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Ofisi v. BNP Paribas S.A.

United States District Court, District of Columbia

September 29, 2017

MARY OFISI, et al., Plaintiffs,
v.
BNP PARIBAS, S.A., et al., Defendants.

          MEMORANDUM OPINION

          JOHN D. BATES UNITED STATES DISTRICT JUDGE

         Plaintiffs in this case are victims and family members of victims of the 1998 terrorist bombings of the U.S. embassies in Kenya and Tanzania, which killed 224 people and injured thousands more. The attacks were perpetrated by al Qaeda, with the assistance of the Republic of Sudan, which provided al Qaeda with safe harbor, as well as financial, military, and intelligence assistance throughout the 1990s. See generally Owens v. Republic of Sudan, 826 F.Supp.2d 128 (D.D.C. 2011) (detailing findings of fact and conclusions of law as to Iran's and Sudan's liability for the bombings). Plaintiffs have already sought and obtained judgment against Sudan for its role in the terrorist bombings, in protracted litigation that began in 2001. See Owens v. Republic of Sudan, 174 F.Supp.3d 242, 250-53 (D.D.C. 2016) (discussing the history of plaintiffs' litigation against Sudan). Earlier this year, the D.C. Circuit affirmed these judgments against Sudan in most respects, but vacated all punitive damages awards. See Owens v. Republic of Sudan, 864 F.3d 751, 769 (D.C. Cir. 2017). Plaintiffs now bring suit against defendant banks BNP Paribas, S.A. (BNPP) and Al Shamal Islamic Bank under the civil liability provision of the Anti-Terrorism Act (ATA), 18 U.S.C. § 2333, the Alien Tort Statute (ATS), 28 U.S.C. §1350, and various common law torts, for allegedly conspiring with Sudan, Sudanese banks, and al Qaeda to defeat U.S. sanctions against Sudan. BNPP has moved to dismiss all of plaintiffs' claims. See Def.'s Mot. to Dismiss [ECF No. 13] at 1.[1] For the reasons described below, BNPP's motion will be granted and the complaint will be dismissed.

         I. BACKGROUND

         The following facts are drawn from plaintiffs' complaint. Plaintiffs are U.S. citizens or foreign national employees or contractors of the U.S. government who were killed or injured in the 1998 embassy bombings, or their immediate family members. Compl. [ECF No. 1] ¶ 31. Plaintiffs were awarded judgments against Sudan for its role in the bombings in prior litigation in this Court. Id. ¶¶ 32, 85. The defendants are two banks, BNPP and Al Shamal. BNPP is a multinational bank, incorporated under the laws of France, and headquartered in Paris, France. Id. ¶ 18. During the time period relevant to the complaint, BNPP operated affiliates, branch offices, and subsidiaries in the U.S. Id. Al Shamal is a Sudanese bank established in 1990, funded in part through a $50 million capital contribution from Osama Bin Laden. Id. ¶ 154. Al Shamal allegedly maintained bank accounts for al Qaeda, and provided financial and material support to al Qaeda prior to, and after, the 1998 embassy bombings. Id. ¶ 69.

         The complaint alleges a conspiracy among BNPP, Sudan, Sudanese banks (including Al Shamal), and al Qaeda to defeat the economic sanctions imposed by the U.S. on Sudan in November 1997. The complaint alleges that BNPP provided access to the U.S. financial system to Sudan, Sudanese banks, and their agents, who in turn provided material support to al Qaeda which it used to carry out the terrorist attacks on the U.S. embassies. Id. ¶¶ 1-2. According to the complaint, the embassy bombings were carried out, in part, to defeat U.S. sanctions against Sudan. Id. ¶¶ 12, 108.

         A. Sudan, al Qaeda, and the Embassy Bombings

         In 1991, Sudan invited al Qaeda-an international terrorist network founded and led by Osama bin Laden-to establish operations in Sudan. Id. ¶ 126. Sudan and al Qaeda allegedly formed a mutually beneficial relationship. For its part, Sudan provided al Qaeda with safe harbor, the ability to operate with impunity, and access to the U.S. financial system. Sudan also provided military and intelligence assistance to al Qaeda and an airliner to transport weapons, and facilitated travel for members of al Qaeda by providing Sudanese passports, Sudanese citizenship, and unregulated passage over the Sudan-Kenya border. Id. ¶¶ 126, 134-36, 138, 140, 144, 151; see Owens, 864 F.3d at 782-83. In return, al Qaeda agreed to support the government in its war in southern Sudan against Christians, and invested in Sudan's economy and infrastructure, for example, by building roads, a major highway, and an airport. Id. ¶¶ 126-127, 137; see Owens, 826 F.Supp.2d at 140.

