19-3970 Freeman v. HSBC Holdings PLC

United States Court of Appeals for the Second Circuit August Term 2020 Argued: February 1, 2021 Decided: January 5, 2023 No. 19-3970

CHARLOTTE FREEMAN, for the Estate of BRIAN S. FREEMAN, KATHLEEN SNYDER, RANDOLPH FREEMAN, G.F., a minor, I.F., a minor, DANNY CHISM, LINDA FALTER, RUSSELL FALTER, for the Estate of SHAWN O. FALTER, SHANNON MILLICAN, for the Estate of JOHNATHON M. MILLICAN, MITCHELL MILLICAN, BILLY WALLACE, STEFANIE WALLACE, D.W., a minor, C.W, A.W., a minor, TRACIE ARSIAGA, CEDRIC HUNT, SR., ROBERT BARTLETT, SHAWN BARTLETT, LISA RAMACI, ISABELL VINCENT, CHARLES VINCENT, GWENDOLYN MORIN-MARENTES, for the Estate of STEVE MORIN, JR., E.M., a minor, AUDREY MORIN, STEVE MORIN, AMY LYNN ROBINSON, FLOYD BURTON ROBINSON, for the Estate of JEREMIAH ROBINSON, DEBORAH NOBLE, for the Estate of CHARLES E. MATHENY, IV, CHARLES E. MATHENY, III, SILVER FARR, PATRICK FARR, for the Estate of CLAY P. FARR, RAYANNE HUNTER, W.H., a minor, T.H., a minor, FABERSHA FLYNT LEWIS, LORENZO SANDOVAL, SR., for the Estate of ISRAEL DEVORA-GARCIA, LORENZO SANDOVAL, JR., H. JOSEPH BANDHOLD, DONALD C. BANDHOLD, NANETTE SAENZ, for the Estate of CARLOS N. SAENZ, JUAN SAENZ, JOHN VACHO, for the Estate of CAROL VACHO, for the Estate of NATHAN J. VACHO, ASHLEY VACHO, JEANETTE WEST, for the Estate of ROBERT H. WEST, SHELBY WEST, DONNA ENGEMAN, SUZZETTEE LAWSON, for the Estate of ISAAC S. LAWSON, C.L., a minor, JUDY ANN CRABTREE, RONALD WAYNE CRABTREE, DEBRA WIGBELS, RONALD WILLIAM CRABTREE, JUDY HUENINK, SEAN SLAVEN, CHASTITY DAWN SLAVEN, NICOLE LANDON, MISTI FISHER, FRED FRIGO, LYNN FOREHAND, LANCE HAUPT, RHONDA HAUPT, TIFANY HAUPT, SABRINA CUMBE, DAVID W. HAINES, DAWN HAINES, C.H., a minor, SANGSOON KIM, MICHELLE KIM, SEOP STEVE KIM, for the Estate of Jang H. Kim, HELEN FRASER, RICHARD FRASER, for the Estate of DAVID M. FRASER, TRICIA ENGLISH, N.W.E., a minor, N.C.E., a minor, A.S.E., a minor, TODD DAILY, for the Estate of SHAWN L. ENGLISH, PHILIP S. FORD, LINDA GIBSON, JOHN GIBSON, DENISE BLOHM, JEREMY BLOHM, JOANNE GUTCHER, TRACY ANDERSON, JEFFREY ANDERSON, ANASTASIA FULLER, A.F., a minor, ANNE F. HARRIS, PAUL D. HARRIS, HYUNJUNG GLAWSON, YOLANDA M. BROOKS, CURTIS GLAWSON, SR., RYAN SABINISH, ANN CHRISTOPHER, for the Estate of KWESI CHRISTOPHER, D.J.F., a minor, AVA TOMSON, for the Estate of LUCAS V. STARCEVICH, RICHARD TOMSON, BRADLEY STARCEVICH, GLENDA STARCEVICH, ARIANA REYES, TRENTON STARCEVICH, KAREN FUNCHEON, for the Estate of ALEXANDER J. FUNCHEON, ROBERT FUNCHEON, HOLLY BURSON-GILPIN, for the Estate of JEROME POTTER, NANCY UMBRELL, MARK UMBRELL, NANCY and MARK UMBRELL, for the Estate of COLBY J. UMBRELL, ILENE DIXON, SHELLEY ANN SMITH, WILLIAM FARRAR, SR., for the Estate of WILLIAM A. FARRAR, TONYA K. DRESSLER, ARDITH CECIL DRESSLER, MELISSA DRESSLER, ELIZABETH BROWN, for the Estate of JOSHUA D. BROWN, MARIAN BROWN, WAYNE BROWN, DANIELLE SWEET, for the Estate of RYAN A. BALMER, A.B., a minor, G.B., a minor, DONNA KUGLICS, for the Estate of MATTHEW J. KUGLICS, LES KUGLICS, EMILY KUGLICS,

2 SYLVIA JOHNSON SPENCER, RAYMOND NIGEL SPENCER, SR., JOHN D. LAMIE, PAULA C. BOBB-MILES, for the Estate of BRANDON K. BOBB, JOHNNY JAVIER MILES, SR., J.J.M., JR., a minor, RACQUEL ARNAE BOBB MILES, URSULA ANN JOSHUA, BRITTANY MARIONIQUE JOSHUA, ASHLEY GUDRIDGE, MARION CRIMENS, TIMOTHY W. ELLEDGE, CHRISTOPHER LEVI, BRENDA HABSIEGER, MICHAEL HABSIEGER, JACOB MICHAEL HABSIEGER, KELLI D. HAKE, for the Estate of CHRISTOPHER M. HAKE, DENICE YORK, RUSSEL YORK, JILL HAKE, PETER HAKE, G.H., a minor, MARIA E. CALLE, KIM MILLER, WALTER BAILEY, CASSANDRA BAILEY, KACEY GILMORE, TERRELL GILMORE, JR., MICHELLE KLEMENSBERG, for the Estate of LARRY R. BOWMAN, HARRY PICKETT, E.C.R., a minor, RACHEL M. GILLETTE, KOUSAY AL-TAIE, for the Estate of AHMED AL-TAIE, ADAM G. STOUT, REBEKAH A. COLDEWE, SCOTT HOOD, PATRICIA SMITH, KATHY STILLWELL, for the Estate of DANIEL CRABTREE, MICHAEL SMITH, CHAD FARR, JACQUELINE A. SMITH, R.J.S., a minor, DAVID HARTLEY, for the Estate of JEFFREY HARTLEY, LINDA PRITCHETT, ALLEN SWINTON, DANIEL FRITZ, TEMIKA SWINTON, MARLYNN GONZALES, T.S., a minor, JULIE CHISM, T.B., a minor, KARI CAROSELLA, MARY JANE VANDEGRIFT, WILLIAM PARKER, SCOTT LILLEY, PAM MARION, KYSHIA SUTTON, DONNIE MARION, JASON SACKETT, PAULA MENKE, ROBERT CANINE, DANIEL MENKE, S.J.S., a minor, MATTHEW MENKE, ADAM WOOD, NICHOLE LOHRING, ROSEMARIE ALFONSO, ANNA KARCHER, K.B., a minor, ANASTASIA FULLER, for the Estate of ALEXANDER H. FULLER, MICHELLE BENAVIDEZ, for the Estate of KENNITH W. MAYNE, DAN DIXON, for the Estate of ILENE DIXON, DANIEL BENAVIDEZ, SR., DAN DIXON, for the Estate of ROBERT J. DIXON, CHRISTINA BIEDERMAN, CYNTHIA DELGADO, DANIEL BENAVIDEZ, JR., KYNESHA DHANOOLAL, JENNIFER MORMAN, MERLESE PICKETT,

