James Owens v. BNP Paribas, S.A.
Opinion
In 1998, al Qaeda detonated truck bombs outside the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, killing over two hundred people and injuring several thousand more. Victims of these attacks sued the French bank BNP
Paribas for damages under the Anti-Terrorism Act (ATA), alleging the bank provided financial assistance to Sudan, which in turn funded and otherwise supported al Qaeda's attack. Because the victims fail to plausibly allege BNP Paribas caused their injuries, and because the ATA does not permit recovery for claims premised on aiding and abetting liability, the district court dismissed the suit for failure to state a claim. We affirm.
I
A
On August 7, 1998, truck bombs exploded outside the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. At least twelve of the more than two hundred deaths and many of the 4,000 injured individuals were U.S. nationals.
See
Owens v. Republic of Sudan
,
But al Qaeda didn't act alone. The Republic of Sudan and the Islamic Republic of Iran helped facilitate the embassy bombings in several ways. For its part, Sudan provided safe harbor for al Qaeda's operational and logistical supply network, as well as critical financial, military, and intelligence services.
See
Owens v. Republic of Sudan
,
In response to Sudan's growing ties to terrorist organizations, the U.S. Secretary of State designated the country as a state sponsor of terrorism in 1993. Id. ¶¶ 47, 61. The Secretary noted that the Sudanese government harbored international terrorists, maintained close ties to Iran, and provided meeting locations, transit points, and safe havens for various radical extremist groups. Id. ¶ 61. The United States thereafter placed sanctions on Sudan, restricting U.S. foreign assistance to its government, banning defense exports and sales, and imposing various financial constraints. Id. ¶ 62.
By the late 1990s, the United States placed even greater restrictions on trade with Sudan. In 1997, President Clinton issued an executive order imposing a complete trade embargo that prohibited the exportation of all goods and services-including financial services-to Sudan unless the exporter received a license from the Office of Foreign Assets Control (OFAC).
Id.
¶¶ 63-65. And in 1998, OFAC designated all of Sudan's national and major commercial banks as "Specially Designated Nationals,"
id.
¶¶ 67-68, subjecting them to even more onerous trade restrictions and sanctions,
see
BNP Paribas, S.A. (BNPP), the largest bank in France, sought to evade U.S. sanctions on Sudan applicable to international institutions. Am. Compl. ¶¶ 30, 73. In 2014, BNPP admitted as much when it pleaded guilty in federal court to illegally conspiring with banks and other entities to evade the sanctions regime and unlawfully move nearly $9 billion through the U.S. financial system.
At least $6 billion of these illegally processed funds involved Sudanese banks and financial institutions. Statement of Facts ¶ 17, J.A. 95. BNPP pleaded guilty to circumventing sanctions on Sudan only from 2002 to 2007, well after the embassy bombings. Am. Compl. ¶ 76;
see also
Statement of Facts ¶ 17, J.A. 95. However, in support of its guilty plea, BNPP stipulated that by 1997 one of its subsidiaries had become the "correspondent bank" in Europe for a Sudanese government bank and all the major commercial banks in Sudan. Am. Compl. ¶ 82 (quoting Statement of Facts ¶ 19, J.A. 96-97). This meant that almost every Sudanese bank began to keep U.S. dollar accounts with BNPP.
B
The ATA creates a private cause of action for those harmed by international terrorism. Specifically, the ATA provides that "[a]ny national of the United States injured in his or her person ... by reason of an act of international terrorism ... may sue therefor ... and shall recover threefold ... damages."
Plaintiffs are U.S. nationals injured in the 1998 embassy bombings, or the estates, heirs, or survivors of U.S. nationals who died or were severely injured in the bombings.
See
Am. Compl. ¶¶ 22-26. They previously sued Sudan under the Foreign Sovereign Immunities Act, alleging that Sudan offered material support to al Qaeda's bombing of the embassies, and in 2011 received default judgments against the country.
Several months after BNPP's 2014 federal plea, Plaintiffs filed their present complaint in district court.
3
Based on BNPP's stipulations in its guilty plea, Plaintiffs allege the bank provided material support to al Qaeda by processing financial transactions for Sudanese banks, converting Sudanese resources into U.S. banknotes, and circumventing U.S. sanctions on Sudan.
