Lelchook v. Lebanese Canadian Bank, SAL

Background

The plaintiffs alleged that they suffered physical, psychological, emotional, property, and income-related injuries from rocket attacks carried out by Hizbollah in Israel in 2006 and 2008. They sued Lebanese Canadian Bank, SAL (LCB), and its former Deputy General Manager, Mohamed Hamdoun, under the Anti-Terrorism Act (ATA), as amended by the Justice Against State Sponsors of Terrorism Act (JASTA). They alleged that LCB provided banking services to Hizbollah through accounts held in the names of Hizbollah leaders and three entities that Hizbollah allegedly controlled: the Shahid Foundation, Bayt al-Mal, and Yousser Company for Finance and Investment.

The complaint alleged that Hizbollah used these accounts for wire transfers and other transactions that supported its terrorist activities, including the rocket attacks. It further alleged that Hamdoun personally initiated and authorized LCB’s banking relationship with Hizbollah, including opening and maintaining accounts and processing wire transfers. The plaintiffs also incorporated allegations from a United States civil forfeiture complaint and a Treasury Department finding concerning LCB’s alleged banking and money-laundering activities involving Hizbollah-linked entities.

Motions and the court’s analysis

Hamdoun moved under Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of personal jurisdiction and under Rule 12(b)(6) to dismiss for failure to state a claim. The court held that Hamdoun waived the personal-jurisdiction defense by failing to include it in his first motion to dismiss. The court rejected his argument that the filing of an amended complaint revived that defense. It also rejected the argument that an earlier stipulation preserved the defense after his first motion, explaining that the stipulation preserved the defense but did not eliminate the requirement that he raise it in his first significant defensive filing.

The court also denied Hamdoun’s request to dismiss the JASTA claim for failure to state a claim. JASTA claims use the three-part aiding-and-abetting standard identified in Halberstam: the person aided must have committed a wrongful act causing injury; the defendant must have generally understood his role in an illegal or tortious activity when providing assistance; and the defendant must have knowingly and substantially assisted that violation. The court relied on the Second Circuit’s ruling in a parallel case involving LCB, which held that similar allegations plausibly satisfied the general-awareness and substantial-assistance requirements.

The court concluded that the complaint contained enough factual allegations to plausibly connect Hamdoun to LCB’s alleged conduct. Those allegations included his alleged frequent or daily communications with members of a Hizbollah-affiliated criminal network, his alleged personal processing of transactions, his alleged family connection to an owner of a Hizbollah-controlled entity, and the alleged reporting exemptions granted by his subordinate to Hizbollah-linked customers. The court emphasized that factual disputes could not be resolved on a motion to dismiss and accepted the plaintiffs’ well-pleaded allegations as true for purposes of that motion.

Ester Lelchook’s individual claims

The defendants separately moved to dismiss Ester Lelchook’s claims brought in her personal capacity for lack of statutory standing. Statutory standing asks whether a particular statute gives a person the right to bring the claim. The ATA authorizes a United States national injured in person, property, or business by international terrorism—or the national’s estate, survivors, or heirs—to sue.

The court held that Ester, whom the opinion identifies as a non-American citizen, could sue only in a representative capacity on behalf of an injured American national. It rejected the plaintiffs’ argument that the ATA also permits non-American family members to recover for their own personal injuries resulting from the death of an American citizen. The court interpreted the statute’s reference to estates, survivors, and heirs as permitting representative claims for the American national’s injuries, not personal-injury claims by non-American nationals.

Disposition

Judge Daniels denied Hamdoun’s motion to dismiss under Rules 12(b)(2) and 12(b)(6). The court granted the defendants’ motion to dismiss Ester Lelchook’s individual claims for lack of statutory standing. The Clerk of Court was directed to close the motion listed at ECF No. 75.