3 CHRISTOPHER MILLER, JOHN VANDEGRIFT, ANGIE JACKSON, MEGAN MARIE RICE, TRINA JACKSON, NANCY FUENTES, for the Estate of DANIEL A. FUENTES, S.J., a minor, NOALA Fritz, for the Estate of LYLE FRITZ, GREGORY BAUER, NOALA FRITZ, THERESA DAVIS, TIFFANY M. LITTLE, LINDA DAVID, for the Estate of TIMOTHY A. DAVID, MICHELLE KLEMENSBERG, MICHAEL DAVID, KOUSAY AL-TAIE, DONNA LEWIS, TIMOTHY KARCHER, KENNETH J. DREVNICK, ELIZABETH CHISM, for the Estate of JONATHAN B. CHISM, TONYA LOTTO, TABITHA MCCOY, for the Estate of STEVE A. MCCOY, JERRY L. MYERS, KATHY STILLWELL, THERESA HART, ROBERTO ANDRADE, SR., WAYNE NEWBY, ROBI ANN GALINDO, VERONICA HICKMAN, RYANNE HUNTER, for the Estate of WESLEY HUNTER, DAVID EUGENE HICKMAN, DEBRA LEVI, DEVON FLETCHER HICKMAN, CORTEZ GLAWSON, REBECCA J. OLIVER, LINDA JONES, J.L., a minor, ARMANDO FUENTES, WOOD MEGAN, SEAN ELLIOTT, GILBERT ARSIAGA, JR., EDNA LUZ BURGOS, ADRIAN MCCANN, ERIK ROBERTS, FRANK LILLEY, N.T., a minor, HARRY RILEY BOCK, COLIN ROBERTS, JILL ANN BOCK, ROBIN ROBERTS, BRETT COKE, CHASTITY DAWN LAFLIN, M.C., a minor, T.M., a minor, MEGHAN PARKER- CROCKETT, KERI COTTON, JANET JONES, JULIO FUENTES, WESLEY WILLIAMSON, DANIEL C. OLIVER, J.L., a minor, TRAVIS GIBSON, DEBBIE BEAVERS, GEORGE J. WHITE, ERIC LEVI, JOHNNY WASHBURN, DAN DIXON, DAKOTA SMITH- LIZOTTE, R.N.R., a minor, GEORGE ARSIAGA, JOHN MCCULLY, HATHAL K. TAIE, JAMES SMITH, C.F., a minor, ANTHONY ALDERETE, AMANDA B. ADAIR, MICHAEL J. MILLER, NICHOLAS BAUMHOER, STEVE MORIN, SR., KIMBERLEY VESEY, ZACHARY HAKE, CASSIE COLLINS, GEORGE D. WHITE, CARA ROBERTS, M.T., a minor, STEPHANIE MCCULLY, T.F., a minor, TERREL CHARLES BARTLETT, CORY SMITH, A.B., a minor, EVAN KIRBY, JUDY HUENINK, for the Estate of BENJAMIN J. SLAVEN,

4 CARROL ALDERETE, B.D., a minor, NANCY FUENTES, JOHN VANDEGRIFT, for the Estate of MATTHEW R. VANDEGRIFT, D.J.F., a minor, CYNTHIA DELGADO, for the Estate of GEORGE DELGADO, MACKENZIE HAINES, NATALIA WHITE, CYNTHIA THORNSBERRY, K.W., a minor, MEGAN MARIE RICE, for the Estate of ZACHARY T. MYERS, R.M., a minor, STEPHANIE GIBSON WEBSTER, CHRISTINA SMITH, DEBBIE SMITH, JEFFREY D. PRICE, CASSIE SMITH, HARRY CROMITY, JAMES CRAIG ROBERTS, MARVIN THORNSBERRY, L.T., a minor, SKYLAR HAKE, VIVIAN PICKETT, ANDREW TOMSON, FLORA HOOD, PATRICIA MONTGOMERY, PATRICIA ARSIAGA, for the Estate of JEREMY ARSIAGA, DON JASON STONE, MATTHEW ARSIAGA, ALESIA KARCHER, LAWRENCE KRUGER, AUDREY KARCHER, THOMAS SMITH, SHAYLYN C. REECE, ANDREW LUCAS, JOHN SACKETT, SHAULA SHAFFER, NOALA FRITZ, for the Estate of JACOB FRITZ, SHYANNE SMITH-LIZOTTE, MEGAN PEOPLE, NATHAN NEWBY, R.M., a minor, TONY GONZALES, KATHERINE MCRILL-FELLINI, VICTORIA DENISSE ANDRADE, KRISTY KRUGER, JOEDI WOOD, AUSTIN WALLACE, TAMMY VANDERWAAL, ANGELICA ANDRADE, BRIAN NEUMAN, ESTHER WOLFER, SAMANTHA TOMSON, MATTHEW LILLEY, BRYAN MONTGOMERY, ANGEL MUNOZ, KEMELY PICKETT, MARIAH SIMONEAUX, JAMES CANINE, VANESSA CHISM, A.K., a minor, RAYMOND MONTGOMERY, DONNA ENGEMAN, for the Estate of JOHN W. ENGEMAN, CAROL KRUGER, NAWAL AL-TAIE, MEGAN SMITH, LEONARD WOLFER, TIM LUCAS, DAVID NOBLE, MARSHA NOVAK, EMILY LEVI, TONY WOOD, E.C.R., a minor, DONNA LEWIS, for the Estate of JASON DALE LEWIS, KIERRA GLAWSON, ETHAN FRITZ, STEPHANIE HOWARD, RUSSELL C. FALTER, KYNESHA DHANOOLAL, for the Estate of DAYNE D. DHANOOLAL, DOUGLAS KRUGER, L.M., a minor, BRIAN COKE, PRESTON SHANE REECE, JEAN MARIANO, A.L.R., a minor, CASSIE COLLINS, for the

5 Estate of SHANNON M. SMITH, G.L., a minor, ERIKA NEUMAN, MICHAEL LUCAS, CALVIN CANINE, DIXIE FLAGG, BASHAR AL-TAIE, MARJORIE FALTER, JOLENE LILLEY, VICTORIA PENA ANDRADE, TIFFANY M. LITTLE, for the Estate of KYLE A. LITTLE, ELIZABETH CHISM, TAMARA RUNZEL, K.L., a minor, MARLEN PICKETT, TABITHA MCCOY, SHILYN JACKSON, KIMBERLEE AUSTIN-OLIVER, SYLVIA MACIAS, MERLESE PICKETT, for the Estate of EMMANUEL PICKETT, DAVID LUCAS,

Plaintiffs-Appellants,

v.

HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC BANK MIDDLE EAST LIMITED, HSBC BANK USA, N.A., BARCLAYS BANK PLC, STANDARD CHARTERED BANK, ROYAL BANK OF SCOTLAND, N.V., CREDIT SUISSE, BANK SADERAT PLC, JOHN DOES 1–50, COMMERZBANK AG,

Defendants-Appellees. *

Appeal from the United States District Court for the Eastern District of New York No. 14-cv-6601, Pamela K. Chen, Judge.

* The Clerk of Court is respectfully directed to amend the official case caption as set forth above.

6 Before: JACOBS, SULLIVAN, Circuit Judges, and BROWN, District Judge. †

Plaintiffs-Appellants are U.S. service members wounded in terrorist attacks in Iraq and the families and estates of service members killed in such attacks. They appeal from the dismissal of their claims under the Antiterrorism Act (the “ATA”),

Stat. 2250–53 (1990), as amended by the Justice Against Sponsors of Terrorism Act (the “JASTA”),

Stat. 852–56 (2016), against various financial institutions in the United States and abroad (the “Banks”). As relevant to this appeal, Plaintiffs allege that the Banks conspired with and aided and abetted Iranian entities to circumvent sanctions imposed by the United States and channel funds to terrorist groups that killed or injured U.S. service members. The district court (Chen, J.) dismissed Plaintiffs’ JASTA conspiracy claims primarily because Plaintiffs failed to plausibly plead a direct connection between the Banks and the terrorist groups. The district court also declined to consider Plaintiffs’ JASTA aiding-and-abetting claims because they were raised for the first time in Plaintiffs’ motion for reconsideration.

