Wultz v. Islamic Republic of Iran

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

)

SHERYL WULTZ, et al., )

)

Plaintiffs, )

)

v. ) 08-cv-1460 (RCL)

)

ISLAMIC REPUBLIC OF IRAN, et al., )

)

Defendants. )

)

MEMORANDUM OPINION

I.  Introduction ......................................................................................................................... 4

II.  Background ......................................................................................................................... 5

A.  A PIJ Suicide Bomber Allegedly Blew Up a Restaurant in Tel Aviv .................... 5

B.  Plaintiffs Make Five Claims Against BOC Related to the Tel Aviv Bombing ...... 6

III.  Discussion ........................................................................................................................... 8

A.  Justiciability ............................................................................................................ 8

1.  Standing ...................................................................................................... 8

a.  Standing Requires Injury in Fact, Causation, and Redressability ... 9

b.  Plaintiffs Have Standing ............................................................... 10

2.  Political-Question Doctrine ...................................................................... 15

a.  Political Questions Are Those Issues Reserved for the Political

Branches and Unsatisfactory for Judicial Determination ............. 15

b.  Plaintiffs’ Claims Do Not Raise Political Questions .................... 17

i.  Adjudication of Plaintiffs’ Claims Does Not Intrude

Upon Foreign Relations of the Executive Branch ............ 17

ii.  The Issue of Whether Adjudication of Plaintiffs’

Claims Depends on Criteria Unsatisfactory for Judicial

Determination Is Unripe ................................................... 21

B.  Subject-Matter Jurisdiction ................................................................................... 22

1.  Subject-Matter Jurisdiction Over a Case to Which a Foreign Sovereign

Is a Party Turns on Sovereign Immunity .................................................. 22

2.  Instrumentalities of Foreign States Are Presumptively Immune .............. 24

3.  BOC Is Not an Instrumentality of China .................................................. 25

C.  Personal Jurisdiction ............................................................................................. 27

1.  Plaintiffs Have the Burden of Alleging Jurisdictional Facts .................... 27

2.  Plaintiffs Have Met Their Burden............................................................. 28

a.  The Court Has Personal Jurisdiction Under the ATA .................. 28

b.  The Court Has Personal Jurisdiction Under the Fifth

Amendment ................................................................................... 29

i.  BOC Must Have Sufficient Minimum Contacts With

the United States ............................................................... 29

ii.  BOC Has Sufficient Minimum Contacts With the

United States ..................................................................... 31

c.  The Court Has Pendent Personal Jurisdiction as to Claims

Under Israeli Law ......................................................................... 36

D.  Venue .................................................................................................................... 37

1.  BOC Waived its Objection to Improper Venue ........................................ 38

2.  Regardless, Venue Is Proper Under the Doctrine of Pendent Venue ....... 39

E.  Sufficiency of Plaintiffs’ Pleadings ...................................................................... 41

1.  Plaintiffs Must Plead a Short and Plain Statement Showing That They

Are Entitled to Relief ................................................................................ 41

2.  Plaintiffs Have Sufficiently Pled Count Two: Primary Liability.............. 44

a.  Primary Liability Under the ATA Requires a Chain of

Incorporations ............................................................................... 45

b.  Plaintiffs Adequately Plead Eligibility ......................................... 48

c.  Plaintiffs Adequately Plead Injury ................................................ 48

d.  Plaintiffs Adequately Plead an Act of International Terrorism .... 49

i.  Plaintiffs Adequately Plead Acts Dangerous to Human

Life .................................................................................... 49

ii.  Plaintiffs Adequately Plead Violations of U.S. Criminal

Law ................................................................................... 50

I.  Plaintiffs Adequately Plead Violations of 18

U.S.C. § 2339A ..................................................... 51

II.  Plaintiffs Adequately Plead a Violation of 18

U.S.C. § 2339B ..................................................... 54

III.  Plaintiffs Adequately Plead a Violation of 18

U.S.C. § 2339C ..................................................... 55

iii.  Plaintiffs Adequately Plead Appearance of Intention to

Intimidate Civilians, Influence Government Policy, or

Affect Government Conduct ............................................. 58

iv.  Plaintiffs Adequately Plead Transcendence of National

Boundaries ........................................................................ 60

e.  Plaintiffs Adequatelly Plead Ordinary Tort Requirements ........... 60

i.  Plaintiffs Adequately Plead Intentional Misconduct ........ 61

ii.  Plaintiffs Adequately Plead Proximate Causation ............ 66

f.  Conclusions Concerning Count Two ............................................ 67

3.  Plaintiffs Have Sufficiently Pled Count Three: Secondary Liability........ 68

a.  Secondary Liability Exists Under the ATA .................................. 68

b.  Plaintiffs Adequately Plead a Claim for Secondary Liability ....... 73

4.  Plaintiffs Have Sufficiently Pled Count Four: Negligence ....................... 74

a.  Liability for Negligence Requires Duty, Breach, Injury, and

Causation....................................................................................... 74

b.  Plaintiffs Adequately Plead Duty.................................................. 75

2

i. Duties Arise When Injury Is Foreseeable ......................... 75

ii.

Plaintiffs Have Adequately Pled That BOC Was Under

a Duty ................................................................................ 78

c.  Plaintiffs Adequately Plead Breach .............................................. 82

i.  Breach Occurs When a Person Under a Duty Acts

Unreasonably With Respect to the Duty ........................... 82

ii.  Plaintiffs Have Adequately Pled that BOC Breached its

Duty................................................................................... 83

d.  Plaintiffs Adequately Plead Injury ................................................ 83

e.  Plaintiffs Adequately Plead Causation.......................................... 83

i.  Factual Causation Exists Where, But For a Defendant’s

Act or Omission, a Plaintiff’s Injury Would Not Have

Occurred............................................................................ 83

ii.  Plaintiffs Adequately Plead That BOC Factually

Caused Their Injury .......................................................... 86

iii.  Legal Causation Exists Where Injury Is Foreseeable,

Within the Field of Risk, and Causation Fits Common

Sense ................................................................................. 87

iv.  Plaintiffs Adequately Plead That BOC Legally Caused

Their Injury ....................................................................... 88

5.  Plaintiffs Have Sufficiently Pled Count Five: Breach of Statutory Duty . 91

a.  Breach of Statutory Duty Operates as a General Private Cause

of Action for Violation of Israeli Law .......................................... 91

b.  Plaintiffs Adequately Plead That BOC Was Under A Duty

Imposed by Three Israeli Penal Laws ........................................... 92

c.  Plaintiffs Adequately Plead That the Relevant Penal Laws

Were Intended for the Benefit of the Public ................................. 97

d.  Plaintiffs Adequately Plead That BOC Breached its Duties ....... 101

i.  Plaintiffs Adequately Plead a Violation of Israel’s

Prevention of Terrorism Ordinance ................................ 102

ii.  Plaintiffs Adequately Plead a Violation of Israel’s Penal

Law ................................................................................. 103

iii.  Plaintiffs Adequately Plead a Violation of Israel’s

Defense (Emergency) Regulations ................................. 106

iv.  The Court Will Not Consider Whether Plaintiffs Have

Pled a Violation of Israel’s Prohibition on Terrorist

Financing Law ................................................................ 108

e.  Plaintiffs Adequately Plead That Their Injuries Were Caused

by BOC’s Breach ........................................................................ 109

f.  Plaintiffs Adequately Plead That They Suffered Injuries of the

Sort Intended to Have Been Prevented by the Relevant Penal

Statutes ........................................................................................ 110

g.  The Double-Actionability Rule Has Been Replaced, and Its

Replacement Does Not Apply .................................................... 110

6.  Plaintiffs Have Sufficiently Pled Count Six: Vicarious Liability ........... 113

F.  Duplicity of Plaintiffs’ Claims ............................................................................ 116

3

1.  Claims Duplicative of Others Should Be Dismissed .............................. 116

2.  Plaintiffs’ Secondary-Liability Claim Is Not Duplicative of Their

Primary-Liability Claim .......................................................................... 117

IV.  Conclusion ...................................................................................................................... 118

I. Introduction.

The Bank of China, Ltd. (“Bank of China,” “Bank,” or BOC) has moved the Court to

dismiss all claims against it. Def. BOC’s Mot. to Dismiss the 1st Am. Compl., Mar. 5, 2009,

ECF No. 15 [hereinafter BOC’s Mot.]. The Bank has advanced several arguments in favor of its

motion: that the case is nonjusticiable because plaintiffs lack standing, id. at 4–5, and because

plaintiffs’ claims raise political questions, id. at 5–12; that the Court lacks personal jurisdiction

over the Bank, id. at 12–18; that venue is improper, Reply Mem. of P. & A. in Support of BOC’s

Mot. 4–9, July 24, 2009, ECF No. 42 [hereinafter BOC’s Reply]; that plaintiffs fail to state any

claim upon which relief can be granted, BOC’s Mot. at 18–28, 29–44; and that plaintiffs make

duplicative claims, id. at 28–29. To this list, the Court will sua sponte add consideration of

whether the Bank is entitled to immunity from suit as an instrumentality of China. Plaintiffs

oppose all arguments. Pls.’ Mem. in Opp’n to BOC’s Mot., May 26, 2009, ECF No. 31.

[hereinafter Pls.’ Opp’n]; Pls.’ Surreply, Oct. 20, 2010, ECF No. 80.

In this memorandum opinion, the Court will first provide an overview of plaintiffs claims

against BOC and will second discuss why the Court will reach the merits of those claims:

plaintiffs have standing, plaintiffs’ claims do not raise nonjusticiable 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. The Court will thus deny the Bank’s motion.

4

II. Background.

Plaintiffs make five claims against BOC: that BOC committed an act of international

terrorism in violation of U.S. law, that BOC aided and abetted acts of international terrorism

committed by others in violation of U.S. law, that BOC is liable for negligence under Israeli law,

that BOC is liable for a breach of a statutory duty under Israeli law, and that BOC is vicariously

liable for acts of the Palestinian Islamic Jihad (PIJ) under Israeli law. All five claims arise under

the same set of alleged facts. This part of the opinion summarizes those facts and claims.

A. A PIJ Suicide Bomber Allegedly Blew Up a Restaurant in Tel Aviv.

On April 17, 2006, a Palestinian suicide bomber allegedly attacked a restaurant in Tel

Aviv, State of Israel (“Israel”) (“Tel Aviv bombing” or, as referred to by plaintiffs, the “Terrorist

Bombing”). 1st Am. Compl. ¶ 1, Jan. 13, 2009, ECF No. 12 [hereinafter FAC]. Daniel Wultz

allegedly suffered severe physical injuries, resulting in his death, further resulting in economic

injuries to his estate. Id. ¶¶ 87, 100. Daniel’s father also allegedly suffered physical injuries in

the attack. Id. ¶¶ 88, 101. Finally, several of Daniel’s family members allegedly also suffered

emotional and financial injuries. Id. ¶¶ 101–02.

In the wake of the bombing, Mr. Wultz’s estate and family members (“plaintiffs”) have

brought suit against several defendants, including BOC. See FAC. Concerning BOC, plaintiffs

specifically allege that between 2003 and the date of the attack, “BOC executed dozens of dollar

wire transfers for the PIJ, totaling several million dollars.” Id. ¶ 69. These transfers allegedly

“were initiated by the PIJ leadership in Iran, Syria[,] and elsewhere in the Middle East, and were

executed by and through BOC’s branches in the United States.” Id. Transferred moneys were

allegedly received into accounts owned by officers and agents of the PIJ and used “for the

purpose of planning, preparing for[,] and executing terrorist attacks” in general. Id. ¶¶ 69–70.

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These transfers, therefore, allegedly “substantially increased and facilitated PIJ’s ability to plan,

to prepare for[,] and to carry out” the particular bombing at issue in this case. Id. ¶¶ 74, 92.

During the years when the alleged transfers were made, the PIJ was designated by the

U.S. Department of State as a “foreign terrorist organization.” Review of Designation of Foreign

Terrorist Organizations, 74 Fed. Reg. 4069, 4069 (Jan. 22, 2009); Redesignation of Foreign

Terrorist Organizations, 68 Fed. Reg. 56,860, at 56,861 (Oct. 2, 2003); Designation of Foreign

Terrorist Organizations, 64 Fed. Reg. 55,112, at 55,112 (Oct. 8, 1999); FAC ¶ 6. During this

same time, the PIJ was also listed by the U.S. Department of the Treasury’s Office of Foreign

Assets Control (OFAC) as a “specially designated terrorist” and “specially designated global

terrorist” entity. 31 C.F.R. ch. V, app. A (2006); 31 C.F.R. ch. V, app. A (2005); 31 C.F.R. ch.

V, app. A (2004); 31 C.F.R. ch. V, app. A (2003). The holder of a BOC account for whom

transfers were made—Said al-Shurafa—however, has never been similarly designated by the

State or Treasury Departments. See generally U.S. Dep’t of the Treasury, OFAC, Terrorism:

What You Need to Know About U.S. Sanctions (Oct. 19, 2010), http://www.treasury.gov/offices/

enforcement/ofac/programs/terror/terror.pdf (identifying designees, not including Mr. Al-

Shurafa). Notably, the transfers allegedly continued even after Israel notified the People’s

Republic of China (PRC or “China”) of the transfers and demanded that China force BOC to

cease any further transfers. FAC ¶ 77.