         The U.S. designated Sudan as a state sponsor of terrorism in 1993, and has maintained that designation ever since. Compl. ¶ 131. A 1993 report by the U.S. State Department noted that Sudan actively harbored international terrorist groups and maintained relations with a wide range of Islamic extremists. Id. ¶ 132. Also in 1993, Bin Laden ordered an al Qaeda operative to Nairobi, Kenya to survey U.S. targets, including the U.S. embassy. Id. ¶ 133. The Sudanese intelligence service facilitated the transport of al Qaeda operatives and funds from Sudan to a terrorist cell operating in Nairobi. Id. ¶ 134. Al Qaeda was present in Sudan in 1997 and 1998 leading up to the embassy bombings and, according to the complaint, the support that al Qaeda received from Sudan and the access Sudan provided to its banking system was integral to al Qaeda's plan to carry out the attacks. Id. ¶ 152. On August 7, 1998, al Qaeda attacked the U.S. embassies in Kenya and Tanzania, killing 224 people and injuring thousands more. Id. ¶ 118.

         B. U.S. Sanctions Against Sudan and BNPP

         Prior to the terrorist bombings of the U.S. embassies, but as a result of Sudan's designation as a state sponsor of terrorism, the U.S. imposed various sanctions against the Sudanese government in the early 1990s. In 1997, the U.S. government imposed a complete trade embargo on Sudan due to Sudan's continued support for terrorism, which made it unlawful to export goods and services, including financial services, to Sudan without a license from the U.S. Treasury Department's Office of Foreign Assets Control (OFAC). Id. ¶¶ 5, 103, 105. As a result of these sanctions, virtually all trade and investment activities involving the U.S. financial system, including the processing of U.S. dollar transactions through the U.S., were prohibited as to Sudan, its agencies, or instrumentalities. Id. ¶ 105.

         The complaint alleges that BNPP did not comply with the U.S. sanctions regime against Sudan and that, had it done so, al Qaeda would not have been able to receive the assistance from Sudan necessary to carry out the 1998 embassy bombings. In July 2014, BNPP pled guilty in federal court to one count of conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). Compl. ¶ 86; see 50 U.S.C. § 1705.[2]BNPP admitted to violating U.S. sanctions imposed on Sudan (as well as on Cuba and Iran) by conducting and concealing U.S. dollar-denominated transactions on behalf of sanctioned entities associated with those countries. See Compl. ¶ 86; see also BNPP Plea Agreement Statement of Facts (SOF) [ECF No. 13-2] ¶¶ 14-16. BNPP stipulated in its plea agreement that this conspiracy took place between 2002 and 2012, based on banking relationships BNPP had established with Sudanese financial institutions as early as 1997. SOF ¶¶ 14, 17.

         Shortly after the imposition of U.S. sanctions in 1997, BNPP agreed to become the sole correspondent bank in Europe for Sudan's central bank, which then directed all major Sudanese commercial banks to use BNPP as their primary correspondent bank in Europe. As a result, most major Sudanese banks eventually held U.S. dollar-denominated accounts with BNPP. Compl. ¶ 87; SOF ¶ 19. This included Al Shamal, which held an account at United European Bank, a subsidiary of BNPP. Compl. ¶ 26. In November 1997, BNPP established relationships with unaffiliated regional satellite banks located throughout Africa, Europe, and the Middle East. Id. ¶ 107; SOF ¶ 23. BNPP used these relationships to facilitate U.S. dollar payments for sanctioned Sudanese banks, essentially using the regional satellite banks as clearinghouses to disguise transactions with sanctioned entities. Compl. ¶¶ 107, 194. BNPP directed its employees to omit any references to Sudan in U.S. dollar payment messages, in order to disguise the source of the transactions from U.S. authorities. Id. ¶¶ 182, 188, 190.

