In re Approximately $3.5 Billion of Assets on Deposit at the Federal Reserve…

Background

The Wodenshek Plaintiffs—The Estate of Christopher Wodenshek, Anne Wodenshek, Sarah Wodenshek, Haley Wodenshek, Mollie Wodenshek, William Wodenshek, and Zachary Wodenshek—filed a separate proposed class action concerning approximately $3.5 billion deposited at the Federal Reserve Bank of New York in the name of Da Afghanistan Bank. They sought an equitable distribution of those assets and proposed a class consisting of people and estates with compensatory-damages claims against the Taliban on file in a U.S. court of record as of April 20, 2022.

The plaintiffs were already members of a related multidistrict litigation proceeding involving the September 11, 2001 attacks. In that proceeding, they had obtained liability judgments and had proposed final default judgments pending. The court also noted that the same Da Afghanistan Bank assets were involved in ongoing turnover proceedings in the multidistrict litigation. “Turnover” proceedings concern efforts to obtain or distribute property under a court’s authority.

Claims and Requests

The proposed class-action complaint sought to distribute the Da Afghanistan Bank assets and included the plaintiffs’ damages from their existing case. It also requested an injunction barring judgment-enforcement proceedings in any court affecting those assets while the proposed class action was pending. The opinion states that the plaintiffs attempted to file the action as related to another case rather than making an application in the multidistrict litigation in which they were already plaintiffs.

Court’s Analysis

The court applied the rule against duplicative litigation, also called claim splitting. That rule allows a court to stay or dismiss a lawsuit that duplicates another pending federal lawsuit and generally requires a plaintiff to bring overlapping theories concerning the same matter in one action. The court concluded that this proposed class action was duplicative because the plaintiffs acknowledged their membership in the multidistrict litigation, their existing judgments and pending proposed final default judgments concerned the same underlying claims, and the proposed action sought distribution of assets already at issue in the related proceedings.

The court stated that the proposed class action did not present new claims that could not be heard in the related multidistrict litigation. It therefore concluded that the plaintiffs could not maintain the separate action.

Disposition

The court dismissed the class-action complaint. The court also denied the plaintiffs’ application for a preliminary injunction for the same reasons given in its April 21, 2022 order denying a temporary restraining order. The Clerk of Court was directed to close the case. The order did not decide the plaintiffs’ entitlement to a distribution of the assets on the merits.