Although we disagree with the district court’s primary reason for dismissing Plaintiffs’ JASTA conspiracy claims, we AFFIRM the district court’s judgment because Plaintiffs failed to adequately allege that the Banks conspired – either directly or indirectly – with the terrorist groups, or that the terrorist attacks that killed or injured the service members were in furtherance of the alleged conspiracy to circumvent U.S. sanctions. We agree with the district court that Plaintiffs forfeited their JASTA aiding-and-abetting claims by raising them for the first time in a motion for reconsideration.

Judge Jacobs concurs in a separate opinion.

AFFIRMED.

†Judge Gary R. Brown, of the United States District Court for the Eastern District of New York, sitting by designation.

7 PETER RAVEN-HANSEN, George Washington University Law School, Washington, DC (Gary M. Osen, Ari Ungar, Michael Radine, Dina Gielchinsky, Aaron A. Schlanger, Osen LLC, Hackensack, NJ, on the brief), for Plaintiffs-Appellants.

ANDREW J. PINCUS, Mayer Brown LLP, Washington, DC (Mark G. Hanchet, Robert W. Hamburg, Mayer Brown LLP, New York, NY, on the brief), for Defendants-Appellees HSBC Holdings PLC, HSBC Bank PLC, HSBC Bank Middle East Limited, and HSBC Bank USA, N.A.

Marc R. Cohen, Alex C. Lakatos, Mayer Brown LLP, Washington, DC, for Defendant- Appellee Credit Suisse.

Alexis Collins, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC; Jonathan I. Blackman, Carmine D. Boccuzzi, Jr., Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Defendant-Appellee Commerzbank AG.

Michael T. Tomaino, Jr., Jeffrey T. Scott, Sullivan & Cromwell LLP, New York, NY, for Defendant-Appellee Barclays Bank PLC.

Sharon L. Nelles, Andrew J. Finn, Bradley P. Smith, Sullivan & Cromwell LLP, New York, NY, for Defendant-Appellee Standard Chartered Bank.

Robert G. Houck, Clifford Chance US LLP, New York, NY, for Defendant-Appellee Royal Bank of Scotland, N.V.

8 Stephen I. Vladeck, Austin, TX, for Amici Curiae Law Professors in support of Plaintiffs- Appellants.

Michael A. Petrino, Jonathan E. Missner, Stein Mitchell Beato & Missner LLP, Washington, DC, for Amici Curiae Eight United States Senators in support of Plaintiffs-Appellants.

Arthur H. Bryant, Bailey & Glasser LLP, Oakland, CA; Joshua I. Hammack, Bailey & Glasser LLP, Washington, DC, for Amici Curiae Retired Generals of the U.S. Armed Forces in support of Plaintiffs-Appellants.

Marc J. Gottridge, Lisa J. Fried, Benjamin A. Fleming, Hogan Lovells US LLP, New York, NY, for Amici Curiae the Institute of International Bankers, the American Bankers Association, the Chamber of Commerce of the United States of America, and the European Banking Federation in support of Defendants-Appellees.

RICHARD J. SULLIVAN, Circuit Judge:

Plaintiffs-Appellants – U.S. service members wounded in terrorist attacks in

Iraq and the families and estates of service members killed in such attacks – appeal

from a judgment of the district court (Chen, J.) dismissing their claims under the

Antiterrorism Act (the “ATA”),

Stat. 2250–53 (1990), as

9 amended by the Justice Against Sponsors of Terrorism Act (the “JASTA”),

Stat. 852–56 (2016). As relevant to this appeal, Plaintiffs allege

that Defendants-Appellees, which are U.S. and international financial institutions

(collectively, the “Banks”), are liable under JASTA’s conspiracy and

aiding-and-abetting provisions,

, 130 Stat. at 854, codified

at

(d)(2), for helping Iranian banks and institutions circumvent

U.S. sanctions against Iran. 1 The district court dismissed Plaintiffs’ JASTA

conspiracy claims primarily because Plaintiffs failed to plausibly plead a direct

connection between the Banks and the terrorist groups responsible for killing or

injuring Plaintiffs. The district court also declined to consider Plaintiffs’ JASTA

aiding-and-abetting claims because they were raised for the first time in Plaintiffs’

motion for reconsideration.

Although we disagree with the district court’s primary reason for

dismissing the Plaintiffs’ JASTA conspiracy claims, we AFFIRM the district

court’s judgment because Plaintiffs failed to adequately allege that the Banks

conspired – either directly or indirectly – with the terrorist groups, or that the

1The Banks include HSBC Holdings PLC, HSBC Bank PLC, HSBC Bank Middle East Limited, HSBC Bank USA, N.A. (collectively, “HSBC”); Barclays Bank PLC (“Barclays”); Standard Chartered Bank (“Standard Chartered”); Royal Bank of Scotland, N.V. (“RBS”); Credit Suisse; and Commerzbank AG (“Commerzbank”).

10 terrorist attacks that killed or injured the service members were in furtherance of

the conspiracy to circumvent U.S. sanctions. We agree with the district court that

Plaintiffs forfeited their JASTA aiding-and-abetting claims by raising them for the

first time in a motion for reconsideration.

I. BACKGROUND

In their operative pleading (the “Complaint”), Plaintiffs identify ninety-two

terrorist attacks – all carried out by Iraqi Shi’a militias – that killed or injured U.S.

service members, including Plaintiffs. The Complaint alleges that these Iraqi

militias were trained and armed by U.S.-designated Foreign Terrorist

Organizations (“FTOs”), including Hezbollah and the Islamic Revolutionary

Guard Corps (the “IRGC”). According to the Complaint, Hezbollah and the IRGC,

in turn, were supported with funding and weapons by the Iranian government

through various state-controlled entities. These Iranian entities included the

Islamic Republic of Iran Shipping Lines (“IRISL”), a state-owned shipping

company that Plaintiffs allege has “a long history of facilitating arms shipments

on behalf of the IRGC,” J. App’x at 373 ¶ 197; the National Iranian Oil Company

(“NIOC”), a state-owned oil company that provided support to the IRGC –

including by using its own helicopters to conduct surveillance on U.S. forces and

11 allies along the Iranian border; and Mahan Air, a privately-operated Iranian airline

that the U.S. Treasury Department designated as a Specially Designated Global

Terrorist (“SDGT”) in 2011 for transporting personnel, weapons, and goods for

Hezbollah and the IRGC.

Plaintiffs allege that, because of the weakness of Iran’s domestic currency,

the Iranian government relied on access to U.S. dollars to finance its terrorism

network. Since 1995, the United States has enacted a series of sanctions designed

to prevent Iran from using U.S. dollars to finance terrorism. See, e.g., Exec. Order

No. 12,959,

(May 6, 1995). Nevertheless, to avoid crippling

Iran’s legitimate economic activities, the U.S. government established the so-called

“U-Turn exemption,” which permitted U.S. banks to process transactions to and

from Iran so long as (1) non-U.S., non-Iranian banks acted as intermediaries

between the U.S. banks and Iranian counterparties; (2) none of the Iranian

counterparties were sanctioned entities; and (3) the payment information was

transparent, so that the transactions could be readily monitored by U.S. banks and

regulators. See

(1995); see also Kemper v. Deutsche Bank AG, 911

, 387–88 (7th Cir. 2018) (describing the U-Turn exemption). 2 Aside from

limiting Iran’s access to U.S. dollars, the United States also established regulations

prohibiting trade with Iran involving certain types of military articles, such as

nuclear weapons, conventional-weapons systems, and dual-use products

(collectively, the “Iran Trade Regulations”).

