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Kaplan v. Hezbollah

United States District Court, District of Columbia

September 29, 2016

CHAIM KAPLAN, et al., Plaintiffs,
v.
HEZBOLLAH, et al., Defendants. CHAIM KAPLAN, et al., Plaintiffs,
v.
THE CENTRAL BANK OF THE ISLAMIC REPUBLIC OF IRAN, et al., Defendants.

          MEMORANDUM OPINION

          Royce C. Lamberth United States District Judge.

         I. BACKGROUND

         This action arises out of the July and August 2006 rocket attacks launched by Hezbollah into northern Israel. Plaintiffs, victims of these attacks, include: Brian, Karene, Mayan, Noa, Netiya and Ariel Erdstein; Chaim, Rivka, Mushka, Reuven, Menachem, Chana and Efraim Kaplan; Theodore and Moreen Greenberg; Jared and Danielle Sauter; Myra Mandel; Michael Fuchs; Dvora Kaszemacher and Chaya Alkareif; Chayim and Nechama Kumer; Laurie and Margalit Rappeport; and Avishai Reuvane and Elisheva Aron. Together, they bring this suit against The Islamic Republic of Iran ("Iran") and The Democratic People's Republic of Korea ("North Korea") under the state-sponsored terrorism exception to the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1602 et seq. ("FSIA"). Codified at 28 U.S.C. § 1605A, the exception provides "a federal right of action against foreign states" that sponsor terrorist acts. Haim v. Islamic Republic of Iran, 784 F.Supp.2d 1, 4 (D.D.C. 2011).

         II. PROCEDURAL HISTORY

         Based on the events of July and August, 2006, Plaintiffs filed a complaint on April 8, 2009 against Hezbollah and North Korea under the Antiterrorism Act, 18 U.S.C. § 2333(a) and the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605A(c) (Case No. 1:09-cv-00646) (ECF No.1). On March 23, 2010, Plaintiffs filed a second complaint, this time against the Central Bank of the Islamic Republic of Iran; Bank Saderat, Iran ("BSI"); Bank Saderat, PLC ("BSPLC"), the Central Bank of Iran ("CBI"), 40 "John Does" as well as Iran under the same statutory schemes, alleging these entities and individuals provided "extensive material support and resources to Hezbollah, that caused, enabled and facilitated" the Hezbollah rocket attacks. (Case No. 1:10-cv-00483) (ECF No. 3)

         The Court dismissed the claims against BSI and BSPLC on November 5, 2010, treating the banks' unopposed motion to dismiss as conceded (10-cv-483) (ECF No. 16). On August 20, 2013, the Court dismissed the statutory claims against Hezbollah (09-cv-646) (ECF No. 50) as well as the claims against the 40 John Does (10-cv-483) (ECF 42). On August 20, 2015, plaintiffs voluntarily dismissed their common-law claims against Hezbollah (09-cv-646) (ECF No. 63). Remaining are plaintiffs' FSIA claims against North Korea (09-cv-646) and Iran (10-cv-483).

         III. LIABILITY

         In an order and accompanying memorandum opinion dated July 23, 2014, (09-CV-646) (ECF No. 57), the Court concluded that it had subject matter jurisdiction over this action and that it could properly exercise personal jurisdiction over the defendants. The Court reasoned, "[b]ased on the allegations in Plaintiffs' Amended Complaint and the evidence presented by plaintiffs, " that "there can be no doubt that North Korea and Iran provided material support to Hezbollah, " and that both nations were subject to suit under 28 U.S.C. § 1605A(c). Id. at 4. In accordance with its liability determination and pursuant to its authority under Federal Rule of Civil Procedure 53, the Court appointed Alan Balaran as Special Master for the purpose of taking evidence and filing reports and recommendations regarding the amount of individual damages to be awarded each plaintiff. Order Appointing Special Master, at 2 (09-cv-646) (ECF 58).

