Boim v. Holy Land Foundation for Relief and Dev.

549 F.3d 685

Stanley BOIM, individually and as administrator of the Estate of David Boim, deceased; and Joyce Boim, Plaintiffs-Appellees, v. HOLY LAND FOUNDATION FOR RELIEF AND DEVELOPMENT, et al., Defendants-Appellants.

No. 05-1815.

No. 05-1816.

No. 05-1821.

No. 05-1822.

United States Court of Appeals, Seventh Circuit.

Argued September 10, 2008.

Decided December 3, 2008.

Stephen J. Landes (argued), Wildman, Harrold, Allen & Dixon, Chicago, IL, Nathan Lewin (argued), Lewin & Lewin, Washington, DC, for Plaintiffs-Appellees.

John W. Boyd (argued), Freedman, Boyd, Daniels, Peifer, Hollander, Guttman & Goldbe, Albuquerque, NM, for Defendant-Appellant Holy Land Foundation for Relief and Development in No. 05-1815.

Matthew J. Piers (argued), Mary M. Rowland, Hughes Socol Piers Resnick & Dym, for Defendant-Appellant Mohammad Abdul Hamid Khalil Salah in No. 05-1816.

John M. Beal, Chicago, IL, for Defendant-Appellant Quaranic Literacy Institute in No. 05-1821.

James R. Fennerty, Brendan Shiller, Chicago, IL, for Defendant-Appellant American Muslim Society in No. 05-1822.

Joseph A. Morris, Morris & De La Rosa, Chicago, IL, for Jewish Community Relations Council of the Jewish United Fund of Metropolitan Chicago.

Daniel Elbaum, Anti-Defamation League, Jonathan K. Baum, Katten Muchin Rosenman, Chicago, IL, for Anti-Defamation League.

Thomas P. Walsh, Office of United States Attorney, Chicago, IL for U.S.

Leon F. DeJulius, Jr., Jones Day, Pittsburgh, PA, for OMB Watch.

Andrea Bierstein, Hanly Conroy Bierstein Sheridan Fisher & Hayes, New York, NY, for 9/11 Families United to Bankrupt Terrorism.

David Yerushalmi, Washington, DC, Center for Security Policy.

Richard A. Samp, Washington Legal Foundation, Washington, DC, for Washington Legal Foundation, Jewish Institute for National Security Affairs and Allied Educational Foundation.

Before EASTERBROOK, Chief Judge, and POSNER, FLAUM, KANNE, ROVNER, WOOD, EVANS, WILLIAMS, SYKES, and TINDER, Circuit Judges.

POSNER, Circuit Judge.

In 1996 David Boim, a Jewish teenager who was both an Israeli citizen and an American citizen, living in Israel, was shot to death by two men at a bus stop near Jerusalem. His parents filed this suit four years later, alleging that his killers had been Hamas gunmen and naming as defendants Muhammad Salah plus three organizations: the Holy Land Foundation for Relief and Development, the American Muslim Society, and the Quranic Literacy Institute. (A fourth, the Islamic Association of Palestine-National, appears to be either an alter ego of the American Muslim Society or just an alternative name for it, and need not be discussed separately. There are other defendants as well but they are not involved in the appeals.) The complaint accused the defendants of having provided financial support to Hamas before David Boim's death and by doing so of having violated 18 U.S.C. § 2333(a), which provides that "any national of the United States injured in his or her person, property, or business by reason of an act of international terrorism, or his or her estate, survivors, or heirs, may sue therefor in any appropriate district court of the United States and shall recover threefold the damages he or she sustains and the cost of the suit, including attorney's fees."

The district court denied the defendants' motion to dismiss the complaint for failure to state a claim, 127 F.Supp.2d 1002 (N.D.Ill.2001); the defendants had argued that providing financial assistance to a terrorist group is not an act of international terrorism and therefore is not within the scope of section 2333. We authorized an interlocutory appeal, 28 U.S.C. § 1292(b), and the panel that heard the appeal affirmed the district court. Boim v. Quranic Literacy Institute, 291 F.3d 1000 (7th Cir.2002). The case then resumed in that court. The court granted summary judgment in favor of the plaintiffs with respect to the liability of the three defendants other than the Quranic Literacy Institute. 340 F.Supp.2d 885 (N.D.Ill.2004). A jury was convened and, after a trial lasting a week, found the Institute — which having filed a statement of "nonparticipation" attended but did not participate in the trial — liable. The jury then assessed damages of $52 million against all the defendants (including the ones not before us) jointly and severally. The amount was then trebled and attorneys' fees added.