On appeal, Plaintiffs claim BNPP's role in processing financial transactions for Sudanese banks violated two federal laws prohibiting the provision of material aid and support to terrorists and terrorist groups,
see
Plaintiffs allege that they were injured "by reason of" BNPP's material aid and support to al Qaeda in violation of §§ 2339A and 2339B. In the alternative, Plaintiffs allege that BNPP's conduct "constituted aiding and abetting" al Qaeda's acts of international terrorism under the ATA. Am. Compl. ¶ 130. 7
After Plaintiffs filed their complaint, BNPP moved to dismiss the suit, arguing
that the complaint failed to state a claim for which relief may be granted under the ATA. The district court granted BNPP's motion.
See
Owens v. BNP Paribas S.A.
,
II
The district court had jurisdiction under the ATA.
See
We review de novo the district court's order granting BNPP's motion to dismiss.
See
Hurd v. District of Columbia
,
III
We first address whether Plaintiffs sufficiently allege that BNPP is directly liable under the ATA. Recall that any ATA claim requires that a U.S. national be injured "by reason of" an act of international terrorism. Plaintiffs are all U.S. nationals and we assume here that BNPP's conduct violated the material-support statutes and therefore constituted an act of international terrorism. We focus only on whether Plaintiffs have sufficiently alleged that they were injured "by reason of" BNPP's actions.
A
Our analysis of a motion to dismiss for failure to state a claim follows a familiar process. "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
,
In determining a complaint's plausibility, we accept as true all of the complaint's factual allegations and draw all reasonable inferences in favor of the plaintiffs.
See
City of Harper Woods Emps.' Ret. Sys. v. Olver
,
B
The district court held and Plaintiffs do not dispute that the ATA's "by reason of" language demands a showing of proximate causation.
See
Owens
,
Plaintiffs contend BNPP's knowing manipulation of currency on behalf of Sudanese banks was a proximate cause of the injuries they suffered in the embassy bombings. Meanwhile, BNPP argues that the ATA's "by reason of" proximate causation requirement cannot be satisfied when a defendant is alleged only to have transferred funds to a state sponsor of terrorism that later supports a terrorist act.
We must first determine which factual allegations in Plaintiffs' complaint speak to BNPP's conduct prior to the 1998 bombings. We must likewise determine whether Plaintiffs' inferences from those facts are reasonable, such that they plausibly state a claim for relief. That is, we must ultimately decide whether the factual allegations and reasonable inferences from Plaintiffs' complaint plausibly allege that BNPP proximately caused the embassy bombings.
Regarding BNPP's conduct, Plaintiffs' complaint relies almost entirely on the statement of facts that BNPP filed in district court when it pleaded guilty in 2014 to violating various U.S. sanctions. 9 From these stipulated facts, Plaintiffs allege that BNPP "move[d] large amounts of money throughout the U.S. financial system on behalf of" Sudan and al Qaeda "between 1997 up to and including August 7, 1998," the date of the embassy bombings. Am. Compl. ¶ 111; see also id. ¶ 86 (alleging that "starting from at least 1997" BNPP "became key to allowing Sudan to sell oil through the United States banking system, thereby allowing Sudan to raise money to buy arms and supplies for" al Qaeda); id. ¶ 127 (alleging that beginning in 1997 BNPP provided "substantial banking services to Sudanese banks and financial institutions controlled by Sudan including moving billions of dollars through the United States financial market").
Most of the facts to which BNPP stipulated in federal court involved conduct after the embassy bombings, which have no bearing on what actions "caused" the bombings. In fact, only two stipulated facts repeated in the complaint occurred before the embassy bombings. First, BNPP agreed to become the sole "correspondent bank" in Europe for the Sudanese government, meaning nearly all major Sudanese banks would have U.S. dollar accounts with BNPP. Id. ¶ 82 (quoting Statement of Facts ¶ 19, J.A. 96). Second, to disguise the true nature of BNPP's later transactions with Sudanese banks and to evade U.S. sanctions, BNPP established relationships with international "satellite banks." Id. ¶ 90 (quoting Statement of Facts ¶ 23, J.A. 99). Neither of these allegations speaks to whether BNPP began moving Sudanese resources through the U.S. financial system prior to the embassy bombings.