The Complaint alleges two principal types of activity that furthered Iran’s

financial support of terrorism. First, Plaintiffs allege that the Banks helped conceal

identifying information from wire transfers to and from several Iranian banks,

including Bank Saderat PLC (“Saderat”), 3 by (1) “stripping” identifying

information from the wire transfer messages of the Society for Worldwide

Interbank Financial Telecommunications (“SWIFT”), the medium used for most

international money transfers; and (2) using an alternate form of SWIFT message

that contained less information about the counterparties than the standard

message used for international money transfers. According to the Complaint,

2In 2008, the U.S. government revoked the U-Turn exemption because it suspected Iran of using the exemption to finance its nuclear-weapons and missile programs. See

(Nov. 10, 2008). 3 Saderat was named as a defendant in the Complaint and initially joined this appeal. However, Saderat’s attorneys subsequently withdrew from their representation on appeal. On January 10, 2020, Saderat, as a pro se corporation, was deemed in default of this appeal and was precluded from submitting a brief. See Doc. No. 30 (citing Berrios v. N.Y. City Hous. Auth.,

, 132–33 (2d Cir. 2009)).

13 these practices allowed Iranian banks to transfer hundreds of millions of dollars

to terrorist organizations without detection by U.S. banks and bank regulators.

Second, Plaintiffs allege that the Banks helped various Iranian entities such as

IRISL, NIOC, and Mahan Air obtain letters of credit that concealed their identity,

thereby allowing them to circumvent the Iran Trade Regulations and acquire

prohibited goods, technologies, and weapons.

Plaintiffs claim that the Banks undertook these transactions despite being

aware of, or deliberately indifferent to, the fact that the Iranian banks and entities

“engaged in money laundering on behalf of a State Sponsor of Terrorism,” J. App’x

at 347 ¶ 49, and “assisted Iran, the IRGC, IRISL, Mahan Air, Hezbollah, and/or the

[Iraqi militias] in committing the acts of international terrorism,”

at 402 ¶ 360.

On November 10, 2014, Plaintiffs commenced this action under the ATA,

asserting claims under

(a) on a theory of primary liability. On

September 28, 2016, Congress passed JASTA, which amended the ATA to permit

claims against third parties that aided and abetted an act of international terrorism

or conspired with a person who committed an act of international terrorism. See

, 130 Stat. at 854, codified at

(d)(2).

14 Congress made JASTA’s secondary-liability provision retroactive to all cases

pending at the time of the enactment. See

, 130 Stat. at 855.

Nevertheless, Plaintiffs did not seek to amend the Complaint after the

passage of JASTA. Rather, in response to the Banks’ renewed motion to dismiss

under Rule 12(b)(6) of the Federal Rules of Civil Procedure, Plaintiffs argued that

JASTA’s secondary liability for conspiracy provided an alternative ground of relief

for the Complaint’s allegations under section 2333(a). The district court referred

the motion to Magistrate Judge Cheryl L. Pollak, who recommended denying the

motion in its entirety. Judge Pollak concluded that with respect to Plaintiffs’

conspiracy claims, the Complaint adequately alleges that the Banks joined a

conspiracy to finance and enrich Iranian terror proxies, and that the ninety-two

terrorist attacks that injured or killed Plaintiffs were both within the scope and

foreseeable risks of the conspiracy.

The district court declined to adopt Judge Pollak’s report and

recommendation, and instead granted the Banks’ motion to dismiss. The district

court explained that “the plain text of JASTA’s conspiracy[-]liability provision

requires that a defendant conspire directly with the person or entity that

committed the act of international terrorism that injured the plaintiff.” Freeman v.

15 HSBC Holdings PLC (Freeman I),

, 99 n.41 (E.D.N.Y. 2019).

According to the district court, the Complaint merely alleges that Hezbollah and

the IRGC, “acting through agents and proxies, are the entities responsible for

committing the acts of international terrorism that injured Plaintiffs.”

at 97–98.

Finding “not a single allegation in the [Complaint] that any of the [Banks] directly

conspired with Hezbollah or the IRGC” or “that any of [the Banks’] alleged

coconspirators, e.g., the Iranian banks, IRISL, NIOC, or Mahan Air, directly

participated in the attacks that injured Plaintiffs,” the district court concluded that

“Plaintiffs have failed to adequately allege the threshold requirements” for their

secondary-liability claims. 4

Plaintiffs then moved for reconsideration, arguing,

among other things, that the district court failed to analyze Plaintiffs’ claims under

JASTA’s aiding-and-abetting theory. The district court denied Plaintiffs’ motion,

explaining that “[n]owhere in any of [Plaintiffs’] submissions” did they assert a

claim under an aiding-and-abetting theory, even after the passage of JASTA.

Sp. App’x. at 92. This appeal followed. 5

4The district court also stated in a footnote “that the [Complaint] fails to sufficiently allege a JASTA conspiracy for the same reasons discussed earlier in the primary[-]liability section.” Freeman I, 413 F. Supp. 3d at 96 n.36. 5On appeal, Plaintiffs do not challenge the district court’s dismissal of their primary-liability claims.

16 II. STANDARD OF REVIEW

“We review de novo a district court’s dismissal of a complaint under

Rule 12(b)(6),” Honickman v. BLOM Bank SAL,

(2d Cir. 2021), and

may affirm the district court’s dismissal “on any ground that finds support in the

record,” Dettelis v. Sharbaugh,

(2d Cir. 2019). “To survive a motion

to dismiss, a complaint must contain sufficient factual matter, accepted as true, to

state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,

(2009) (internal quotation marks omitted).

III. DISCUSSION

Plaintiffs challenge the district court’s dismissal of their JASTA conspiracy

claims and its decision to not consider their JASTA aiding-and-abetting claims.

We address each challenge in turn.

A. Plaintiffs Failed to Plausibly State a JASTA Conspiracy Claim

The district court dismissed Plaintiffs’ JASTA conspiracy claims primarily

because the Complaint failed to plausibly allege that the Banks conspired directly

with the terrorist groups that killed or injured U.S. service members. Although

we disagree with the district court’s primary reason for dismissal, we affirm its

decision because Plaintiffs have not adequately alleged that the Banks conspired –

either directly or indirectly – with the terrorist groups that carried out the attacks,

17 or that the terrorist attacks that killed or injured the service members were in

furtherance of the Banks’ alleged conspiracy with Iranian entities to circumvent

U.S. sanctions.

1. JASTA’s Secondary-Liability Provision Extends Liability to Any Person Who Conspires with a Person Who Commits an Act of International Terrorism

In 1992, Congress enacted the core provisions of the ATA. See

, 106 Stat. 4521–24 (1992), codified at 18 U.S.C. §§ 2331–2338.

As relevant to this appeal, the ATA added

(a), which provides:

Any national of the United States injured in his or her person, property, or business by reason of an act of international terrorism, or his or her estate, survivors, or heirs, may sue therefor in any appropriate district court of the United States and shall recover threefold the damages he or she sustains and the cost of the suit, including attorney’s fees.

(a). The ATA further defines “international terrorism” as activities

that:

(A) involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State . . . ;

(B) appear to be intended ––

(i) to intimidate or coerce a civilian population;

(ii) to influence the policy of a government by intimidation or coercion; or

18 (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and

(C) occur primarily outside the territorial jurisdiction of the United States.

§ 2331(1)(A)–(C). This original version of the ATA established primary liability

for those who committed an act of international terrorism. But it did not expressly

provide for secondary liability – liability for those who aided and abetted or

conspired with the primary wrongdoers. See Rothstein v. UBS AG,

(2d Cir. 2013).

