Shatsky v. Palestine Liberation Org.

955 F.3d 1016

Shabtai Scott SHATSKY, Individually and as Personal Representative of the Estate of Keren Shatsky, et al., Appellants

v.PALESTINE LIBERATION ORGANIZATION, et al., Appellees

No. 17-7168

United States Court of Appeals, District of Columbia Circuit.

Argued September 9, 2019

Decided April 14, 2020

Tejinder Singh argued the cause for appellants. With him on the briefs were Charles H. Davis, Robert Joseph Tolchin, Brooklyn, NY, and Meir Katz, Baltimore, MD.

Mitchell R. Berger, Washington, DC, argued the cause for appellees. With him on the brief were Gassan A. Baloul, Amy B. Doolittle, Alexandra E. Chopin, and Aaron W. Knights, Washington, DC.

Before: Henderson, Millett, and Wilkins, Circuit Judges.

Millett, Circuit Judge:

The American victims of a 2002 suicide bombing in the West Bank and their families (collectively, "the Families") brought this suit under the Anti-Terrorism Act, 18 U.S.C. §§ 2331 et seq. , against two entities that they believe are among those responsible for the attack. Specifically, the Families allege that the Popular Front for the Liberation of Palestine ("Popular Front"), a designated foreign terrorist organization, orchestrated the 2002 bombing. See Families’ Response to Palestinian Defendants’ Statement of Material Facts at ¶¶ 1–13, Shatsky v. Palestine Liberation Org. , No. 1:02-cv-02280-RJL (D.D.C. Jan. 29, 2016), ECF No. 331 at 59–65. In this case, the Families seek to hold the Palestinian Authority and the Palestine Liberation Organization (collectively, "the Palestinian Defendants") liable for the attack on the theory that they enabled the bombing through their provision of significant support to the Popular Front.

As described in the complaint, the harms suffered by the Families as a result of the bombing are tragic and horrific. This case, though, turns not on the merits of their claims for remediation, but on the narrow question of where those claims should be litigated. We hold that the district court erred in rejecting the Palestinian Defendants’ argument that the court lacked personal jurisdiction. We therefore vacate the district court’s judgment and remand for it to dismiss the case without prejudice.

I

A

On February 16, 2002, a suicide bomber attacked a pizzeria in Karnei Shomron, a town in the West Bank. The bombing killed United States citizens Keren Shatsky and Rachel Thaler and wounded United States citizens Steven Braun, Chana Friedman, Leor Thaler, and Hillel Trattner, along with a non-citizen, Ronit Trattner. For the purpose of summary judgment only, the parties agree that the bomber was Sadeq Ahed Mahmoud Abdel Hafez. Palestinian Defendants’ Response to Families’ Reconstituted Statement of Purported Material Facts at ¶ 5, Shatsky , No. 1:02-cv-02280-RJL (D.D.C. March 2, 2016), ECF No. 332-1; Families’ Response to Palestinian Defendants’ Statement of Material Facts, supra , at ¶ 5, ECF No. 331 at 61.

In November 2002, the Shatsky family, Steven Braun, and the other bombing survivors and their families filed suit against (i) the Palestinian Defendants, (ii) Syria and several Syrian governmental entities and individuals ("Syrian Defendants"), and (iii) 99 Doe defendants. The Families asserted claims under the Anti-Terrorism Act, which authorizes "[a]ny 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," to sue for treble damages "in any appropriate district court of the United States[,]" 18 U.S.C. § 2333(a).

The Palestinian Authority is a government established following the 1993 Oslo Accords between Israel and the Palestine Liberation Organization. See Livnat v. Palestinian Auth. , 851 F.3d 45, 47 (D.C. Cir. 2017). The Authority is headquartered in the West Bank and provides civilian and internal security services in parts of the West Bank and Gaza Strip. Id. The Palestine Liberation Organization, commonly known as the "PLO," is the international representative of the Palestinian people. Families’ Response to Palestinian Defendants’ Statement of Material Facts, supra , at 18, ECF No. 331 at 76.

The Popular Front is one of the seven "factions" that make up the PLO. J.A. 89. The United States government has designated the Popular Front a foreign terrorist organization. See 8 U.S.C. § 1189 ; see also Designation of Foreign Terrorist Organizations, 62 Fed. Reg. 52,650, 52,650 (Oct. 8, 1997) (original designation); In re Review of the Designation of Popular Front for the Liberation of Palestine (and Other Aliases) as a Foreign Terrorist Organization, 80 Fed. Reg. 25,766, 25,766 (May 5, 2015) (maintaining the designation).

