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Sheryl Wultz, et al v. Islamic Republic of Iran

January 28, 2011

SHERYL WULTZ, ET AL., PLAINTIFFS,
v.
ISLAMIC REPUBLIC OF IRAN, ET AL., DEFENDANTS.



MEMORANDUM OPINION

I. INTRODUCTION

This case arises out of the suicide bombing of a restaurant in Tel Aviv, Israel by members of the Palestinian Islamic Jihad ("PIJ") on April 17, 2006. Plaintiffs are the estate and family members of Daniel Wultz, an American citizen killed in the attack. They allege that defendant Bank of China, Ltd. ("BOC") executed dozens of wire transfers on behalf of the PIJ, funneling money that was used in the planning and execution of terrorist attacks between senior PIJ leadership in Iran and Syria and officers and agents of that organization. Based on these allegations, plaintiffs assert that BOC substantially increased PIJ's ability to plan, fund and facilitate the specific attack that killed Mr. Wultz, and they set forth claims for relief under the federal Antiterrorism Act, 18 U.S.C. § 2331 et seq. ("ATA"), and Israeli law. Defendant BOC moved to dismiss this action on several grounds, which the Court previously denied. Memorandum Opinion, Oct. 20, 2010 [83] ("Mem. Op.").

BOC now moves the Court to reconsider its decision or, in the alternative, to certify an issue for interlocutory appeal. Specifically, BOC asks the Court to re-evaluate its determination that BOC is subject to personal jurisdiction in the District of Columbia. Defendant maintains that the Court was mistaken in permitting plaintiffs to invoke the nationwide service of process provision in the ATA because that statute's language ties its grant of service explicitly to its provision of venue. BOC argues that this language renders the service provision inapplicable unless plaintiffs can satisfy the ATA's venue requirements, which all parties agree they cannot. Thus, the argument goes, because nationwide service cannot be invoked, this Court's constitutional ruling concerning BOC's contacts with the United States as a whole lacks proper foundation and must be revisited. For the reasons set forth below, the Court grants defendant's motion and holds that it lacks personal jurisdiction over BOC. The Court, pursuant to plaintiffs' request, thus severs the claims against defendant BOC, and transfers those claims to the United States District Court for the Southern District of New York.

II. BACKGROUND AND PROCEDURAL HISTORY

Plaintiffs first brought this suit in August of 2008, Complaint, Aug. 22, 2008 [1], and filed their Amended Complaint in early 2009. First Amended Complaint, Jan. 13, 2009 [12] ("FAC"). A few months later, BOC moved to dismiss the FAC, asserting that (1) plaintiffs lacked standing to bring this suit, (2) the Court could not assert subject matter jurisdiction because the case involved political questions, (3) the Court lacked personal jurisdiction over BOC, and (4) plaintiffs could not state claims for relief under either the ATA or Israeli law. Motion to Dismiss the First Amended Complaint, Mar. 5, 2009 [15] ("MTD Br."). With regard to personal jurisdiction, BOC argued that the Court lacked jurisdiction over it under the Due Process Clause of the Constitution, which requires plaintiffs to show that BOC "purposefully established 'minimum contacts with [the District of Columbia] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Helmer v. Doletskaya, 393 F.3d 201, 205 (D.C. Cir. 2004) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); alterations in original). This standard requires plaintiffs to establish that BOC had "minimum contacts . . . aris[ing] from some act" by which it purposefully availed itself of "the privilege of conducting activities with the forum . . . thus invoking the benefits and protections of its laws." Gomez v. Aragon, 705 F. Supp. 2d 21, 24 (D.D.C. 2010) (quotations omitted). In its motion, defendant argued that plaintiffs could not establish-either through factual evidence or reliance on the allegations in the FAC-that BOC had any contacts with D.C., much less those "minimum contacts" necessary to support jurisdiction. MTD Br. at 13--18.

In response, plaintiffs conceded that, as a factual matter, they could not establish any contact that defendant had with this forum. Memorandum in Opposition to Motion to Dismiss 30, May 26, 2009 [31] ("MTD Opp."). Instead, plaintiffs relied upon the ATA's provision of nationwide service, id. at 29--30, which permits "[p]rocess . . . [to] be served in any district where the defendant resides, is found, or has an agent." 18 U.S.C. § 2334(a) (emphasis added). Because the ATA permits nationwide service of process, plaintiffs argued that they need only show that defendant has minimum contacts with the United States as a whole, rather than with the D.C. specifically. See Reese Bros. v. USPS, 477 F. Supp. 2d 31, 37--38 (D.D.C. 2007) ("When statutes include congressional authorization of nationwide service of process . . . minimum contacts with the United States generally satisfies personal jurisdiction.").

BOC foresaw this argument in its opening brief, and set forth two responses: first, BOC asserted that plaintiff could not state a claim under the ATA, and thus could not invoke the Act's nationwide service of process provision, MTD Br. at 13--14; and second, BOC argued that the national contacts test had only been invoked against "shadowy international terrorist organization[s]," and thus was inapplicable in this case because BOC is an established institution with ties to the United States. Id. at 14--15. In addition, in its briefing on reply BOC raised an additional criticism of plaintiffs' exclusive reliance on the ATA, Reply to Opposition to Motion to Dismiss 4--10, July 24, 2009 [42] ("MTD Reply"), which the Court understood as an objection on the grounds of improper venue. Mem. Op. at 41. Plaintiffs then filed a sur-reply addressing the supplemental jurisdiction and venue arguments that BOC raised in its reply. Plaintiffs' Surreply, Oct. 20, 2010 [80] ("MTD Sur-reply").

