Kaplan v. Lebanese Canadian Bank, SAL

999 F.3d 842

Chaim KAPLAN, Rivka Kaplan, Brian Erdstein, Karene Erdstein, Ma'ayan Erdstein, Chayim Kumer, Nechama Kumer, Laurie Rappepport, Margalit Rappeport, Theodore (Ted) Greenberg, Moreen Greenberg, Jared Sauter, Dvora Chana Kaszemacher, Chaya Kaszemacher Alkareif, Avishai Reuvane, Elisheva Aron, Yair Mor, and Mikimi Steinberg, Plaintiffs-Appellants,

v.LEBANESE CANADIAN BANK, SAL, Defendant-Appellee.^*

Docket No. 19-3522

August Term, 2020

United States Court of Appeals, Second Circuit.

Argued: November 19, 2020

Decided: June 9, 2021

GARY M. OSEN, Hackensack, New Jersey (Ari Ungar, Michael Radine, Dina Gielchinsky, Aaron A. Schlanger, Osen, Hackensack, New Jersey; Robert J. Tolchin, The Berkman Law Office, Brooklyn, New York, on the brief), for Plaintiffs-Appellants.

JONATHAN D. SIEGFRIED, New York, New York (Douglas Walter Mateyaschuk, DLA Piper (US), New York, New York, on the brief), for Defendant-Appellee.

HOGAN LOVELLS US, New York, New York (Marc J. Gottridge, Lisa J. Fried, Benjamin A. Fleming, New York, New York, of counsel), filed a brief for Amici Curiae The Institute of International Bankers and The European Banking Federation, in support of Defendant-Appellee.

STEPHEN I. VLADECK, Austin, Texas, filed a brief for Amici Curiae Law Professors, in support of Plaintiffs-Appellants.

Before: LIVINGSTON, Chief Judge, KEARSE and WESLEY, Circuit Judges.

KEARSE, Circuit Judge:

Plaintiffs Chaim Kaplan et al ., United States citizens who were victims of rocket attacks in Israel in July and August 2006 (the "2006 Summer rocket attacks") (hereinafter "Plaintiffs"), allegedly carried out by the designated foreign terrorist organization ("FTO") Hizbollah (so spelled in the operative complaint, and hence also in this opinion, except when quoting documents that use an alternative spelling), appeal from a November 4, 2019 judgment of the United States District Court for the Southern District of New York, George B. Daniels, Judge , dismissing, for failure to state a claim on which relief can be granted, their second amended complaint seeking (A) to hold defendant Lebanese Canadian Bank, SAL ("LCB" or the "Bank"), liable as a principal under the Antiterrorism Act of 1990 ("ATA"), see 18 U.S.C. §§ 2331(1), 2333(a), for providing banking services to certain individuals or entities alleged to be part of or closely affiliated with Hizbollah; and (B) to hold LCB liable under the Justice Against Sponsors of Terrorism Act ("JASTA"), see 18 U.S.C. § 2333(d)(2), as a coconspirator or an aider and abettor in Hizbollah's terrorist attacks. The district court granted the Bank's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), concluding that the second amended complaint (A) failed to state a claim under the ATA, principally because it lacked plausible factual allegations that LCB itself had engaged in acts of terrorism, and (B) failed to state a claim under JASTA because it lacked nonconclusory factual allegations (1) that the Bank had entered into a conspiracy or agreement with Hizbollah to commit acts of terrorism, or (2) that the Bank had knowingly provided assistance to Hizbollah affiliates and was aware that, in providing those services, it was playing a role in Hizbollah's acts of terrorism. See Kaplan v. Lebanese Canadian Bank, SAL , 405 F.Supp.3d 525 (S.D.N.Y. 2019) (" Kaplan v. LCB "). On appeal, Plaintiffs seek reversal only of the dismissal of their JASTA aiding-and-abetting claims, contending principally that the district court did not correctly apply the analytical framework set out in Halberstam v. Welch , 705 F.2d 472 (D.C. Cir. 1983), specified by Congress as the proper legal framework for assessing such claims, that the court erred in its assessment of the plausibility of their allegations that the Bank had knowledge of its customers' affiliation with Hizbollah, and that it failed to draw the permissible inferences that LCB provided Hizbollah's affiliates with substantial assistance and was generally aware that it was thereby playing a role in Hizbollah's terrorism.

Plaintiffs having abandoned their ATA claims and JASTA conspiracy claims, we address only their JASTA aiding-and-abetting claims; and as to the latter, we find merit in Plaintiffs' contentions. Accordingly, we vacate so much of the judgment as dismissed Plaintiffs' JASTA claims of aiding and abetting, and remand for further proceedings on those claims.