B. Plaintiffs Make Five Claims Against BOC Related to the Tel Aviv Bombing.

In count two of their first amended complaint, plaintiffs’ claim that BOC committed “an

act of international terrorism” subjecting it to civil suit under the Antiterrorism Act (ATA),

which, in relevant part, permits “[a]ny national of the United States injured in his or her person,

property, or business by reason of an act of international terrorism, or his or her estate, survivors,

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or heirs, [to] sue therefor in any appropriate district court of the United States.” 18 U.S.C.

§ 2333(a).1 Plaintiffs base their claim on a chain-of-corporations theory, alleging that BOC

intentionally and knowingly provided financial services to an agent of the PIJ, thereby

proximately causing plaintiffs’ injury. FAC ¶¶ 106–15. Plaintiffs thus assert a theory of primary

liability: BOC is allegedly liable for its own acts.

In count three of their first amended complaint, plaintiffs’ second claim that BOC aided

and abetted the commission of an act of terrorism by the PIJ. Id. ¶¶ 116–25. Plaintiffs thus

allege a theory of secondary liability: BOC is allegedly liable for acts of the PIJ.2

In counts four, five, and six of their first amended complaint, plaintiffs third, fourth, and

fifth claim that, under the law of Israel, BOC committed the civil wrong of negligence by

providing financial services to the PIJ knowing it would conduct terrorist attacks, id. ¶¶ 126–40,

committed a breach of a statutory obligation by violating several Israeli criminal laws, id.

¶¶ 141–52, and should be held vicariously liable for actions of the PIJ, id. ¶¶ 153–58.

1

The current text of 18 U.S.C. § 2333 should not technically be referred to as the

“Antiterrorism Act.” The current text was enacted by the Federal Courts Administration Act of

1992. Pub. L. No. 102-572, § 1003(a)(4). A previous version of § 2333, however, was enacted

by the Antiterrorism Act of 1990. Pub. L. No. 101-519, § 132(b)(4), 104 Stat. 2240, 2251.

Changes between the two laws were minimal. The Court will therefore follow the common

practice of referring to current § 2333, as well as surrounding sections, as the Antiterrorism Act.

2

Some courts have confusingly used the phrase “aiding and abetting” not only to refer to

secondary liability for aiding and abetting a primary violator of the ATA, but also to the actions

of another primary actor acting in a secondary-like capacity. See, e.g., Boim v. Holy Land

Found. for Relief & Dev., 549 F.3d 685, 692 (7th Cir. 2007) [hereinafter Boim III] (en banc)

(comingling terminology “when the primary liability is that of someone who aids someone else,

so that functionally the primary violator is an aider and abettor or other secondary actor”). A

partially dissenting judge in that case criticized that conceptualization as “one that straddles both

primary and secondary liability.” Id., 549 F.3d at 707 n.5 (Rovner, J., concurring in part and

dissenting in part). To avoid any confusion, this Court uses the phrase “aiding and abetting”

only to refer to aiding-and-abetting—that is, secondary—liability.

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III. Discussion.

This section will first evaluate BOC’s arguments relating to justiciability: that plaintiffs

lack standing and raise political questions. They do not. The Court will then turn to subject-

matter jurisdictional issues: whether BOC is entitled to sovereign immunity as an instrumentality

of China. Because BOC is not such an instrumentality, it is not entitled to immunity from this

suit. The Court will then address personal jurisdictional issues: whether fundamental fairness

permits plaintiffs to haul BOC into this Court. It does. The Court will then examine venue,

concluding that this Court is a proper place for plaintiffs to raise their claims. Finally, the Court

will evaluate defendant’s remaining arguments concerning plaintiffs’ individual claims: that

plaintiffs fail to state any claims upon which relief may be granted and make duplicative claims.

Plaintiffs’ claims may warrant relief and are not duplicative.

A. Justiciability.

BOC raises two arguments concerning justiciability: that plaintiffs lack standing and raise

political questions. If plaintiffs lack standing to sue the Bank of China or if the complaint raises

political questions, then the case is nonjusticiable and must be dismissed. This case is justiciable

because plaintiffs have standing to sue BOC and plaintiffs’ claims do not raise political

questions.

1. Standing.

Parties must have standing to sue. That is, a plaintiff must have suffered an injury in fact

that was caused by a defendant and that is redressable by a court. If plaintiffs lack standing to

sue BOC, then this case is nonjusticiable and must be dismissed. Because plaintiffs sufficiently

8

allege a causal chain between BOC and alleged injuries suffered that are redressable under

various theories of recovery pled by plaintiffs, plaintiffs have standing.

a. Standing Requires Injury in Fact, Causation, and

Redressability.

The Constitution “limits the jurisdiction of federal courts to ‘Cases’ and ‘Controversies.’”

Lujan v. Defenders of Wildlife, 504 U.S. 555, 559–60 (1992) (quoting U.S. Const. art. III, § 2, cl.

1). The requirement that plaintiffs have standing to sue is born of this case-or-controversy

requirement. Id. at 560 (citing Allen v. Wright, 468 U.S. 737, 751 (1984)). Whether a plaintiff

has standing is composed of three elements. “First, the plaintiff must have suffered an ‘injury in

fact.’” Id. To constitute an “injury in fact” the injury must be “concrete and particularized”—

that is, it “must affect the plaintiff in a personal and individual way.” Id. at 560, 560 n.1 (citing

Allen, 468 U.S. at 751; Warth v. Seldin, 422 U.S. 490, 508 (1975); Sierra Club v. Morton, 405

U.S. 727, 740–41 (1972)). The injury must also be “actual or imminent, not ‘conjectural’ or

‘hypothetical.’” Id. at 560 (citing Whitmore v. Arkansas, 495 U.S. 149, 155 (1990) (quoting Los

Angeles v. Lyons, 461 U.S. 95, 102 (1983)). “Second, there must be a causal connection between

the injury and the conduct complained of.” Id. A causal connection exists where the injury is

“‘fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the

independent action of some third party not before the court.” Id. at 560–61 (quoting Simon v. E.

Ky. Welfare Rights Org., 426 U.S. 26, 41–42 (1976)). “Third, it must be ‘likely,’ as opposed to

merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.’” Id. at 561

(quoting Simon, 426 U.S. at 38, 43).

The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing

these three elements. Devlin v. Scardelletti, 536 U.S. 1, 6–7 (2005) (citing Defenders of Wildlife,

504 U.S. at 555). When ruling on a motion to dismiss for want of standing, the trial court “must

9

accept as true all material allegations of the complaint.” Warth v. Seldin, 422 U.S. 490, 501

(1975). “At the pleading stage, general factual allegations of injury resulting from the

defendant’s conduct may suffice, for on a motion to dismiss we ‘presum[e] that general

allegations embrace those specific facts that are necessary to support the claim.’” Defenders of

Wildlife, 504 U.S. at 561 (quoting Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 889 (1990)). With

these considerations in mind, the Court now turns to plaintiffs’ allegations relating to standing

and BOC’s arguments that such allegations are insufficient.

b. Plaintiffs Have Standing.

BOC does not contest that the claimant has suffered an injury in fact, nor does it argue

that the injuries alleged are non-redressable. See BOC’s Mot. Rather, BOC argues that

“[s]tanding cannot be established here because [p]laintiffs’ alleged injuries are too causally

attenuated from the wire transfers allegedly executed by the Guangzhou branch of BOC.” Id. at

5. According to BOC, because “[t]here are innumerable third parties without whose

‘independent action’ [p]laintiffs would not have been injured,” the injuries on which the claims

are based are not fairly traceable to its alleged execution of the fund transfers. Id. (quoting

Greenberg v. Bush, 150 F. Supp. 2d 447, 455 (E.D.N.Y. 2001). The issue, however, is not

merely whether independent third parties are involved, but rather whether a sufficient causal

chain is established between the alleged actions of a defendant and the injury suffered by the

claimant. See Allen v. Wright, 468 U.S. 737, 759 (1984).

The circumstances of Greenberg, 150 F. Supp. 2d at 447, the case cited by BOC for the

proposition that causation is too attenuated, are quite different from the facts alleged in this case.

In Greenberg, plaintiffs argued that foreign-policy actions of the executive branch supporting the

establishment of a Palestinian state had “weaken[ed] and paralyze[d]” Israel in violation of

10

longstanding policy favoring the creation and maintenance of a Jewish homeland in the Middle

East. The plaintiffs thus concluded that these actions resulted in terrorist attacks on Israel. Id. at

449–50. The plaintiffs made no attempt to prove a causal chain between these foreign-policy

decisions and the terrorist acts perpetrated by third parties. The absence of that causal chain led

the court to conclude that the plaintiffs lacked standing. Id. at 454–55. According to the court,

“[i]t would be difficult to imagine a clearer example of a third party’s actions breaking the causal

chain.” Id. at 455.

This case is distinguishable from Greenberg because, per plaintiffs’ allegations, there are

links in a causal chain—and plaintiffs have connected them. According to defendant’s motion,

the “implausible conclusory assertions that the wire transfers ‘enable[d]’ PLJ to carry out the

attacks . . . are plainly insufficient” for purposes of standing. BOC’s Mot. 5 (quoting FAC ¶ 72).

Defendant’s assertion is an oversimplified characterization of plaintiffs’ allegations. The first

amended complaint alleges that for several years predating the bombing, BOC executed dozens

of wire transfers totaling several million dollars to and from an account owned by Mr. Al-

Shurafa. FAC ¶ 69. Those transfers were allegedly initiated by the PIJ, executed in part through

BOC branches in the United States, and eventually directed to members of the PIJ to plan,

prepare for, and execute terrorist activities, including the bombing at issue in this case. Id.

¶¶ 69–70, 74, 77, 92. Based on these allegations, the Court finds that plaintiffs have adequately

pled injuries that are fairly traceable to BOC’s alleged actions.

This finding is supported by two other recent decisions addressing standing for claims

brought against financial institutions under the ATA. In Rothstein v. UBS AG, scores of victims

and their families brought suit alleging that UBS had executed fund transfers to Hamas and

Hezbollah, the perpetrators of the attacks out of which the suit arose. 647 F. Supp. 2d 292

11

(S.D.N.Y. 2009), appeal dismissed, No. 09-4108-cv (2d Cir. Aug. 26, 2010), filed as Pls.’ Notice

of New Appellate Auth. Relevant to Def. BOC’s Pending Mot. to Dismiss, Ex. A, ECF No. 77-1.

The court explained the causal chain alleged by the plaintiffs:

[The] plaintiffs allege that the Iranian government is a recognized sponsor of

terrorism and has funded and supported Hamas, Hezbollah, and other Palestinian

terrorist organizations; that these terrorist organizations require U.S. cash dollars

to carry out their activities; and that UBS’s involvement in banknote transactions

with Iranian counterparties had the effect of providing U.S. cash dollars to the

Iranian government, which, in turn, supplied the aforementioned terrorist

organizations with U.S. cash dollars that were used to facilitate terrorist acts. This

indirect facilitation, plaintiffs argue, makes UBS liable to plaintiffs for the harms

they suffered at the hands of the terrorist groups.

Id. at 294. The court then identified several breaks in that chain: (1) the plaintiffs did

“not allege that UBS is a primary or even relatively significant source of U.S. banknotes for the

Iranian government”; (2) the plaintiffs did not consider that “cash dollars have multiple

legitimate uses besides funding terrorism”; and (3) the plaintiffs made no allegations “showing

that the terrorist groups here in question raise their funds from monies transferred from Iran.” Id.

The court thus concluded that the “plaintiffs’ allegations here are far too speculative to provide

the plausible indication of . . . causation necessary to establish plaintiffs’ standing in this case.”

Id. In the instant case, however, plaintiffs have alleged a flow of money directly into the coffers

of the PIJ, FAC ¶ 69—an organization entirely devoted to terrorist activity, and thus one that is

unlikely to use wired moneys for any other purpose, see Holly Fletcher, Council on Foreign

Relations, Palestinian Islamic Jihad (Apr. 10, 2008), http://www.cfr.org/publication/15984

(noting that “the PIJ offers no social services,” but rather engages solely in terroristic violence).

The claimants’ causation allegations are therefore not speculative like those considered in

Rothstein.

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In Goldberg v. UBS AG, the plaintiffs brought significantly similar claims alleging that

UBS had transferred funds to Hamas, the perpetrator of the bombing out of which the suit arose.

660 F. Supp. 2d 410 (E.D.N.Y. 2009). The court explained the causal chain: (1) the plaintiffs

alleged that Hamas is financed through false charities, one of which is the Association de

Secours Palestinien (ASP); (2) UBS maintained an account for ASP and transferred money to

ASP and other Hamas-controlled entities; and (3) that because Hamas had been designated a

foreign terrorist organization by the State Department, and because ASP had been designated as

a Hamas fundraising entity by the OFAC, UBS knew the result of transferring the money—the

funding of terrorist violence. Id. at 415–16. Thus, where UBS had transferred funds directly to a

terrorist-affiliated entity, and knew or had reason to know of that entity’s terrorist affiliation, the

court found that the plaintiffs had adequately pled standing.

The circumstances of Goldberg parallel those now before the Court. BOC allegedly

transferred funds directly from PIJ operatives to an account it maintained for Mr. Al-Shurafa, a

PIJ agent. FAC ¶ 69. BOC urges the Court to distinguish Goldberg from this case, arguing that

here, BOC performed financial services for an individual “who has never been designated as a

member of a terrorist organization by any Government agency, and has never appeared on the

OFAC list.” Def. BOC’s Resp. to Pls.’ Notice of New Auth. 2, Sept. 29, 2010, ECF No. 54

[hereinafter BOC’s Resp. to Pls.’ New Auth.]. BOC thus claims that, unlike the defendant in

Goldberg, it had no knowledge that it was effectively providing financial services to the PIJ. Id.