         IV. STANDING UNDER THE FSIA

         The Special Master determined, at the outset, that two of the plaintiffs, Myra Mandel and Michael Fuchs lacked standing to bring any claims under the FSIA and that plaintiff Danielle Sauter lacked standing to claim an award for pain and suffering. The Court's review of these determinations follow.

         Myra Mandel

         Myra Mandel, a Canadian citizen, owned an art gallery that was shuttered as a result of the rocket attacks. She asserts both a claim for pain and suffering as well as economic damages. The Special Master recommended that Ms. Mandel's claims be dismissed, finding that her Canadian citizenship placed her outside the ambit of 28 U.S.C. § 1605A(c), as she is not a United States citizen, a member of the military, a United States employee, or a legal representative of the aforementioned as required by 28 U.S.C. § 1605 A(2)(A)(ii)(I-III). The Special Master also found that Ms. Mandel's claims did not derive from "injuries suffered by victims who meet the statute's requirements." Worley v. Islamic Republic of Iran, 75 F.Supp.3d 311, 327 (D.D.C. 2014) (citing Leibovitch v. Islamic Republic of Iran, 697 F.3d 561, 572 (7th Cir. 2012)). And in accordance with the principle that foreign nationals "must [] base their claims on injuries suffered by victims who meet the statute's requirements", Worley, 75 F.Supp.3d at 326 (emphasis added), the Special Master recommended that Ms. Mandel's claims be dismissed for lack of standing.

         The Court concurs with the Special Master's finding that Myra Mandel lacks standing under the FSIA and ADOPTS his recommendation that Ms. Mandel's claims be dismissed.

         Michael Fuchs

         Michael Fuchs, an Israeli citizen, seeks compensation for injuries sustained as a result of an exploding shell. The Special Master recommended that Mr. Fuchs' claims be dismissed on evidence that Mr. Fuchs neither is a United States citizen, a member of the military, a United States employee, nor a legal representative of the aforementioned. And, as Mr. Fuchs' claims are not derivative of those brought by any person meeting the statutory criteria of the FSIA, the Special Master dismissed Mr. Fuchs' action for lack of standing.

         The Court concurs with the Special Master's finding that Michael Fuchs lacks standing under 28 U.S.C. § 1605A(c) and ADOPTS the recommendation that Mr. Fuchs' claims be dismissed.

         Danielle Sauter

         Danielle Sauter seeks compensatory damages for pain and suffering and solatium. The Special Master denied Ms. Sauter's claim for pain and suffering in light of her Israeli citizenship and the fact that, unlike her claim for solatium, her pain and suffering did not arise from the claims of a U.S. national. See Owens v. Republic of Sudan, 826 F.Supp.2d 128, 149 (D.D.C. 2011).

         The Court ADOPTS the Special Master's recommendation that Danielle Sauter's status as an Israeli citizen precludes her from pursuing an award for pain and suffering under the FSIA.

         V. DAMAGES

         Damages available under the FSIA include "economic damages, solatium, pain and suffering, and punitive damages." 28 U.S.C. § 1605A(c). To demonstrate entitlement to damages under the FSIA, a claimant "must prove that the consequences of the defendants' conduct were 'reasonably certain (i.e., more likely than not) to occur, and must prove the amount of the damages by a reasonable estimate consistent with this [Circuit's] application of the American rule on damages.'" Salazar v. Islamic Republic of Iran, 370 F.Supp.2d 105, 115-16 (D.D.C. 2005) (quoting Hill v. Republic of Iraq, 328 F.3d 680, 681 (D.C. Cir. 2003) (internal quotations omitted). See also O'Brien v. Islamic Republic of Iran, 853 F.Supp.2d 44, 46 (D.D.C. 2012).

         A. Pain and Suffering

         In its review of the Special Master's recommendations, the Court is guided by prior decisions awarding damages to victims of terrorism, mindful of the difficulties associated with "assess[ing] the amount of compensatory damages for the pain and suffering of surviving victims of terrorist attacks, especially where severe mental anguish is involved." Valencia v. Islamic Republic of Iran, 774 F.Supp.2d 1, 14 (D.D.C. 2010).

