Hakimyar v. Habib Bank Limited

Background

The plaintiffs are 67 individuals who were injured, or whose family members were injured or killed, in terrorist attacks in Afghanistan between 2014 and 2017. They sued Habib Bank Limited under the Anti-Terrorism Act, as amended by the Justice Against Sponsors of Terrorism Act, seeking damages based on alleged support for terrorism.

The complaint alleges that al-Qaeda, the Taliban, the Haqqani Network, the Kabul Attack Network, and related organizations committed the attacks. It also alleges that Habib Bank provided banking services to terrorists, terrorist fronts, fundraisers, and people linked to terrorist organizations. Among other allegations, the complaint describes a “good guy list” that allegedly reduced scrutiny of certain customers, “wire stripping” that allegedly removed identifying information from transactions, and repeated regulatory actions concerning the bank’s anti-money-laundering controls. In 2017, according to the complaint, Habib Bank paid a $255 million fine and lost its New York banking license after regulatory findings concerning its compliance practices.

Issues and Rulings

Habib Bank moved to dismiss all claims. It argued that the complaint did not establish personal jurisdiction in New York, did not adequately plead primary liability under the Anti-Terrorism Act, and did not adequately plead secondary liability under the Justice Against Sponsors of Terrorism Act.

Personal jurisdiction. The court denied the motion to dismiss for lack of personal jurisdiction, without prejudice to renewal after jurisdictional discovery. The court found that the complaint plausibly alleged that Habib Bank purposefully used New York’s banking system, including its former New York branch, in connection with the alleged wrongdoing. The complaint alleged that approximately one-quarter of the transactions through that branch involved Al Rajhi Bank during the relevant period, and that Habib Bank’s practices could have allowed transactions involving terrorists and their funders to pass through the branch. The court did not decide whether other possible bases for jurisdiction were adequate.

Primary liability. The court granted the motion to dismiss the primary-liability claims. Primary liability under the Anti-Terrorism Act requires an act of international terrorism committed by the defendant, along with injury and causation. The court explained that the alleged provision of banking services and financial support was not itself a violent act or an act directly connected to a specifically identified violent event. Because the complaint did not allege the required direct connection between Habib Bank’s services and violence or danger to human life, the primary-liability claims were dismissed.

Secondary liability. The court denied the motion to dismiss the secondary-liability claims. The Justice Against Sponsors of Terrorism Act permits claims against a person who aids and abets an act of international terrorism committed, planned, or authorized by a designated foreign terrorist organization, or who conspires with the person committing that act.

The court found that the complaint plausibly alleged both aiding-and-abetting and conspiracy theories. For aiding and abetting, the complaint sufficiently alleged that Habib Bank was generally aware of its role in unlawful terrorist activity and knowingly provided substantial assistance. The court relied on allegations involving the bank’s relationships with customers publicly linked to al-Qaeda and other terrorist organizations, its alleged treatment of certain customers, its regulatory history, and its continued services during the period of the attacks. The court considered the assistance substantial because the complaint alleged that the bank helped move large amounts of money and maintained long-running relationships with terrorist-affiliated customers. The fact that Habib Bank was not physically present when the attacks occurred did not outweigh the other allegations.

For conspiracy, the court found that the allegations supported a reasonable inference that Habib Bank and the alleged al-Qaeda terrorist syndicate shared a common object, including forcing the U.S. military to leave Afghanistan. The court rejected Habib Bank’s argument that the Supreme Court’s decision in Twitter, Inc. v. Taamneh or the Second Circuit’s decision in Freeman v. HSBC Holdings PLC required dismissal. The court concluded that the complaint alleged more than routine banking services and sufficiently alleged deliberate assistance to terrorist-affiliated customers.

Disposition

The court granted Habib Bank’s motion to dismiss in part and denied it in part. The motion to dismiss for lack of personal jurisdiction was denied without prejudice to renewal. The motion was granted as to the primary-liability claims and denied as to the secondary-liability claims. The clerk was directed to close the motion at Docket No. 22.