Rosenberg v. Lashkar-E-Taiba

SHIMON ROSENBERG, et al., KIA SCHERR, et al.,EMUNAH CHROMAN, et al., LINDA RAGSDALE, et al.,AUTUMN GILLES, et al., Plaintiffs, v. LASHKAR-E-TAIBA et al., Defendants.

10-CV-5381 (DLI) (CLP)

10-CV-5382 (DLI) (CLP)

10- CV-5448 (DLI) (CLP)

11- CV-3893 (DLI) (CLP)

12- CV-5816 (DLI) (CLP)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 31, 2017

MEMORANDUM AND ORDER ADOPTING IN PART AND MODIFYING REPORT AND RECOMMENDATION

DORA L. IRIZARRY, Chief United States District Judge:

The plaintiffs, Shimon Rosenberg, Nachman Holtzberg, Moses Shvarzblat, Maribeth Jeswani, Kia Scherr, Emunah Chroman, Andreina Varagona, Linda Ragsdale, and Autumn Gilles (collectively, "Plaintiffs") are American and Israeli citizens who were injured or whose relatives were killed during the 2008 terrorist attacks in Mumbai, India. (Amended Complaint 10-CV-5381 (DLI) (CLP) ("Am. Compl.") ¶¶ 1-9, Dkt. Entry No. 66.)¹ Plaintiffs assert claims pursuant to the Alien Tort Statute ("ATS"), 28 U.S.C. § 1350, and the Antiterrorism Act ("ATA"), 18 U.S.C. § 2333, against the terrorist organization Jamat ud Dawa ("JuD"), a/k/a Lashkar-e-Taiba, a/k/a Markaz ud Dawa, a/k/a Idara Khidmat-e-Khalaq, a/k/a Tehrik-e-Tahaffuz-e-Qibla Awal (collectively, "LeT"), and several of its alleged leaders, including Mohammed Hafiz Sayeed ("Sayeed"), Zaki ur Rehman Lakhvi ("Lakhvi"), Sajid Majid ("Majid"), Azam Cheema ("Cheema"), Major Iqbal ("Iqbal"), and Major Sameer Ali ("Ali") (collectively with LeT the "Defendants"). (See Am. Compl. ¶¶ 10-16.)

This Memorandum and Order is written for the benefit of the parties. The Court assumes the parties' familiarity with the facts and circumstances underlying the allegations in the Initial and Amended Complaints and procedural history of these consolidated cases as they were detailed in the August 2014 Report and Recommendation ("R & R") and July 5, 2016 R & R issued by the assigned magistrate judge (see below). Accordingly, only those facts necessary to address the objections to the R & R are mentioned herein.

Plaintiffs initially filed separate complaints in each of the five above-captioned cases between 2010 and 2012. On December 10, 2013, this Court consolidated the cases. (See 12/10/13 Order Consolidating Cases.) Defendants failed to appear, and, on November 4, 2013, the Clerk of the Court entered notations of default against Defendants. Subsequently, this Court referred Plaintiffs' motions for entry of default judgment and damages to the Hon. Cheryl L. Pollak, U.S.M.J., for a Report and Recommendation. The magistrate judge requested supplemental briefing on Plaintiffs' motions and held an inquest hearing. (See Dkt. Entry Nos. 54, 59.)

On August 1, 2014, the magistrate judge issued a Report and Recommendation recommending that the Court deny the motions without prejudice to filing an amended complaint and refiling the motions, supplemented by facts and legal arguments, as discussed in the Report and Recommendation ("the August 2014 R & R"). (See Dkt. Entry No. 61.) The magistrate judge identified numerous deficiencies with service of process, Plaintiffs' standing to assert ATA claims, the Court's subject matter jurisdiction over Plaintiffs' ATS claims, and the potential immunity of Defendants Iqbal and Ali as foreign officials under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1603 et seq. (Id.)

On September 10, 2014, this Court adopted the August 2014 R & R in its entirety. (See 9/10/13 Order Adopting Report and Recommendations.) In the Order, this Court stated that,"Plaintiffs indicated that they intend to fully brief the issue of service when they re-file their [m]otions [and] . . . [f]or the reasons set forth in the R & R by the magistrate judge, with respect to lack of service as to certain defendants, Plaintiffs' objections are overruled." (Id.) The Court denied Plaintiffs' motions without prejudice "to re-file in accordance with the R & R" and granted "leave to file an amended complaint also in accordance with the R & R." (Id.)

On October 30, 2014, Plaintiffs filed the Amended Complaint. (See generally Am. Compl.) After the Clerk of the Court's entry of the notation of default on the Amended Complaint against LeT, Sayeed, Lakhvi, Majid, and Cheema (collectively, "Defaulting Defendants"), Plaintiffs' moved pursuant to Rule 55 of the Federal Rules of Civil Procedure, for default judgment and damages (collectively, the "motion papers") against Defaulting Defendants. (See Dkt. Entry Nos. 77-78.) Notably, Plaintiffs did not move for default judgment and damages against Ali or Iqbal. (See Dkt. Entry Nos. 77, 77-2, at 2-3, 78, at 2 n. 1.) Defaulting Defendants did not respond to the motion papers.

