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Owens v. Republic of Sudan

May 29, 2005

JAMES OWENS, ET AL., PLAINTIFFS,
v.
REPUBLIC OF SUDAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

On August 7, 1998, nearly simultaneous truck bombs were exploded at the United States embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya. Hundreds were killed and thousands were injured in the explosions. Several of the injured victims and their family members brought this suit under section 1605(a)(7) of the Foreign Sovereign Immunities Act against the Republic of Iran, the Republic of Sudan, and two of their respective ministries, for allegedly providing material support to the terrorist organizations that carried out the attacks. Defendants were served through diplomatic channels, and when they initially failed to appear, the clerk entered default against them.

Several months later, although well before any trial was scheduled to occur in the case, counsel entered an appearance for the Republic of Sudan and its Ministry of the Interior ("the Sudan defendants"). Soon thereafter, the Sudan defendants filed a motion to dismiss arguing that they are immune from suit under the Foreign Sovereign Immunities Act, that plaintiffs' complaint fails to state a claim upon which relief can be granted, and that the default should be vacated and judgment entered in their favor instead. Attached to the motion are declarations from Timothy Michael Carney, a former United States Ambassador to Sudan, and John E. Cloonan, a former Special Agent of the Federal Bureau of Investigation, stating their views that the Sudan defendant did not have any involvement in the embassy bombings. Plaintiffs responded with a succession of filings, including a motion to strike the motion to dismiss, an opposition to the motion to dismiss, a motion to take the depositions of former Ambassador Carney and former Special Agent Cloonan, a motion in the alternative to strike the declarations of former Ambassador Carney and former Special Agent Cloonan, and two separate motions requesting forms of jurisdictional discovery. Finally, after briefing of these motions was complete, Hunton & Williams LLP -- the Sudan defendants' second counsel to file an appearance in this casefiled a motion seeking leave to withdraw as counsel.

The Court now denies plaintiffs' motion to strike the motion to dismiss, but also denies the motion to dismiss itself, allowing plaintiffs to amend the complaint in accordance with the holdings in this opinion. The Court also denies plaintiffs' motions to take the depositions or strike the declarations of former Ambassador Carney and former Special Agent Cloonan until such time as plaintiffs comply with the relevant Touhy regulations. The Court further denies plaintiffs' motions seeking jurisdictional discovery until plaintiffs have cured the deficiencies in their complaint, at which time the Court will further consider the opening of jurisdictional discovery in this case. Finally, the Court will hold a status conference on April 20, 2005, to address the pending motion of Hunton & Williams LLP to withdraw as counsel, and the status of this action moving forward.

BACKGROUND

Plaintiffs in this case are United States nationals injured in the terrorist attacks on the United States embassies in Dar es Salaam, Tanzania and Nairobi, Kenya on August 7, 1998, and certain of their family members. The attacks were carried out through the nearly simultaneous detonations of explosive materials in trucks at the respective embassies. The explosions led to the death of hundreds of employees, visitors, and bystanders, and the injury of thousands more. Plaintiff James Owens commenced this civil action on October 26, 2001, seeking damages from the Republic of Sudan, the Islamic Republic of Iran and the Iranian Ministry of Information and Security for their role in the alleged bombings. The complaint has since been amended twice to add the Ministry of the Interior of the Republic of Sudan as a defendant and more than forty individuals as plaintiffs, but the claims and basic structure of the complaint have remained unchanged.

Plaintiffs bring this action pursuant to the state-sponsored terrorism exception to the immunity of a foreign state in section 1605(a)(7) of the Foreign Sovereign Immunities Act ("FSIA"). The complaint alleges broadly that defendants provided"material support" to Hizbollah and al Qaeda, the two terrorist organizations alleged to be responsible for the embassy bombings, in the form of"cover, sanctuary, technical assistance, explosive devices and training." Second Am. Compl. ¶¶ 2, 13. As to the Sudan defendants in particular, the complaint alleges that they gave"cover" and"support" to the terrorist groups, id. ¶ 7; that they"provided cover and protection for the organization and training of the persons carrying out the attack as well as venues for these activities," id. ¶ 9; that they"entered into an agreement with al Qaeda and Hizbollah under which those organizations received shelter and protection from interference while carrying out planning and training of various persons for the attacks of August 7, 1998," id. ¶ 8; and that an"organizational and planning meeting" for the embassy attacks occurred"within the Republic of the Sudan" between"Usama Bin Laden, chief of al Qaeda, and Imad Mughaniyah, chief of Hezbollah," id. Plaintiffs purport to state claims against the defendants for"intentional infliction of emotional distress/solatium" under the Flatow Amendment to the FSIA,*fn1 and for"personal injury" and"loss of consortium" without identifying a specific cause of action under federal or state law for those claims. E.g., id. ¶¶ 12-16, 25-26.

