and employees directly and knowingly assisted the hijackers and plotters who carried out the attacks” [at 2].
The FSIA provides the sole basis for federal courts of the United States to obtain jurisdiction over a foreign state. The FSIA treats foreign states (and their agencies and instrumentalities) “presumptively immune from the jurisdiction of United States courts[,]” unless an exception applies, 28 USC §1604. In 2015, the District Court granted the Defendants’ motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure, because the Plaintiffs had failed to allege or present evidence of one of the existing exceptions to sovereign immunity set out in the FSIA, 28 USC §1605A. During the pendency of the Plaintiff’s appeal, Congress enacted the JASTA (overriding a presidential veto by President Obama), the aim of which is “in part to allow suits against Saudi Arabia for the September 11 attacks” (Lelchook v Islamic Republic of Iran). Recognising that the JASTA was intended to apply to this case, the Court of Appeal for the Second Circuit vacated the 2015 dismissal of the claims, and the case was remanded to District Court to consider whether the JASTA provides a basis for the Court to exercise subject matter jurisdiction where none existed before.
The District Court’s Application of the JASTA
The immediate proceedings concerned both whether JASTA affected the Defendants’ claim to sovereign immunity as an answer to the above claims, and whether it was cause to grant the Plaintiffs jurisdictional discovery [at 4]. Vital to the Court’s determination was the fact that these proceedings were interlocutory by nature, which involved the Court accepting the Plaintiff’s articulation of a “reasonable basis” for the Court to assume prima facie jurisdiction [at 4-7].
Judge George B. Daniels distilled the four elements of the new JASTA exception (28 USC §1605B(b)) as follows [at 9]:
- physical injury to a person or property or death occurring in the United States;
- an act of international terrorism in the United States, and a tortious act or acts by a foreign state or any official, employee, or agent of that state while acting within the scope of that person’s office, employment, or agency;
- causation; and
Judge Daniels extrapolated upon the contentious elements to explain the applicable legal standards of the JASTA [at 9]. Firstly, as no definition of ‘tortious act’ was promulgated by the Act, the Court accepted the agreement by the parties that it “at least includes the knowing or deliberately indifferent provision of material support to terrorists” [at 9-10]. Secondly, the JASTA exception extends foreign state liability to tortious acts by its agents (in addition to state officials and employees), which permitted the Court to attribute to Saudi Arabia, for the purposes of satisfying the JASTA exception, the actions of non-employees who were following instructions from senior officials in the Saudi Embassy. This represents a marked reduction in the scope of FSIA sovereign immunity, as the FSIA non-commercial tort exception waives immunity only for tortious acts by state officials or employees (28 USC 1605(a)(5)). Thirdly, Daniels resoundingly rejected the Defendant’s assertion that causation under JASTA involved a more stringent ‘but for’ test (noting, inter alia, that there was significant judicial precedent rejecting that standard in other FSIA exemption cases). Instead, the ‘proximate causation’ standard was held applicable, whereby the Defendant’s conduct had to be a ‘substantial factor’ in the sequence of events leading to the Plaintiff’s injury, and that injury had to be ‘reasonably foreseeable or anticipated as a natural consequence’ of the impugned conduct [at 14].
The Plaintiffs alleged that Saudi Arabia was directly and vicariously liable under the JASTA exception; directly for its own actions, and vicariously for the actions of certain employees, agents, and related charity organisations. Of all the claims, the Court held that it only had prima facie jurisdiction over Saudi Arabia for the actions of two individuals [at 23]. Judge Daniels found that there were no prima facie jurisdiction for the claims concerning the actions of the Saudi state, the other allegedly related individuals or charities, or SHC [at 15-37].
US Position – Sovereign Immunity in Customary International Law
The JASTA exception is significantly wider than the FSIA exceptions; it does not incorporate the FSIA non-commercial tort exception’s “entire tort” rule and, unlike the FSIA’s terrorism exception, does not require that the defendant be designated a state sponsor of terrorism by the Secretary of State.