This changed in 2016, when Congress amended the ATA through JASTA.

See

Stat. at 852–56. The JASTA amendments added a new

provision, codified at

(d)(2), that explicitly recognized secondary

liability – aiding-and-abetting and conspiracy – for a claim brought under

section 2333(a). Specifically, JASTA’s secondary-liability provision states:

In an action under [section 2333(a)] for an injury arising from an act of international terrorism committed, planned, or authorized by an organization that has been designated as a foreign terrorist organization under section 219 of the Immigration and Nationality Act (8 U.S.C. [§] 1189), as of the date on which such act of international terrorism was committed, planned, or authorized, liability may be asserted as to any person who aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism.

19

(d)(2). A “person” who commits an act of international terrorism –

as used in this provision – can “include corporations, companies, associations,

firms, partnerships, societies, and joint stock companies, as well as individuals.”

; see also

(d)(1) (incorporating this definition of

“person”).

In JASTA’s “Purpose” section, Congress explained that the purpose of the

amendments was “to provide civil litigants with the broadest possible basis,

consistent with the Constitution of the United States, to seek relief against persons,

entities, and foreign countries . . . that have provided material support, directly or

indirectly, to foreign organizations or persons that engage in terrorist activities

against the United States.”

(b), 130 Stat. at 853. Congress also

took the unusual step of specifying a decision from the D.C. Circuit, Halberstam v.

Welch,

(D.C. Cir. 1983), as one that provides “the proper legal

framework for how [civil aiding-and-abetting and conspiracy] liability should

function in the context of” the ATA as amended by JASTA.

(a)(5), 130 Stat. at 852. As Congress indicated, Halberstam has been recognized

as a “leading case regarding [f]ederal civil aiding[-]and[-]abetting and conspiracy

liability, including by the Supreme Court of the United States” and this Court. Id.;

20 see, e.g., Beck v. Prupis,

(2000); Hecht v. Com. Clearing House, Inc.,

, 25 n.3 (2d Cir. 1990).

Halberstam addressed whether the defendant, Linda Hamilton, could be

held civilly liable, under a theory of aiding and abetting or as a coconspirator, for

the killing of Michael Halberstam by Hamilton’s long-term business and romantic

partner, Bernard Welch. See

. Welch killed Halberstam during a

burglary – one of many burglaries that Welch had committed over the course of

five years. See

But while Hamilton was not present during the burglary, and

was not even aware of the burglary at the time it took place, she had helped Welch

fence and manage his inventory of stolen goods over the years and “knew full well

the purpose of Welch’s evening forays and the means by which she and Welch had

risen from rags to riches in a relatively short period of time,” “clos[ing] neither her

eyes nor her pocketbook to the reality of the life she and Welch were living.”

(alteration and internal quotation marks omitted). One of the primary issues

before the court in Halberstam was therefore “to what extent . . . [a] secondary

defendant [can] be liable for another tortious act (murder) committed by the

primary tortfeasor while pursuing the underlying tortious activity.”

.

21 In an opinion by Judge Wald, for a panel that included Judge Bork and

then-Judge Scalia, the D.C. Circuit held that Hamilton could be held civilly liable

for Halberstam’s murder, both on a theory of aiding and abetting and as a

coconspirator.

at 487–89. With respect to conspiracy, the court explained that

the elements required to establish civil liability for a conspiracy are:

(1) an agreement between two or more persons; (2) to participate in an unlawful act, or a lawful act in an unlawful manner; (3) an injury caused by an unlawful overt act performed by one of the parties to the agreement; (4) which overt act was done pursuant to and in furtherance of the common scheme.

. The court went on to explain that, in contrast to a criminal conspiracy,

“the agreement in a civil conspiracy does not assume the same importance it does

in a criminal action,” and that “[p]roof of a tacit, as opposed to explicit,

understanding is sufficient to show agreement.”

As such, a civil conspirator

“can be liable even if he neither planned nor knew about the particular overt act

that caused injury, so long as the purpose of the act was to advance the overall

object of the conspiracy.”

.

The Halberstam court affirmed the district court’s conclusion that Hamilton

could be held civilly liable for Halberstam’s murder as a coconspirator because

(1) “Hamilton and Welch agreed to undertake an illegal enterprise to acquire

22 stolen property,” and (2) “Welch’s killing of Halberstam during a burglary was an

overt act in furtherance of the agreement.”

In reaching this conclusion, the

court emphasized that “Welch was trying to further the conspiracy by escaping

after an attempted burglary, and he killed Halberstam in his attempt to do so.”

Because “[t]he use of violence to escape apprehension was certainly not outside

the scope of a conspiracy to obtain stolen goods through regular nighttime forays

and then to dispose of them,” the court concluded that Hamilton was civilly liable

for that violence. Id.

2. The District Court Erred in Concluding That JASTA Required Plaintiffs to Allege that the Banks Conspired Directly with Terrorist Organizations

Applying Halberstam to this case, the district court found that the Complaint

failed to state a JASTA conspiracy claim because it did not contain “a single

allegation . . . that any of the [Banks] directly conspired with Hezbollah or the

IRGC,” the two entities “responsible for committing the acts of international

terrorism that injured Plaintiffs.” Freeman I, 413 F. Supp. 3d at 98. The district

court explained that although JASTA added conspiracy liability to the ATA,

“Congress significantly limited that secondary liability to defendants who

conspired with” the person who committed an act of international terrorism. Id.

at 94 n.35. The Banks press this interpretation of section 2333(d)(2) on appeal,

23 arguing that the phrase “conspires with” demands “that the defendant interact

with the terrorist attacker.” Banks’ Br. at 14–15. We conclude that this narrow

construction of section 2333(d)(2) is unsupported by the text and structure of

JASTA and runs counter to basic principles of conspiracy liability.

First, the word “directly” is absent from JASTA. The text of the statute

plainly provides that “liability may be asserted as to any person . . . who conspires

with the person who committed such an act of international terrorism,” without

requiring a direct connection between the Banks and terrorist attackers.

(d)(2) (emphasis added). The Banks attempt to shoehorn the “proximity

requirement” into the word “with.” Banks’ Br. at 18. But from a linguistic

standpoint, it is difficult to attach great significance to Congress’s use of the

preposition “with” after “conspires.” In the context of section 2333(d)(2), the terms

“aids” and “abets” are both transitive verbs, which do not require a preposition to

link them to the phrase “the person who committed such an act of international

terrorism.” See Bryan A. Garner, Garner’s Modern English Usage 1035 (4th ed. 2016).

By contrast, the term “conspires” – as used in the statute – is an intransitive verb,

after which a preposition is necessary. See

. The word “with,” therefore,

does not circumscribe the scope of JASTA conspiracy liability; it is simply the

24 natural way of linking the verb “conspires” to the remainder of the text. As

Justice Cardozo observed nearly a century ago, “[i]t is impossible in the nature of

things for a man to conspire with himself,” since one necessarily conspires with

other people. Morrison v. California,

(1934).

Second, under well-settled principles of conspiracy law, “[t]here is no

requirement that each member of a conspiracy conspire directly with every other

member of it, or be aware of all acts committed in furtherance of the conspiracy,

or even know every other member.” United States v. Rooney,

(2d Cir.

1989) (citation omitted). Indeed, a standard formulation of the jury instruction for

such crimes makes clear that “to become a member of the conspiracy, the

defendant need not have known the identities of each and every other member,

nor need he have been apprised of all of their activities.” 2 Leonard B. Sand et al.,

Modern Federal Jury Instructions – Criminal ¶ 19.01 (2021). That is also the law of

this Circuit. See United States v. Labat,

(2d Cir. 1990) (“The defendant

need not know the identities of all of the other conspirators.”).