Plaintiffs served the complaint on the defendants through diplomatic channels. When none of the defendants appeared, the Clerk of the Court entered default against them on May 9, 2003. As is customary in these cases, the Court scheduled an ex parte trial on liability and damages. See 28 U.S.C. § 1608(e) ("No judgment by default shall be entered by a court of the United States or of a State against a foreign state... unless the claimant establishes his claim or right to relief by evidence satisfactory to the court."). Plaintiffs then filed several motions in anticipation of trial, including a motion asking the Court to compel the Federal Bureau of Investigation to produce documents relating to the attacks, and a motion for issuance of letters rogatory asking the government of Israel to allow plaintiffs to depose several individuals in its custody.

On February 6, 2004, several months after the entry of default but well before any trial was set to begin, counsel from Piper Rudnick LLP filed an appearance on behalf of the Sudan defendants. At about the same time, the D.C. Circuit issued a decision in Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004), holding that"neither 28 U.S.C. § 1605(a)(7) nor the Flatow Amendment, nor the two considered in tandem, creates a private right of action against a foreign government." Id. at 1033. The Court issued an order asking plaintiffs and the Sudan defendants to submit briefs addressing the viability of plaintiffs' complaint in light of Cicippio-Puleo. A month later, plaintiffs submitted their brief on Cicippio-Puleo issues. Only a few days later, the Sudan defendants filed a motion to dismiss.

The motion to dismiss advances a litany of arguments, all of which fall into one of three categories: (i) the Court lacks jurisdiction over the claims against the Sudan defendants because they are immune from suit under the FSIA and plaintiffs have failed to demonstrate that the case comes within the exception to immunity in section 1605(a)(7); (ii) plaintiffs have failed to state a claim upon which relief can be granted under Cicippio-Puleo and other recent authority interpreting the causes of action that may be brought against a foreign state; and (iii) plaintiffs' claims are foreclosed by the act of state and political question doctrines. The Sudan defendants include in the motion to dismiss a request to vacate the entry of default against them.

The Sudan defendants also attach to their motion declarations from two former United States officials. The first declaration is from Timothy Michael Carney, the United States Ambassador to Sudan from August 1995 until November 1997. Former Ambassador Carney explains that he is unaware of any credible intelligence or evidence that the Sudan defendants were involved in, aware of, or provided material support to the groups that carried out the Tanzania and Kenya embassy attacks. Decl. of Timothy Michael Carney ("Carney Decl.") ¶ 6. He explains that the government of Sudan even expelled al Qaeda from Sudan in May 1996 at the request of the United States, and he notes that there was a great deal of intelligence before this date attributing misconduct to Sudan that was later discredited or withdrawn by the CIA. Carney Decl. ¶¶ 7, 10.

The second declaration is from John E. Cloonan, a former Special Agent with the Federal Bureau of Investigations ("FBI"), who explains that while at the FBI he worked on a joint FBI/CIA operation tasked in part with building a prosecutable case against Osama bin Laden. Decl. of John E. Cloonan ("Cloonan Decl.") ¶ 2. He attests that he participated in the investigation of the embassy bombings and has a thorough understanding of the information developed in that investigation, and states his belief that the Sudan defendants did not have any involvement in the embassy bombings and that the Sudan defendants did not provide any support to al Qaeda or Hizbollah. Id. ¶¶ 3, 5-9. Both former Ambassador Carney and former Special Agent Cloonan emphasize that they believe they would have been aware of any credible evidence linking the Sudan government to the embassy bombings if such evidence existed. Cloonan Decl. ¶ 7; Carney Decl. ¶ 9.