In its Memorandum Opinion, the Court denied BOC's motion on all grounds, holding that "plaintiffs have standing, plaintiffs' claims do not raise non-justiciable political questions, the Bank is not entitled to sovereign immunity, the Court has personal jurisdiction over the Bank, venue is proper, plaintiffs have adequately pled claims upon which relief may be granted, and plaintiffs have not pled duplicative claims." Mem. Op. at 3. With respect to the arguments concerning jurisdiction, the Court found that by invoking the nationwide service provision of the ATA, id. at 23, plaintiffs could establish jurisdiction by serving defendant BOC anywhere in the United States and successfully alleging "'merely a colorable claim under the [ATA].'" Id. at 28 (quoting Burnett v. Al Baraka Inv. & Dev. Corp., 274 F. Supp. 2d 86, 97--98 (D.D.C. 2003)).*fn1

Turning to defendant's argument that the ATA's service provision could only alter the "minimum contacts" test in cases involving what defendant referred to as "shadowy international terrorist organization[s]," the Court noted that while the cases listed in BOC's brief may have involved such groups, "[n]one of [those cases] support the proposition that a national-contacts test applies only to terrorist organizations." Id. at 31. The Court thus applied the national-contacts test, and determined that the extensive business conducted by BOC through its own branches in the U.S., along with plaintiffs' allegations that BOC performed a wire transfer to PIJ through one of its U.S. branches, sufficiently established BOC's minimum contacts with the United States and therefore warranted the exercise of jurisdiction. Id. at 32--33.

Moving to a discussion of venue, the Court first held that because BOC failed to raise any objection to venue in its moving papers, it had waived any such objection in this case. Id. at 38. However, in an abundance of caution, the Court also reached the merits of the venue question, holding that the doctrine of pendent venue, which provides that "where venue is proper for some, but not all, claims and where . . . the claims arise out of the same core of operative facts, plaintiffs may rely on the doctrine of 'pendent venue' to cure any venue defect," Sisso v. Islamic Republic of Iran, 448 F. Supp. 2d 76, 82 (D.D.C. 2006) (citing Washington v. Gen. Elec. Corp., 686 F. Supp. 361, 362 (D.D.C. 1988)), was applicable here. The Court then briefly addressed BOC's argument in its reply concerning the ATA's service provision, concluding-after characterizing BOC's position as arguing "that because venue is improper, plaintiffs cannot establish personal jurisdiction"-that it "need not reach" this argument because it had already held "that this is a proper venue." Mem. Op. at 41 n.5.

Shortly after the release of the Court's opinion, BOC filed its Motion for Reconsideration or for Certification for Interlocutory Appeal of the Order Denying Motion to Dismiss, Nov. 5, 2010 [92] ("Br."), in which it maintains that the Court erred in asserting personal jurisdiction over defendant, and also disputes the Court's determination that this suit is properly venued.*fn2 Id. at 5--18. The primary thrust of defendant's motion focuses on an issue that-as defendant correctly points out, id. at 2-the Court did not squarely address in its opinion. That issue is whether plaintiffs must satisfy the specific venue provision of the ATA, as provided at 18 U.S.C. § 2334(a), in order to invoke the statute's nationwide service provision, or whether plaintiffs must simply establish that venue is proper on any grounds. Id. Plaintiffs, in opposition to BOC's motion, argue that there is no link between the ATA's venue and service provisions, and emphasize that the Court has already determined that defendant's objection to venue was waived. Opposition to Motion for Reconsideration or for Certification for Interlocutory Appeal 1--6, Nov. 24, 2010 [95] ("Opp.").

III. LEGAL DISCUSSION

A. Grounds for Reconsideration

Though "no express rule . . . is needed to justify a motion for reconsideration," Federal Rule of Civil Procedure 54(b) "by its terms allow[s] the trial court to modify its earlier order." Dellums v. Powell, 566 F.2d 231, 234 (D.C. Cir. 1977); see also Cobell v. Norton, 355 F. Supp. 2d 531, 539 (D.D.C. 2005) ("Rule 54(b) governs reconsideration of orders that do not constitute final judgments in a case."). While this rule provides a procedural mechanism for courts to reconsider their prior opinions, the actual language of Rule 54(b) sets forth little guidance as to when such review is appropriate.*fn3 To fill this gap, courts in this district have held that "relief upon reconsideration . . . pursuant to Rule 54(b) is available 'as justice requires.'" Hoffman v. District of Columbia, 681 F. Supp. 2d 86, 90 (D.D.C. 2010) (quoting Childers v. Slate, 197 F.R.D. 185, 190 (D.D.C. 2000)). "[A]sking 'what justice requires' amounts to determining, within the Court's discretion, whether reconsideration is necessary under the relevant circumstances." Cobell, 355 F. Supp. 2d at 539; see also United States v. Second Chance Body Armor, Inc., 709 F. Supp. 2d 52, 55 (D.D.C. 2010) ("[A] court has wide discretion in deciding a motion for reconsideration and can revise its earlier decision if such relief is necessary under the circumstances.") (citing Judicial Watch v. Dep't of Army, 466 F. Supp. 2d 112, 123 (D.D.C.2006)). The relevant circumstances that may warrant reconsideration include "whether the court 'has patently misunderstood a party, has made a decision outside the adversarial issues presented to the court by the parties, has made an error not of reasoning, but of apprehension, or where a controlling or significant change in the law or facts [has occurred] since ...


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