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 brought one claim under the Anti-Terrorism Act, as amended by the Justice Against Sponsors of Terrorism Act, alleging that Standard Chartered Bank aided and abetted al-Qaeda and an affiliated terrorist network. According to the complaint, Fatima, a Pakistani fertilizer company, supplied the network with calcium ammonium nitrate fertilizer, which was used to make many improvised explosive devices.

The complaint alleged that Standard Chartered Bank provided Fatima with banking services, project financing, and loans. It further alleged that, in January 2013, U.S. officials warned the bank’s senior executives that Fatima was supplying the terrorist network with material used in attacks against U.S. personnel. The plaintiffs alleged that the bank nevertheless continued providing financial services and gave Fatima a specially structured $22 million loan intended to remove production bottlenecks and increase its calcium ammonium nitrate production capacity.

The defendants initially moved to dismiss the case for lack of personal jurisdiction and failure to state a claim. In March 2023, the court dismissed the claims against Standard Chartered PLC for lack of personal jurisdiction but declined to dismiss the claims against Standard Chartered Bank. After the Supreme Court decided Twitter, Inc. v. Taamneh, Standard Chartered Bank sought reconsideration of the ruling that the plaintiffs had adequately pleaded their claim.

Legal standard

Reconsideration is an extraordinary remedy generally available only when there has been an intervening change in controlling law, new evidence, a clear error, or manifest injustice. A motion to dismiss for failure to state a claim tests whether the complaint contains enough factual allegations to make liability plausible; it does not decide whether the plaintiff will ultimately prevail.

The court explained that aiding-and-abetting liability under the Anti-Terrorism Act uses the framework from Halberstam v. Welch. The framework asks whether: (1) another party committed a wrongful act causing injury; (2) the defendant was generally aware of its role in an overall illegal or tortious activity when it provided assistance; and (3) the defendant knowingly and substantially assisted the primary violation. The third element is evaluated using six factors concerning the nature and amount of assistance, the defendant’s presence, its relationship with the primary actor, its state of mind, and the length of its assistance.

The Supreme Court’s decision in Twitter held that courts must focus on the defendant’s conduct in relation to the specific terrorist attack or wrongful act, rather than merely on the usefulness of the defendant’s services to a terrorist organization. The Supreme Court also emphasized that passive inaction ordinarily is not enough without an independent duty to act, and that the defendant must act with the intent of facilitating the offense. At the same time, the Supreme Court did not require a strict connection to every detail of a particular attack. More remote assistance may be sufficient when combined with stronger evidence of intent or misconduct, and the six Halberstam factors remain relevant when applied as a coherent framework rather than mechanically.

Court’s analysis

The court agreed with Standard Chartered Bank that Twitter requires attention to the bank’s conduct in relation to the attacks that injured the plaintiffs. It also agreed that the knowledge component of knowing and substantial assistance cannot simply duplicate the separate requirement that the defendant had general awareness of the illegal activity.

The court nevertheless rejected the bank’s argument that Twitter required a direct connection between the bank’s assistance and each specific attack. The court stated that a defendant need not know every detail of the primary actor’s plan. It also reaffirmed that liability may extend to foreseeable injuries resulting from the defendant’s intended assistance.

The court found that the plaintiffs alleged affirmative conduct, not merely a failure to stop providing existing services. In particular, they alleged that Standard Chartered Bank continued to provide specialized financial services after receiving an in-person warning from U.S. officials and affirmatively funded a loan designed to expand Fatima’s production of calcium ammonium nitrate. Because the allegations involved affirmative financing directed toward production of a material allegedly used in terrorist attacks, the court concluded that Twitter’s concerns about passive service providers did not require dismissal.

The court also rejected the argument that the bank had provided only ordinary, routine services. It distinguished routine transactions available to the public from a loan allegedly tailored and preauthorized for a specific business purpose: increasing production of a chemical that the plaintiffs alleged was being supplied to terrorist groups. The court further rejected the argument that the bank could not be liable because it financed Fatima rather than providing services directly to al-Qaeda. It stated that the Supreme Court’s decision did not categorically exclude liability for foreseeable consequences involving this type of intermediary.

Disposition

The court held that the plaintiffs had sufficiently stated an aiding-and-abetting claim under the Justice Against Sponsors of Terrorism Act against Standard Chartered Bank. Judge Edgardo Ramos denied Standard Chartered Bank’s motion for reconsideration and directed the Clerk of Court to terminate that motion. The opinion did not determine ultimate liability or damages.