King v. Habib Bank Limited

Background

This opinion concerns three related actions: King v. Habib Bank Limited, No. 20 Civ. 4322; Alexander v. Habib Bank Limited, No. 21 Civ. 2351; and Border v. Habib Bank Limited, No. 21 Civ. 6044. In an earlier opinion and order dated September 28, 2022, the court granted Habib Bank’s motion to dismiss the complaints’ primary liability claims. The court denied the motion as to the plaintiffs’ secondary-liability claims for aiding and abetting and conspiracy under the Anti-Terrorism Act, 18 U.S.C. § 2333(d)(2).

On August 8, 2023, Habib Bank moved for reconsideration of the earlier ruling on those secondary-liability claims. The bank relied on two later decisions: the Supreme Court’s decision in Twitter, Inc. v. Taamneh, issued May 18, 2023, and the Second Circuit’s decision in Freeman v. HSBC Holdings PLC, issued January 5, 2023.

Standard for reconsideration

A motion for reconsideration is an effort to have the court revisit an earlier decision. It generally requires an intervening change in controlling law, new evidence, or a need to correct clear error or prevent manifest injustice. Although the motion was filed after the 14-day period in the local rule, the court exercised its discretion to consider the merits because Habib Bank alleged an intervening change in controlling law.

The court emphasized that reconsideration is held to a strict standard. A party seeking to depart from binding Second Circuit precedent must show more than tension between a Supreme Court decision and that precedent. The Supreme Court decision must undermine the Second Circuit precedent so thoroughly that the Second Circuit will almost inevitably overrule it.

Aiding-and-abetting claim

The court held that Twitter did not justify reconsideration of the aiding-and-abetting ruling. In Twitter, the Supreme Court explained that aiding and abetting under the Anti-Terrorism Act requires conscious, voluntary, and culpable participation in another person’s wrongdoing. Mere passive failure to act is not enough without a strong showing of assistance and knowledge. The assistance must also have a sufficient connection to a specific terrorist act, although the defendant need not know every detail of the primary actor’s plan. Liability may extend to other torts that were a foreseeable risk of the intended tort.

The court found that these principles largely aligned with the framework it had applied in the earlier opinion. That framework used the six-factor test from Halberstam v. Welch to evaluate the substantiality of assistance. The factors were treated as part of an overall assessment rather than as separate requirements with one factor controlling the result.

The court also rejected Habib Bank’s arguments that Twitter improperly separated the “knowing” assistance requirement from the requirement of general awareness, or that Twitter imposed a connection requirement inconsistent with the earlier ruling. The court noted that the earlier opinion had found that the complaints sufficiently alleged that Habib Bank provided non-routine banking services to terrorists and their allies. Even if some part of Twitter could be viewed as being in tension with existing Second Circuit precedent, the court held that this was not enough to warrant reconsideration.

Conspiracy claim

The court also held that Freeman did not justify reconsideration of the conspiracy ruling. In Freeman, the Second Circuit held that the complaint failed to state a conspiracy claim because it did not allege facts showing that the defendant financial institutions had conspired, directly or indirectly, with terrorist groups or shared a common intent with them.

The court explained that Freeman clarified rather than overturned existing Second Circuit law. In the court’s view, Freeman supported the earlier conclusion that a complaint may state a conspiracy claim through allegations of either direct or indirect interaction and that every member of a conspiracy need not conspire directly with every other member.

The court further noted that, unlike the complaint in Freeman, the complaints in these actions alleged a common intent shared by Habib Bank and terrorist organizations, including an alleged purpose of driving the U.S. military out of Afghanistan. The earlier opinion had found that the complaints plausibly alleged an agreement and common purpose to further the customers’ campaign of terrorism. The court stated that whether the complaints ultimately alleged a conspiracy was not the issue on reconsideration; the issue was whether Freeman changed the governing law enough to require a different result.

Order

The court ordered that Habib Bank’s motion for reconsideration of the earlier rulings on its motion to dismiss was DENIED. The Clerk of Court was directed to close the motion at Docket Number 159.