In alleging that transactions between BNPP and Sudan began in 1997, Plaintiffs also rely on a blatant misinterpretation of BNPP's stipulations. Plaintiffs allege that BNPP admitted that "in the months and years" following a 1997 decision to use an unaffiliated bank in the United States (captioned in the statement of facts as "U.S. Bank 1") as its "principal means for clearing U.S. dollar transactions" with sanctioned Sudanese banks, its personnel were aware that BNPP was circumventing U.S. sanctions. Id . ¶ 84; see also id. ¶ 85 (quoting Statement of Facts ¶ 31, J.A. 103). But Plaintiffs misrepresent the timeline established by BNPP's stipulations. The decision to use U.S. Bank 1 did not occur in 1997, as Plaintiffs claim. Rather, BNPP admitted that it decided to use U.S. Bank 1 at a meeting that took place shortly after BNPP entered into a Memorandum of Understanding with federal and state authorities regarding BNPP's failure to comply with a federal anti-money-laundering statute. See Statement of Facts ¶ 29, J.A. 102. BNPP entered into that agreement in September 2004. Id. ¶ 28, J.A. 101-02. Establishing that BNPP processed U.S. dollars for Sudan "in the months and years" after a decision made in 2004 does nothing to support the existence of banking transactions between BNPP and Sudan before the 1998 embassy bombing. 10 At bottom, Plaintiffs do not allege facts addressing directly whether BNPP began to process funds for Sudan before the embassy bombings.
That said, Plaintiffs' failure to allege transactions between BNPP and Sudan
before the bombings does not end our inquiry. We must also grant Plaintiffs "the benefit of all reasonable inferences derived from the facts alleged,"
Bregman v. Perles
,
"But even if the complaint's well-pleaded facts" of a banking relationship "give rise to a plausible inference" that BNPP processed funds for Sudan before the bombings, "that inference alone would not entitle [Plaintiffs] to relief."
Iqbal
,
In addressing whether BNPP's alleged conduct was a "substantial factor" in producing Plaintiffs' injuries, we are guided by
Rothstein
, in which the Second Circuit confronted a remarkably similar set of facts. The Second Circuit held that another bank, UBS, could not be liable under the ATA for merely converting funds into U.S. currency for Iran, another state sponsor of terrorism. The plaintiffs there failed to plead non-conclusory allegations of a "proximate causal relationship between the cash transferred by UBS to Iran and the terrorist attacks by H[e]zbollah and Hamas that injured plaintiffs."
Rothstein
,
Rothstein correctly recognized that when a defendant is more than one step removed from a terrorist act or organization, plaintiffs suing under the ATA must allege some facts demonstrating a substantial connection between the defendant and terrorism. In Rothstein , the presence of an independent intermediary, Iran, created a more attenuated chain of causation connecting UBS to Hezbollah and Hamas than one in which a supporter of terrorism provides funds directly to a terrorist organization.
See, e.g.
,
Boim III
,
Furthermore, when an intermediary is a sovereign state with "many legitimate agencies, operations, and programs to fund," the need for additional allegations supporting substantiality is all the more acute.
Rothstein
,
In sum, in order to satisfy proximate causation under the ATA, Plaintiffs' complaint needs to adequately plead facts alleging that BNPP
substantially
contributed to Plaintiffs' injuries because the funds to Sudan "actually [were] transferred to al Qaeda ... and aided in" the embassy bombings.
In re Terrorist Attacks on Sept. 11, 2001
,
Plaintiffs' complaint fails to plausibly allege that any currency processed by BNPP for Sudan was either in fact sent to al Qaeda or necessary for Sudan to fund the embassy bombings. As such, Plaintiffs fail to adequately allege that they were injured "by reason of" BNPP's acts and cannot state a claim for relief based on a theory of primary liability under the ATA.
IV
We next address whether Plaintiffs can bring a claim of aiding and abetting under the ATA. If aiding and abetting liability were available under the ATA, BNPP would not need to satisfy any of the ATA's
elements to be held liable for Plaintiffs' injuries. Instead, BNPP would be liable for al Qaeda's acts of international terrorism, so long as BNPP "knowingly and substantially assist[ed] the principal violation" of the ATA by al Qaeda and was "generally aware" of its role as part of al Qaeda's illegal activities when providing that assistance.