On February 25, 2015, this Court referred Plaintiffs' motions for default judgment and damages to the magistrate judge for a Report and Recommendation. The magistrate judge held an inquest hearing on June 5, 2015,² where she identified deficiencies with service of process (as to both the Amended Complaint and Default Judgment Motion) and with Plaintiffs' motion papers. (See Dkt. Entry No. 83.) The magistrate judge requested supplemental briefing and documentation. (Id.) Subsequently, Plaintiffs supplemented their motions with additional briefing. (See Dkt. Entry Nos. 85-88.)

On July 5, 2016, Magistrate Judge Pollak issued an exceptionally thorough R & R, with an astute and detailed legal analysis, recommending that Plaintiffs' motions for default judgment anddamages be denied, without prejudice, for failure to serve properly the Amended Complaint or the motion papers on Defaulting Defendants. (R & R at 2, 28.) In denying Plaintiffs' motions, the magistrate judge found that Plaintiffs could serve LeT properly at "4 Lake Road, Chauburji, Lahore, Pakistan" ("4 Lake Road"), but that they had failed "to address why any of the individual defendants may be served at this address." (Id. at 25.) Moreover, the magistrate judge found that, since the hearing, Plaintiffs had not provided any additional "authority for their attempts to serve the individual defendants at 4 Lake Road, nor have they sought authorization to serve by some alternative means." (Id. at 25-26.)

The magistrate judge also concluded that service was improper on Defaulting Defendants because Plaintiffs had not explained what positions any of the individuals "who are marked as having signed for many of the packages on behalf of the defendants, [held] in the organization or why the Court should find that these individuals were authorized to accept service on behalf of LeT/JuD or any of the individually named defendants." (Id. at 26.) Specifically, the magistrate judge concluded that Plaintiffs had failed to provide information for an individual named "ISHFAQ," who the Federal Express ("FedEx") delivery receipts identified as having signed for the mailings allegedly containing the Amended Complaint at 4 Lake Road, other than he was an adult who represented he worked there and could receive and sign for packages. (Id. at 26.) Notably, for the additional individuals who purportedly signed service receipts, Plaintiffs did not provide any information showing they were authorized to accept service. (Id.). The magistrate judge stated, "Indeed, it is unclear if some of these documents were signed for by anyone." (Id.)

In addition to these deficiencies, the magistrate judge also found an "absence of evidence to show service of the Amended Complaint and the motion for default judgment on any of the defendants." (Id. at 28.) The magistrate judge explained that Plaintiffs had submitted no evidencethat they ever mailed the default motion papers at all and had failed to "provide[] receipts indicating that" the packages containing the Amended Complaint "were actually delivered." (Id. at 27.) Based "on the numerous deficiencies in service," the magistrate judge expressed "serious concerns about whether [she had] the authority to exercise personal jurisdiction over the defendants[.]" (Id.) Accordingly, the magistrate judge found that "plaintiffs have not satisfied the requirements for service set out in the Hague Convention nor have they complied with the standards of Rule 4 with respect to service of the Amended Complaint or the motion papers on any of the defendants." (Id. at 28.) In denying Plaintiffs' motions, the magistrate judge recommended that this Court grant Plaintiffs an opportunity to re-file their motions "with proper proof of service as to all necessary documents and further explanation as to: (1) the authority of these individuals to accept mail and service at 4 Lake Road; and (2) the basis for serving the individual defendants at this address." (Id.) Moreover, the magistrate judge noted that alternative service by mail under Rule 4(e) would be required for Defendants Cheema and Sayeed. (Id. at n. 24.) Significantly, no such alternative service had been requested by Plaintiffs prior to their objections to the R & R.

The magistrate judge recommended, assuming this Court would overlook the numerous deficiencies in service, that: (1) Plaintiffs' ATS claims be dismissed with prejudice for lack of subject matter jurisdiction; (2) Plaintiffs' ATA claims be dismissed for lack of standing or for failure to state a claim, except for the ATA claims brought by Andreina Varagona, Linda Ragsdale, and Kia Scherr on behalf of her deceased husband Alan Scherr and deceased daughter N.S; and (3) only these three plaintiffs' motions for entry of default judgment be granted and they be awarded damages in the amounts computed by the magistrate judge. (Id. at 34-39, 42, 71, 75-77.) Additionally, the magistrate judge recommended that the Court grant Plaintiffs limited leave tofile a Second Amended Complaint, and deny Plaintiffs' counsel's request for costs, except for an award of $400.00 representing the filing fee in this district. (Id. at 77.)

Plaintiffs Andreina Varagona, Linda Ragsdale and Kia Scherr (collectively "Objecting Plaintiffs") timely filed objections to the R &...