Smith v. Islamic Emirate of Afghanistan (In re Terrorist Attacks on Sept. 11, 2001)

657 F.Supp.3d 311

IN RE: TERRORIST ATTACKS ON SEPTEMBER 11, 2001

This document relates to: Smith v. The Islamic Emirate of Afghanistan, et al.,Ashton, et al. v. Al Qaeda Islamic Army, et al.,Havlish, et al. v. Bin Laden; et al.,Fed. Ins. Co. et al. v. Al Qaida, et al.,John Does 1 Through 7 v. The Taliban, et al.

03 MDL 1570 (GBD) (SN)

No. 01-cv-10132

No. 02-cv-6977

No. 03-cv-9848

No. 03-cv-6978

No. 20-mc-740

United States District Court, S.D. New York

Signed February 21, 2023

John Brian Galligan, Michael J. Sommi, Cozen O'Connor, New York, NY, Mark T. Mullen, Cozen O'Connor, Philadelphia, PA, for Federal Insurance Company.

Elliott R. Feldman, Mark T. Mullen, Cozen O'Connor, Philadelphia, PA, Michael J. Sommi, Cozen O'Connor, New York, NY, for Pacific Indemnity Company, Chubb Custom Insurance Company, Chubb Indemnity Insurance Company, Chubb Insurance Company of Canada, Chubb Insurance Company of New Jersey, Great Northern Insurance Company, Vigilant Insurance Company, One Beacon Insurance Company, One Beacon America Insurance Company, American Employers' Insurance Company, Homeland Insurance Company of New York, American Alternative Insurance Corporation, Great Lakes Reinsurance U.K. PLC.

Mark T. Mullen, Cozen O'Connor, Philadelphia, PA, Michael J. Sommi, Cozen O'Connor, New York, NY, for The Camden Fire Insurance Association, The Princeton Excess & Surplus Lines Insurance Company.

Elliott R. Feldman, Mark T. Mullen, Cozen O'Connor, Philadelphia, PA, for Hiscox Dedicated Corporate Member, Ltd., Allstate Insurance Company, Boston Old Colony Insurance Company, Continental Insurance Company, Commercial Insurance Company of Newark, N.J., CNA Casualty of California, Continental Insurance Company of New Jersey, Fidelity and Casualty Company of New York, Glens Falls Insurance Company, National Ben Franklin Insurance Company of Illinois.

Carter G. Phillips, Sidley Austin LLP, Washington, DC, Elliott R. Feldman, Sean P. Carter, Cozen O'Connor, Philadelphia, PA, for Federal Insurance Company et al., Plaintiffs.

Elliott R. Feldman, Sean P. Carter, Pro Hac Vice, Stephen A. Cozen, Cozen O'Connor, Philadelphia, PA, for TIG Insurance Company.

All Plaintiffs, Pro Se.

Timothy Brian Mills, Maggs & McDermott LLC, Washington, DC, for Republic of Iraq.

Gregory G. Rapawy, Michael Kerry Kellogg, Mark Charles Hansen, Kellogg, Hansen, Todd, Figel & Frederick PLLC, Washington, DC, for The Kingdom of Saudi Arabia.

Jason Dzubow, Washington, DC, Martin Francis McMahon, Martin F. McMahon and Associates, Washington, DC, James Vann, for Rabita Trust, International Islamic Relief Organization.

Mark Charles Hansen, Kellogg, Hansen, Todd, Figel & Frederick PLLC, Washington, DC, for Princess Haifa Al-Faisal, Prince Bandar bin Sultan bin Abdulaziz.

Frederick James Goetz, Pro Hac Vice, Goetz & Eckland P.A., Minneapolis, MN, for World Assembly of Muslim Youth.

David P. Gersch, Arnold & Porter Kaye Scholer LLP, Washington, DC, for Mohammed Salim Bin Mahfouz.

