Havlish v. Bin-Laden

Background

This opinion concerns proceedings within multidistrict litigation arising from the September 11, 2001 terrorist attacks, including Havlish v. Bin-Laden and a related proceeding involving claims against the Taliban. The Havlish Plaintiffs and the John Doe Plaintiffs had obtained writs of execution targeting funds belonging to Afghanistan’s central bank, Da Afghanistan Bank, that were held at the Federal Reserve Bank of New York. The execution of those writs had been stayed, and motions to lift the stays were pending.

The Amduso Plaintiffs were 157 United States government employees injured or killed in al Qaeda’s 1998 attacks on United States embassies, together with family members and estate representatives. They had obtained judgments against Sudan, Iran, and government agencies of those countries in four cases brought in the District Court for the District of Columbia. The opinion states that Afghanistan and the Taliban were not defendants in those cases. The Amduso Plaintiffs had not attached the Da Afghanistan Bank funds and had not obtained writs of execution against them.

The Amduso Plaintiffs moved to intervene and proposed seeking a declaratory judgment—an order stating the parties’ legal rights—that neither the Havlish Plaintiffs nor the Amduso Plaintiffs had an explicit right to the Afghan funds. They sought to leave open the possibility that the funds could be distributed through the United States Victims of State Sponsored Terrorism Fund.

Intervention as of right

The court denied intervention as of right under Federal Rule of Civil Procedure 24(a). That rule requires an applicant to show, among other things, a timely motion, a direct and legally protectable interest in the property or transaction at issue, a risk that the case will impair the applicant’s ability to protect that interest, and inadequate representation by the existing parties.

The court concluded that the Amduso Plaintiffs had no cognizable interest in the Da Afghanistan Bank funds. Their proposed judgment was based on the position that neither they nor the Havlish Plaintiffs had an explicit right to the funds. The court reasoned that the Amduso Plaintiffs could not rely on a right they sought to have declared nonexistent.

The court also rejected the Amduso Plaintiffs’ argument that they were similarly situated to the Havlish and Doe Plaintiffs because all had been injured by terrorism associated with the Taliban. The Havlish and Doe Plaintiffs had judgments against the Taliban; the Amduso Plaintiffs did not. Any entitlement based on Taliban liability would therefore depend on the Amduso Plaintiffs first suing the Taliban and obtaining judgments.

The court further found that the Amduso Plaintiffs’ interest in having the funds placed in the terrorism-victim fund was speculative and indirect. The opinion states that the Amduso Plaintiffs identified no right to require terrorism-related funds to be deposited there, and that the executive order and government license concerning the Da Afghanistan Bank funds did not direct that result.

The court also found that denying intervention would not prevent the Amduso Plaintiffs from asserting any cognizable rights. Turnover proceedings under New York law, potentially combined with interpleader proceedings under Federal Rule of Civil Procedure 22, could provide a procedure for adverse claimants to assert and contest rights to disputed property.

Finally, the court concluded that the Amduso Plaintiffs’ interests were adequately represented by existing parties. Several parties already sought to limit or prevent the Havlish and Doe Plaintiffs’ entitlement to the funds, and the United States had addressed terrorism victims’ interests and proposed mechanisms for deciding entitlement to the funds.

Permissive intervention

The court also denied permissive intervention under Federal Rule of Civil Procedure 24(b). Permissive intervention may be allowed when an applicant’s claim or defense shares a factual or legal question with the main action, but the court must consider whether intervention would cause undue delay or prejudice.

The court held that the same problems undermining intervention as of right, along with the likely prejudice and delay, counseled against permissive intervention. The proposed declaratory-judgment action would require a new complaint and additional proceedings, effectively adding another member case to an already complex multidistrict litigation. The court also reasoned that a judgment would generally bind only the parties to that declaratory action, potentially requiring further rounds of litigation by other claimants.

Declining declaratory-judgment jurisdiction

The court separately held that, even if intervention were viable, it would decline to exercise jurisdiction over the proposed declaratory-judgment action. The Declaratory Judgment Act gives federal courts discretion to decide whether to hear such actions. The court considered whether the action would clarify the parties’ rights, resolve the controversy, and provide effective relief, among other factors.

The court concluded that the proposed action was unlikely to meaningfully clarify entitlement to the funds for more than a small group of potential claimants and would not finally resolve the controversy. Instead, it would prolong and complicate the dispute. The court identified turnover and interpleader proceedings as a better and more effective remedy.

Disposition

The court denied the Amduso Plaintiffs’ motion to intervene. The Clerk was directed to terminate the identified motions on the multidistrict-litigation, Havlish, and John Doe dockets. The opinion did not decide which parties were ultimately entitled to the Da Afghanistan Bank funds.