Fed. Ins. Co. v. Qaida (In re Terrorist Attacks on September 11, 2001)

122 F.Supp.3d 181

In re TERRORIST ATTACKS ON SEPTEMBER 11, 2001 (Federal Insurance Co., et al. v. Al Qaida, et al., Case No. 03–CV–6978).

No. 03–MDL–1570 (GBD).

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

Signed Aug. 14, 2015.

Sean Carter, Scott Tarbutton, Cozen Connor, Philadelphia, PA, for Plaintiffs.

Alan R. Kabat, Lynne Bernabei, Bernabei & Wachtel, PLLC, Washington, DC, for Defendant.

OPINION

GEORGE B. DANIELS, District Judge.

In this vast multi-district litigation, Plaintiffs allege that hundreds of defendants sponsored and aided the terrorist attacks on September 11, 2001 by knowingly and intentionally providing financial and other material support to Osama bin Laden, al Qaeda, and its affiliated terrorist organizations. One of the defendants, Dr. Abdul Rahman Al–Swailem ("Al–Swailem"), is the former President of both the Saudi Joint Relief Committee ("SJRC") and the Saudi Red Crescent Society ("SRC"), two instrumentalities of the Saudi government that are immune from suit under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602 et seq. Plaintiffs allege that Al–Swailem used his authority over the SJRC and the SRC to deliver material support and resources to al Qaeda. Al–Swailem moved to dismiss for lack of subject matter jurisdiction, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(h)(3), on the grounds that he is entitled to common law sovereign immunity. (Motion to Dismiss, (ECF No. 2773).) For the reasons set forth below, Al–Swailem's motion to dismiss is GRANTED.

BACKGROUND

Al–Swailem is one of nine¹ "Charity Official defendants" who "allegedly controlled and managed purported charitable organizations that provided support and funding to al Qaeda" in the years prior to the September 11, 2001 terrorist attacks. In re Terrorist Attacks on Sept. 11, 2001 (Asat Trust Reg., et al.), 714 F.3d 659, 666 (2d Cir.2013) ("Terrorist Attacks (Asat Trust Reg., et al.) "). In 1998 and 1999, respectively, Al–Swailem was appointed by the King of Saudi Arabia, Fahd bin Abdulaziz, to serve as President of the SRC and the SJRC. Al–Swailem led both organizations until 2005.² Al–Swailem is among the Charity Official defendants who allegedly:

(1) served as senior officials of one or more of al-Qaeda's front charities, (2) used their authority over those organizations to orchestrate their material support and sponsorship of al-Qaeda, and (3) acted with knowledge that the organizations under their control were channeling material support and resources to al-Qaeda, and that such support would be used to support al-Qaeda's jihad against the United States.

Id. at 667 (citations and internal quotation marks omitted). Al–Swailem argues that Plaintiffs only allege one act that could be construed as providing material support to al Qaeda: "[A]s head of the SRC, al Swailem was responsible for the decision to appoint [Wa'el] Julaidan as a Director of the SJRC, thus placing a prominent and known al Qaida figure in a position of authority within his charity." (Am. RICO Statement, (ECF No. 2784–1), Ex. 1 at 11.) "[A]ccepting all material facts alleged in the complaint as true and drawing all reasonable inferences in the plaintiff[s'] favor," Liranzo v. United States, 690 F.3d 78, 84 (2d Cir.2012), this Court relies on the allegations against Al–Swailem in the Complaint and as characterized by the Second Circuit in Terrorist Attacks (Asat Trust Reg., et al.) . (See Oral Arg. Tr. 56:19–20 (Apr. 24, 2014) (Plaintiffs' counsel stated that "the way that the Second Circuit characterized [the allegations] is, in fact, the law of the case").)

On June 17, 2010, this Court dismissed Al–Swailem, the SJRC, and the SRC from this case—Al-Swailem on personal jurisdiction grounds, and the SJRC and the SRC on sovereign immunity grounds.See In re Terrorist Attacks on September 11, 2001, 718 F.Supp.2d 456, 467 n. 4, 476 (S.D.N.Y.2010) ("In re Terrorist Attacks IV "). The decision dismissing Al–Swailem did not address the merits of Al–Swailem's common law sovereign immunity defense due to his dismissal on personal jurisdiction grounds. See id. at 467.

On April 16, 2013, the Second Circuit vacated this Court's judgment insofar as it dismissed Plaintiffs' claims against the Charity Official defendants, including Al–Swailem, and other defendants, and remanded the case as to those claims only for "prompt commencement of a course of judicially-supervised jurisdictional discovery." Terrorist Attacks (Asat Trust Reg., et al.), 714 F.3d at 666, 682. Personal jurisdiction discovery has since been ongoing under the guidance of Magistrate Judge Frank Maas.