         Plaintiffs allege that BNPP's conduct violated: (1) the ATA, 18 U.S.C. §§ 2339A, 2339C and 2332d, entitling those plaintiffs who are U.S. citizens to damages under section 2333, see Compl. ¶¶ 293-318 (Counts V and VI); (2) the law of nations, thus entitling those plaintiffs who are not U.S. citizens to damages under the ATS, id. ¶¶ 255-292 (Counts III and IV); (3) common law principles of conspiracy and aiding and abetting various torts, id. ¶¶ 226-254 (Counts I and II); and (4) constituted a fraudulent conveyance that interfered with plaintiffs' ability to collect on the judgment they obtained against Sudan from prior litigation, id. ¶¶ 327-340 (Count VIII).

         C. Owens v. BNP Paribas, S.A.

         Earlier this year, this Court decided a case brought by a different group of plaintiffs who are victims of the 1998 embassy bombings against BNPP and two of its subsidiaries. Owens v. BNP Paribas S.A., 235 F.Supp.3d 85 (D.D.C. 2017). Plaintiffs in that case made allegations similar to plaintiffs here, and asserted claims under the civil liability provision of the ATA and various state tort laws. This Court dismissed those claims based on plaintiffs' failure to plead the required elements to state a civil liability claim under the ATA. See id. at 98-100. The Owens plaintiffs have appealed this Court's judgment to the D.C. Circuit. See Owens v. BNP Paribas S.A., No. 17-7037 (D.C. Cir. appeal docketed Feb. 28, 2017).

         II. LEGAL STANDARD

         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, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A plaintiff must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A complaint that “‘pleads facts that are merely consistent with a defendant's liability'” falls short of showing plausible entitlement to relief. Atherton v. D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) (quoting Iqbal, 556 U.S. at 678). The Court must take all allegations in the complaint as true, and draw all reasonable inferences in the plaintiffs' favor. See Aktieselskabet AF 21. Nov. 2001 v. Fame Jeans, Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). However, “labels and conclusions, ” “a formulaic recitation of the elements of a cause of action, ” or “naked assertion[s] devoid of further factual enhancement, ” do not satisfy the pleading standard. Iqbal, 556 U.S. at 678 (citation and internal quotation marks omitted). The Court need not accept legal conclusions or inferences drawn by the plaintiff which are unsupported by facts alleged in the complaint. Food & Water Watch, Inc. v. Vilsack, 808 F.3d 905, 913 (D.C. Cir. 2015).

         III. DISCUSSION A. SUBJECT MATTER JURISDICTION

         BNPP initially argues that the Court lacks subject matter jurisdiction over plaintiffs' ATA and ATS claims because plaintiffs have failed to individually allege their nationalities. Def.'s Mot. to Dismiss at 11. The ATS and the ATA establish subject matter jurisdiction for certain plaintiffs. Ali v. Rumsfeld, 649 F.3d 762, 775 (D.C. Cir. 2011); Gill v. Arab Bank, PLC, 893 F.Supp.2d 474, 495 (E.D.N.Y. 2012). The ATS provides that “[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” 28 U.S.C. § 1350 (emphasis added). Conversely, the ATA provides that “[a]ny national of the United States injured in his or her person . . . may sue therefor in any appropriate district court of the United States . . . .” 18 U.S.C. § 2333(a) (emphasis added). The term “national of the United States” means (a) a citizen of the U.S., or (b) a person who, though not a citizen, owes permanent allegiance to the U.S. 18 U.S.C. § 2331(2); 8 U.S.C. § 1101(a)(22).

         The complaint alleges that lead plaintiff Mary Ofisi is a Kenyan national, Compl. ¶ 29; thus, she is an “alien” as required to bring a claim under the ATS. The complaint does not specify the individual nationalities for the remaining 566 named plaintiffs; rather, it alleges that “[e]ach of the other named plaintiffs are either United States citizens or foreign national employees or contractors of the United States Government who were killed or injured in the 1998 East African Embassy Attacks, or their immediate family members.” Id. ¶ 31. The question is whether, as BNPP argues, this is insufficient.