Christopher J. Beal, Jay D. Hanson, DLA Piper LLP, San Diego, CA, John Joseph Walsh, Carter Ledyard & Milburn LLP, New York, NY, Michael D. McNeely, DLA Piper U.S. LLP, Florham Park, NJ, Nancy Luque, Luque Geragos Marino, LLP, Washington, DC, Maddox Steven a, Maddox Edwards, PLLC, Washington, DC, for International Institute of Islamic Thought, Mar-Jac Investments, Inc., M. Yaqub Mirza, Iqbal Yunus, M. Omar Ashraf, Muhammad Ashraf, Grove Corporate, Inc., Heritage Education Trust, Reston Investments, Inc., Safa Trust, Sterling Charitable Gift Fund, Sterling Management Group, York Foundation.

Christopher J. Beal, Jay D. Hanson, DLA Piper LLP, San Diego, CA, John Joseph Walsh, Carter Ledyard & Milburn LLP, New York, NY, Michael D. McNeely, Steven Karl Barentzen, DLA Piper U.S. LLP, Florham Park, NJ, Nancy Luque, Luque Geragos Marino, LLP, Washington, DC, Maddox Steven a, Maddox Edwards, PLLC, Washington, DC, for African Muslim Agency.

James Michael Cole, Bryan Cave LLP, Washginton, DC, for Prince Naif Bin Abdulaziz Al Saud.

Timothy James McCarthy, Aimee Rebecca Kahn, Mishcon de Reya New York, LLP, New York, NY, for Dar-Al-Maal Al Islami.

T. Barry Kingham, Curtis, Mallet-Prevost, Colt and Mosle LLP, New York, NY, for Faisal Group Holding Co.

Maher Hana Hanania, Sr., Hanania & Kheder, P.C., Falls Chuch, VA, for Abdulrahman Alamoudi.

Christopher J. Beal, Jay D. Hanson, DLA Piper LLP, San Diego, CA, Christopher Canon Swindle Manning, Pro Hac Vice, Manning Sossamon, Washington, DC, Nancy Luque, Luque Geragos Marino, LLP, Washington, DC, Maddox Steven A, Maddox Edwards, PLLC, Washington, DC, John Joseph Walsh, Carter Ledyard & Milburn LLP, New York, NY, Eurydice Aliferis Kelley, Rottenberg Lipman Rich, P.C., New York, NY, Michael D. McNeely, DLA Piper U.S. LLP, Florham Park, NJ, for Sana-Bell, Inc.

Christopher Canon Swindle Manning, Pro Hac Vice, Manning Sossamon, Washington, DC, Nancy Luque, Luque Geragos Marino, LLP, Washington, DC, Maddox Steven a, Maddox Edwards, PLLC, Washington, DC, Michael D. McNeely, DLA Piper U.S. LLP, Florham Park, NJ, for Sanabel Al-Kheer, Inc.

Christopher J. Beal, Jay D. Hanson, DLA Piper LLP, San Diego, CA, Michael D. McNeely, DLA Piper U.S. LLP, Florham Park, NJ, Nancy Luque, Luque Geragos Marino, LLP, Washington, DC, Maddox Steven a, Maddox Edwards, PLLC, Washington, DC, for Taha Jaber Al-Alwani.

Abigael Bosch, Eric James Snyder, Jones Day, New York, NY, Samidh Jalem Guha, Perry Guha LLP, New York, NY, C. Kevin Marshall, Gabrielle Ellisa Pritsker, Stephen DeGenaro, Juan Pablo Morillo, Jones Day, Washington, DC, Steven Thomas Cottreau, Clifford Chance U.S. LLP, Washington, DC, for Dubai Islamic Bank.

James Joseph McGuire, Greenspoon Marder LLP, New York, NY, Timothy James McCarthy, Aimee Rebecca Kahn, Mishcon de Reya New York, LLP, New York, NY, for Dar Al Maal Islami Trust.

William Horace Jeffress, Jr., Baker Botts LLP, Washington, DC, for Salman Bin Abdulaziz Al Saud.

Christopher Canon Swindle Manning, Pro Hac Vice, Manning Sossamon, Washington, DC, Eurydice Aliferis Kelley, Rottenberg Lipman Rich, P.C., New York, NY, for Sanabel Al Kheer, Inc.