I. BACKGROUND

This case was initiated in July 2008 by several dozen American, Canadian, or Israeli citizens who were injured, or represented persons who were injured or killed, in the 2006 Summer rocket attacks. Their amended complaint filed in 2009 asserted, inter alia , claims against LCB principally under the ATA and the Alien Tort Statute, 28 U.S.C. § 1350 (or "ATS"), along with negligence claims against American Express Bank Ltd. ("American Express"). The ATS gives federal district courts jurisdiction to entertain a civil tort action "by an alien." 28 U.S.C. § 1350. The ATA grants United States nationals a private right of action for injury caused by an act of international terrorism. See 18 U.S.C. § 2333(a) ; see also id . § 2331(1) (defining "international terrorism" to include activities that would violate the criminal laws of the United States or any State and that, inter alia , "involve violence or endanger human life" and "appear to be intended" to intimidate or coerce a civilian population or government). The amended complaint alleged that the defendants had intentionally and/or negligently provided Hizbollah with wire transfer services involving millions of dollars, enabling and assisting Hizbollah to carry out terrorist attacks, including those that injured the plaintiffs or their decedents. (See Part I.C. below.)

A. The Course of This Litigation

The case is now before this Court for the fourth time, but substantially narrowed both as to plaintiffs and as to claims. The prior stages of the case have been the subject of many opinions--most of them styled with a lead plaintiff called " Licci " or " Licci ex rel. Licci " or " Licci by Licci " (hereinafter collectively " Licci ")--familiarity with which is assumed. See , e.g. , Licci v. American Express Bank Ltd. , 704 F.Supp.2d 403, 408 (S.D.N.Y. 2010) (" Licci I ") (dismissing the negligence claims against American Express for failure to state a claim, and dismissing the claims against LCB for lack of personal jurisdiction), affirmed in part , 672 F.3d 155 (2d Cir. 2012), and vacated and remanded in part , 732 F.3d 161 (2d Cir. 2013) ; Licci v. Lebanese Canadian Bank, SAL , 673 F.3d 50, 75 (2d Cir. 2012) (" Licci II ") (certifying personal-jurisdiction questions of New York law to the New York Court of Appeals, including whether "a foreign bank's maintenance of a correspondent bank account at a financial institution in New York, and use of that account to effect ‘dozens’ of wire transfers on behalf of a foreign client, constitute a ‘transact[ion]’ of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)"); Licci v. Lebanese Canadian Bank, SAL , 20 N.Y.3d 327, 960 N.Y.S.2d 695, 984 N.E.2d 893 (2012) (" Licci III ") (answering the above Licci II -certified question in the affirmative); Licci v. Lebanese Canadian Bank, SAL , 732 F.3d 161 (2d Cir. 2013) (" Licci IV ") (noting the Licci III ruling as to New York law; holding that the exercise of personal jurisdiction over LCB in New York comported with the due process requirements imposed by the United States Constitution; and vacating so much of Licci I as dismissed the claims against LCB for lack of personal jurisdiction, and remanding for further proceedings); Licci v. Lebanese Canadian Bank, SAL , Civ. No. 08-cv-7253, 2015 WL 13649462 (S.D.N.Y. Apr. 14, 2015) (" Licci V ") (dismissing plaintiffs' ATS claims for lack of subject matter jurisdiction, and dismissing their ATA claims on the ground of collateral estoppel based on Kaplan v. Central Bank of the Islamic Republic of Iran , 961 F.Supp.2d 185 (D.D.C. 2013) ) (" Kaplan versus Iranian banks I ") (dismissing ATA claims complaining of the 2006 Summer rocket attacks--brought by the same plaintiffs who brought Licci I --as beyond the scope of the ATA, given its exclusion of claims for injuries caused by an "act of war," 18 U.S.C. § 2336(a) ), vacated in part , 896 F.3d 501 (D.C. Cir. 2018) (" Kaplan versus Iranian banks II "); and Licci v. Lebanese Canadian Bank, SAL , 834 F.3d 201 (2d Cir. 2016) (affirming the Licci V ATS dismissals) and 659 F. App'x 13 (2d Cir. 2016) (affirming the Licci V ATA dismissals), cert. denied , ––– U.S. ––––, 138 S. Ct. 1691, 200 L. Ed. 2d 948 (2018).

B. Interim Legal Developments

In the decade following the 2008 commencement of this action, the rights and claims of the original plaintiffs were impacted by at least three alterations, clarifications, or interpretations of relevant law. First, in 2016 the ATA--which did not originally provide a private right of action against actors who facilitated terrorist acts by others but did not commit such acts themselves, see , e.g. , Rothstein v. UBS AG , 708 F.3d 82, 97 (2d Cir. 2013) (" Rothstein "); Linde v. Arab Bank, PLC , 882 F.3d 314, 319-20 (2d Cir. 2018) (" Linde "); Siegel v. HSBC North America Holdings, Inc. , 933 F.3d 217, 222 (2d Cir. 2019) (" Siegel ")--was amended by the enactment of JASTA. As discussed further in Part II.B.1. below, JASTA provides that a civil action for injury in an international terrorist attack from an organization that had been designated an FTO at the time of the attack's commission, planning, or authorization, may be maintained on a theory of conspiracy or a theory of aiding and abetting. See 18 U.S.C. § 2333(d)(2). Congress also provided that with respect to such an injury occurring on or after September 11, 2001, such a secondary liability theory would be retroactively available in any action that was pending on or commenced after the date of JASTA's enactment. See JASTA, Pub. L. No. 114-222, § 7, 130 Stat. at 855 (...