         Courts consider a "myriad of factors" when assessing damages for surviving victims of terrorist hostilities. These factors include: "the severity of the pain immediately following the injury, the length of hospitalization, and the extent of the impairment that will remain with the victim for the rest of his or her life." Peterson v. Islamic Republic of Iran, 515 F.Supp.2d 25, 52 n. 26 (D.D.C. 2007) (citing Blais, 459 F.Supp.2d at 59). Calculating damages begins with the baseline assumption that "persons suffering injuries in terrorist attacks are entitled to $5 million in damages." Davis v. Islamic Republic of Iran, 882 F.Supp.2d 7, 12 (D.D.C. 2012) (citing Peterson, 515 F.Supp.2d at 54). This lodestar is "not set in stone, " Murphy v. Islamic Republic of Iran, 740 F.Supp.2d 51, 74 (D.D.C. 2010), and can deviate upward in the presence of "severe instances of physical and psychological pain, such as where victims suffered relatively more numerous and severe injuries, were rendered quadriplegic, [including] partially lost vision and hearing, or were mistaken for dead, " Valore v. Islamic Republic of Iran, 700 F.Supp.2d 52, 84 (D.D.C. 2010), or downward in the face of "minor shrapnel injuries or minor injury from small-arms fire." Id. These deviations defer to the principle that "strict application of precedent could lead to conflicting conclusions about an appropriate award." Brewer v. Islamic Republic of Iran, 664 F.Supp.2d 43, 57 (D.D.C. 2009) (quoting Blais v. Islamic Republic of Iran, 459 F.Supp.2d 40, 59 (D.D.C. 2006)).

         For victims who "suffer[ed] severe emotional injury without physical injury, this Court has typically awarded the victim $1.5 million." Harrison v. Republic of Sudan, 882 F.Supp.2d 23, 49 (D.D.C. 2012) (citing Valore, 700 F.Supp.2d at 85). Notwithstanding the "presumption" that emotional trauma is a natural consequence of terrorist activity, Slethem v. Islamic Republic of Iran, 201 F.Supp.2d 78, 89 (D.D.C. 2002), claimants "must prove damages in the same manner and to the same extent as any other default winner, " Hill, 328 F.3d at 683-84 (internal quotation marks and citation omitted), which, in turn, requires that they "prove the fact of injury with reasonable certainty." Samaritan Inns, Inc. v. District of Columbia, 114 F.3d 1227, 1235 (D.C. Cir. 1997).

         In keeping with the guidelines set out in Harrison, 582 F.Supp.2d at 49, the Special Master recommended that Rivka Kaplan, Brian Erdstein, Nechama Kumer, Laurie Rappeport, Margalit Rappeport, Theodore Greenberg, Maureen Greenberg, Jared Sauter, Dvora Kaszemacher, Chaya Kaszemacher Alkareif, Avishai Reuvane, and Elisheva Aron each receive $1.5 million. The Court ADOPTS all of the Special Master's recommendations regarding these claimans. Those instances where the Special Master either denied an award or departed from the established framework are discussed below.

         1. Denial of Compensatory Damages for Pain and Suffering

         (a) Mushka, Reuven, Menachem Chana and Efraim Kaplan

         The Special Master recommended that no damages for pain and suffering be awarded to Chaim and Rivka Kaplan's children - Mushka, Reuven, Menachem, Chana and Efraim. The Special Master reasoned that the children supplied no testimony describing the trauma they experienced as a result of the events of July and August 2006 nor did they agree to undergo a psychological evaluation from which an informed opinion could be rendered. Accordingly, the Special Master concluded that he was unable to be "reasonably certain" that Mushka, Reuven, Menachem, Chana and Efraim Kaplan were "severely injured" as a result of the Hezbollah rocket attacks.

         Plaintiffs contest the Special Master's recommendation that Mushka, Reuven, Menachem, Chana and Menachem Kaplan receive no compensatory damages for pain and suffering. The Court ...


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