Below, the Court discusses an overarching knowledge requirement applicable to civil actions

brought under 18 U.S.C. § 2333(a). See discussion infra Part III.E.2.e.i. As more fully

discussed in that part, Israeli officials allegedly informed China, which informed BOC, that the

transfers were enabling the terrorist activities of the PIJ. FAC ¶ 77. Therefore, as in Goldberg,

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plaintiffs have pled the knowing provision of financial services to terrorists resulting in terrorist

violence.

In addition to its attenuation argument, BOC contends that causation fails because

“[t]here can be no genuine claim that PIJ lacked the means to finance and carry out the April 17,

2006 bombing without the wire transfers from Guangzhou.” BOC’s Mot. 5. But the question is

not whether, absent the wire transfers by BOC, it would have been impossible for the PIJ to carry

out the bombing. Rather, the question is whether “it could reasonably be inferred that,” absent

the wire transfers, “there is a substantial probability” that plaintiffs would not have been injured.

Greenberg, 150 F. Supp. 2d at 455. Such an inference may be based on “general factual

allegations of injury resulting from the defendant’s conduct” because, on a motion to dismiss,

courts will “‘presum[e] that general allegations embrace those specific facts that are necessary to

support the claim.’” Defenders of Wildlife, 504 U.S. at 561 (quoting Nat’l Wildlife Fed., 497

U.S. at 889).

A review of the factual allegations set forth in the first amended complaint demonstrates

that plaintiffs have sufficiently pled causation for purposes of standing. First, plaintiffs allege

that “[t]he PIJ is subject to strict economic sanctions programs imposed by the United States as

the result of its designation” as a foreign terrorist organization and specially designated global

terrorist entity, the enforcement of which is intended to limit the PIJ’s “ability to plan, to

prepare[,] and to carry out terrorist attacks.” FAC ¶¶ 63–64. Second, were these sanctions

universally enforced by financial institutions, plaintiffs allege that “the ability of PIJ to conduct

banking activities would be severely restricted, and PIJ’s ability to plan, to prepare[,] and to

carry out terrorist attacks would be significantly reduced.” Id. ¶ 66. Third, plaintiffs allege that

“very few banks and financial institutions . . . do not observe and enforce the U.S. Sanctions

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Regime,” among which is BOC. Id. ¶ 67. Finally, the first amended complaint alleges that BOC

executed “dozens of . . . wire transfers . . . totaling several million dollars” on behalf of Mr. Al-

Shurafa, a BOC account holder and “a senior officer and agent both of the PIJ and of the Hamas

terrorist organization,” which were “necessary for planning, preparing and carrying out” the

attack for which relief is sought. Id. ¶¶ 69, 73 (emphasis added). Rather than “implausible

conclusory assertions,” BOC’s Mot. 5, these allegations are supported by specific references to

dates, amounts, and geographical distribution of funds by BOC on behalf of the PIJ’s leadership.

In light of these factual allegations, it can reasonably be inferred that, absent the wire transfers,

there is a substantial probability that claimants would not have suffered the harm alleged.

2. Political-Question Doctrine.

Political questions are those that have been reserved to the executive or legislative

branches of government and that are not well suited for determination by courts. If plaintiffs’

claims raise political questions, then this case would be nonjusticiable and must be dismissed.

Although plaintiffs’ claims allege facts concerning the conduct of the Chinese government, those

allegations do not intrude upon the foreign policy of the United States, and BOC’s allegations

concerning unsuitability for determination by courts are unripe. Accordingly, plaintiffs’ claims

do not raise nonjusticiable political questions.

a. Political Questions Are Those Issues Reserved for the Political

Branches and Unsatisfactory for Judicial Determination.

The political question doctrine “excludes from judicial review those controversies which

revolve around policy choices and value determinations constitutionally committed for

resolution” by the executive and legislative branches. Japan Whaling Ass’n v. Am. Cetacean

Soc’y, 478 U.S. 221, 230 (1986). Thus, the doctrine makes nonjusticiable those “political

decisions that are by their nature committed to the political branches to the exclusion of the

15

judiciary.” Schneider v. Kissinger, 412 F.3d 190, 194 (D.C. Cir. 2005) (quoting Antolok v.

United States, 873 F.2d 369, 379 (D.C. Cir. 1989)). Two considerations guide a court’s testing

for nonjusticiable political questions: “the appropriateness under our system of government of

attributing finality to the action of the political departments” and “the lack of satisfactory criteria

for a judicial determination.” Baker v. Carr, 369 U.S. 186, 210 (1962) (citing Coleman v. Miller,

307 U.S. 433 (1939)).

Based on those considerations, the Supreme Court in Baker identified “six independent

tests for the existence of a political question”:

[1] a textually demonstrable constitutional commitment of the issue to a

coordinate political department; or [2] a lack of judicially discoverable and

manageable standards for resolving it; or [3] the impossibility of deciding without

an initial policy determination of a kind clearly for nonjudicial discretion; or [4]

the impossibility of a court’s undertaking independent resolution without

expressing lack of the respect due coordinate branches of government; or [5] an

unusual need for unquestioning adherence to a political decision already made; or

[6] the potentiality of embarrassment from multifarious pronouncements by

various departments on one question.

Vieth v. Jubelirer, 541 U.S. 267, 277 (2004) (quoting Baker, 369 U.S. at 217) (quotation marks

removed). Under the Baker analysis, “[t]o find a political question . . . [a court] need only

conclude that one factor is present, not all.” Schneider, 412 F.3d at 194. However, upon finding

that a claim implicates “none of the [six] characteristics that Baker v. Carr identified as essential

to . . . rais[ing] a political question,” a court may treat that claim as justiciable for purposes of the

political question doctrine. U.S. v. Munoz-Flores, 495 U.S. 385, 395 (1990).

When undertaking the Baker analysis, a court must remember that “the mere fact that a

case touches on the political process does not necessarily create a political question beyond

courts’ jurisdiction.” In re Nazi Era Cases Against German Defs. Litig., 129 F. Supp. 2d 370

(D.N.J. 2001) (citing Nixon v. Herndon, 273 U.S. 536, 540 (1927); Can v. United States, 14 F.3d

16

160, 163 (2d Cir. 1994)). For instance, “[d]isputes involving . . . foreign policy decisions are

‘quintessential sources of political questions.’” El-Shifa Pharm. Indus. v. United States, 559

F.3d 578, 583 (D.C. Cir. 2009) (quoting Bancoult v. McNamara, 445 F.3d 427, 433 (D.C. Cir.

2006)). Nonetheless, “it is ‘error to suppose that every case or controversy which touches

foreign relations lies beyond judicial cognizance.’” Japan Whaling Ass’n, 478 U.S. at 229–30

(quoting Baker, 369 U.S. at 211). Unless applicable Baker factors are “inextricable from the

case at bar, there should be no dismissal for nonjusticiability on the ground of a political

question’s presence.” Baker, 369 U.S. at 217.

b. Plaintiffs’ Claims Do Not Raise Political Questions.

BOC argues that the first amended complaint raises nonjusticiable political questions

under two prongs of the Baker analysis. First, BOC maintains that the complaint “involve[s]

issues which are constitutionally committed” to the Executive Branch by virtue of its plenary

power over foreign affairs. BOC’s Mot. 9. Second, BOC argues nonjusticiability due to the lack

of “‘satisfactory criteria for a judicial determination’ of the issues.” Id. at 10 (quoting Baker,

369 U.S. at 210). The Court will deny BOC’s motion with respect to the political-question

doctrine, finding that the Court may adjudicate all claims presented without implicating “policy

choices and value determinations constitutionally committed for resolution” by the executive and

legislative branches, Japan Whaling Ass’n, 478 U.S. at 230, and that concerns about the

difficulty of evidentiary compulsion raised by BOC’s motion are unripe.

i. Adjudication of Plaintiffs’ Claims Does Not Intrude

Upon Foreign Relations of the Executive Branch.

BOC first contends that the claimants’ allegations raise “issues which are constitutionally

committed to a coordinate political department”—the Executive Branch. BOC’s Mot. 9. It is

true that “foreign relations are ‘quintessential sources of political questions,’” id. (quoting

17

Bancoult, 445 F.3d at 433), and that “the power to conduct foreign affairs is constitutionally

committed to the political branches,” id. (citing Ange v. Bush, 752 F. Supp. 509, 512 (D.D.C.

1990)). These broad generalizations do not, however, render nonjusticiable all claims that have

some relation to a foreign government’s “political policies and goals . . . with respect to other

foreign powers.” Id.

Acceptance of BOC’s characterization of the political question doctrine would be a

significant departure from the traditionally accepted scope of the doctrine in the context of

foreign affairs. For instance, in Japan Whaling Ass’n, the petitioners argued that the claims

against them were “unsuitable for judicial review because they involve foreign relations and that

a federal court, therefore, lack[ed] the judicial power” to hear those claims under the Baker

analysis. 478 U.S. at 221. The Court rejected the petitioner’s reasoning, ruling that “Baker

carefully pointed out that . . . it is ‘error to suppose that every case or controversy which touches

foreign relations lies beyond judicial cognizance.’” Id. at 229–30 (quoting Baker, 369 U.S. at

211). Unless one of the six factors of the Baker analysis is “inextricable from the case at bar,

there should be no dismissal for nonjusticiability on the ground of a political question’s

presence.” Baker, 369 U.S. at 217 (emphasis added). To the extent that the claimant’s

allegations implicate any of the Baker factors, the Court finds that those allegations are

extricable from the Court’s adjudication of the underlying claims.

BOC argues that “[p]laintiffs’ attempt to litigate the political policies and goals of the

Chinese government with respect to other foreign powers, including the United States and Israel,

its relationship to Chinese citizens and corporations in connection with its policies, the alleged

communications between Israeli and Chinese counterterrorism officials, and the Chinese

government’s alleged disregard of Israeli government concerns about terrorism invite[s] judicial

18

encroachment on matters assigned by the Constitution exclusively to the political branches of

government.” BOC’s Mot. 9–10. BOC thus takes issue with three paragraphs of plaintiffs’

complaint: paragraph 77, which alleges that Israeli officials informed China, which informed

BOC, that the wire transfers at issue were enabling the terrorist activities of the PIJ, and

paragraphs 112 and 123, which allege that BOC actually intended to “intimidate or coerce a

civilian population”; “influence the policy of a government by intimidation or coercion”; or

“affect the conduct of a government by mass destruction.” 18 U.S.C. § 2331(1)(B).

Concerning paragraphs 112 and 123, because, as the Court concludes below, actual intent

is not required—plaintiffs need only plead the appearance of intent—the Court need not consider

these allegations with respect to the plaintiffs’ claims under the ATA. See discussion infra Part

III.E.2.d.iii. These allegations of actual intent also have nothing to do with plaintiffs’ claims

under Israeli law. Pls.’ Opp’n 41. Because the Court will not consider them, there is no concern

that these allegations will raise a political question to be decided by the Court.

Concerning paragraph 77, whatever political character there may be to allegations that

Israeli officials met with Chinese officials, and that BOC thereafter knew it was providing

financial services to the PIJ but did nothing to stop it, is extricable from the resolution of

plaintiffs’ claims. Plaintiffs do not attempt, as BOC puts it, to “litigate . . . political policies and

goals.” BOC’s Mot. 9. Plaintiffs do not ask this court to “pass judgment” on whether those

policies are “valid or invalid, good or evil.” Pls.’ Opp’n 41. Indeed, considering the Court’s

determination that only appearance of intent is relevant under § 2331(1)(B), plaintiffs do not ask

the Court to say anything at all with respect to the actual policies or goals of China. Plaintiffs

merely ask the Court to determine whether, as a matter of fact, China received certain

information from Israel. See discussion infra Part III.E.2.e.i. (discussing in detail plaintiffs’

19

allegations made in FAC ¶ 77). Ruling on that issue will not require the Court to intrude on the

foreign policy prerogatives of the executive.

BOC, through an expert declaration on the nuances of the Sino-U.S. relationship, argues

that judicial determination of other, more sensitive policy issues, would intrude on those

prerogatives. Freeman Decl. 7–17, Mar. 4, 2009, ECF No. 15-16 (arguing that adjudication of

allegations as to, among other things, Chinese direction of BOC decisions for ideological

purposes, Chinese foreign policy goals of undermining the United States and Israel, and Chinese

support for radical Islamic terrorism would intrude on the foreign policy of the United States).

Because only the appearance of intent is at issue under § 2331(1)(B), the Court need not consider

these allegations, which relate to actual intent. BOC does not explain how or why adjudication

of the mere fact that China received certain information from Israel will in any way affect

foreign affairs. The Court is content that it may therefore decide the issue at trial.