Plaintiffs responded to the motion to dismiss with several filings of their own. First, they moved to strike the motion to dismiss, arguing that the entry of default in the case foreclosed the Sudan defendants from seeking relief in this Court. Along with the motion to strike, plaintiffs filed a motion for jurisdictional discovery, and a separate motion to disqualify Piper Rudnick LLP as counsel for the Republic of Sudan, citing an alleged conflict between the law firm's work in this case and its representation of plaintiffs in another pending section 1605(a)(7) case in this Court. In response to plaintiffs' motion to qualify, Piper Rudnick LLP filed a motion to withdraw as counsel, which the Court granted.

On March 31, 2004, plaintiffs filed motions seeking leave to depose former Ambassador Carney and former Special Agent Cloonan. The Federal Bureau of Investigation and the Department of State submitted papers opposing these motions on the ground that plaintiffs had failed to comply with the Touhy regulations governing requests for documents or testimony from former government officials on issues relating to their employment. The government also observed that neither defendants nor the two former officials had contacted the agencies for permission to submit the declarations consistent with the requirements of the Touhy regulations. Plaintiffs responded to the government's opposition with a separate motion to strike the declarations, maintaining that the government admitted that the declarations disclose classified information, and arguing that it is unfair to allow defendants to use the declarations in support of their motion to dismiss when plaintiffs are prevented by the Touhy regulations from testing those declarations through deposition.

On May 4, 2004, the Court issued an order denying without prejudice plaintiffs' various motions for discovery, and staying the case until such time as successor counsel for the Sudan defendants joined the case. The Court also denied plaintiffs' motion to compel the production of documents by the Federal Bureau of Investigation due to plaintiffs' failure to comply with the relevant Touhy regulations. On July 29, 2004, counsel from Hunton & Williams LLP filed an appearance on behalf of Sudan, and briefing continued anew on the remaining motions in the case. Two weeks later, plaintiffs submitted an opposition to the motion to dismiss. They attached to the opposition transcripts of the testimony of two al Qaeda officers -- one had testified in the criminal action against Osama Bin Laden arising out of the embassy bombings, the other had testified in a deposition in this action -- who claimed that the Sudan and al Qaeda had formed a partnership during the first half of the 1990s in which Sudan provided al Qaeda with military protection, safe passage, transportation, and other forms of support in exchange for weapons, communications equipment, and intelligence.

A hearing was held on October 27, 2004, to address the pending motions in the case. The day before the hearing, plaintiffs filed additional renewed motions for jurisdictional discovery and issuance of letters rogatory for judicial assistance from the State of Israel. More recently, Hunton & Williams LLP filed a motion to withdraw as counsel for the Sudan defendants, claiming that their clients were overdue on several legal bills and had not responded to requests for guidance on several matters. Plaintiffs responded to the motion to withdraw with their own motion seeking an order setting a date for trial. The Court issued an order denying both motions at that time. The motion to dismiss and the many other pending motions are now fully briefed and argued, and ready for decision by the Court.*fn2

ANALYSIS

The Court addresses several of the outstanding motions in this opinion, including the Sudan defendants' motion to dismiss, plaintiffs' motion to strike the motion to dismiss, plaintiffs' motions for leave to depose former Ambassador Carney and former Special Agent Cloonan, plaintiffs' motion to strike the declarations of these former officials, and plaintiffs' motions seeking jurisdictional discovery.

I. Plaintiffs' Motion to Strike the Motion to Dismiss

Plaintiffs contend that the Sudan defendants' motion to dismiss must be stricken, because the Sudan defendants never moved the Court to vacate the entry of default and because such a motion would be futile. They also argue that any motion to vacate should be denied because the Sudan defendants have not filed the verified answer arguably required by Local Civil Rule 7(g) when a party is the subject of an entry of default. Plaintiffs finally cite evidence that the Sudan defendants spent several months actively collecting evidence to use in their defense before they appeared in the case, and contend that this intentional delay is an abuse of the court's procedures that warrants denying the motion to dismiss.*fn3

