Anti-Terrorism Act Loses Some Teeth
In a significant setback for anti-terrorism litigation in the U.S., an appeals court on Wednesday reversed a $655.5 million verdict against the Palestine Liberation Organization and the Palestinian Authority. The ruling -- that the groups’ diplomatic missions in Washington and New York were not enough of a connection to give the U.S. courts jurisdiction -- will make it extremely difficult for other terror victims to sue international terrorist organizations, which typically lack official U.S. representation altogether.
The lawsuit was brought by 11 families of Americans killed in and around Jerusalem in 2002 and 2004, during the Al-Aqsa intifada. The federal law that authorized the suit is the Anti-Terrorism Act, which says that Americans injured by “international terrorism” may bring suit “in any appropriate district court” and recover treble damages and attorneys’ fees. A federal district court agreed to hear the case, and a jury awarded the families $218.5 million in damages, which tripled to $655.5 million.
The PA and the PLO challenged the U.S. court’s authority to hear the case. In their ideal world, the PA would be recognized as a sovereign government, which is ordinarily immune from suit by virtue of traditional principles of international law and the Foreign Sovereign Immunities Act. But as the district court recognized -- and the U.S. Court of Appeals for the 2nd Circuit agreed on appeal -- the U.S. has not recognized Palestine as a state. That meant the PA and PLO couldn’t rely on sovereign immunity to escape liability. 1
The question then arose whether, as foreign defendants, they could be made subject to the authority of U.S. courts. There are two kinds of jurisdiction that could have been relevant here: specific and general.
Specific jurisdiction exists when there is some connection between the wrongful conduct at issue in the case and the place where it occurred. The families didn’t try to claim that the Jerusalem attacks or the planning for them took place in the U.S. They asked the court to find that it had general jurisdiction over the PA and PLO because those organizations had sufficient contacts with the U.S. in the form of a diplomatic mission. They served the papers for the lawsuit on Palestine’s representative in Washington, Hassan Abdel Rahman.
The 2nd Circuit threw out the verdict, holding that the U.S. courts don’t have general jurisdiction over the PA and PLO under the Supreme Court’s precedent governing foreign defendants. The key test, which the justices laid out in a 2014 decision called Daimler AG v. Bauman, is whether a foreign defendant’s contacts with the U.S. “are so constant and pervasive as to render [it] essentially at home” in the U.S. forum where the lawsuit is brought.
The Daimler case involved a claim that Mercedes-Benz Argentina, a Daimler subsidiary, conspired with the Argentine government to kidnap, torture and kill Mercedes-Benz employees during the 1976-83 Dirty War there. The plaintiffs sued Daimler in California, where Mercedes-Benz USA had car dealerships. The Supreme Court rejected the suit as beyond the constitutional authority of the U.S. courts.
The 2nd Circuit said that the PA and PLO similarly could not be held to be “at home” in the U.S. for purposes of suit simply on the basis of their diplomatic mission. In a sentence that most Palestinians would no doubt approve, the court explained that “The overwhelming evidence shows that the defendants are ‘at home’ in Palestine, where they govern.”
The consequences of the decision are significant, not so much for what they say about Palestine but for the operation of the Anti-Terrorism Act more broadly.
The basic idea of the “at home” doctrine is that parties should be sued where they live, not where it’s convenient for the plaintiffs. That’s very close to being the opposite of the idea of the Anti-Terrorism Act, which specifies that Americans can sue the perpetrators of international terrorism domestically.
In essence, then, the 2nd Circuit was striking down the heart of the federal law as unconstitutional. Some unusual international terrorist acts might still fall under the specific jurisdiction of U.S. courts, for example if they were planned or partly carried out in the U.S. But those situations will be few and far between, and would have been subject to suit in U.S. courts even without the Anti-Terrorism Act.
The result shows a powerful tension between Congress’s desire to make international terrorism into a subject for U.S. courts and the Supreme Court’s strong tendency in recent years to restrict the reach of U.S. laws and courts over foreign entities. And because the court’s holding was constitutional, there’s nothing Congress can do about it.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The district court did, however, give the PA and PLO one of the benefits generally available only to states, namely an exemption for the Palestinians’ United Nations mission, which the courts consider not to be a basis for asserting jurisdiction over a foreign actor.
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