This conclusion is buttressed by Lev v. Arab Bank, P.L.C., a recent case also involving

the alleged provision of financial services by a foreign bank to Hamas. No. 08-cv-3251, 2010

WL 623636 (E.D.N.Y. Jan. 29, 2010). Although Lev concerned claims brought under the Alien

Tort Claims Act, id. at *1, the district court’s reasoning on the political-question issue is apposite

to analysis under the ATA. In Lev, as here, “no action by a coordinate branch of the United

States government . . . is involved.” Id. at *4. And as discussed above, any political ingredient

of the Court’s consideration plaintiffs’ alleged facts is merely incidental. Moreover, “the United

States has enacted legislation implementing international conventions condemning . . . the

provision of financial services to terrorist groups.” Id. (citing Almog v. Arab Bank, P.L.C., 471

F. Supp. 2d 257, 282–83 (E.D.N.Y. 2007)). If anything, then, far from intruding on the political

branches’ political interests, the Court’s application of those laws furthers those interests. See

20

also Burnett v. Al Baraka Inv. and Dev. Corp., 274 F. Supp. 2d 86, 110 n.19 (D.D.C. 2003)

[hereinafter Burnett I] (concluding, without significant discussion, that suit under the ATA

against a Saudi Arabian bank for allegedly providing financial services to Al-Qaeda did not raise

nonjusticiable political questions).

ii. The Issue of Whether Adjudication of Plaintiffs’ Claims

Depends on Criteria Unsatisfactory for Judicial

Determination Is Unripe.

The second argument BOC advances for dismissal under the Baker analysis is a lack of

“‘satisfactory criteria for a judicial determination’ of the issues” presented. BOC’s Mot. 10

(quoting Baker, 369 U.S. at 210). According to BOC, “the Judiciary has neither the aptitude,

facilities[,] nor responsibility” to overcome the difficulties of evidentiary compulsion in “the

realm of foreign affairs where the Constitution grants operational powers only to the two

political branches.” Id. (citing Ange v. Bush, 752 F. Supp. 509, 513 (D.D.C. 1990). “What

discovery will take place to develop evidence in support of, and in opposition to, the FAC’s

contentions about the Chinese government’s policies with respect to Israel, the United States,

terrorism, and counterterrorism?” asks BOC. Id. “Do [p]laintiffs expect the Court to require

Chinese and Israeli government officials to produce documents in response to discovery

requests, and to submit to depositions, on the subject of governmental policies and goals with

respect to terrorism, including an exploration of the inner councils of these governments?” BOC

adds rhetorically. Id.

BOC thus argues that discovery via compulsion orders to China is the only way plaintiffs

could prove up their case, but that the Court cannot issue such orders, so plaintiffs’ claims

depend on criteria that are unsatisfactory for judicial determination. This argument is unripe.

Plaintiffs have not yet attempted to acquire evidence of their allegations through discovery. The

21

Court will not guess how plaintiffs will attempt to prove their case, whether through discovery

requests to China, Israel, or any other entity, or whether through some other as-yet unimagined

means. Just as “it is premature to dismiss the case as involving political questions on the chance

that discovery may bump up against issues of confidentiality,” Al-Quraishi v. Nakhla, No. 08-cv-

1696, 2010 WL 3001986, at *19 (D. Md. July 29, 2010), so too is it premature to dismiss this

case on the chance that discovery may bump up against noncooperation by China or Israel. Not

until the Court is presented with a discovery dispute, or at least until after the parties formulate a

discovery plan, can the Court decide whether plaintiffs have raised a political question with

respect to evidentiary compulsion.

B. Subject-Matter Jurisdiction.

Although neither party has raised the issue of sovereign immunity, the general impression

that BOC is linked to China herself gives the Court pause to consider the issue sua sponte. If

BOC is entitled to sovereign immunity as a corporate instrumentality of China, for the Court to

have jurisdiction over the subject-matter of this case, BOC must fall into some exception to that

immunity. BOC, however, is not such an instrumentality and is therefore not entitled to

immunity. BOC has not made any arguments in its motion that the Court lacks subject-matter

jurisdiction, and the Court finds no other subject-matter jurisdictional issues necessary to address

sua sponte.

1. Subject-Matter Jurisdiction Over a Case to Which a Foreign

Sovereign Is a Party Turns on Sovereign Immunity.

The Foreign Sovereign Immunities Act of 1976 (FSIA) provides “the sole basis for

obtaining jurisdiction over a foreign state in federal court.” Argentine Republic v. Amerada Hess

Shipping Corp., 488 U.S. 428, 439 (1989). The FSIA jurisdictional provisions consist of two

parts. First, “[28 U.S.C.] § 1604 bars federal and state courts from exercising jurisdiction when a

22

foreign state is entitled to immunity.” Id. at 434. Second, “[28 U.S.C.] § 1330(a) confers

jurisdiction on district courts to hear suits brought by United States citizens and by aliens when a

foreign state is not entitled to immunity.” Id. Thus, under the FSIA, “a foreign state is

presumptively immune from the jurisdiction of United States courts; unless a specified exception

applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state.”

Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); see 28 U.S.C. §§ 1605–1605A (enumerating

exceptions to the general rule of foreign sovereign immunity).

Because “subject-matter jurisdiction turns on the existence of an exception to foreign

sovereign immunity,” the Court may raise the issue sua sponte. Verlinden B.V. v. Cent. Bank of

Nigeria, 461 U.S. 480, 495 n.20 (1983). Further, because a foreign sovereign has “immunity

from trial and the attendant burdens of litigation, and not just a defense to liability on the merits,”

Foremost-McKesson, 905 F.2d at 443, this Circuit requires a district court “to decide the

predicate issues of jurisdiction and sovereign immunity at its earliest opportunity,” Peterson v.

Islamic Republic of Iran, 563 F. Supp. 2d 268, 271 n.2 (D.D.C. 2008) (citing Phoenix

Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 39 (D.C. Cir. 2000)). “To defer the

question . . . [would] ‘frustrate the significance and benefit of entitlement to immunity from

suit.’” Phoenix Consulting, 216 F.3d at 39 (quoting Foremost-McKesson, 905 F.2d at 449).

Although neither plaintiffs nor BOC have raised the issue of sovereign immunity, BOC has

previously been presumed immune when “the Bank was wholly owned and operated by the

People’s Republic of China.” Orient Mineral Co. v. Bank of China, 506 F.3d 980, 985, 991–

1001 (10th Cir. 2007). Accordingly, and because it is appropriately early in this litigation, the

Court should raise and resolve this issue sua sponte.

23

2. Instrumentalities of Foreign States Are Presumptively Immune.

Other than for purposes of service of process, a “foreign state” entitled to immunity under

the FSIA is defined to include any “agency or instrumentality” of that state. 28 U.S.C.

§ 1603(a). This Circuit “follows a categorical approach when determining whether a foreign

governmental entity should be considered ‘a foreign state or political subdivision’ rather than an

‘agency or instrumentality of the nation.’” In re Islamic Republic of Iran Terrorism Litig., 659

F. Supp. 2d 31, 48 n.10 (D.D.C. 2009) (quoting Roeder v. Islamic Republic of Iran, 333 F.3d

228, 234 (D.C. Cir. 2003)). “Under the categorical approach, if the core functions of the entity

are governmental, it is considered the foreign state itself.” Id. If the core functions are

commercial, however, then the entity qualifies as an agency or instrumentality of a foreign state.

Id.

The Court’s analysis does not end, however, with this categorical distinction. Upon

finding that an entity’s core functions are commercial, a district court must also determine

whether the entity constitutes an agency or instrumentality as defined by the FSIA. The entity

thus must be (1) a separate legal person, corporate or otherwise, from the foreign state; (2) “an

organ of a foreign state or political subdivision thereof, or a majority of whose shares or other

ownership interest is owned by a foreign state or political subdivision thereof”; and (3) “neither a

citizen of a State of the United States . . . nor created under the laws of any third country.” 28

U.S.C. § 1603(b)(1)–(3). Concerning the second criterion, the Supreme Court has held that “a

foreign state must itself own a majority of the shares of a corporation if the corporation is to be

deemed an instrumentality of the state under the provisions of the FSIA.” Dole Food Co. v

Patrickson, 538 U.S. 468, 480 (2003). Therefore, “a subsidiary of an instrumentality is not itself

entitled to instrumentality status,” regardless of the degree of control the foreign state exercises

24

over that subsidiary. Id. at 473, 477. Importantly, “instrumentality status is determined at the

time of the filing of the complaint.” Id. at 480.

3. BOC Is Not an Instrumentality of China.

Pleadings and papers filed with the Court state that BOC is “the fifth largest commercial

bank in the world,” BOC’s Mot. 14, and that it “does extensive business throughout the United

States and holds significant assets in the United States.” FAC ¶ 24. BOC’s core functions are

therefore commercial in nature, and BOC is therefore properly considered an instrumentality of

China under the categorical analysis.

Concerning the definitional analysis, BOC satisfies the first and third criteria for

classification as an agency or instrumentality of China: BOC is a legal person separate from

China and is neither a citizen of this country nor created under the laws of a country other than

the United States or China. BOC, Annual Report 2008, at 1 (2008), http://pic.bankofchina.com/

bocappd/report/200904/P020090430343687728848.pdf (discussing BOC’s history, including its

incorporation in China). It is less clear, however, that BOC satisfies the second criterion, which

limits instrumentality status to those corporations in which a foreign state directly owns a

majority of shares or other ownership interest at the time the suit was filed. Dole Food, 538 U.S.

at 478, 480.

At the beginning of 2008, BOC was principally owned by China SAFE Investments

Limited (“SAFE”), which held 67.49% of BOC’s shares. BOC, Annual Report 2007, at 89

(2007), http://www.boc.cn/en/investor/ir3/200812/P020081212710831551281.pdf. By the end

of 2008, SAFE had marginally increased its holdings to 67.52%. BOC, Annual Report 2008,

supra, at 77 (2008). It is therefore reasonable to infer that SAFE owned a majority interest in

BOC on August 22, 2008, the date on which this action was filed.

25

SAFE, which stands for “State Administration of Foreign Exchange,” is also known by

its Chinese name: Central Huijin Investment Company, Ltd. (“Huijin”). Wang Jianxi, Executive

Vice President, Chief Risk Officer, China Investment Corp., Commercial Banking Reform, in

China’s Emerging Financial Markets 107, 114 (Min et al. eds., 2009). Huijin operates as an

investment arm of the Chinese government. Id.; BOC, Annual Report 2008, supra, at 79

(“Huijin makes equity investment in key state-owned financial institutions . . . .”). But Huijin is

not directly owned by China; instead, Huijin is a subsidiary of the China Investment Corporation

(CIC), China’s sovereign wealth fund. CIC, Overview, http://www.china-inv.cn/cicen/about_cic

/aboutcic_overview.html (last visited Oct. 20, 2010) (“CIC[] is an investment institution

established as a wholly state-owned company . . . . Huijin[] is wholly-owned subsidiary of

CIC.”); Amadan Int’l, The Creation of the China Investment Corporation 6, 16 (2008),

http://www.amadaninternational.com/reports/TheCreationoftheChinaInvestmentCorporation.pdf;

see also Jamil Anderlini, China Investment Arm Emerges From Shadows, Fin. Times, Jan. 5,

2008, http://www.ft.com/cms/s/0/fd0b7e6e-bb2f-11dc-9fbc-0000779fd2ac.html; China’s

Trillion-Dollar Kitty Is Ready, Asia Times Online, Oct. 2, 2007, http://www.atimes.com/atimes/

China_Business/IJ02Cb01.html.

Thus, when this action was filed on August 22, 2008, BOC was several corporate entities

removed from direct ownership by China. Unfortunately for BOC, a transitive property of

ownership does not apply under the FSIA: although China owns CIC, CIC owns Huijian, and

Huijian owns BOC, China does not therefore directly own BOC. As an indirect subsidiary of

China, BOC is not an instrumentality of China and is not presumed immune under the FSIA.

The Court, therefore, is not statutorily barred from exercising subject-matter jurisdiction over

claims against BOC.

26

BOC has not made any arguments in its motion that the Court lacks subject-matter

jurisdiction, and the Court finds no other subject-matter jurisdictional issues necessary to address

sua sponte. Accordingly, the Court will now turn to issues of personal jurisdiction.

C. Personal Jurisdiction.

BOC argues that the Court lacks personal jurisdiction over it. Plaintiffs thus have the

burden of asserting jurisdictional facts supporting the Court’s exercise of personal jurisdiction

over BOC. As discussed below, plaintiffs have satisfied their burden.

1. Plaintiffs Have the Burden of Alleging Jurisdictional Facts.

“When a defendant asserts that the court lacks personal jurisdiction, the burden is on the

plaintiff to prove that jurisdiction can be exercised.” Burnett I, 274 F. Supp. 2d at 97 (citing

Baltierra v. W.V. Bd. of Med., 253 F. Supp. 2d 9, 13 (D.D.C. 2003)). Satisfaction of plaintiffs’

burden requires “a prima facie showing of jurisdiction, but the burden is ‘only a minimal one.’”

Id. (quoting Jacobsen v. Oliver, 201 F. Supp. 2d 93, 104 (D.D.C. 2002)); see Fed. R. Civ. P.

12(b)(2). “In order to meet its burden, plaintiffs must allege specific facts on which personal

jurisdiction can be based; it cannot rely on conclusory allegations.” Estate of Klieman v.

Palestinian Auth., 467 F. Supp. 2d 107, 111 (D.D.C. 2006) (citing GTE New Media Servs., Inc.

v. Ameritech Corp., 21 F. Supp. 2d 27, 36 (D.D.C. 1998)).

When assessing whether a plaintiff has adequately pled jurisdiction over a defendant,

“the Court must resolve factual discrepancies in the record in favor of the plaintiff.” Gilmore v.