         BNPP's argument must be considered in the context of Rule 8's requirement that the complaint provide “a short and plain statement of the grounds for the court's jurisdiction.” Fed.R.Civ.P. 8(a)(1). In assessing whether a complaint sufficiently alleges subject matter jurisdiction, the Court accepts as true the complaint's allegations, see Iqbal, 556 U.S. at 678, and liberally construes the pleadings such that the plaintiff benefits from all inferences derived from the facts alleged, Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004). “‘At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice.'” Attias v. Carefirst, Inc., 865 F.3d 620, 625-26 (D.C. Cir. 2017) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).

         In light of these authorities, the Court is satisfied that the complaint's allegation-that all of the named plaintiffs are “either U.S. citizens or foreign national employees or contractors of the United States government”-provides a short and plain statement of the court's jurisdiction, which is all that is required under Rule 8. Granting plaintiffs the benefit of liberal construction, the Court infers that the U.S. citizen plaintiffs are asserting claims under the ATA, while the other plaintiffs are asserting claims under the ATS. The Court will therefore move forward and evaluate whether plaintiffs have plausibly alleged the other elements required to state those claims.

         B. ATA CLAIMS

         BNPP moves to dismiss the U.S. citizen plaintiffs' ATA claims for failure to state a claim. See Def.'s Mot. to Dismiss at 12-31. The ATA's civil liability provision, 18 U.S.C. § 2333(a), provides that “[a]ny national of the United States injured in his or her person . . . 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 . . . damages.” On its face, the ATA appears to require: (1) injury to a U.S. national, (2) an act of international terrorism, and (3) causation. Section 2333 does not contain an express intent element, but courts have concluded that the statute requires some kind of deliberate misconduct by the defendant, i.e., more than mere negligence, although “deliberate disregard of the interests of others” may be sufficient. Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 692-93 (7th Cir. 2008) (en banc) (citation and internal quotation marks omitted); see also Gill, 893 F.Supp.2d at 503; Wultz v. Islamic Republic of Iran, 755 F.Supp.2d 1, 42 (D.D.C. 2010); Goldberg v. UBS AG, 660 F.Supp.2d 410, 428 (E.D.N.Y. 2009).

         The intent required under § 2333 is complicated by the meaning of “international terrorism, ” which is defined as activities that, inter alia, “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.” 18 U.S.C. § 2331(1)(A). Section 2333 thus incorporates a range of state and federal crimes that may constitute “acts of international terrorism” if a plaintiff can show both that the defendant committed the criminal violation and that the crime satisfies the additional elements listed above, i.e., injury to a U.S. national and causation. In other words, “while section 2333 itself requires at least reckless conduct, plaintiffs will also have to show varying levels of scienter depending on the underlying criminal violation alleged as constituting the requisite ‘act of international terrorism.'” Owens, 235 F.Supp.3d at 90-91; see also, e.g., Gill, 893 F.Supp.2d at 504; Goldberg, 660 F.Supp.2d at 427-28.

         Plaintiffs allege that BNPP violated three criminal provisions of the ATA: 18 U.S.C. §§ 2332d, 2339A, and 2339C. Section 2339A(a) makes it a crime to “provide[ ] material support or resources [to terrorists] . . . knowing or intending that they are to be used in preparation for, or in carrying out, a violation of” various criminal statutes that prohibit, for example, the extraterritorial killing of a U.S. national (§ 2332(a)) or the extraterritorial bombing of a place of public use or a government facility (§ 2332f(a)(1)). Section 2339C(a)(1) makes it a crime to “by any means, directly or indirectly, unlawfully and willfully provide[ ] or collect[ ] funds . . . with the knowledge that such funds are to be used” to carry out an act intended to cause death or serious bodily injury, where “the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or to abstain from doing any act.” Finally, § 2332d(a) makes is a crime for any “United States person, knowing or having reasonable cause to know that a country is designated under section 6(j) of the Export Administration Act of 1979 . . . as a country supporting international terrorism, ” to “engage[] in a financial transaction with the government of that country.” Before proceeding any further, the Court will dismiss plaintiffs' claim for primary liability based on BNPP's alleged violation of § 2339C because that statute was enacted in 2002, four years after the relevant conduct in this case leading up to the embassy bombings. See Terrorist Bombings Convention Implementation Act of 2002, Pub. L. No. 107-197, § 202, 116 Stat. 721, 724; Owens, 235 F.Supp.3d at 98 (dismissing civil claim against BNPP premised on § 2339C for same reason); see also Boim, 549 F.3d at 691 (holding civil liability may not be imposed under § 2333 because defendant did not render material support to terrorist group between the effective date of § 2339A and plaintiff's injury).

