Federal Insurance v. Al Qaida

Background

This memorandum decision relates to six cases in multidistrict litigation concerning the September 11, 2001 terrorist attacks. The plaintiffs sought to hold various defendants responsible for losses allegedly connected to al Qaeda. One defendant, Dubai Islamic Bank (DIB), was accused of laundering money for Osama bin Laden and al Qaeda before the attacks. DIB denied those allegations and challenged the court’s authority to exercise personal jurisdiction over it.

In 2010, the court denied DIB’s motion to dismiss for lack of personal jurisdiction. That earlier ruling relied on the plaintiffs’ allegations that DIB had knowingly provided financial assistance to bin Laden and al Qaeda, despite warnings from United States officials, and that money had moved from DIB to two hijackers. After the parties completed merits discovery, DIB moved for summary judgment, arguing that the evidence did not support those allegations.

Evidence and Jurisdictional Framework

The court admitted declassified Central Intelligence Agency reports for the limited purpose of deciding the motion. It concluded that the reports qualified for the public-record exception to the hearsay rule and that DIB had not shown that they were untrustworthy.

The court explained that personal jurisdiction requires both a statutory basis and compliance with constitutional due process. It considered New York’s long-arm statute, the District of Columbia’s comparable statute for one transferred case, and Federal Rule of Civil Procedure 4(k)(2), which can provide jurisdiction for certain federal-law claims against a defendant not subject to jurisdiction in any state.

DIB was incorporated and headquartered in the United Arab Emirates and did not conduct ordinary business or provide services in the United States, apart from maintaining correspondent banking accounts. The court therefore considered specific jurisdiction, which depends on a connection between the defendant’s forum-related conduct and the claims.

Purposeful-Direction Theory

The plaintiffs argued that DIB purposefully directed its conduct at the United States by supporting al Qaeda, an organization known to target the United States. The court held that this theory required evidence of both DIB’s intent to aid al Qaeda in attacks against the United States and a reasonable temporal, geographic, or causal connection between DIB’s conduct and the September 11 attacks.

The court found that discovery had not produced evidence that funds from DIB accounts were used to finance al Qaeda’s operations or the September 11 attacks. Although people and entities linked to al Qaeda had accounts at DIB, the court found no specific evidence that those accounts funded the attacks. The court also found that the most suspicious transactions occurred in the 1990s and were too remote from the attacks.

The court concluded that DIB’s conduct was more like that of a passive conduit providing routine banking services than a bank intentionally directing funds for an attack on the United States. It also found insufficient evidence that DIB had the general awareness required to show that it knowingly played a role in al Qaeda’s violent activities. The court distinguished the facts established through discovery from the allegations on which it had relied in 2010.

Concerted-Action Theory

The plaintiffs also argued that DIB’s contacts could be established through a conspiracy or concerted-action theory. Under the theory recognized by the Second Circuit, a plaintiff must show that a conspiracy existed, that the defendant participated in it, and that a co-conspirator committed acts with sufficient contacts with the forum.

The court found that the plaintiffs had not shown that DIB and al Qaeda agreed to participate in an unlawful scheme. DIB’s ties to extremists, its former chairman’s friendship with bin Laden, and evidence that the bank may have facilitated transactions for people linked to al Qaeda did not establish a shared commitment to attack the United States. The court also declined to extend the concerted-action theory to alleged aiders and abettors, reasoning that attributing another person’s contacts to a foreign aider and abettor could violate due process.

Disposition

The court held that the plaintiffs’ evidence failed to establish personal jurisdiction over DIB. It therefore granted DIB’s motion for summary judgment for lack of personal jurisdiction. The court denied DIB’s request for an evidentiary hearing as unnecessary and moot and denied its request for oral argument. The clerk was directed to close the listed motions.