Halberstam v. Welch
,
Before 2016, the ATA made no explicit reference to aiding and abetting liability. Then, in 2016, Congress enacted JASTA to "provide civil litigants with the broadest possible basis ... to seek relief against [those] that have provided material support, directly or indirectly, to foreign organizations or persons that engage in terrorist activities against the United States." JASTA, § 2(b), 130 Stat. at 853. Specifically, Congress maintained that it was "necessary to recognize the substantive causes of action for aiding and abetting and conspiracy liability under" the ATA.
Id.
§ 2(a)(4), 130 Stat. at 852. JASTA therefore amended § 2333 to expressly state that "liability [under the ATA] may be asserted as to any person who aids and abets, by knowingly providing substantial assistance" to an act of international terrorism or "who conspires with" any person committing such an act.
Id.
§ 4(a), 130 Stat. at 854 (codified at
However, this amended version of § 2333 is inapplicable to Plaintiffs' present suit. JASTA's provision for aiding and abetting liability only applies to injuries arising "on or after September 11, 2001." JASTA § 7(2), 130 Stat. at 855. Because Plaintiffs were injured in bombings that took place before this effective date, they must instead rely on the pre-JASTA version of § 2333.
In answering whether the pre-JASTA version of § 2333 incorporated aiding and abetting liability, we are guided by the Supreme Court's decision in
Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A.
,
The key takeaway from
Central Bank
is that when Congress creates a private cause of action, aiding and abetting liability is not included in that cause of action unless Congress speaks to it explicitly. This presumption against the inclusion of aiding and abetting liability rests partially on the fact that "Congress has not enacted a general
civil
aiding and abetting statute,"
So too with the ATA. As the Second and Seventh Circuits correctly concluded, § 2333 does not allow for aiding and abetting liability because that provision is "silent as to the permissibility of aiding and abetting liability."
Rothstein
,
Plaintiffs maintain that Congress's 2016 passage of JASTA confirms that § 2333 incorporated aiding and abetting liability all along. We disagree. We generally presume that congressional amendments make substantive changes to existing law.
See
Ross v. Blake
, --- U.S. ----,
JASTA does not indicate that Congress merely "clarified" existing law when it amended § 2333. In fact, Congress itself stated that its amendment in JASTA was " necessary to recognize the substantive causes of action for aiding and abetting and conspiracy liability under" the ATA. JASTA § 2(a)(4), 130 Stat. at 852 (emphasis added). If anything, JASTA's passage confirms that Congress knows how to provide for aiding and abetting liability explicitly and that the version of § 2333 in effect at the time of the embassy bombings did not provide for that liability. At the very least, nothing in JASTA shows with sufficient clarity that its amendment in § 4(a) merely clarified § 2333 's preexisting meaning.
Although
Central Bank
seems to resolve with ease the availability of aiding and abetting liability, several courts in older decisions have disregarded
Central Bank
's applicability to the ATA. For example, some courts have distinguished
Central Bank
because it involved an
implied
cause of action in the Securities Exchange Act of 1934, while the ATA provides an
express
cause of action.
See
Boim I
,
But nothing in
Central Bank
's analysis turned on the implied character of § 10(b)'s cause of action, and the Court's reasoning applies to express causes of action
as well. The Court found that because Congress did not attach aiding and abetting liability to express causes of action in other securities laws, "Congress likely would not have attached aiding and abetting liability to § 10(b) if it provided a private § 10(b) cause of action."
Central Bank
,
Courts have also sometimes premised aiding and abetting liability under the ATA on legislative history that purportedly expresses Congress's "intent to cut off the flow of money to terrorists at every point along the causal chain of violence."
Boim I
,
But these arguments overstate the role of legislative history in statutory interpretation. Some think it is appropriate to consult legislative history as "a way to understand the text" of a statute, while others go further and tout legislative history as a "more authentic ... expression of legislators' will" than the statute's text.
In re Sinclair
,
Section 2333 is not ambiguous, so no appeal to legislative history is necessary or helpful here. As
Central Bank
teaches, "the statutory text controls the definition of conduct covered by" § 2333, and when the statutory text is silent there simply is no "congressional intent to impose ... aiding and abetting liability."
Central Bank 's reasoning is inescapable: Because the ATA does not expressly provide for aiding and abetting liability, such liability is unavailable. 12 Therefore, the ATA does not allow for any of Plaintiffs' claims against BNPP premised on aiding and abetting liability, and the district court rightly dismissed them.