Although the Court is concerned about the timing of the Sudan defendants' appearance in this action, it concludes that striking the motion to dismiss would be inappropriate for several reasons. First, plaintiffs' suggestion that the Sudan defendants have not requested a vacation of the entry of default against them is clearly incorrect. See Mot. to Dismiss at 2 ("Accordingly, the Republic of the Sudan and the Interior Ministry of the Republic of the Sudan move for an Order dismissing these proceedings with prejudice as to them and vacating any and all previously entered orders of default against them."). Second, the D.C. Circuit has stressed that an entry of default should not be applied inflexibly to deny a willing foreign state the opportunity to offer a full defense to an FSIA action:

Foreign sovereigns unfamiliar with the United States judicial system may fail to comprehend accurately what the FSIA means and how it operates. Intolerant adherence to default judgments against foreign states could adversely affect this nation's relations with other nations and undermine the State Department's continuing efforts to encourage... foreign sovereigns generally to resolve disputes within the United States' legal framework.... When a defendant foreign state has appeared and asserts legal defenses, albeit after a default judgment has been entered, it is important that those defenses be considered carefully and, if possible, that the dispute be resolved on the basis of all relevant legal arguments. Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1552 & n.19 (D.C. Cir. 1987) (quotation omitted).

Third, section 1608(e) of the FSIA provides that a court cannot enter judgment by default against a foreign state"unless the claimant establishes his claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). This provision requires the Court to satisfy itself that there exists an adequate legal and factual basis for plaintiffs' claims. See, e.g., Roeder v. Islamic Republic of Iran, 333 F.3d 228, 232 (D.C. Cir. 2003); Regier v. Islamic Republic of Iran, 281 F. Supp. 2d 87, 88-89 (D.D.C. 2003). Even if it were true that the Sudan defendants committed procedural error in some respect upon appearing in the case, the Court is not inclined to prevent the Sudan defendants from making arguments in their own defense that the Court would have a statutory obligation to fully consider even in their absence. See Int'l Road Fed'n v. Embassy of the Dem. Republic of the Congo, 131 F. Supp. 2d 248, 250 (D.D.C. 2001) ("Congress intended § 1608(e) to provide foreign states protection from unfounded default judgments rendered solely upon a procedural default.").

Finally, it is not evident to the Court that there is any procedural error here. Plaintiffs seize on the fact that Local Civil Rule 7(g) states that a"motion to vacate an entry of default... shall be accompanied by a verified answer presenting a defense sufficient to bar the claim in whole or in part." However, the Federal Rules of Civil Procedure permit a party to file a motion to dismiss for lack of subject matter jurisdiction or failure to state a claim instead of an answer. See Fed. R. Civ. P. 12(b). Courts routinely allow defendants to file a motion to dismiss in place of an answer despite a prior entry of default, and this Court is unaware of any decision in which a court has struck a motion to dismiss following an entry of default because the motion to vacate the default was filed without an answer. See, e.g., Simpson v. Socialist People's Libyan Arab Jamahiriya, 326 F.3d 230, 232 (D.C. Cir. 2003) (remanding for dismissal of torture claim against foreign state that had moved to vacate the entry of default and dismiss the complaint but had filed no answer); Harris v. District of Columbia, 159 F.R.D. 315, 317 (D.D.C. 1995) (motion to vacate without either motion to dismiss or answer is consistent with the local rules provided that a motion to dismiss is filed later and the balance of the relevant factors favors vacating the entry of default).

The strong presumption against the entry of default judgment against a foreign state that has appeared in the case and expressed a desire to contest the claims, along with the uniquely sensitive nature of a suit in which a foreign state wishes to challenge the allegation that it has harbored terrorists, convinces the Court that it is appropriate to allow the Sudan defendants to participate in their defense. Plaintiffs are not prejudiced in any significant way by this result, because the Sudan defendants appeared well before any trial or final judgment, and the Court holds below that the declarations the defendants obtained before entering an appearance do not provide a basis for dismissing the complaint.*fn4 Finally, it cannot be ignored that striking the motion to dismiss on procedural grounds would only delay this action unnecessarily, because the Sudan defendants could easily file a verified answer and then simply resubmit their motion to dismiss at that time. For these reasons, the Court will deny plaintiffs' motion to strike the motion to dismiss, and grant the Sudan defendants' request to vacate the entry of default.*fn5