In a separate opinion, also issued April 16, 2013, the Second Circuit upheld the dismissal of the SJRC and the SRC because the defendants qualify as instrumentalities of a foreign sovereign, and Plaintiffs did not meet their burden of showing that an exception to the FSIA applies. In re Terrorist Attacks on September 11, 2001 (Saudi Joint Relief Committee, et al.), 714 F.3d 109, 114, 118 (2d Cir.2013) ("Terrorist Attacks (SJRC) ") ("[T]he noncommercial tort exception to the immunity from suit conferred by the Foreign Sovereign Immunities Act does not apply in these circumstances pursuant to the so-called ‘entire tort’ rule, and thus, we lack jurisdiction to consider plaintiffs' claims against the SJRC and the SRC.").

On August 29, 2013, Al–Swailem again moved this Court for dismissal on the grounds that he is entitled to common law sovereign immunity. He argues that he is immune from suit because the Saudi government has asserted immunity on his behalf,³ and Plaintiffs' allegations are based entirely on official acts that he took in his official capacity as head of the SJRC and the SRC—two instrumentalities of Saudi Arabia that are themselves immune from suit.⁴

Plaintiffs argue that (1) the motion is not properly before this Court because Saudi Arabia has not requested a suggestion of immunity from the State Department; (2) sovereign immunity is not available to the former head of charitable organizations that engage in activities commonly performed by private entities; and (3) the allegations against Al–Swailem relate to illegal conduct that is not protected by the immunity doctrine.⁵

MOTION TO DISMISS

I. LEGAL STANDARD

Foreign sovereign immunity is a question of subject matter jurisdiction. See, e.g., Rosenberg v. Pasha, 577 Fed.Appx. 22, 23 (2d Cir.2014). "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000) (citing Fed.R.Civ.P. 12(b)(1) ). On a motion to dismiss pursuant to Rule 12(b)(1), "[a] plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Rosenberg, 577 Fed.Appx. at 23 (citing Makarova, 201 F.3d at 113 ).

In Samantar v. Yousuf, the Supreme Court held that the FSIA does not apply to individual officials of a foreign state. 560 U.S. 305, 322–24, 130 S.Ct. 2278, 176 L.Ed.2d 1047 (2010). However, "[e]ven if a suit is not governed by the Act," as is the case here, "it may still be barred by foreign sovereign immunity under the common law." Id. at 324, 130 S.Ct. 2278.

Under the common law, a "two-step procedure [is] typically followed when a foreign official assert[s] immunity." Id. at 312, 130 S.Ct. 2278. First, "the diplomatic representative of the sovereign c[an] request a ‘suggestion of immunity’ from the State Department." Id. at 311, 130 S.Ct. 2278 (citation omitted). If the State Department grants the request, "the district court surrender[s] its jurisdiction." Id. Second, " ‘in the absence of recognition of the immunity by the Department of State,’ a district court ‘ha[s] authority to decide for itself whether all the requisites for such immunity exist[ ].’ " Id. (quoting Ex parte Republic of Peru, 318 U.S. 578, 587, 63 S.Ct. 793, 87 L.Ed. 1014 (1943) ). "In making that decision, a district court inquire[s] ‘whether the ground of immunity is one which it is the established policy of the [State Department] to recognize.’ "⁶ Id. at 312, 130 S.Ct. 2278 (alterations in original) (quoting Republic of Mexico v. Hoffman, 324 U.S. 30, 36, 65 S.Ct. 530, 89 L.Ed. 729 (1945) ).

The common law distinguishes between two types of immunity: (1) "status-based" immunity that is awarded to sitting heads-of-state and (2) "conduct-based" immunity that is awarded to individuals acting on behalf of a sovereign government. See Moriah v. Bank of China, Ltd., 107 F.Supp.3d 272, 277, No. 12 Civ. 1594(SAS), 2015 WL 631381, at *3 (S.D.N.Y. Feb. 13, 2015) ; see also Sikhs for Justice v. Singh, 64 F.Supp.3d 190, 193 (D.D.C.2014) (citations and internal quotation marks omitted) ("Status-based immunities enable certain incumbent foreign officials to perform their duties unencumbered by legal proceedings. Conduct-based immunities shield individuals from legal consequences for acts performed on behalf of the state during their tenure in office."); Matar v. Dichter, 563 F.3d 9, 14 (2d Cir.2009) (quoting Restatement (Second) of Foreign Relations Law of the United States § 66(f) (1965) ) ("At the time the FSIA was enacted, the common law of foreign sovereign immunity recognized an individual official's entitlement to immunity for ‘acts performed in his official capacity.’ "). Al–Swailem contends that he is entitled to conduct-based immunity.

II. EXECUTIVE BRANCH IMMUNITY DETERMINATION

Plaintiffs argue that Al–Swailem's motion to dismiss is not properly before this Court because Saudi Arabia has not requested a suggestion of immunity from the State Department. Plaintiffs rely on a footnote to the Statement of Interest and Suggestion of Immunity that the State Department submitted in Rosenberg v. Lashkar–e–Taiba, 980 F.Supp.2d 336 (E.D.N.Y.2013), (the "Rosenberg Statement") to argue that Saudi Arabia must petition the Executive Branch before seeking immunity for Al–Swailem...