V
We affirm the district court's judgment.
So ordered.
An activity must meet three criteria to qualify as "international terrorism." First, the activity must "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, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State."
Because treble damages usually have a punitive aim, several courts have also interpreted § 2333 to require that a defendant act with some scienter above negligence, independent of any scienter required to commit the predicate act of international terrorism.
See
Boim v. Holy Land Found. for Relief & Dev.
,
Plaintiffs also sued two of BNPP's wholly owned subsidiaries, BNP North America, Inc. and BNP Paribas (Suisse) S.A. See Am. Compl. ¶¶ 2, 29-40. We refer to these entities collectively as "BNPP."
Plaintiffs initially pled a violation of a third statute, 18 U.S.C. § 2339C, which criminalizes providing or collecting funds with knowledge that such funds would be used to carry out acts intending to cause death or serious bodily injury in order to intimidate a population or government.
See
Am. Compl. ¶¶ 116, 121-29. The district court dismissed this claim because § 2339C was enacted in 2002, post-dates the conduct at issue in this case, and does not apply retroactively.
See
Owens v. BNP Paribas S.A.
,
The district court held that Plaintiffs failed to plausibly allege that BNPP had sufficient knowledge of the Sudanese banks' ultimate investments to satisfy the scienter requirements of either 18 U.S.C. § 2339A or § 2339B.
See
Owens
,
Because BNPP's alleged conduct took place in 1997-98, the 1996 versions of §§ 2339A and 2339B apply to this case. See 18 U.S.C. §§ 2339A(a), 2339B(a)(1) (1996).
As the district court observed, "Plaintiffs' complaint is not a model of clarity."
Owens
,
Additionally, Plaintiffs pepper their complaint with allegations that BNPP "conspired" with Sudan to provide financial services to al Qaeda. See, e.g. , Am. Compl. ¶¶ 7, 8, 107, 110-11, 126. On appeal, Plaintiffs continue to claim briefly that BNPP is liable pursuant to principles of civil conspiracy. If civil conspiracy were available, BNPP would be liable if (1) BNPP entered into an "agreement" with Sudan and al Qaeda; (2) BNPP participated in an "unlawful act, or a lawful act in an unlawful manner"; (3) Plaintiffs' injuries were caused by an "unlawful overt act performed by one of the parties to the agreement"; and (4) the "overt act was done pursuant to and in furtherance of the common scheme." Halberstam v. Welch ,705 F.2d 472 , 477 (D.C. Cir. 1983). However, as we discuss below, just as Plaintiffs cannot pursue a theory of recovery based on aiding and abetting liability under § 2333, they also cannot pursue one based on conspiracy liability. See infra note 12.
After briefing and oral argument in this appeal, the Ninth Circuit issued a decision interpreting the ATA's "by reason of" language.
See
Fields v. Twitter, Inc.
,
The complaint also briefly incorporates a stipulation by BNPP in a consent order filed in the New York courts. See Am. Compl. ¶ 88 (quoting New York State Department of Financial Services Consent Order: In re BNP Paribas, S.A. at 6-7 (June 30, 2014), J.A. 132-33). However, the factual allegation drawn from the consent order is virtually identical to one made in BNPP's stipulated statement of facts. See id. ¶ 90 (quoting Statement of Facts ¶ 23, J.A. 99).
Moreover, in a portion of the stipulated statement of facts that Plaintiffs neglected to cite in their complaint, BNPP even indicated that it only began processing funds for Sudan in 2000, long after the embassy bombings. See Statement of Facts ¶ 19, J.A. 96 ("In addition to processing U.S. dollar transactions, in 2000, BNPP ... also developed a business in letters of credit for the Sudanese banks.").
Proximate causation also requires that Plaintiffs' injuries were "reasonably foreseeable or anticipated as a natural consequence" of BNPP's conduct.
Owens
, 864 F.3d at 794 (quoting
Rothstein
,
The Court's reasoning in
Central Bank
also forecloses Plaintiffs' appeal to civil conspiracy liability, given the absence of an explicit congressional statement addressing it.
See
Central Bank
,
Reference
- Full Case Name
- James OWENS, Et Al., Appellants v. BNP PARIBAS, S.A., Et Al., Appellees
- Cited By
- 73 cases
- Status
- Published