II. Motion to Dismiss

A. Standard of Review

The FSIA renders a foreign state immune from suit unless the case falls within one of the statutory exceptions to immunity. See 28 U.S.C. §§ 1604-1607. Consistent with the"restrictive view of sovereign immunity reflected in FSIA, the defendant bears the burden of proving that the plaintiff's allegations do not bring its case within a statutory exception to immunity." Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000) (quotation omitted). A court may dismiss a complaint brought pursuant to the FSIA only if it appears beyond doubt that plaintiffs can prove no set of facts that would establish the jurisdiction of the court and a viable claim for relief. Cicippio-Puleo, 353 F.3d at 1031-32; Daliberti v. Republic of Iraq, 97 F. Supp. 2d 38, 42-43 (D.D.C. 2000).

If a defendant "challenges only the legal sufficiency of the plaintiff's jurisdictional allegations, then the district court should take the plaintiff's factual allegations as true and determine whether they bring the case within any of the exceptions to immunity invoked by the plaintiff." Phoenix Consulting, 216 F.3d at 39 (quotation omitted). However, if the defendant also challenges"the factual basis of the court's jurisdiction, the court may not deny the motion to dismiss merely by assuming the truth of the facts alleged by the plaintiff and disputed by the defendant." Id. at 40. Instead, the "court must go beyond the pleadings and resolve any disputed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss." Id. at 40. A district court"retains considerable latitude in devising the procedures it will follow to ferret out the facts pertinent to jurisdiction," and"must give the plaintiff ample opportunity to secure and present evidence relevant to the existence of jurisdiction." Kilburn v. Socialist People's Libyan Arab Jamahiriya, 376 F. 3d 1123, 1130 (D.C. Cir. 2004); Phoenix Consulting, 216 F.3d at 40.

B. The Statutory Scheme

The Foreign Sovereign Immunities Act ("FSIA") provides the sole basis for the exercise of jurisdiction over a foreign state in a United States court. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989). Section 1604 of the statute establishes the general rule that a foreign state is immune from suit, stating that "a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in section 1605 to 1607 of this chapter." 28 U.S.C. § 1604. Section 1605 then identifies particular categories of cases in which sovereign immunity is not available, including those"in which the action is based upon a commercial activity" with a nexus to the United States, id. § 1605(a)(2), and"in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state," id. § 1605(a)(5). This action concerns the most recent exception to sovereign immunity to be added to the statute: the state-sponsored terrorism exception in section 1605(a)(7). Section 1605(a)(7) was enacted as part of the Antiterrorism and Effective Death Penalty Act ("AEDPA") in 1996. The provision waives the immunity of foreign states and their instrumentalities and agents in any case in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extra-judicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources (as defined in section 2339A of title 18) for such an act if such act or provision of material support is engaged in by an official, employee, or agent of such foreign state while acting within the scope of his or her office, employment, or agency.... 28 U.S.C. § 1605(a)(7).*fn6 It applies only if the foreign state was designated a state sponsor of terrorism at the time of the act or as a result of the act, the foreign state has been given a reasonable opportunity to arbitrate the claim if the act at issue occurred within the foreign state's territory, and either the claimant or the victim was a national of the United States at the time of the alleged act. Id. §§ 1605(a)(7)(A), (B)(i)-(ii).*fn7

The liability of a foreign state that has lost its immunity under section 1605 is determined by section 1606, which provides in relevant part:

As to any claim for relief with respect to which a foreign state is not entitled to immunity under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances; but a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.... Id. § 1606. Five months after the addition of section 1605(a)(7), Congress enacted a provision creating a private cause of action against officials, employees, and agents of foreign states for cases falling within the waiver of sovereign immunity in section 1605(a)(7). Known as the Flatow Amendment, this provision states in relevant part:

(a) An official, employee, or agent of a foreign state designated as a state sponsor of terrorism designated under section 6(j) of the Export Administration Act of 1979 while acting within the scope of his or her office, employment, or agency shall be liable to a United States national or the national's legal representative for personal injury or death caused by acts of that official, employee, or agent for which the courts of the United States may maintain jurisdiction under section 1605(a)(7) of title 28, United States Code for money damages which may include economic damages, solatium, pain, and suffering, and punitive damages if the acts ...


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