Bonacasa v. Standard Chartered PLC

Background

The plaintiffs are family members of U.S. service members killed by improvised explosive devices in Afghanistan between 2013 and 2015. They sued Standard Chartered PLC and Standard Chartered Bank under the Anti-Terrorism Act, as amended by the Justice Against Sponsors of Terrorism Act. The plaintiffs alleged that Standard Chartered Bank, acting through its New York branch and other banking operations, provided financial services to Fatima, a Pakistani fertilizer company whose calcium ammonium nitrate was allegedly supplied to al-Qaeda and affiliated groups for use in explosive devices.

The complaint alleged that Standard Chartered provided Fatima with dollar clearing, foreign exchange, export financing, daily banking services, and loans. It also alleged that U.S. officials met with Standard Chartered executives in New York in January 2013, described Fatima’s alleged role in supplying materials for terrorist attacks, and urged the bank to end its relationship with Fatima. According to the complaint, Standard Chartered continued providing services.

Motion and personal jurisdiction

Standard Chartered moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(6) for failure to state a claim. The court held that it had personal jurisdiction over Standard Chartered Bank. The bank’s New York branch allegedly provided Fatima with dollar clearing, foreign exchange, and trade-financing services, and processed the overwhelming majority of the bank’s transactions. The court also considered the New York meeting at which U.S. officials warned the bank about Fatima. These allegations showed purposeful, repeated use of New York’s banking system connected to the plaintiffs’ claims and made the exercise of jurisdiction reasonable.

The court reached a different conclusion for Standard Chartered PLC. Personal jurisdiction must be assessed separately for each defendant, and the complaint did not identify specific New York conduct by Standard Chartered PLC. The jurisdictional allegations instead concerned Standard Chartered Bank or referred to the two companies collectively. The court therefore found insufficient facts to establish personal jurisdiction over Standard Chartered PLC.

Failure to state a claim

The court held that the complaint plausibly alleged aiding-and-abetting liability under the Justice Against Sponsors of Terrorism Act. The statute requires allegations that the defendant knowingly provided substantial assistance to an act of international terrorism committed, planned, or authorized by a designated foreign terrorist organization. Applying the three-part framework from Halberstam v. Welch, the court examined whether the complaint plausibly alleged: (1) an injury-causing wrongful act by the party aided; (2) the defendant’s general awareness of its role in an overall illegal activity; and (3) knowing and substantial assistance.

First, the court found it plausible that members of al-Qaeda’s affiliated network committed, planned, or authorized the attacks that killed the plaintiffs’ family members. The court also held that the alleged assistance could reach the terrorist organizations indirectly through Fatima; the statute did not require Standard Chartered to provide assistance directly to the organization that committed the attacks.

Second, the court found plausible allegations that Standard Chartered was generally aware of its role in the alleged terrorist activity. The complaint alleged that U.S. officials gave Standard Chartered executives detailed information about Fatima’s fertilizer and its alleged connection to materials used in terrorist attacks, and that public reporting also described Fatima’s alleged role. The court concluded that these allegations supported an inference that Standard Chartered knew its banking services were assisting the bomb-making operation.

Third, the court found substantial-assistance allegations plausible. The complaint described significant financial services, at least $25 million in loans, a relationship with Fatima that continued during the relevant attacks, and banking services allegedly connected to Fatima’s ability to produce calcium ammonium nitrate. The court also found that the alleged assistance lasted for a substantial period and that the deaths of U.S. service members were a foreseeable consequence of helping produce explosive devices for al-Qaeda and affiliated groups.

The court rejected Standard Chartered’s argument that the plaintiffs had to prove proximate cause for the Justice Against Sponsors of Terrorism Act claim. It concluded that the statute’s language allowing liability for direct or indirect assistance did not impose that requirement on the plaintiffs’ aiding-and-abetting claim.

Disposition

Judge Ramos granted in part and denied in part Standard Chartered’s motion to dismiss. The court found personal jurisdiction over Standard Chartered Bank but not Standard Chartered PLC, and it found that the complaint plausibly stated an aiding-and-abetting claim under the Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act. The clerk was directed to terminate the motion, and the parties were directed to appear for a telephonic status conference.