Freeman v. HSBC Holdings PLC

KATHALEEN FREEMAN, et al., Plaintiffs, v. HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED,

HSBC BANK USA, N.A., BARCLAYS, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V.,

CREDIT SUISSE, BANK SADERAT PLC, COMMERZBANK AG, and JOHN DOES 1-50, Defendants.

RYAN BOWMAN, et al., Plaintiffs, v. HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED,

HSBC BANK USA, N.A., BARCLAYS, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V.,

CREDIT SUISSE, BANK SADERAT PLC, COMMERZBANK AG, and JOHN DOES 1-50, Defendants.

18- CV-7359 (PKC) (CLP)

19- CV-2146 (PKC) (CLP)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

August 4, 2020

MEMORANDUM & ORDER

PAMELA K. CHEN, United States District Judge:

In November 2014, a group of American citizens killed or injured by terrorist attacks in Iraq between 2004 and 2011, and/or their families, filed an action, Freeman, et al. v. HSBC Holdings PLC, et al., 14-CV-6601 (PKC) (CLP) ("Freeman I"), against ten banking institutions—HSBC Holdings, PLC, HSBC Bank PLC, HSBC Bank Middle East Ltd., HSBC Bank USA, N.A., Barclays Bank PLC, Standard Chartered Bank, Royal Bank of Scotland, N.V., Credit Suisse AG, Bank Saderat PLC, and Commerzbank AG ("Commerzbank")—as well as John Does 1-50, seeking damages pursuant to the Antiterrorism Act (the "ATA"), 18 U.S.C. § 2333, as amended by the Justice Against State Sponsors of Terrorism Act ("JASTA"), Pub. L. No. 114-222, 130 Stat. 852 (2016). See Freeman v. HSBC Holdings PLC, 413 F. Supp. 3d 67, 72 (E.D.N.Y. 2019) ("Freeman I"). While Freeman I was pending, a different group of Americans who were injured or killed by terrorist attacks in Iraq, and/or their families, represented by the Freeman I counsel, filed these two additional actions, Freeman, et al. v. HSBC Holdings PLC, et al. No. 18-CV-7359 (PKC) (CLP) ("Freeman II"), and Bowman, et al. v. HSBC Holdings PLC, et al., No. 19-CV-2146 (PKC) (CLP) ("Bowman"), seeking damages under the ATA and JASTA against the same defendants for materially the same conduct.¹

On September 16, 2019, the Court dismissed Freeman I in its entirety. See Freeman I, 413 F. Supp. 3d at 73.² On June 5, 2020, the Court dismissed Plaintiffs' claims for relief asserted against all Defendants but Bank Saderat PLC. See Freeman v. HSBC Holdings PLC, Nos. 18-CV-7359, 19-CV-2146 (PKC) (CLP), ___ F. Supp. 3d ___, 2020 WL 3035067, at *1 (E.D.N.Y. June 5, 2020) ("Freeman III"). Specifically, the Court dismissed Plaintiffs' Sixth Claim for Relief against Defendant Commerzbank for lack of personal jurisdiction, but dismissed Plaintiffs' TenthClaim for Relief against Defendant Commerzbank for failure to state a claim upon which relief may be granted, and not for lack of personal jurisdiction, given that Defendant Commerzbank had not moved on that basis as to the Tenth Claim. Id. at *4 n.8. On June 9, 2020, Defendant Commerzbank filed a motion for a pre-motion conference in anticipation of filing a motion for the Court to modify its June 5, 2020 Memorandum and Order with respect to the basis for dismissal of the Tenth Claim. (Bowman, No. 19-CV-2146, Dkt. 45; Freeman II, No. 18-CV-7359, Dkt. 82.) Plaintiffs responded to Defendant Commerzbank's motion on June 17, 2020. (Bowman, No. 19-CV-2146, Dkt. 47; Freeman II, No. 18-CV-7359, Dkt. 83.) On June 19, 2020, the Court denied Defendant Commerzbank's motion for a pre-motion conference as unnecessary and construed Defendant Commerzbank's motion as one for reconsideration of the Court's ruling as to the Tenth Claim. (Order, June 19, 2020.) That motion was fully briefed on June 26, 2020 (Bowman, No. 19-CV-2146, Dkt. 50; Freeman II, No. 18-CV-7359, Dkt. 85), and is currently pending before the Court. For the following reasons, the Court denies Defendant Commerzbank's motion.