Turning first to the terrorism exception, the US and Canada are still the only states to have enacted legislation to this effect. As noted previously by Victor Grandaubert and others, the Italian Court of Cassation in Flatlow v Iran accepted, in October 2015, the legality of this exception provided the act of terrorism constitutes a crime against humanity i.e. a breach of jus cogens. Yet the International Court of Justice (ICJ) found in Jurisdictional Immunities of the State (Germany v Italy) that immunity does not depend on the gravity of the unlawful act or its jus cogens nature, noting that the FSIA terrorism exception “has no counterpart in the legislation of other States” [at para.88]. In view of this, as well as the lack of general and uniform state practice, and the JASTA exception moreover being significantly wider than the FSIA terrorism exception, the US does not find itself on solid footing regarding such an exception in relation to sovereign immunity under customary international law.
Writing over on Just Security in 2016, in reference to the FSIA and Canadian Legislation, William Dodge argued that:
“neither exception, to my knowledge, has provoked the sort of widespread protests from other nations that one might expect in the case of a clear violation of customary international law”.
The same certainly cannot be said for the terrorism exception of the JASTA, which has indeed provoked outcry from a multitude of states. In a letter to the State Department, the EU expressed that JASTA “would be in conflict with fundamental principles of international law and in particular the principle of State sovereign immunity”, and the Gulf Cooperation Council, Russia, and France expressed similar concerns. The exception is neither supported by state practice nor opinio juris.
Whilst the JASTA is written as a terrorism exception, it also falls under the territorial tort exception, the existence of which in relation to customary international law of sovereign immunity is still unclear. The ICJ in Germany v Italy carefully restricted itself to an examination of whether a tort exception exists in customary international law for acts committed by armed forces in armed conflict [at para.65]. Acknowledging that such a tort exception has been included in the United Nations Convention on Jurisdictional Immunities of States and Their Property, and the European Union Convention on State Immunity, the former is not yet in force, and the latter has been ratified by only eight states. Moreover, other states with legislation to this effect have used almost identical, and more restricted, clauses; notably, they limit the exception to death, injury or damage “caused by an act or omission in the [State]” (see UK, South Africa, Canada, Australia, Singapore, and Israel, with the exception of Japan “all or part of said act”, and Pakistan having no comparable provision). With the JASTA now explicitly widening the application of the US exception “regardless of where the tortious act or acts of the foreign state occurred”, the US’s position is arguably isolated even further.
It may also be asked how this JASTA decision relates to the case of Certain Iranian Assets (Islamic Republic of Iran v United States of America) concerning US domestic lawsuits against Iranian state and non-state assets, in connection with the 1996 FSIA amendment and ensuing enforcement measures. Unlike the terrorism in exception in the FSIA, the JASTA exception does not make reference to enforcement, and it is not immediately clear how the latter will interact with the broader protection FSIA affords the assets of sovereigns against execution, or indeed how any award in In Re Terrorist Attacks on September 11, 2001 would be enforced. Despite this, and bearing in mind that the accusation that the US legislation is contra to customary international law may be levelled in both instances, neither situation in its current un-adjudicated form is likely to affect the US position in the other.
Conclusions, Looking Ahead
Although JASTA’s promulgation of a broader exception to sovereign immunity allowed parts of the Plaintiffs’ claims to succeed where they had not before, Judge Daniels still dismissed the vast majority of the claim. The jurisdiction of US courts over Saudi Arabia in the proceedings is far from determined, and the Plaintiffs remain a considerable distance from redress.
Whilst the Act represents a culmination of efforts to facilitate lawsuits by victims of terrorism against foreign states and officials supporting terrorism, it has undeniably placed the US even further out of line with sovereign immunity under customary international law. Admittedly, the outcome of In Re Terrorist Attacks on September 11, 2001 remains to be seen, but with the Court holding that it has prima facie jurisdiction over Saudi Arabia, and with the case Certain Iranian Assets pending before the ICJ, the US indeed finds itself in an isolated position.