Palestinian Interim Self-Gov’t., 422 F. Supp. 2d 96, 99 (quoting Crane v. New York Zoological

Soc’y, 894 F.2d 454, 456 (D.C. Cir. 1990)) (internal quotation marks omitted). However, “the

Court need not treat all of the plaintiffs’ allegations as true.” Estate of Klieman, 467 F. Supp. 2d

at 112. “Instead, the court ‘may [also] receive and weigh affidavits and other relevant matter to

27

assist in determining the jurisdictional facts.’” Id. (quoting Jung v. Assoc. of Am. Med. Colls.,

300 F. Supp. 2d 119, 127 (D.D.C. 2004)).

2. Plaintiffs Have Met Their Burden.

First, the Court has personal jurisdiction under the ATA, which permits national service

of process. Second, BOC has sufficient minimum contacts, both general and specific, with the

United States such that requiring its defense of plaintiff’s ATA claims in this Court does not

offend traditional notions of fair play and substantial justice. Third, as to plaintiffs’ claims based

on Israeli law, the Court may exercise pendent personal jurisdiction over BOC.

a. The Court Has Personal Jurisdiction Under the ATA.

The Federal Rules of Civil Procedure provide that “[s]erving a summons . . . establishes

personal jurisdiction over a defendant . . . when authorized by a federal statute.” Fed. R. Civ. P.

4(k)(1). The ATA authorizes nationwide service of process to establish personal jurisdiction

over a defendant. 18 U.S.C. § 2334(a) (noting that a defendant “may be served in any district

where the defendant resides, is found, or has an agent”). “A plaintiff may utilize a statute’s

nationwide service of process to establish personal jurisdiction . . . if the plaintiff asserts merely

a colorable claim under the statute.” Burnett I, 274 F. Supp. 2d at 97–98 (citing Republic of

Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 941–42 (11th Cir. 1997); IUE

AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056 (2d Cir. 1993)). If a defendant moves

for dismissal for failure to state a colorable claim under 18 U.S.C. § 2334(a), that motion “should

be granted ‘only if the right claimed is so insubstantial, implausible, foreclosed by prior

decisions of the court, or otherwise devoid of merit as not to involve a federal controversy.’”

Burnett I, 274 F. Supp. 2d at 98 (quoting Republic of Panama, 119 F.3d at 947).

28

BOC argues that plaintiffs fail to state a colorable ATA claim—that is, that plaintiffs’

ATA claim is not one upon which relief may be granted. BOC’s Mot. 13. This argument falls

flat. For the reasons stated below, the Court finds that plaintiffs have stated an ATA claim upon

which relief may be granted. See discussion infra Part III.E.2.–3. The Court will not belabor

that discussion here. BOC does not argue that it was served not with process within the United

States, and the docket sheet for this case indicates that summons was issued to BOC. See Fed. R.

Civ. P. 4. The Court therefore has no reason to doubt that BOC was appropriately served under

§ 2334. Therefore, the Court has jurisdiction over BOC under the ATA.

b. The Court Has Personal Jurisdiction Under the Fifth

Amendment.

Although the Court has personal jurisdiction under the ATA, it still must inquire whether

it has personal jurisdiction under the Due Process Clause of the Fifth Amendment—that is,

whether requiring BOC to defend against ATA claims in this forum comports with traditional

notions of fair play and substantial justice. That inquiry, however, is informed by the national-

service-of-process provision of the ATA; when evaluating BOC’s minimum contacts with this

forum, the forum is the entire United States. Based on BOC’s contacts with the United States,

both in general and specific to the facts alleged in this case, the Court has personal jurisdiction

over BOC as to plaintiffs’ ATA claims.

i. BOC Must Have Sufficient Minimum Contacts With

the United States.

Nationwide service of process does not dispense with the requirement that an exercise of

personal jurisdiction comport with the Due Process Clause of the Fifth Amendment. Due

process requires that a defendant “have certain minimum contacts with . . . [the forum] such that

the maintenance of the suit does not offend traditional notions of fair play and substantial

29

justice.” Int’l Shoe Co. v. Wash., 326 U.S. 310, 320 (1945) (internal quotation marks omitted);

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985). Depending on the sort of contacts a

defendant has with a given jurisdiction, a court may exercise either general personal jurisdiction

or specific personal jurisdiction over a defendant. A court has specific personal jurisdiction

when a defendant’s contacts with the forum derive from the defendant having purposefully

directed its activities toward the forum and when the litigation arises out or of relates to those

activities. Rudzewicz, 471 U.S. at 472; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466

U.S. 408, 414 (1984). Conversely, a court has general personal jurisdiction when a defendant

has sufficiently minimum contacts with the forum, but where those contacts are unrelated to the

litigation. Helicopteros, 466 U.S. at 414 n.9.

“Because the . . . [ATA] provides for nationwide service of process, the relevant Due

Process inquiry for personal jurisdiction purposes, assuming that the defendant has been properly

served, ‘is whether the defendant has had minimum contacts with the United States.’” Burnett I,

274 F. Supp. 2d at 95–96 (emphasis added) (quoting Busch v. Buchman, Buchman & O’Brien,

Law Firm, 11 F.3d 1255, 1258 (5th Cir. 1994)); see also Estate of Ungar v. Palestinian Auth.,

400 F. Supp. 2d 541, 548 (S.D.N.Y. 2005) (holding that ATA authorization of nationwide

service of process permits due process analysis based on party’s contacts with the United States

as a whole). It will rarely be the case under the ATA that “a defendant who has minimum

contacts with the United States nonetheless will be unduly burdened by the assertion of

jurisdiction” such that the “inconvenience rise[s] to a level of constitutional concern.” Burnett I,

274 F. Supp. 2d at 96 n.5 (quoting BCCI Holdings, 119 F.3d at 947) (internal quotation marks

omitted). “Such instances . . . are highly unusual and . . . require that a defendant make a

showing of constitutionally significant inconvenience of litigating in the chosen forum.” Id.

30

(citation omitted) (quoting BCCI Holdings, 119 F.3d at 947) (citation omitted) (internal

quotation marks omitted).

BOC argues that use of the national-contacts standard is only appropriate to provide

“redress to plaintiffs injured by international terrorist organizations which had no traditional ties

to or presence in the United States.” BOC’s Mot. 14. Unfortunately for BOC, nothing in the

text of interpretative history of the ATA justifies BOC’s attempt to distinguish itself from other

litigants to which the national-contacts test has been applied. BOC’s interpretation is wholly

unsupported by the language of the statute, which provides that the national-contacts test applies

to “[a]ny civil action under section 2333 . . . against any person,” § 2334(a) (emphasis added),

not simply those persons lacking traditional ties to or presence in the United States. In an

attempt to convince the Court to read this limitation into the text, BOC cites several cases where

the national-contacts test was applied to what BOC calls “shadowy international terrorist

organization[s].” BOC’s Mot. 14 (citing Estate of Klieman, 467 F. Supp. 2d 107; Biton, 310 F.

Supp. 2d at 172; Burnett I, 274 F. Supp. 2d 86; see Gilmore, 422 F. Supp. 2d 96; Burnett v. Al

Baraka Inv. & Dev. Corp., 292 F. Supp. 2d 9 (D.D.C. 2003) [hereinafter Burnett II]). None of

these cases, however, support the proposition that a national-contacts test applies only to terrorist

organizations. The Court, therefore, will not accept BOC’s invitation to make a special

exception in this case. The national-contacts test applies to BOC.

ii. BOC Has Sufficient Minimum Contacts With the

United States.

Plaintiffs allege that “BOC has branches in California and New York, does extensive

business throughout the United States[,] and holds significant assets in the United States.” FAC

¶ 24. The complaint further alleges that “BOC executed dozens of dollar wire transfers for the

PIJ, totaling several million dollars,” a portion of which “were executed by and through BOC’s

31

branches in the United States.” Id. ¶ 69. None of these assets are held in the District of

Columbia, nor does BOC have a branch in D.C. BOC thus argues that its contacts, or lack

thereof, with the District of Columbia, are insufficient to establish either general or specific

personal jurisdiction under the relevant provisions of the D.C. Code. BOC’s Mot. 12–13 (citing

D.C. Code §§ 13-422 to 13-423). BOC’s focus on a lack of contacts with the District is

misplaced; as the Court has concluded above, the proper inquiry is whether BOC has minimum

contacts with the United States as a whole. It does.

The alleged jurisdictional fact that BOC does extensive business in the United States

through its own branches supports a finding of general personal jurisdiction. Such a finding is

supported by Oriental Imports & Exports, Inc. v. Maduro & Curiel’s Bank, N.V., a case in which

a federal court did not find general personal jurisdiction over a foreign bank where the bank

merely engaged in a correspondent relationship with banks in the forum. 701 F.2d 889, 891–92

(11th Cir. 1983). Under such relationships, in-forum banks provided financial services to

customers of foreign banks. Id. Such a relationship provided insufficiently minimum contacts

with the forum by the foreign bank in that case. Id. In this case, however, BOC does business

directly through its own branches, not indirectly through third-party correspondents. BOC’s

contact with the United States is therefore far more significant. See In re Terrorist Attacks on

Sept. 11, 2001, 349 F. Supp. 2d 765, 819–20 (S.D.N.Y. 2005) [hereinafter Terrorist Attacks I]

(denying foreign bank’s motion to dismiss for lack of personal jurisdiction in part because the

bank operated a branch office in the United States).3 BOC’s contacts with the United States thus

support the assertion of general personal jurisdiction.

3

The procedural history of the multidistrict litigation under the heading In re Terrorist

Attacks on Sept. 11, 2001 is very complex, including well over one dozen published opinions.

32

Moreover, the alleged jurisdictional fact that BOC knowingly performed a wire transfer

for the PIJ thorough one of its U.S. branches supports a finding of specific personal jurisdiction.

“In the absence of any allegations that a bank has ties to a terrorist organization, or that it knew

or had reason to believe that the monies it was processing through the bank would be used to

carry out terrorist attacks on civilian targets,” the mere provision of routine banking services that

benefitted a terrorist organization “in some general, nondescript manner” will not support a

finding of specific personal jurisdiction based on the contacts created by such provision. In re

Terrorist Attacks on Sept. 11, 2001, No. 03-mdl-570 (GBD), 2010 WL 2484411, at *25

(S.D.N.Y. June 17, 2010) [hereinafter Terrorist Attacks III]. Where a bank has knowledge that it

is funding terrorists, however, contacts created by such funding can support such a finding. See,

e.g., id. For example, in Terrorist Attacks III, the district court concluded that the Dubai Islamic

Bank (DIB) “was an intentional, knowing[,] and direct participant in providing money

laundering services to al Qaeda, which allowed for direct funding of terrorist attacks” against the

United States, which supported the Court’s specific personal jurisdiction over the DIB. Id.

Plaintiffs have pled similar jurisdictional facts in this case: Israeli officials allegedly informed

China, which informed BOC, that the transfers were enabling the terrorist activities of the PIJ.

FAC ¶ 77; see discussion infra Part III.E.2.e.i. BOC’s contacts with the United States thus

support the assertion of specific personal jurisdiction.

Courts have been inconsistent in the short citations they have used when referring to the various

opinions. Accordingly, this Court will refer to these cases as Terrorist Attacks I, Terrorist

Attacks II, and so on, based on the date on which each opinion was issued, but will only assign

numbers to cases cited in this memorandum opinion. The Court will not, in an attempt to

maintain a consistent use of a short citation form used in other cases, “skip over” cases not cited

in this memorandum opinion, because no such consistency exists. Cf. infra note 6 (adopting

consistently used short citation forms for a different line of cases).

33

BOC further argues that it could not reasonably anticipate being subject to suit in the

District of Columbia due to its lack of contacts with the District and because the Court has no

discernable interest in adjudication of the matter due to the attenuated connection between the

subject matter of the suit and the District. BOC’s Mot. 15–17. Both of these arguments fail.

With regard to BOC’s capacity to foresee suit in the District of Columbia, the Court notes

that BOC is a sophisticated international financial institution that plaintiffs allege “has branches

in California and New York, does extensive business throughout the United States[,] and holds

significant assets in the United States.” FAC ¶ 24. As such, it is reasonable to presume that

BOC is fully aware of U.S. law concerning financial institutions, including provisions of the

ATA criminalizing material support to terrorist organizations. Likewise, BOC should be aware

that any party subject to a civil claim under § 2333 may be hauled into any U.S. District Court,

per the provision of nationwide service of process. § 2334(a). Taking plaintiffs’ allegations to

be true, the Court therefore finds that BOC could have reasonably foreseen that providing Mr.

Al-Shurafa and PIJ with financial services would give rise to a civil claim under § 2333 and, by

virtue of that claim, that BOC would be subject to litigation in any U.S. district court in this

country.

As for this jurisdiction’s interest in adjudication of the matter, the Court finds the

Circuit’s reasoning in Mwani v. Bin Laden persuasive. 417 F.3d 1 (D.C. Cir. 2005). In Mwani,

Kenyan victims and their families brought suit against Osama bin Laden, Al-Qaeda, and the

then-named Transitional Islamic State of Afghanistan in relation to the terrorist bombing outside

the American embassy in Kenya. Id. With regard to Mr. Bin Laden and Al-Qaeda, the district

court concluded that personal jurisdiction was inappropriate, in part due to a lack of physical

connections between the District of Columbia, the defendants, and the underlying events. Id. at

34

11. On appeal, however, the Court of Appeals ruled that when personal jurisdiction is based on

national contacts under Federal Rule of Civil Procedure 4(k)(2), due process is satisfied so long

an actor has “purposefully directed his activities at residents of the forum.” Id. at 12 (internal

quotation marks omitted).