The Families allege that the Popular Front planned and carried out the bombing. They contend that the Palestinian Defendants facilitated the bombing by providing financial support to the Popular Front. Specifically, they accuse the Palestinian Defendants of (i) paying the alleged mastermind, Ra’ed Nazal, a salary for a no-show job; (ii) covering some of the Popular Front’s necessary expenses, including rent for its office in the nearby city Qalqilya, and (iii) providing what the Families call "martyr payments" to Nazal’s and Hafez’s families after their deaths. See Families’ Br. 27–28.

B

Due to a number of procedural complexities, this case wended its way through district court for fifteen years. The case started when the Families filed their complaint in November 2002 and served the Palestinian Defendants in July 2003.

Two months later, the Syrian Defendants and the Palestinian Defendants jointly moved for a protective order to prevent the Families from moving forward with depositions before the defendants’ "sovereign and governmental immunity[ ] and other defenses" could be litigated. Defendants’ Motion for Protective Order at 1–2, Shatsky , No. 1:02-cv-02280-RJL (D.D.C. Sept. 11. 2003), ECF No. 14. That same day, the Clerk of the Court entered a default against the Palestinian Defendants under Federal Rule of Civil Procedure 55(a) because they had not responded to the complaint by what the Families asserted was the deadline. By way of explanation, Rule 55(a) requires the Clerk to enter a default when a defendant "has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise[.]" FED. R. CIV. P. 55(a). Once the Clerk does so, the plaintiff may "apply to the court for a default judgment" under Rule 55(b). FED. R. CIV. P. 55(b)(2).

The Palestinian Defendants then moved to strike that default and requested additional time to respond to the complaint. While those motions were still pending, the Palestinian Defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b), asserting among other things sovereign and governmental immunity and lack of personal jurisdiction. As for personal jurisdiction, the Palestinian Defendants argued that they lacked the minimum contacts with the United States that the Due Process Clause requires. They explained that their only contacts with the United States were the activities of Palestine’s Mission to the United Nations and its ambassador in New York. The Palestinian Defendants argued that those diplomatic contacts were "government contacts" that could not provide a basis for personal jurisdiction. J.A. 147–148.

On June 23, 2004, the district court entered minute orders granting the motions for a protective order and to strike the entry of default.

Eight months later, the district court denied the Palestinian Defendants’ motion to dismiss in a minute order that provided no reasoning. At a status hearing the next month, the Palestinian Defendants requested an explanation, but the district court declined to provide one. The Palestinian Defendants then informed the court that they planned to rest their defense entirely on jurisdiction and were contemplating an interlocutory appeal.

The Palestinian Defendants, however, never took an interlocutory appeal. After the Palestinian Defendants failed to file an answer or otherwise participate in the litigation, the Clerk of the Court entered a second default against them on April 12, 2005.

The next month, the Families voluntarily dismissed their claims against the Syrian Defendants without prejudice.¹

On January 31, 2006, the Palestinian Defendants informed the district court that they had new political leadership and sought a stay until May 1, 2006 to allow the new government to decide how to handle the litigation. The district court denied the motion as moot in a May 30, 2006 minute order.

Almost a year later, the Families asked the court to enter a default judgment against the Palestinian Defendants under Federal Rule of Civil Procedure 55(b). In their brief opposing the motion, the Palestinian Defendants reasserted their personal jurisdiction argument: "For the reasons presented in their Motion to Dismiss and supporting memorandum, the [Palestinian Defendants] continue to contend that they have insufficient contacts with the United States to warrant the Court’s exercise of personal jurisdiction over them and reserve that issue." J.A. 161 (citation omitted).

The Palestinian Defendants tried a new approach in December 2007. They moved to vacate the Clerk’s entry of default, emphasizing that they were now "committed to litigating the case on the merits." J.A. 182 (formatting modified). The Palestinian Defendants explained that, earlier in the litigation, they "might rightly have wondered why they would be haled into U.S. courts to litigate claims" that arose abroad "against the backdrop of the Palestinian–Israeli conflict." J.A. 183. But they told the court that they "ha[d] come to appreciate that they need to address these cases head on, rather than continuing to rely exclusively on jurisdictional defenses." J.A. 183.

At the same time, the Palestinian Defendants filed an answer that both responded to the merits of the complaint’s allegations and, as relevant here, raised lack of personal jurisdiction as an affirmative...