MEMORANDUM DECISION AND ORDER

GEORGE B. DANIELS, United States District Judge:

In this multidistrict litigation, four groups of judgment creditors ("Judgment Creditors")¹ with judgments against the Taliban stemming from the terrorist attacks on September 11, 2001 (the "9/11 Attacks") moved for turnover to satisfy their judgments with assets in the name of Afghanistan's central bank, Da Afghanistan Bank ("DAB"), held at the Federal Reserve Bank of New York (the "FRBNY"). (ECF Nos. 7763, 7767, and 7936 in No. 03-md-1570; ECF No. 62 in No. 01-cv-10132; ECF No. 597 in No. 03-cv-9848.)² Before this Court is Magistrate Judge Sarah Netburn's August 26, 2022 Report and Recommendation (the "Report"), recommending that this Court deny the Judgment Creditors' motions and not allow Judgment Creditors of the Taliban to satisfy their judgments with DAB funds. (See Report, ECF No. 8463, at 2.) Magistrate Judge Netburn advised the parties that failure to file timely objections to the Report would constitute a waiver of those objections on appeal. (Id. at 42-43.) Judgment Creditors filed objections on November 10, 2022, (see Objections, ECF No. 8733),³ and amicus curiae Mr. Naseer A. Faiq, the Chargé de Affaires of the Permanent Mission of the Islamic Republic of Afghanistan, responded to those objections on November 25, 2022, (see Faiq Nov. 25, 2022 Letter, ECF No. 8773).⁴

Because the parties filed timely objections, this Court undertakes a de novo review of the Report. After doing so, this Court ADOPTS Magistrate Judge Netburn's Report in finding that this Court lacks subject-matter jurisdiction over the turnover motions under the FSIA, (Report at 12-26), and that this Court is constitutionally restrained from determining the Taliban is the legitimate government of Afghanistan as required to attach DAB's assets, (Report at 27-37).⁵ For the reasons stated herein, the Judgment Creditors' turnover motions are DENIED.

I. LEGAL STANDARD

A court "may accept, reject, or modify, in whole or in part, the findings or recommendations" set forth in a magistrate judge's report. 28 U.S.C. § 636(b)(1)(C). The court must review de novo the portions of a magistrate judge's report to which a party properly objects. Id. The court, however, need not conduct a de novo hearing on the matter. See United States v. Raddatz, 447 U.S. 667, 675-76, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980). Rather, it is sufficient that the court "arrive at its own, independent conclusion" regarding those portions of the report to which objections are made. Nelson v. Smith, 618 F. Supp. 1186, 1189-90 (S.D.N.Y. 1985) (citation omitted).

Portions of a magistrate judge's report to which no or "merely perfunctory" objections are made are reviewed for clear error. See Edwards v. Fischer, 414 F. Supp. 2d 342, 346-47 (S.D.N.Y. 2006) (citations omitted). The clear error standard also applies if a party's "objections are improper—because they are 'conclusory,' 'general,' or 'simply rehash or reiterate the original briefs to the magistrate judge.' " Stone v. Comm'r of Soc. Sec., No. 17-cv-569 (RJS)(KNF), 2018 WL 1581993, at *3 (S.D.N.Y. Mar. 27, 2018) (citation omitted). Clear error is present when "upon review of the entire record, [the court is] 'left with the definite and firm conviction that a mistake has been committed.' " United States v. Snow, 462 F.3d 55, 72 (2d Cir. 2006) (citation omitted).

II. BACKGROUND

A. Afghanistan and 9/11

The 9/11 Attacks resulted in the murder of nearly three thousand innocent people and injuries to thousands more.⁶ In the ensuing days, U.S. President George W. Bush launched a global military campaign to respond to the 9/11 Attacks and counter international terrorism. Since 1996, the Taliban had de facto control over the Islamic Emirate of Afghanistan, although the United States did not recognize the Taliban as Afghanistan's government.⁷ President Bush demanded that the Taliban permanently close...