By way of example, in United States v. Bicaksiz,

(2d Cir. 1999),

we upheld the sufficiency of a defendant’s conviction for conspiring to commit a

murder for hire, even though the defendant never met his coconspirators and

25 coordinated through an intermediary who turned out to be a non-conspiring

government informant. See

. We explained that even though the

defendant and one of his coconspirators “were unaware of each other’s identity,

there [was] sufficient evidence in the record for the jury to have reasonably found

that each was aware of an unknown participant playing an assigned and

understood role in furtherance of the criminal venture.”

This same rationale applies to a JASTA conspiracy claim. So long as the

defendant and the “person” – which can include an entity or association – carrying

out the act of international terrorism are part of a common conspiracy, there is

nothing in the text or structure of JASTA requiring that they meet, communicate,

or interact for the defendant to be held liable for his coconspirator’s actions. This

conclusion is further reinforced by the fact that the elements of civil conspiracy

articulated in Halberstam – “(1) an agreement between two or more persons; (2) to

participate in an unlawful act . . . ; (3) an injury caused by an unlawful overt act

performed by one of the parties to the agreement; (4) which overt act was done

pursuant to and in furtherance of the common scheme” – make no mention of

directness.

.

26 The Concurrence agrees with the district court and would hold that JASTA

requires a direct link between the Banks and the terrorist groups. After surveying

statutes in the United States Code that contain the phrases “conspire with” or

“conspire to,” the Concurrence observes that “JASTA stands alone as the only

statute that prohibits defendants from conspiring ‘with’ a specific person or

category of persons.” Concurrence at 3.

But this is a distinction without a difference. The fact that JASTA limits its

reach to conspiracies that include a specified “category of persons” does not

suggest that a defendant must interact directly with such “category of persons.”

Again, “directly” is nowhere to be found on the face of the statute, and

well-established principles of conspiracy law do not require “that each member of

a conspiracy conspire directly with every other member of it.” Rooney,

. Indeed, by ignoring JASTA’s text and black-letter conspiracy law, the

Concurrence’s narrow construction would absolve terrorist facilitators from

liability as long as they interact with terrorist perpetrators through an

intermediary. That result would be a drastic distortion of JASTA, as Congress

made clear in enacting the statute that its purpose was to provide civil litigants

with the “broadest possible basis . . . to seek relief against persons, entities, and

27 foreign countries . . . that have provided material support, directly or indirectly, to

foreign organizations or persons that engage in terrorist activities against the

United States.”

(b), 130 Stat. at 853 (emphasis added). 6

We therefore see no reason to conclude that a JASTA conspiracy claim

requires a direct connection between the defendant and the person who commits

an act of international terrorism. To hold otherwise would require us to read

“directly” into the plain text of the statute, defy well-established principles of

conspiracy law, and risk shielding avowed terrorists and terrorist facilitators from

liability simply because they did not have direct dealings with those who

detonated explosive devices – something that is clearly inconsistent with JASTA’s

stated purpose.

6Contrary to the Banks’ position in their Rule 28(j) letter, this Court’s opinion in Kaplan v. Lebanese Canadian Bank,

(2d Cir. 2021), does not compel us to adopt the district court’s narrow reading of JASTA. While it is true that Kaplan makes a passing reference to the word “with” in assessing the language of the aiding-and-abetting provision of section 2333(d)(2),

, Kaplan did not involve a JASTA conspiracy claim. To the extent that Kaplan purported to interpret the term “conspires with,” it was pure dicta. Moreover, Kaplan recognized that JASTA has the statutorily codified purpose of “provid[ing] civil litigants with the broadest possible basis” to seek damages against organizations responsible for “terrorist activities against the United States, whether directly or indirectly.”

(internal quotation marks omitted) (citing JASTA,

(b), 130 Stat. at 853). Surely, that purpose was not limited to the aiding-and-abetting prong of section 2333(d)(2).

28 3. Plaintiffs Failed to Allege That the Banks Conspired with Terrorist Organizations

Although the district court erred in requiring Plaintiffs to allege a “direct”

connection between the Banks and the terrorist organizations that perpetrated the

acts of violence in question, we nevertheless find that Plaintiffs have not

sufficiently alleged a JASTA conspiracy claim because the Complaint is devoid of

any fact suggesting that the Banks conspired – either directly or indirectly – with the

terrorist perpetrators. As discussed, to assert a conspiracy claim under JASTA, a

plaintiff must plead “an agreement between two or more persons . . . to participate

in an unlawful act” and an “injury caused by an unlawful overt act performed by

one of the parties to the agreement.” Halberstam,

(emphasis added).

While courts may “infer an agreement from indirect evidence in most civil

conspiracy cases,”

, a complaint must nonetheless allege that the

coconspirators were “pursuing the same object,”

; see also N. Am. Soccer

League, LLC v. U.S. Soccer Fed’n, Inc.,

(2d Cir. 2018) (“Proof of a

conspiracy” requires “direct or circumstantial evidence that reasonably tends to

prove a conscious commitment to a common scheme designed to achieve an

unlawful objective.” (alteration and internal quotation marks omitted)); United

States v. Parker,

(2d Cir. 2009) (“[U]nless at least two persons have

29 a shared purpose or stake in the promotion of an illegal objective, there is no

conspiracy.”); Int’l Distrib. Ctrs., Inc. v. Walsh Trucking Co.,

, 793 (2d Cir.

1987) (“[C]onspirators [must have] a unity of purpose or a common design and

understanding.”).

Here, the Complaint fails to allege that the Banks and the terrorist groups

shared any “common intent.” Halberstam,

. As to the Banks, the

Complaint states that they “shared the common goal of . . . providing Iran and the

Iranian [b]ank[s] . . . the ability to illegally transfer billions of dollars (undetected)

through the United States.” J. App’x at 398 ¶ 344. With respect to the terrorist

groups, the Complaint asserts that they “actively engaged in planning and

perpetrating the murder and maiming of hundreds of Americans in Iraq.”

at 403 ¶ 359. Nowhere in the Complaint, however, do Plaintiffs plead that the

Banks intended to kill or injure U.S. service members in Iraq, or that the terrorist

groups agreed to help the Banks and Iranian entities evade U.S. sanctions. In the

absence of any allegation that the Banks and the terrorist groups “engaged in a

common pursuit,” Halberstam,

, we cannot identify “an[y]

agreement” that could form the basis of a JASTA conspiracy between the Banks

and the terrorist groups, whether they conspired directly or indirectly with one

30 another,

; see also Bernhardt v. Islamic Republic of Iran,

(D.C. Cir. 2022) (holding that “Bernhardt’s conspiracy claim [against HSBC] is

inadequate” because “[t]he complaint states that HSBC was trying to make

substantial profits by evading sanctions, whereas al-Qaeda sought to terrorize the

U.S. into retreating from the world stage” (internal quotation marks omitted)).

4. Plaintiffs Likewise Failed to Allege an Overt Act in Furtherance of the Common Scheme

Aside from Plaintiffs’ failure to adequately allege an agreement between the

Banks and the terrorist groups, we also cannot find that the ninety-two terrorist

attacks alleged in the Complaint furthered a conspiracy in which the Banks were

participants. Under Halberstam, a plaintiff asserting a civil conspiracy claim must

adequately plead that their injuries were caused by “an unlawful overt act” done

“in furtherance of the [coconspirators’] common scheme.” Halberstam,

. In this case, the Complaint defines “the Conspiracy” as “six Western

international banks . . . knowingly conspir[ing] with Iran and its banking

agents . . . to evade U.S. economic sanctions, conduct illicit trade-finance

transactions, and disguise financial payments to and from

U.S. dollar-denominated accounts.” J. App’x at 335 ¶ 6. The Complaint also

alleges that Plaintiffs were “killed and injured by reason of acts of international

31 terrorism perpetrated by Iran through its agents.”

at 403 ¶ 361. Notably absent

from the Complaint, however, are allegations of ways by which the “acts of

international terrorism” furthered “the Conspiracy.” Rather, the Complaint

alleges only that “[t]he Conspiracy was . . . a significant factor in the chain of events

leading to Plaintiffs’ deaths and injuries,”

at 402 ¶ 360, without explaining how

the terrorist attacks “advance[d] the overall object of the conspiracy” – the evasion

of U.S. sanctions against Iran, Halberstam,

.