These defendants again appealed, this time from a final judgment. The panel vacated the judgment and directed the district court to redetermine liability. 511 F.3d 707 (7th Cir.2007). Judge Evans agreed with the reversal as to the Holy Land Foundation but otherwise dissented.

The plaintiffs petitioned for rehearing en banc, and the full court granted the petition, primarily to consider the elements of a suit under 18 U.S.C. § 2333 against financial supporters of terrorism. The parties have filed supplemental briefs. A number of amici curiae have weighed in as well, including the Department of Justice, which has taken the side of the plaintiffs.

The first panel opinion rejected the argument that the statute does not impose liability on donors to groups that sponsor or engage in terrorism. The supplemental briefs do not revisit the issue, and at oral argument counsel for Salah and the Holy Land Foundation disclaimed reliance on their former position concerning the liability of donors. But in a letter to the court after oral argument, Salah's counsel indicated that the disclaimer had been based solely on a belief that the doctrine of law of the case foreclosed any further consideration of the statutory issue in this court. That was a mistake. The full court can revisit any ruling by a panel. All arguments that the defendants have presented in their appeals are open today — and will be open in the Supreme Court. It is better to decide the question than to leave it hanging; why bother to address the elements of a legal claim that may not exist? Before deciding what a plaintiff must prove in order to recover from a donor under section 2333, we should decide whether the statute applies. United States National Bank of Oregon v. Insurance Agents of America, Inc., 508 U.S 439, 445-48, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993).

Section 2333 does not say that someone who assists in an act of international terrorism is liable; that is, it does not mention "secondary" liability, the kind that 18 U.S.C. § 2 creates by imposing criminal liability on "whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission," or "willfully causes an act to be done which if directly performed by him or another would be an offense against the United States." See also 18 U.S.C. § 3 (accessory after the fact). The Supreme Court in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994), held that section 10(b) of the Securities and Exchange Act of 1934, which prohibits securities fraud, does not reach aiding and abetting because it makes no reference to secondary liability, the kind of liability that statutes such as 18 U.S.C. §§ 2 and 3 create in criminal cases. The Court discussed the securities laws at length, but nothing in its holding turns on particular features of those laws.

So statutory silence on the subject of secondary liability means there is none; and section 2333(a) authorizes awards of damages to private parties but does not mention aiders and abettors or other secondary actors. Nevertheless the first panel opinion concluded that section 2333 does create secondary liability. It distinguished Central Bank of Denver as having involved an implied private right of action (for it was a private suit, yet section 10(b) does not purport to authorize such suits), while section 2333(a) expressly creates a private right. But as the dissenting Justices in Central Bank of Denver had pointed out, the majority's holding was not limited to private actions. 511 U.S. at 200, 114 S.Ct. 1439. It encompassed suits by the SEC, which section 10(b) authorizes expressly.

Congress agreed with this understanding of Central Bank of Denver, for the next year it enacted 15 U.S.C. § 78t(e) to allow the SEC in section 10(b) suits to obtain relief against aiders, abettors, and others who facilitate primary violations. Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., ___ U.S. ___, 128 S.Ct. 761, 771-72, 169 L.Ed.2d 627 (2008). The enactment of section 78t(e) would have been pointless had Central Bank of Denver allowed secondary liability to be imposed in suits, such as suits by the SEC under section 10(b), that the statute expressly authorizes. Years later, reaffirming Central Bank of Denver, the Supreme Court repeated that the earlier decision had not been limited to private suits under section 10(b). Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., supra, 128 S.Ct. at 768-69.

The first panel opinion relied on Harris Trust & Savings Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 120 S.Ct. 2180, 147 L.Ed.2d 187 (2000), an ERISA case involving an application of trust law. Trust law permits trust beneficiaries to maintain actions against third parties who have received trust assets improperly. ERISA not only does not upset this principle of trust law; it authorizes the Secretary of Labor to penalize third parties who "knowing[ly] participat[e]" in a fiduciary's misconduct. 29 U.S.C. §§ 1106(a), 1132(l)(1)(B). Harris Trust did not cite Central Bank of Denver and did not purport to limit its holding. Stoneridge, decided eight years after Harris Trust, also did not treat Harris Trust as circumscribing Central Bank of Denver — it did not even cite Harris Trust.

To read secondary liability into section 2333(a), moreover, would enlarge the federal courts' extraterritorial jurisdiction. The defendants are accused of promoting terrorist activities abroad. Congress has the power to...