Thus, the Court of Appeals found that Mr. Bin Laden and Al-Qaeda had purposefully

directed their activities toward the District of Columbia by orchestrating the bombing of the

American embassy in Kenya to kill American and Kenyan employees; attempting to “cause pain

and sow terror in the embassy’s home country, the United States”; and engaging in an “ongoing

conspiracy to attack the United States, with overt acts occurring within [the United States’]

borders.” Id. at 13. Because plaintiffs’ injuries arose from those activities, and those activities

were directed generally at residents of the United States, this Circuit concluded that an exercise

of personal jurisdiction was proper based on the purposeful direction of the activities toward the

District of Columbia as the U.S. capital. This due-process analysis set forth in Mwani is readily

applicable to this case. Like Mwani, the exercise of personal jurisdiction is based on the

defendant’s contacts with the nation as a whole, the claimants and defendant are all nonresidents

of the forum, and plaintiffs’ injuries were attributable to a terrorist attack on foreign soil.

Plaintiffs further allege that “[a]t all times, BOC had actual knowledge that the PIJ

Transfers were being made by the PIJ for the purpose of carrying out terrorist attacks” targeting

American interests. FAC ¶ 77. Similar to Mwani, then, the direction of terrorist activities

toward American interests in this case shows that the PIJ “engaged in unabashedly malignant

actions directed at [and] felt in this forum.” Mwani, 417 F.3d at 13 (internal quotation marks

omitted). Just as the Court would have an interest in adjudicating a suit against the PIJ for those

malignant actions, so too does it have an interest in the adjudication of a suit against BOC, which

35

plaintiffs allege has provided material support to the PIJ that “enhanced the PIJ’s ability to plan,

prepare for and carry out . . . [terrorist] attacks.” FAC ¶ 77.

Because PIJ allegedly purposefully directed terrorist activities toward the United States

with the allegedly knowing support of BOC through the provision of financial services, it

comports with due process to require BOC to defend itself in this Court. Because BOC allegedly

does business with and holds assets in the United States, BOC has sufficient minimum contacts

with the United States to support the exercise of general personal jurisdiction. Because BOC

allegedly performed a transfer of money through one of its branches in the United States as part

of the provision of financial services to the PIJ at issue in this case, BOC has sufficient specific

minimum contacts to support specific personal jurisdiction. Therefore, the Court has personal

jurisdiction over BOC with respect to plaintiffs’ ATA claims.

c. The Court Has Pendent Personal Jurisdiction as to Claims

Under Israeli Law.

On deciding a motion for dismissal of claims arising under Israel’s Civil Wrongs

Ordinance, another court of this District explained:

[T]he D.C. Circuit has adopted the doctrine of “pendent personal jurisdiction,”

whereby a court may assert personal jurisdiction over a defendant “with respect to

a claim for which there is no independent basis of personal jurisdiction so long as

it arises out of a common nucleus of operative facts with a claim in the same suit

over which the court does have personal jurisdiction.”

Sisso v. Islamic Republic of Iran, 448 F. Supp. 2d 76, 90–91 (D.D.C. 2006) (quoting Action

Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004) (citing Oetiker

v. Jurid Werke, G.m.b.H., 556 F.2d 1, 5 (D.C. Cir. 1977))).4 Requiring claims with respect to

4

The court ultimately avoided the issue of pendent personal jurisdiction in Sisso because

defendant Hamas was an unincorporated association which could neither sue or be sued in the

District of Columbia. 448 F. Supp. 2d at 91.

36

which the Court will entertain pendent personal jurisdiction to derive from a nucleus of operative

fact common with other claims with respect to which the Court has original personal jurisdiction

insures against due-process concerns over hauling the defendant into court to defend against the

former, because the defendant is already justifiably hauled in to defend against the latter. See 4A

Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1069.7 (discussing

due process concerns implicated by pendent personal jurisdiction); see also United Mine

Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966).

The Court has already found personal jurisdiction to be appropriate with regard to

plaintiffs’ ATA claims. See discussion supra Part III.C.2.a.–b. Furthermore, plaintiffs’ ATA

claims and those raised under Israeli law derive from a common nucleus of operative fact:

BOC’s alleged provision of financial services to the PIJ and the PIJ’s subsequent attack giving

rise to plaintiffs’ injuries. Therefore, the Court has pendent personal jurisdiction over BOC with

respect to plaintiffs’ claims under Israeli law.

D. Venue.

By not raising the issue of improper venue until it filed its reply to plaintiffs’ opposition

to its motion to dismiss, BOC waived its right to challenge venue as improper. To allow BOC to

dispute venue for the first time in its reply would unduly burden plaintiffs by forcing them to

respond to the new argument and risk hasty decisionmaking by this Court without full briefing

on the issue. Plaintiffs, however, have undercut this concern by volunteering a response in the

form of a surreply. Accordingly, the Court considers whether venue is appropriate and

concludes that it is, not under the ATA, but as pendent to venue over plaintiffs’ main claim

brought under the Foreign Sovereign Immunities Act.

37

1. BOC Waived its Objection to Improper Venue.

Venue is proper under the ATA “in the district court of the United States for any district

where any plaintiff resides or where any defendant resides or is served, or has an agent.”

§ 2334(a). In its reply to plaintiffs’ opposition to BOC’s motion, BOC argues, for the first time,

that this Court is an improper venue for this action because plaintiffs do not reside in this district

and because BOC does not reside, was not served, and does not have an agent in this district.

BOC’s Reply 4–9. BOC, however, has waived its venue objections. Fed. R. Civ. P. 12(h)(1).

The only mention of the word “venue” in BOC’s 45-page motion to dismiss is in a

footnote pondering why “[p]laintiffs and their counsel may have chosen this forum.” BOC’s

Mot. 16 n.6. BOC posits that it must have been “because of their focus on the defendants who

are foreign state and foreign government officials . . . and the venue provision specifying that for

a civil action ‘brought against a foreign state or political subdivision thereof,’ this District is the

appropriate venue.” Id. (quoting 28 U.S.C. § 1391(f)(4)). Indeed, that section, along with “the

rules of pendent venue,” are what plaintiffs plead as the basis for the propriety of venue in this

district. FAC ¶ 4. But nowhere in its motion does BOC contest the propriety of venue, either

under § 2334(a), § 1391(f)(4), or any other theory. BOC’s reply, which devotes several pages to

the subject, is the first document in which BOC makes any allegations as to the impropriety of

venue. BOC’s Reply 4–9.

“As the D.C. Circuit has consistently held, the Court should not address arguments raised

for the first time in a party’s reply.” Jones v. Mukasey, 565 F. Supp. 2d 68, 81 (D.D.C. 2008);

see, e.g., Am. Wildlands v. Kempthorne, 530 F.3d 991, 1001 (D.C. Cir. 2008) (not considering an

argument when plaintiffs “raised it for the first time in their reply brief”). Accordingly, by not

raising its venue concerns in its original motion, BOC has waived those concerns.

38

The Court notes, however, that the policy underlying the application of waiver principles

to BOC may not fully apply in this case. The Court of Appeals explained in McBride v. Merrell

Dow & Pharm., Inc. that “[c]onsidering an argument advanced for the first time in a reply

brief . . . is not only unfair to” the opposing party, “but also entails the risk of an improvident or

ill-advised opinion on the legal issues tendered.” 800 F.2d 1208, 1211 (D.C. Cir. 1986). That is

because the opposing party is not entitled to file a surreply to address new issues raised for the

first time in a reply. In this case, however, plaintiffs moved for and were granted leave to file a

surreply. Pls.’ Mot for Leave to File Br. Surreply, Sept. 29, 2009, ECF No. 53 [hereinafter Pls.’

Mot.]; Mem. 2, Oct. 20, 2010, ECF No. 78; Pls.’ Surreply. Ironically, by crafting their

opposition to BOC’s new venue argument as a request for permission to respond to that

argument—and then by submitting a response—plaintiffs effectively negated the policy reasons

for not allowing consideration of the new argument: the burden of being made to submit a

response to it and the concern that the Court will not be fully briefed on it. Accordingly, the

Court feels, as plaintiffs say, “constrained . . . to address this new argument.” Pls.’ Mot. 1.

2. Regardless, Venue Is Proper Under the Doctrine of Pendent Venue.

Ordinarily, venue must be established under 28 U.S.C. § 1391, but this general venue

statute applies only in the absence of a more specific venue statute. Section 1334(a) is one such

more specific statute. Plaintiffs have not adequately pled and cannot adequately plead facts

supporting venue under § 1334(a): plaintiffs do not reside in this district and BOC does not

reside, was not served, and does not have an agent in this district. “Generally, a plaintiff must

‘demonstrate proper venue with respect to each cause of action and each [defendant].’” Elemary

v. Philipp Holzmann, A.G., 533 F. Supp. 2d 144, 149 (D.D.C. 2008) (quoting Lamont v. Haig,

39

590 F.2d 1124, 1135 (D.C. Cir. 1978)). So, says BOC, this Court is not a proper venue. Under

the doctrine of pendent venue, however, it is.

“[W]here 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, 448 F. Supp. 2d at 82 n.8 (citing Washington v. Gen. Elec. Corp., 686

F. Supp. 361, 362 (D.D.C. 1988)); see also Elemary, 533 F. Supp. 2d at 149 (“[W]hen venue lies

for some of the plaintiff’s claims, the doctrine of pendent venue may allow the court to hear the

rest.”). Plaintiffs’ core claim is that which they lay out in count one: a claim brought under the

FSIA-created federal cause of action against the Islamic Republic of Iran, the Syrian Arab

Republic, and several other foreign-state defendants alleging the provision of material support

and resources to the PIJ thus facilitating the Tel Aviv bombing. FAC ¶¶ 93–105; 28 U.S.C.

§ 1605A(c). This Court is clearly a proper venue for claims brought against Iran, Syria, and

other foreign-state defendants under the FSIA, as the general venue statute specifically provides

that civil actions against foreign states “may be brought . . . in the United States District Court

for the District of Columbia.” § 1391(f)(4).

In Sisso, the court applied the pendent venue doctrine to permit a claim under the ATA

with venue pendent to claims alleged under the FSIA. 448 F. Supp. 2d at 82 n.8. This Court will

do the same. Plaintiffs’ allegations against BOC arise out of the same core of operative facts as

plaintiffs’ core claim against foreign-state defendants: the alleged provision of material support

and resources to the PIJ, thus facilitating the attack causing plaintiffs’ injuries. As a matter of

“judicial economy, convenience, and fairness,” then, it makes sense to hear plaintiffs’ claims

against BOC along with their claims against the foreign-state defendants. Beattie v. United

States, 756 F.2d 91, 103, 103 n.80 (D.C. Cir. 1984) (internal quotation marks omitted), overruled

40

on other grounds, Smith v. United States, 507 U.S. 197 (1993). Therefore, under the doctrine of

pendent venue, this Court is a proper venue.5

E. Sufficiency of Plaintiffs’ Pleadings.

Plaintiffs must plead a short and plain statement showing that they are entitled to relief.

That is, plaintiffs must plead facts sufficient to state a claim upon which relief may be granted.

Plaintiffs have pled five such claims, all based on BOC’s alleged provision of financial services

to the PIJ. First, plaintiffs adequately plead that BOC committed an act of international terrorism

for which it is liable under the Antiterrorism Act. Second, plaintiffs adequately plead that BOC

also aided and abetted the commission of an act of international terrorism by the PIJ. Third,

plaintiffs adequately plead that BOC acted negligently under the law of Israel by providing

financial services to the PIJ despite knowing its terroristic goals and activities. Fourth, plaintiffs

adequately plead that BOC breached several statutory duties imposed by Israeli penal laws

prohibiting the provision of support to terrorist groups. Finally, plaintiffs adequately plead that

BOC is vicariously liable under Israeli law for the terrorist acts of the PIJ. The Court will

therefore deny BOC’s motion to dismiss for failure to state a claim.

1. Plaintiffs Must Plead a Short and Plain Statement Showing That They

Are Entitled to Relief.

The Federal Rules of Civil Procedure require that a pleading contain a “short and plain

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).

“[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it

5

BOC carries its venue argument into the issue of personal jurisdiction, arguing that the

venue provision of § 2334(a) is a “condition precedent to the nationwide service of process

provision” which governs personal jurisdiction and that because venue is improper, plaintiffs

cannot establish personal jurisdiction. BOC’s Reply 5–9. Plaintiffs disagree. Pls’ Surreply 1–3.

Because the Court concludes that this is a proper venue under the doctrine of pendent venue, the

Court need not reach this additional argument concerning personal jurisdiction.

41

demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft

v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

555 (2007)). The Rule 8 standard is not satisfied where a pleading offers only “labels and

conclusions,” “a formulaic recitation of the element of a cause of action,” or “naked assertion[s]

devoid of further factual enhancement.” Id. at 1949 (citing Twombly, 550 U.S. at 555, 557).

“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.’” Id. (quoting Twombly,

550 U.S. at 557) (emphasis added). Twombly’s facial plausibility standard is satisfied when “the

plaintiff pleads factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. at 556).

Therefore, based on the factual allegations within the plaintiff’s complaint, a court must

conclude that it is not merely possible, but also plausible, that the plaintiff is entitled to relief. Id.

(“[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.”). This

determination is a “context-specific task that requires the reviewing court to draw on its judicial

experience and common sense.” Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157–158 (2d

Cir. 2007)).