On appeal, Plaintiffs do not contend that the ninety-two terrorist attacks

furthered the conspiracy to evade U.S. sanctions; instead, they argue that civil

conspiracy liability under Halberstam reaches not only acts “in furtherance of” the

conspiracy but also any conduct that might “foreseeably result from it.” Reply Br.

at 19. The crux of Plaintiffs’ argument is that, because the Iraqi militias’ “terror

campaign” was “the foreseeable result” of the Banks’ conspiracy with Iranian

entities to circumvent U.S. sanctions, the Banks should be liable for the terrorist

attacks.

at 19–20. In making this argument, Plaintiffs rely principally on

American Family Mutual Ins. Co. v. Grim,

(1968), a case discussed in

Halberstam, 705 F.2d at 482–83.

32 The facts in Grim are certainly a far cry from those at issue here. In Grim, a

boy broke into a local church with three companions at night to search for soft

drinks.

. Because the doors to the kitchen were locked, several of the

boys attempted to gain entry through the attic.

at 341–42. While the boy in

question remained in a storeroom behind the sanctuary, two of his companions

proceeded to the attic, but failed to completely extinguish the torches they used to

illuminate their way.

at 342–43. After the boys obtained the soft drinks and

left, the church caught fire from the torches and was severely damaged.

at 343–44. Although the defendant in question neither entered the attic, knew

about the torches, nor was near the church when the fire started,

the court

nonetheless found him liable for the fire damage, “invoking both civil conspiracy

and aiding-abetting theories,” Halberstam,

. Drawing on the

restatement’s section on aiding and abetting, the court pointed out that “a person

who encourages another to commit a tortious act may also be responsible for other

foreseeable acts done by such other person in connection with the intended act.”

Grim,

. The court also relied on a theory of conspiracy, reasoning

that despite the boy’s lack of involvement with the torches, he was liable for the

33 fire because “the torches were used in the four boys’ attempt to carry out their

original unlawful plan.”

.

As Plaintiffs acknowledge, the Halberstam court identified Grim as an

example of “judicial merger” of civil conspiracy and aiding and abetting,

Halberstam,

; see also Reply Br. at 19, without “distinguish[ing] the

elements and proof of civil conspiracy and aiding-abetting,” Halberstam,

. But the Halberstam court noted that “[t]here is a qualitative difference

between proving an agreement to participate in a tortious line of conduct [– in the

case of conspiracy –] and proving knowing action that substantially aids tortious

conduct [– in the case of aiding and abetting].”

. The Halberstam court

therefore found “it important to keep the distinctions [between conspiracy and

aiding and abetting] clearly in mind” because “the distinctions can make a

difference.” Id.; see also

(“Our effort to distinguish the elements and proof

of civil conspiracy and aiding-abetting may appear formalistic, but it is motivated

by our desire to move cautiously in cases like this one.”).

Keeping the distinctions “clearly in mind,”

, we are unpersuaded

by Plaintiffs’ contention that civil conspiracy liability reaches any coconspirator

conduct that “foreseeably” results from the conspiracy, Reply Br. at 19. Plaintiffs

34 put great emphasis on the fact that foreseeability is discussed in Halberstam. See

(citing Halberstam, 705 F.2d at 482–83). But that discussion pertains to

aiding-and-abetting liability – not conspiracy. See, e.g., Halberstam,

(“[T]he principle to apply in assigning liability under the aiding-abetting theory

was: ‘[a] person who encourages another to commit a tortious act may also be

responsible for other foreseeable acts done by such other person in connection with

the intended act.’” (quoting Grim,

) (emphasis added));

(“As for the second issue in aiding-abetting, the extent of liability, the test from Cobb

and Grim appears to be that a person who assists a tortious act may be liable for

other reasonably foreseeable acts done in connection with it.” (emphasis added));

(“Similarly, under an aiding-abetting theory, it was a natural and foreseeable

consequence of the activity Hamilton helped Welch to undertake.” (emphasis

added)). Given Halberstam’s repeated admonition to keep the two theories

separate, we see no reason to inject the foreseeability requirement pertinent to

aiding-and-abetting liability into the “in-furtherance-of” requirement that exists

for conspiracy.

Halberstam’s requirement of an overt act to further the “overall object” of the

conspiracy,

(emphasis added), is grounded in the very core of

35 conspiracy liability, which is “an agreement between the defendant and the

primary wrongdoer to commit a wrong,” Restatement (Third) of Torts: Liability

for Economic Harm § 27 (Am. L. Inst. 2020) (emphasis added). The mere fact that

certain conduct may be the “natural and foreseeable consequence” of the

conspiracy is therefore not enough to meet the in-furtherance-of requirement at

the heart of a conspiracy claim. Halberstam,

. For instance, in a

conspiracy between A and B to smuggle firearms into the United States, it may

well be foreseeable to A that B might use the smuggled firearms to commit a

robbery; but, without more, there is no basis for concluding that B’s use of the

firearm in the robbery would somehow further A and B’s firearms-smuggling

conspiracy. To hold a defendant liable for a coconspirator’s actions merely

because they are foreseeable – even though wholly detached from the shared

conspiratorial plan – would stretch the concept of civil conspiracy too far beyond

its origin. See Halberstam, 705 F.2d at 484–85 (explaining that the overt act causing

the plaintiff’s injury must be “in furtherance of the agreement”); Bernhardt,

(“[I]t [is not] plausible to infer that an attack on a secret CIA base in

Afghanistan would further HSBC’s alleged objective of maximizing profits

through the evasion of U.S. sanctions.”); Adams v. Alcolac, Inc.,

, 545

36 (5th Cir. 2020) (“The question is not whether the plaintiffs’ battery was a

foreseeable result of the alleged conspiracy but whether the battery was done in

pursuance of the common purpose of the conspiracy.” (internal quotation marks

omitted)).

When read in context, Halberstam makes clear that a coconspirator’s overt

act must further the objects of a conspiracy for another coconspirator to be held

civilly liable for that act. After upholding “the district court’s finding that

Hamilton and Welch agreed to undertake an illegal enterprise to acquire stolen

property,” the court explained that “[t]he only remaining issue, then, is whether

Welch’s killing of Halberstam during a burglary was an overt act in furtherance of

the agreement.” Halberstam,

(emphasis added). The court

concluded that it was, noting that “a conspirator can be liable even if he neither

planned nor knew about the particular overt act that caused injury, so long as the

purpose of the act was to advance the overall object of the conspiracy.”

(emphasis added). In this case, Plaintiffs simply have not explained how the

ninety-two terrorist attacks furthered the Banks’ conspiracy with Iranian entities

to circumvent U.S. sanctions. We therefore affirm the district court’s dismissal of

Plaintiffs’ JASTA conspiracy claims also on this ground. See Bernhardt,

at 873 (holding that Bernhardt “fail[ed]to allege an overt act in furtherance of a

conspiracy,” as “HSBC’s sanctions evasion . . . is not . . . an overt act of

international terrorism or the source of Bernhardt’s injury under the ATA.”).