         The parties have raised several issues of statutory interpretation related to plaintiffs' remaining claims under § 2339A and § 2332d. The first two issues-whether § 2333 provides for aiding and abetting liability and what standard of causation applies-are ones that the Court recently resolved in Owens, 235 F.Supp.3d at 91-97. Hence, the Court will incorporate that portion of the Owens opinion here and only briefly summarize those issues below. The third- whether BNPP is a “United States person” for purposes of § 2332d-was not raised in Owens and will thus be addressed fully below.

         1. Aiding and Abetting Liability

         The parties dispute whether section 2333 of the ATA permits secondary liability claims for aiding and abetting. See Mot. to Dismiss at 26-29; Pls.' Opp'n [ECF No. 19] at 23-25. The Court decided this issue in Owens where, after surveying the relevant case law, it concluded that the prior version of the ATA that is applicable to plaintiffs' claims in this case does not provide for civil aiding and abetting liability under § 2333. See 235 F.Supp.3d at 91-95.[3] Plaintiffs argue here that the Court should follow an earlier decision by a court in this district, see Wultz, 755 F.Supp.2d at 56-57, [4] that recognized aiding and abetting liability under the ATA, instead of decisions from the Second and Seventh Circuits[5] going the other way. This Court already considered and rejected this argument in Owens, 235 F.Supp.3d at 93. Thus, to the extent that plaintiffs' ATA claims are based on an aiding and abetting theory, they will be dismissed.

         2. Proximate Causation

         The parties also dispute the applicable causation standard. Section 2333(a) requires that a plaintiff be injured “by reason of” an act of international terrorism. The parties agree that the “by reason of” language requires plaintiffs to show that BNPP's conduct proximately caused the attacks, but they appear to disagree about what that means. See Def.'s Mot. to Dismiss at 13-14; Pls.' Opp'n at 28-30. This Court also resolved this issue in Owens, concluding that § 2333 requires a showing of proximate cause as that “term is typically defined.” 235 F.Supp.3d at 97 (citing Burnett, 274 F.Supp.2d at 105 (“Proximate cause is defined as a test of whether the injury is the natural and probable consequence of the negligent or wrongful act and ought to have been foreseen in light of the circumstances.” (internal quotations omitted))); see Siegel v. SEC, 592 F.3d 147, 159 (D.C. Cir. 2010) (“[P]roximate causation . . . is normally understood to require a direct relation between conduct alleged and injury asserted.” (citation and internal quotation marks omitted)). That is the standard that the Court will apply to plaintiffs' ATA claims here.

         3. United States Person Under § 2332d

         The final issue of statutory interpretation concerns whether BNPP qualifies as a “United States person” under § 2332d. BNPP argues that it does not and that plaintiffs' claim founded on BNPP's alleged violation of this statute should therefore be dismissed. Def's. Mot. to Dismiss at 30-31.[6]

         Section 2332d defines “United States person” to mean a: “(A) United States citizen or national; (B) permanent resident alien; (C) juridical person[7] organized under the laws of the United States; or (D) any person in the United States.” Notwithstanding the complaint's conclusory allegations that BNPP is a “United States person” within the meaning of § 2332d, see Compl. ¶¶ 98, 312, the complaint acknowledges that BNPP is “a French multinational bank, incorporated under the laws of France, and headquartered in Paris, France, ” id. ¶ 18 (emphasis added). Hence, BNPP clearly does not qualify as a “juridical person organized under the laws of the United States.” 18 U.S.C. § 2332d(b)(2)(C) (emphasis added); see also Abecassis v. Wyatt, 785 F.Supp.2d 614, 648 (S.D. Tex. 2011) (finding liability under § 2332d “does not extend to [two companies] because they are foreign entities”); United States v. Chalmers, 474 F.Supp.2d 555, 565-66 (S.D.N.Y. 2007) (dismissing criminal charges under ยง 2332d against a ...


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