Tomorrow the Senate Judiciary Committee's Subcommittee on Crime and Drugs will hold a hearing to examine the potential impact of S. 2930, the "Justice against Sponsors of Terrorism Act". The bill was drafted in response to an August 2008 decision by the Second Circuit, of which one impact was to so limit the jurisdiction over individual (non-state) foreign terrorist financiers that they are effectively immunized from civil liability under the Due Process clause. (NOTE: The decision also addressed the immunity granted by the Foreign Sovereign Immunities Act to foreign officials for their terrorism financing activities, but this post will not address that issue). In 2009, the Supreme Court denied cert in the case, and last month a District Court recently issued a decision which only raises the bar to civil liability even further. The bill would provide a basis for a finding of in personam jurisdiction over individual terrorist financiers in federal court, and I've worked for its enactment by Congress for over a year.
Thousands of surviving family members of the 9-11 attacks represented by my clients at the Motley Rice law firm, were joined by insurers and owners of the properties attacked that day, and filed suit against a number of Saudi-based entities and individuals for alleged involvement in funding al Qaeda prior to the attacks. In 2006, a federal court dismissed claims against twelve of the defendants, and the plaintiffs appealed that judgment to the Second Circuit with respect to the Kingdom of Saudi Arabia, four Saudi princes, a Saudi banker, and a Saudi charity.
In its August 2008 decision, the Second Circuit affirmed the dismissals and, on pages 61 and 62, laid down the following test for jurisdiction over the princes in their nonofficial capacity - when you read this, think about how a defendant could gather the information required to meet the test:
Even if the Four Princes (defendants) were reckless in monitoring how their donations were spent, or could and did foresee that recipients of their donations would attack targets in the United States, that would be insufficient to ground the exercise of personal jurisdiction... Rather, the plaintiffs have the burden of showing that the Four Princes engaged in "intentional, and allegedly tortious, actions . . . expressly aimed" at residents of the United States... That burden is not satisfied by the allegation that the Four Princes intended to fund al Qaeda through their donations to Muslim charities. Even assuming that the Four Princes were aware of Osama bin Laden's public announcements of jihad against the United States and al Qaeda's attacks on the African embassies and U.S.S. Cole, their contacts with the United States would remain far too attenuated to establish personal jurisdiction in American courts. It may be the case that acts of violence committed against residents of the United States were a foreseeable consequence of the princes' alleged indirect funding of al Qaeda, but foreseeability is not the standard for recognizing personal jurisdiction. Rather, the plaintiffs must establish that the Four Princes "expressly aimed" intentional tortious acts at residents of the United States... Providing indirect funding to an organization that was openly hostile to the United States does not constitute this type of intentional conduct. In the absence of such a showing, American courts lacked personal jurisdiction over the Four Princes.
So the plaintiffs would have had to prove that the princes gave al Qaeda the money with the orders to use it for attacking Americans. I submit that is virtually an impossible standard to meet, not just by defendants in a lawsuit but by an experienced intelligence service (unless they are buried in the terrorists' headquarters). Unfortunately, the Supreme Court's denial of the cert petition last year left that standard in place.
When counsel thereafter asked the District Court this year to rule on motions to dismiss (for which there had been no action by the judge for years), the federal judge stuck the knife in deeper by adding details to the Second Circuit's standard. On pages 32 through 34 of the decision, issued on June 17, he basically issued a roadmap for non-state foreign terrorist financiers to follow in order to escape with no fear of civil liability in the U.S., as follows:
"The Second Circuit's rulings can be synthesized to stand for the following cohesive principle of controlling law: The due process rights of a foreign defendant protects him from being subject to the jurisdiction of the American courts based solely on allegations that he provided material support to al Qaeda through either contributions to Muslim charities or provision of financial services to entities with al Qaeda ties, and did so when he: (1) was "aware" that Osama bin Laden has publicly declared war against the United States; (2) was "aware" that, consistent with the declaration of war, al Qaeda has committed violent attacks against the United States; (3) "intended" to provide support to al Qaeda through circuitous, indirect means aimed at defying detection; (4) "did foresee" that the ultimate and intended al Qaeda recipients, of the support given by him, would attack targets in the United States; and (5) did "foresee [ ]" that the consequence of his indirect support of al Qaeda would be the commission of undisclosed acts of violence against residents of the United States.
The Second Circuit identified a defendant's alleged intentional, tortious conduct that is expressly aimed at the United States as being a necessary prerequisite to the exercise of specific jurisdiction. Although the Second Circuit concluded that providing indirect funding to al Qaeda did not constitute this type of intentional conduct, the Second Circuit did not articulate what acts would constitute intentional conduct for purposes of specific jurisdiction. This Court finds that, in the context of a terrorism-related litigation, a defendant's alleged intentional tortious conduct aimed at the United States is conduct that is intended to directly aid in the commission of a terrorist act, with knowledge that the brunt of the injuries will be felt in the United States.....
While a defendant-donor may intend, and have every reason to believe, that the suspect charity will funnel those charitable funds to al Qaeda, the donor himself has no authority to direct how the monies are used nor the power or ability to direct his monetary donations into the hands of al Qaeda. In contrast, a defendant who, for example, provides money laundering services directly for al Qaeda, assumes possession of and control over the monies, and takes an active role in directing the flow of funds to and from al Qaeda and its operatives. If such money laundering activities are intentionally performed to support some future attack to be planned by al Qaeda against the United States, reasonably anticipating that the brunt of the injuries will be felt there, the defendant need not know that the support provided is specifically for the 9/11 attacks in order to be subject to the exercise of personal jurisdiction."
Any idiot can stand offshore and hide his funding of a terrorist groups so as to avoid those extremely narrow criteria for liability. That ruling leaves the 9-11 victims with virtually no opportunity to pursue the financiers of the attacks after so many years. A legislative solution would at least add to the cost of attempting to finance a terrorist group. Hopefully the hearing tomorrow will initiate a long-term avenue for accountability for terrorist funding.
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