When considering whether dismissal of a complaint is appropriate for failure to state a

claim upon which relief can be granted, Fed. R. Civ. P. 12(b)(6), a court must “assume all the

allegations in the complaint are true (even if doubtful in fact) . . . [and] must give the plaintiff the

benefit of all reasonable inferences derived from the facts alleged,” Aktieselskabet AF 21.

November 2001 v. Fame Jeans Inc., 525 F.3d 8, 18 (D.C. Cir. 2008) (internal quotations marks

omitted). The Court, however, need not accept inferences drawn by the plaintiff if those

inferences are unsupported by facts alleged in the complaint, nor must the Court accept the

42

plaintiff’s legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002); Kowal v.

MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994).

In briefing the Court on their arguments in favor or against BOC’s motion, both plaintiffs

and BOC have submitted several declarations concerning issues of both fact and law. See

Naschitz Decl., Mar. 1, 2009, ECF No. 15-14; Lijun Decl., Dec. 15, 2008, ECF No. 15-15;

Freeman Decl.; Matalon Decl., May 16, 2009, ECF No. 31-1; Porat Decl., May 18, 2009; ECF

No. 31-6; Gross Decl., May 24, 2009, ECF No. 31-7; Mann Decl., July 24, 2009, ECF No. 42-1;

Naschitz Supp. Decl., July 24, 2009, ECF No. 42-2; Stern Decl., Sept. 29, 2009, ECF No. 79-1.

“If, on a motion under Rule 12(b)(6) . . . , matters outside the pleadings are presented to and not

excluded by the court, the motion must be treated as one for summary judgment under Rule 56.”

Fed. R. Civ. P. 12(d). The Court thus excludes all statements made in declarations concerning

facts at issue in this case as matters outside the pleadings. Declarations concerning how Israeli

law should be interpreted, however, do not present matters outside the pleadings; instead they

inform the Court on matters within the pleadings. Under the authority of Federal Rule of Civil

Procedure 44.1, which permits a court to consider “any relevant material or source” when

evaluating the application of foreign law, the Court will thus consider these declarations, but

only to the extent that plaintiffs’ legal experts make declarations as to how Israeli law is

interpreted. To the extent that plaintiffs’ legal experts make declarations as to facts outside the

pleadings, the Court will ignore them.

Concerning plaintiffs’ claims based on Israeli law, “[a] party who intends to raise an

issue about a foreign country’s law must give notice by a pleading or other writing.” Fed. R.

Civ. P. 12(d). Plaintiffs have done so. FAC ¶ 127 (“[P]laintiffs hereby give notice of their

intention to rely on the law of the State of Israel.”). Similar to U.S. law, Israeli law is composed

43

of legislation, regulations, and judicial interpretations thereof. Ruth Levush, Israeli Law Guide

(Nov. 24, 2007), http://www.llrx.com/features/israel3.htm; Yoram Shachar, History and Sources

of Israeli Law, in Introduction to the Law of Israel 1, 8 (Amos Shapira & Keres C. DeWitt-Arar

eds., 1995). These interpretations carry precedential value, with Israeli Supreme Court decisions

“followed, as a matter of practice and almost without exception, by all courts in Israel, including

by the Supreme Court itself.” Shachar, supra, at 8–10; see also Levush, supra. When evaluating

whether plaintiffs have stated claims upon which relief may be granted under Israeli law, the

Court will therefore evaluate the text of relevant Israeli law with appropriate deference to Israeli

Supreme Court interpretations thereof.

Further, “[i]n determining foreign law, the court may consider any relevant material or

source, . . . whether or not submitted by a party.” Fed. R. Civ. P. 44.1. In addition to caselaw

and statutory materials submitted by the parties, the Court will thus consider several third-party

sources discussing that caselaw and those materials. The Court also notes that English

translations of Israeli law often use British English, not American English. The Court’s

quotations of words with spellings such as “organisation” for “organization” or “defence” for

“defense,” are, therefore, intentional. With these standards and considerations in mind, the Court

now turns to whether plaintiffs have stated claims upon which relief may be granted.

2. Plaintiffs Have Sufficiently Pled Count Two: Primary Liability.

To state a claim of primary liability under the ATA, a plaintiff must plead facts as to all

statutory elements of the claim, established through a chain of incorporations, as well as

overarching elements of ordinary tort law. Plaintiffs have done so.

44

a. Primary Liability Under the ATA Requires a Chain of

Incorporations.

The ATA provides that “[a]ny national of the United States injured in his or her person,

property, or business 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.” § 2333(a).

“International terrorism” means activities that

(A) involve violent acts or acts dangerous to human life that are a

violation of the criminal laws of the United States . . . ;

(B) appear to be intended—

(i) to intimidate or coerce a civilian population;

(ii) to influence the policy of a government by intimidation or

coercion; or

(iii) to affect the conduct of a government by mass destruction,

assassination, or kidnapping; and

(C) occur primarily outside the territorial jurisdiction of the United

States, or transcend national boundaries in terms of the means by which they are

accomplished, the persons they appear intended to intimidate or coerce, or the

locale in which their perpetrators operate or seek asylum . . . .

18 U.S.C. § 2331(1). Three criminal laws, all part of the ATA, are particularly relevant to civil

cases brought under the ATA: 18 U.S.C. §§ 2339A, 2339B, and 2339C.

The first law makes it a federal crime to “provide[] material support or

resources . . . knowing or intending that they are to be used in preparation for, or in carrying out,

a violation of” various terrorism-related criminal statutes. § 2339A(a). “Material support or

resources” includes, among other things, “financial services.” § 2339A(b)(1). Among the

referenced terrorism-related criminal statutes are 18 U.S.C. §§ 2332(a), 2332a(a)(1), and

2332f(a)(1), which criminally prohibit, among other things, the extraterritorial killing of a U.S.

national, the extraterritorial use of a weapon of mass destruction against a U.S. national, and the

extraterritorial bombing of a place of public use, respectively. These laws make further

referential incorporations of, for example, definitions of key terms. See, e.g., § 2332(a)

45

(referencing definitions of “murder,” “voluntary manslaughter,” and “involuntary manslaughter”

located elsewhere in title 18).

The second law makes it a crime to “provide[] material support or resources to a foreign

terrorist organization” with “knowledge that the organization is a designated terrorist

organization . . . , that the organization has engaged or engages in terrorist activity . . . , or that

the organization has engaged or engages in terrorism.” § 2339B(a)(1). The statute also defines

several terms by reference to other sections of title 18. See id.

Finally, the third law makes it a crime to, among other things,

by any means, directly or indirectly, unlawfully and willfully provide[] or

collect[] funds . . . with the knowledge that such funds are to be used, in full or

part, to carry out . . . any . . . act intended to cause death or serious bodily injury

to a civilian . . . when 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.

§ 2339C(a)(1). As with the other two laws, this law incorporates several definitions by reference

to other statutes. See § 2339C(e).

The ATA thus compels a “chain of incorporations” from § 2333(a), which references

international terrorism, to § 2331(1), which defines international terrorism, to whatever federal

criminal laws the violation of which a plaintiff might plead, which are referenced in the

definition of international terrorism, and further to whatever additional referential incorporations

those criminal laws might make. Boim III, 549 F.3d at 691; Boim v. Quranic Literacy Inst., 291

F.3d 1000, 1012–16 (7th Cir. 2002) [hereinafter Boim I].6 Additionally, the ATA requires

6

The Boim cases have a complicated procedural history. Boim I upheld the district

court’s denial of a motion to dismiss for failure to state a claim, agreeing that the provision of

financial assistance can come within the scope of the ATA. 291 F.3d 1000, aff’g Boim v.

Quaranic Literacy Inst., 127 F. Supp. 2d 1002 (N.D. Ill. 2001). The district court then granted

summary judgment with respect to some defendants and proceeded to trial on the others. Boim v.

46

allegations of intentional misconduct—in addition to other state-of-mind requirements

incorporated in §§ 2339A–2339C—and proximate causation. Boim III, 549 F.3d at 691–98;

Biton v. Palestinian Interim Self-Gov’t Auth., 310 F. Supp. 2d 172, 182 (D.D.C. 2004) (citing

Boim I, 291 F.3d at 1011–12 (interpreting “by reason of” language of § 2333(a) as requiring a

showing that defendant’s actions proximately caused plaintiffs’ injuries)). Courts have thus

evaluated claims against those who provided financial services or assistance to terrorist groups

under this chain-of-incorporations theory, inquiring whether plaintiffs should be held primarily

liable for their own actions: the provision of financial services or assistance. See, e.g., Boim III,

549 F.3d 685; Goldberg, 660F. Supp. 2d at 426–27; In re Terrorist Attacks on September 11,

2001, 462 F. Supp. 2d 561 (S.D.N.Y. 2006) [hereinafter Terrorist Attacks II]; Weiss v. Nat’l

Westminster Bank, P.L.C., 453 F. Supp. 2d 609, 622–32 (E.D.N.Y. 2006).

BOC does not deny the availability of the chain-of-incorporations theory to plaintiffs;

indeed, BOC argues that it is “the only theory available” to plaintiffs under the ATA. BOC’s

Mot. 19. Instead, BOC criticizes the “labyrinthine route” through which plaintiffs attempt to

plead a chain of incorporations, arguing that theirs is “a theory so utterly implausible—indeed

irrational—that it falls well short of the Twombly standard.” Id. at 20–22. BOC additionally

argues that plaintiffs have failed to adequately plead facts relating to BOC’s state of mind to

support the elements of knowledge or intent required by the ATA and the other statutes it

Quaranic Literacy Inst., 340 F. Supp. 2d 885 (N.D. Ill. 2004). Following a trial in which all

defendants were found liable, some defendants appealed, and the Court of Appeals vacated the

judgment and remanded the case. Boim v. Holy Land Found for Relief & Dev., 511 F.3d 707

(7th Cir. 2007) [hereinafter Boim II]. Plaintiffs then petitioned for a rehearing en banc, which

was granted, yielding Boim III. 549 F.3d 685. For a fuller explication of this history, see Boim

III, 549 F.3d at 688.

Also, for an excellent summary of the Boim cases as well as other cases involving suits

against banks brought under the ATA, see Jimmy Gurulé, Unfunding Terror: The Legal

Response to the Financing of Global Terrorism 326–39 (2008).

47

incorporates. Id. at 23–28. Although BOC does not specifically argue that plaintiffs have failed

to adequately plead proximate causation, see id. at 19–23, the Court will nonetheless also address

this issue, which is implied by BOC’s general argument that plaintiffs have failed to adequately

state a primary-liability ATA claim. For the reasons discussed below, the Court disagrees with

BOC: plaintiffs have adequately pled links in a plausible chain of incorporations, including those

relating to state of mind, and have also adequately pled proximate causation.

b. Plaintiffs Adequately Plead Eligibility.

To be eligible for civil relief under the ATA, a plaintiff must either be a U.S. national or

an estate, a survivor, or an heir of a U.S. national. § 2333(a). A national of the United States is

“a citizen of the United States” or “a person who, though not a citizen of the United States, owes

permanent allegiance to the United States.” 8 U.S.C. § 1101(a)(22); see 18 U.S.C. § 2331(2).

Plaintiffs plead that the one estate-plaintiff in this case is the estate of an individual who was a

U.S. citizen while living, and further plead that all other survivor-plaintiffs are survivors of a

U.S. citizen, and are U.S. citizens themselves. FAC ¶¶ 3, 5–7. Plaintiffs have therefore

adequately pled their eligibility under § 2333(a).

c. Plaintiffs Adequately Plead Injury.

After pleading eligibility, plaintiffs must allege that they suffered some injury to their

person, property, or business. § 2333(a). Personal injury includes “[a]ny invasion of a personal

right, including mental suffering” in addition to physical or financial suffering. Black’s Law

Dictionary 802 (8th ed. 2004). Family members of decedents can therefore suffer “mental

anguish, emotional pain and suffering, [and] loss of society, companionship, comfort, protection,

marital care, attention, advice or counsel.” Biton, 310 F. Supp. 2d at 182 (internal quotation

marks omitted).

48

First, plaintiffs plead that Daniel Wultz, the estate of whom is a plaintiff, “was severely

injured in the Terrorist Bombing, and died of his injuries on May 14, 2006.” FAC ¶¶ 3, 100.

Second, plaintiffs plead that Yekutiel Wultz—Daniel’s father—“was seriously injured in the

Terrorist Bombing but survived,” suffering “severe physical, psychological, emotional[,] and

other injuries . . . including[] disfigurement; loss of physical and mental functions; extreme pain

and suffering; loss of guidance, companionship[,] and society; loss of consortium; severe

emotional distress and mental anguish; loss of solatium; and loss of future income.” Id. ¶¶ 3,

100–01. Finally, plaintiffs plead that Sheryl Wultz, Amanda Wultz, and Abraham Leonard

Wultz—Daniel’s mother, sister, and brother, respectively—suffered “severe injury,

including . . . pecuniary loss and loss of income; loss of guidance, companionship and society;

loss of consortium; severe emotional distress and mental anguish; and loss of solatium.” Id. ¶ 3,

6–7, 100, 102. Plaintiffs have thus adequately alleged injury under the ATA.

d. Plaintiffs Adequately Plead an Act of International Terrorism.

As part of the chain of incorporations, plaintiffs must allege an act of international

terrorism, which, in turn, requires that plaintiffs allege acts dangerous to human life; violations

of U.S. criminal law; the appearance of intention to intimidate civilians, influence government

policy, or affect government conduct; and transcendence of national boundaries. § 2331(1).