B. Plaintiffs Forfeited Their JASTA Aiding-and-Abetting Claims

Plaintiffs also urge us to consider their JASTA aiding-and-abetting claims,

which they raised for the first time in their motion for reconsideration. As a

general rule, we “will not consider an argument on appeal that was raised for the

first time below in a motion for reconsideration.” Off. Comm. of Unsecured Creditors

of Color Tile, Inc. v. Coopers & Lybrand, LLP,

(2d Cir. 2003). While

we have discretion to consider untimely arguments, we frequently decline to do

so when the party asserting the argument presents no persuasive excuse. See, e.g.,

Phillips v. City of New York,

(2d Cir. 2015); Sompo Japan Ins. Co. of

Am. v. Norfolk S. Ry. Co.,

, 188–19 (2d Cir. 2014); Analytical Survs., Inc.

v. Tonga Partners, L.P.,

, 52–53 (2d Cir. 2012). In this case, Plaintiffs have

not articulated any excuse that would warrant the exercise of our discretion.

Instead, Plaintiffs cherry-pick certain statements made by the district court during

a hearing to show that they did not forfeit their aiding-and-abetting claims. But

conveniently omitted from Plaintiffs’ excerpt of the transcript are the following

remarks from the district court:

38 Nowhere in any of your submissions have you actually used the words, [“]We are alleging aiding[-]and[-]abetting liability under JASTA,[”] and even in your briefing now, you simply say that one of the elements is met, namely, a general awareness of the terrorist activities of some of these entities that they provided banking services for[.] [B]ut . . . I find it a little disingenuous, to be perfectly frank, because you never declared in this case that you were advancing an aiding[-]and[-]abetting theory.

Sp. App’x at 92–93. The district court therefore emphatically rejected Plaintiffs’

suggestion that they had raised their aiding-and-abetting arguments prior to the

motion for reconsideration or that it ever considered them. The district court’s

conclusion is also supported by the record: Plaintiffs never asserted JASTA

aiding-and-abetting liability in their opposition to the Banks’ motion to dismiss or

in their response to the Banks’ objections to the Report and Recommendation,

despite ample opportunity to do so. See Dist. Ct. Doc. Nos. 125 at 26, 31–32; 183

at 2–21.

Plaintiffs point us to the Supreme Court’s decision in Johnson v. City of

Shelby,

, 12 (2014), to suggest that “the [Complaint] can be sustained on

any legal theory that its allegations, fairly construed, support.” Reply Br. at 21.

But this case hardly resembles Johnson, in which the plaintiffs had simply failed to

identify

in an action asserting violations of their constitutional

rights. Johnson, 574 U.S. at 10. Here, the Complaint does not merely articulate an

39 “imperfect statement of the legal theory supporting the claim asserted,” id. at 11;

it asserts only a conspiracy theory, with no reference to aiding and abetting

whatsoever, see generally J. App’x at 318–927. Plaintiffs’ subsequent briefs before

the district court do the same. See, e.g., Dist. Ct. Doc. No. 125. Indeed, Plaintiffs

themselves concede that they did not assert a claim under an aiding-and-abetting

theory until they commenced a second lawsuit in 2018. See Reply Br. at 21 n.21

(“[C]laims for aiding and abetting were first pleaded as such in Freeman [v. HSBC

Holdings PLC (Freeman II), No. 18-cv-7359 (PKC) (E.D.N.Y. 2018)].”). The fact that

Plaintiffs ultimately filed an entirely separate action asserting JASTA

aiding-and-abetting liability only reinforces the fact that they failed to raise those

arguments here.

On this record, we find that the district court acted within its discretion in

declining to consider Plaintiffs’ untimely JASTA aiding-and-abetting claims. We

also decline to do so on appeal.

IV. CONCLUSION

Although we disagree with the district court’s conclusion that a JASTA

conspiracy claim requires a direct connection between the defendant and the

person who commits an act of international terrorism, we AFFIRM the district

40 court’s judgment because Plaintiffs failed to adequately allege that the Banks

conspired either directly or indirectly with the terrorist groups, or that the terrorist

attacks that killed or injured U.S. service members furthered the Banks’ conspiracy

with Iranian entities to circumvent U.S. sanctions. We agree with the district court

that Plaintiffs forfeited their aiding-and-abetting claims by raising them for the

first time in a motion for reconsideration.

41 1 DENNIS JACOBS, Circuit Judge, concurring:

2 The majority opinion observes that JASTA does not require a direct

3 relationship between the Banks and the terrorist attackers. This observation is

4 dicta because, as we all agree, it does not affect the result. I would let the dicta

5 pass, except that it is wrong.

6 JASTA requires that a defendant conspire “with the person who

7 committed” acts of terrorism.

(d)(2) (emphasis added). That

8 intimate little preposition requires that there be a direct link between a defendant

9 bank and a terrorist.

10 The use of “with” is particular, and unusual. The United States Code is

11 full of statutes that sweep up defendants who “conspire[] to” commit certain

12 acts, without reference to the person or category of persons with whom the

13 defendant must conspire. Examples are in the margin. 1 The phrase “conspires

14 with” appears in that Code far less often. 2 Where it does appear, the object of the

1See, e.g.,

(a)(2) (“Whoever assaults, kidnaps, or murders, or attempts or conspires to kidnap or murder . . . shall be punished as provided in subsection (b).” (emphasis added));

(c) (“Whoever without lawful authority develops, possesses, or attempts or conspires to develop or possess a radiological weapon . . . shall be imprisoned for any term of years or for life.” (emphasis added)).

2By my count, the phrase “conspires to” appears 125 times in the United States Code, while the phrase “conspires with” appears only 19 times. 1 preposition “with” is not particular: that is, the conspirator is prohibited from

2 conspiring with anybody at all. See, e.g.,

(a)(1) (“Whoever, within

3 the jurisdiction of the United States, conspires with one or more other persons . . . to

4 commit . . . the offense of murder, kidnapping, or maiming [overseas] . . . shall . .

5 . be punished as provided in subsection (a)(2).” (emphasis added));

1594(c) (“Whoever conspires with another to violate section 1581 . . . shall be

7 punished in the same manner as a completed violation of such section.”

8 (emphasis added)).

9 The requirement that the defendant conspire “with another” or “with one

10 or more other persons” does not amount to a limitation because “[i]t is

11 impossible in the nature of things for [one] to conspire with [one]self.” Morison

12 v. California,

(1934). Rather, these statutes prohibit conspiracy in

13 its broadest terms, whereby each member must conspire directly with another

14 member of the conspiracy, but not necessarily “with every other member of it.”

15 United States v. Rooney,

(2d Cir. 1989). Application of these

2 1 statutes does not depend on whether the defendant conspires directly with any

2 defined person. “With” requires a direct linkage, even if it is promiscuous. 3

3 So far as I can tell, JASTA stands alone as the only statute that prohibits

4 defendants from conspiring “with” a specific person or category of persons: “the

5 person who committed such an act of international terrorism.”

2333(d)(2).

7 This substantive and grammatical difference between JASTA and other

8 statutes must be given meaning. See Marx v. General Revenue Corp.,

(2013) (“Finally, the language in § 1692k(a)(3) sharply contrasts with

10 other statutes in which Congress has placed conditions on awarding costs to

11 prevailing defendants.”); Orff v. United States,

(2005)(“Our

12 conclusion draws force from . . . the broader phrasing of [other] statutes . . . .”);

13 H.J. Inc. v. Northwestern Bell Telephone Co.,

(1989)

14 (“Moreover, Congress’ approach in RICO can be contrasted with its decision to

15 enact explicit limitations to organized crime in other statutes.”).

3The Majority acknowledges that in Kaplan v. Lebanese Canadian Bank,

(2d Cir. 2021) we emphasized that “JASTA states that to be liable for conspiracy a defendant would have to be shown to have ‘conspire[d] with’ the principal,”

.

3 1 The only reasonable reading of JASTA is that it requires proof of a direct

2 link between a defendant bank and a terrorist. A holding on that issue must

3 await a case in which it affects the outcome.

4