BACKGROUND

The Court assumes the parties' familiarity with the facts of these three actions and with the Court's prior orders. In brief, Plaintiffs are alleging a wide-ranging conspiracy between Defendants, Bank Saderat PLC, the Government of Iran, and multiple state-affiliated and private Iranian entities that, at times, operate as financial and logistical conduits for the Islamic Revolutionary Guard Corps' ("IRGC") and Hezbollah's terrorist activities. Freeman I, 413 F. Supp. 3d at 73. In addition to asserting the same seven claims alleged in the Freeman I complaint, the Plaintiffs in Freeman II and Bowman assert five claims for secondary liability—one for conspiracy, and four for aiding and abetting under JASTA, 18 U.S.C. § 2333(d)(2). (Compare Freeman I, No. 14-CV-6601, Second Amended Complaint ("SAC"), Dkt. 115, ¶¶ 2179-293, with Freeman II, No. 18-CV-7359, Amended Complaint ("Am. Compl."), Dkt. 72, at ¶¶ 3724-86; andBowman, No. 19-CV-2146, Am. Compl., Dkt. 21, at ¶¶ 1321-83.) Plaintiffs added the Tenth Claim for Relief, asserting civil aiding-and-abetting liability under JASTA, 18 U.S.C. § 2333(d)(2), as to Defendant Commerzbank only. (Bowman, No. 19-CV-2146, Am. Compl., Dkt. 21, ¶¶ 1354-61; Freeman II, No. 18-CV-7359, Am. Compl., Dkt. 72, ¶¶ 3757-64.)

On June 5, 2020, this Court issued a Memorandum and Order dismissing all of the claims Plaintiffs had asserted against the responding Defendants, including Defendant Commerzbank. See Freeman III, 2020 WL 3035067, at *10. As discussed, the Sixth Claim for Relief in Freeman II and Bowman, asserted against Defendant Commerzbank, was dismissed for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(2), while the Tenth Claim for Relief was dismissed for failure to state a claim upon which relief may be granted, pursuant to FRCP 12(b)(6). Id. With respect to the latter, the Court explained:

Plaintiffs' Tenth Claim for Relief, brought as an aiding and abetting claim in violation of JASTA, is premised on substantially the same factual allegations as their Sixth Claim in Freeman I, Freeman II, and Bowman, though this Sixth Claim is asserted as a conspiracy, rather than an aiding-and-abetting claim. In Freeman I, the Court dismissed the conspiracy claim against Commerzbank for lack of personal jurisdiction. While the Court believes that the same analysis applies to Plaintiffs' Tenth Claim, which is based on the materially same facts, but alleges aiding and abetting instead of conspiracy, Commerzbank has not moved to dismiss the Tenth Claim for lack of personal jurisdiction under FRCP 12(b)(2). Instead, Commerzbank joins its co-defendants in moving to dismiss all of the JASTA aiding and abetting claims in the Complaints for failure to state a claim under FRCP 12(b)(6). Personal jurisdiction, unlike subject-matter jurisdiction, can be purposely waived or inadvertently forfeited[,] therefore, a district court should not raise personal jurisdiction sua sponte when a defendant has appeared and consented, voluntarily or not, to the jurisdiction of the court. Because Defendant Commerzbank has appeared and not moved to dismiss the Tenth Claim of the Complaints for lack of personal jurisdiction, the Court deems Commerzbank as having consented to the Court's jurisdiction for the purposes of the Tenth Claim and, therefore, addresses it as part of Defendants' motions to dismiss pursuant to FRCP 12(b)(6).

Id. at *4 n.8 (internal quotation marks, citations, and alterations omitted) (quoting, inter alia, City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 133 (2d Cir. 2011)).

Defendant Commerzbank now moves for reconsideration of the Court's ruling on the Tenth Claim, insofar as the Court's dismissal of that claim was based on the failure to state a claim pursuant to FRCP 12(b)(6), and not also on the lack of personal jurisdiction pursuant to FRCP 12(b)(2). Defendant Commerzbank argues that, pursuant to FRCP 54(b), the Court has the discretion to overlook Defendant Commerzbank's failure to seek dismissal of the Tenth Claim for lack of personal jurisdiction, and that the Court should modify its prior ruling to add this as a ground for dismissal.

LEGAL STANDARD

FRCP 54(b) provides that

[w]hen an action presents more than one claim for relief[,] . . . or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.

Fed. R. Civ. P. 54(b). This Rule affords the district court with an "inherent power to reconsider and modify its prior orders prior to the entry of judgment." Tafari v. Fanelli, No. 18-CV-6471 (MAT), 2019 WL 8750335, at * 1 (W.D.N.Y. Feb. 20, 2019) (citing United States v. LoRusso, 695 F.2d 45, 53 (2d Cir. 1982)). "A litigant seeking reconsideration under Rule 54(b) must set forth 'controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court," and such motion "should not be granted where the moving party seeks solely to relitigate an issue already decided." Id. (quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)).

A litigant may also seek reconsideration under FRCP 59(e), "an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources."Coventry Capital US LLC v. EEA Life Settlements Inc., 439 F. Supp. 3d 169, 175 (S.D.N.Y. 2020) (internal quotation marks and citation omitted) (discussing reconsideration under FRCP 59(e) and Local Rule 6.3). Reconsideration will not be granted simply because a party is dissatisfied with the Court's previous decision, see Salveson v. JP Morgan Chase & Co., 166 F. Supp. 3d 242, 249 (E.D.N.Y. 2016), and "is not a...