Plaintiffs have adequately pled these allegations.

i. Plaintiffs Adequately Plead Acts Dangerous to Human

Life.

After pleading injury, plaintiffs must allege that BOC committed an act of international

terrorism, § 2333(a), which must include allegations that BOC’s activities were violent acts or

acts dangerous to human life, § 2331(1)(A). The first amended complaint alleges that defendant

BOC provided “extensive banking services to PIJ,” which thereby “enable[d] PIJ to plan, to

49

prepare for and to carry out terrorist attacks,” including the attack in this case. FAC ¶¶ 69, 72.

The complaint further alleges that the defendant’s provision of financial services to Mr. Al-

Shurafa and the PIJ was “dangerous to human life, since the PIJ is a violent terrorist

organization” the only goal of which is to engage in terroristic violence, including the murder of

Israeli and American citizens. Id. ¶ 109.

Plaintiffs’ pleadings are similar to those made in Goldberg, which arose out of a bus

bombing allegedly carried out by Hamas. 660 F. Supp. 2d at 416. In that case, the plaintiffs

alleged that Hamas, which had been designated a foreign terrorist organization by the State

Department, was financed through false charities. Id. at 415–16. UBS allegedly maintained an

account for one of these charities and transferred money to it and other Hamas-controlled

entities. Id. The court denied a motion to dismiss by UBS for failure to state a primary-liability

claim under § 2333, concluding that the “plaintiffs have sufficiently alleged that defendant UBS

committed acts of international terrorism,” necessarily including allegations that the provision of

financial services constitutes an act dangerous to human life. Id. at 427. This Court reaches a

similar conclusion: plaintiffs have adequately pled the commission of an act dangerous to human

life.

ii. Plaintiffs Adequately Plead Violations of U.S. Criminal

Law.

After pleading acts dangerous to human life, plaintiffs must continue their allegations that

BOC committed an act of international terrorism by alleging that BOC violated a criminal law of

the United States. § 2331(1)(A). Plaintiffs thus allege that BOC’s actions constitute “a violation

of . . . the criminal provisions of 18 U.S.C. §§ 2339A, 2339B and 2339C, which prohibit the

provision of material support and resources to terrorist organizations.” FAC ¶ 108. Adequately

pleading a violation under any single provision would suffice for purposes of the plaintiffs’

50

primary liability claim, but based on the allegations set forth in the first amended complaint, the

Court finds plaintiffs have sufficiently pled BOC’s violation of all three applicable laws.

I. Plaintiffs Adequately Plead Violations of 18

U.S.C. § 2339A.

Section 2339A makes it a crime to “provide[] material support or resources . . . knowing

or intending that they are to be used in preparation for, or in carrying out, a violation of” various

terrorism-related criminal statutes. § 2339A(a). Plaintiffs have pled facts satisfying these

elements.

First, material support or resources include, among other things, “financial services.”

§ 2339A(b)(1). BOC protests that it merely engaged in the “routine provision of banking

facilities,” not “acts of international terrorism.” BOC’s Mot. 22. Material support or resources,

however, can include “even the ‘provision of basic banking services,’” so long as other elements

of § 2339A(a), such as knowledge, are met. Weiss, 453 F. Supp 2d at 2006 (citing Terrorist

Attacks I, 349 F. Supp. 2d at 833, 835) (quoting Linde v. Arab Bank, P.L.C., 384 F. Supp. 2d

571, 588 (E.D.N.Y. 2005)). Compare Terrorist Attacks I, 349 F. Supp. 2d at 835 (“Providing

routine banking services, without having knowledge of the terrorist activities, cannot subject

Arab Bank to liability.”), with Linde, 384 F. Supp. 2d at 588 (“Given plaintiff’s allegations

regarding the knowing and intentional nature of [Arab] Bank’s activities there is nothing

‘routine’ about the services the Bank is alleged to provide.”). Plaintiffs have alleged that BOC

provided financial services to the PIJ by executing dozens of wire transfers totaling millions of

dollars to an agent of the PIJ. FAC ¶ 69. Plaintiffs thus plead facts in satisfaction of this first

element of § 2339A, particularly considering facts also pled as to knowledge, which are

discussed below.

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Second, among the various terrorism-related criminal statutes referenced in § 2339A are

18 U.S.C. §§ 2332(a), 2332a(a)(1), and 2332f(a)(1). The first statute proscribes murder—“the

unlawful killing of a human being with malice aforethought.” 18 U.S.C. §§ 1111(a), 2332(a)(1).

Plaintiffs allege that the PIJ maliciously killed several human beings by meticulously planning

for and successfully carrying out the Tel Aviv bombing with the intent to kill civilians in a

crowded restaurant. FAC ¶¶ 82. Plaintiffs thus plead facts satisfying the elements of the first

statute.

The second statute proscribes, among other things, the use “without lawful authority” of a

“weapon of mass destruction . . . against a national of the United States while such national is

outside of the United States.” § 2332a(a)(1). A weapon of mass destruction is, among other

things, “any destructive device,” which includes “any explosive,” such as a “bomb.” 18 U.S.C.

§§ 921(a)(4)(A)(i); 2332a(c)(2)(A). Plaintiffs allege that “[t]he PIJ is a radical terrorist

organization” that works toward its goal—“the destruction of the State of Israel”—“by carrying

out terrorist attacks against Jewish civilians,” including the Tel Aviv bombing. FAC ¶¶ 27, 82.

Terrorism is fundamentally extra-legal. See 8 U.S.C. § 1182(a)(3)(B)(iii) (defining “terrorist

activity” to mean, in part, “any activity which is unlawful under the laws of the place where it is

committed (or which, if it had been committed in the United States, would be unlawful under the

laws of the United States or any State)”). Plaintiffs thus adequately plead that the PIJ lacked

lawful authority to engage in its attack. Plaintiffs further plead that the PIJ exploded “a powerful

explosive device covered with nails and other metallic projectiles. FAC ¶¶ 84–85. Plaintiffs

thus adequately plead the use of a weapon of mass destruction. Plaintiffs also plead the use of

the weapon against Daniel Wultz and Yekutiel Wultz, both alleged U.S. nationals, while they

52

were outside the United States in Tel Aviv, Israel. FAC ¶¶ 1, 3, 5, 87–88. Plaintiffs thus plead

facts satisfying the final elements of the second statute.

Finally, the third statute proscribes, among other things, the delivery, placement,

discharge, or detonation of “an explosive or other lethal device in, into, or against a place of

public use . . . with the intent to cause death or serious bodily injury. § 2332f(a)(1)(A).

Plaintiffs plead that an agent of the PIJ carried the aforementioned explosive device to the

public—and very crowded—Rosh Ha’ir restaurant and detonated it, intending to kill and maim

Jewish civilians. FAC ¶¶ 82–85. Plaintiffs thus plead facts satisfying the elements of the third

statute. Because plaintiffs have pled facts as to the elements of §§ 2332(a), 2332a(a)(1), and

2332f(a)(1), plaintiffs have therefore pled facts in satisfaction of the criminal-law-violation

element of § 2339A.

Third and finally, liability under § 2339A attaches only when the provider of material

support or resources knew or intended that its financial services would be used in preparation for

or carrying out violations of the various criminal-law provisions referenced in subsection (a).

§ 2339A(a). Such provider need not have had the “specific intent to aid or encourage the

particular attacks that injured plaintiffs.” Linde, 384 F. Supp. 2d at 586 n.9. Thus, plaintiffs

need only allege that BOC provided financial services knowing or intending that such provision

would generally facilitate the terrorist activities of the PIJ. Id.; Estate of Parsons v. Palestinian

Auth., 2010 WL 2169617 at *2 (D.D.C. 2010); Gates v. Syrian Arab Republic, 580 F. Supp. 2d

53, 67 (D.D.C. 2008); Ben-Rafael v. Islamic Republic of Iran, 540 F. Supp. 2d 39, 46 (D.D.C.

2008). Below, the Court discusses the overarching knowledge requirement imposed by § 2333.

See discussion infra Part III.E.2.e.i. As more fully discussed in that part, Israeli officials

53

allegedly informed China, which informed BOC, that the transfers were enabling the terrorist

activities of the PIJ. FAC ¶ 77. Plaintiffs have thus adequately pled knowledge under § 2339A.

II. Plaintiffs Adequately Plead a Violation of 18

U.S.C. § 2339B.

Section 2339B makes it a crime to “provide[] material support or resources to a foreign

terrorist organization” with “knowledge that the organization is a designated terrorist

organization . . . , that the organization has engaged or engages in terrorist activity . . . , or that

the organization has engaged or engages in terrorism.” § 2339B(a)(1). The law defines

“material support or resources” by reference to § 2339A, which includes the provision of

financial services. § 2339B(g)(4). The law also defines “terrorist activity” to mean “any activity

which is unlawful under the laws of the place where it is committed (or which, if it had been

committed in the United States, would be unlawful under the laws of the United States or any

State) and which involves,” among other things, “the use of any . . . explosive,” 8 U.S.C.

§ 1182(a)(3)(B)(iii); § 2339B(a)(1); and, relatedly, defines engagement in terrorist activity to

mean, among other things, “to commit . . . , under circumstances indicating an intention to cause

death or serious bodily injury, a terrorist activity.” 8 U.S.C. § 1182(a)(3)(B)(iv)(I);

§ 2339B(a)(1). Finally, the law defines “terrorism” to mean “premeditated, politically motivated

violence perpetrated against noncombatant targets by subnational groups or clandestine agents.”

22 U.S.C.A. § 2656f(2); § 2339B(a)(1).

As discussed above, material support or resources include the provision of financial

services, § 2339A(b)(1), and plaintiffs have adequately pled the provision of such services by

BOC, see discussion supra Part III.E.2.d.ii.I. Plaintiffs plead that the PIJ is a designated foreign

terrorist organization. FAC ¶ 31. The only remaining issue, therefore, is whether plaintiffs

adequately plead that BOC provided financial services to the PIJ with the requisite state of mind.

54

Discussing the state-of-mind requirement, the Supreme Court recently stressed that “Congress

plainly spoke to the necessary mental state for a violation of § 2339B, and it chose knowledge

about the organization’s connection to terrorism, not specific intent to further the organization’s

terrorist activities.” Holder v. Humanitarian Law Project, 130 S. Ct. 2705, 2717 (2010).

Therefore, by alleging that defendant had knowledge of an organization’s connection to

terrorism by one of the three means provided at § 2339B(a)(1), a plaintiff can sufficiently plead

the state of mind necessary to plead a violation of § 2339B.

Below, the Court discusses the overarching knowledge requirement imposed by § 2333.

See discussion infra Part III.E.2.e.i. As more fully discussed in that part, Israeli officials

allegedly informed China, which informed BOC, that the transfers were enabling the terrorist

activities of the PIJ. FAC ¶ 77. Plaintiffs thus adequately allege that BOC at least knew that it

provided financial services to an organization that had previously engaged in terrorism and

terrorist activities.

III. Plaintiffs Adequately Plead a Violation of 18

U.S.C. § 2339C.

Section 2339C makes it a crime to, among other things,

unlawfully and willfully provide[] or collect[] funds . . . with the knowledge that

such funds are to be used, in full or part, to carry out . . . any . . . act intended to

cause death or serious bodily injury to a civilian . . . when 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.

§ 2339C(a)(1).

Provision includes “giving, donating, and transmitting” funds, § 2339C(e)(4), and

collection includes “raising and receiving” funds, § 2339C(e)(4). Thus, providing financial

services to a terrorist organization falls within the scope of § 2339C, to the extent that the

financial institution receives and transmits the organization’s funds. See, e.g., Weiss, 453 F.

55

Supp. 2d at 628–30 (concluding, after reviewing legislative history, that “maintenance of bank

accounts[] and processing of deposits and withdrawals” constitutes provision and collection

under § 2339C); Linde, 384 F. Supp. 2d at 588 (denying motion to dismiss claims against bank

for provision of financial services under § 2339C where bank received funds as deposits and

transmitted funds to terrorist organizations). Plaintiffs plead that BOC transmitted and received

funds for the PIJ on several occasions. FAC ¶ 69. There is no indication that BOC’s provision

of financial services was done against its will. Plaintiffs thus adequately plead the first element

of a claim under § 2339C.

Plaintiffs also plead facts concerning the act described in subsection (a)(1), which the

statute refers to as a “predicate act.” § 2339C(e)(6). By allegedly carrying out the Tel Aviv

bombing, the PIJ allegedly intended to kill and maim Jewish civilians with the purpose of

intimidating those civilians to leave Israel and compelling the Israeli government into acceding

to its demands. FAC ¶¶ 27, 82–85.

Concerning state of mind, § 2339C does not require a showing of specific intent that the

defendant acted to further the organization’s terrorist activities or that it intended to aid or

encourage the particular attack giving rise to a plaintiff’s injuries. Boim I, 291 F.3d at 1023–24.

Mere knowledge that the funds provided and collected would be used to carry out the predicate

act is enough. See e.g., Linde, 384 F. Supp. 2d at 588 (denying motion to dismiss where the

plaintiffs alleged that a financial institution knew that funds received as deposits and transmitted

to various organizations “were to be used for conducting acts of international terrorism.”).

Below, the Court discusses below the overarching knowledge requirement imposed by § 2333.

See discussion infra Part III.E.2.e.i. As more fully discussed in that part, Israeli officials

allegedly informed China, which informed BOC, that the transfers were enabling the terrorist

56

activities of the PIJ. FAC ¶ 77. Plaintiffs have thus adequately pled that BOC knew that its

provision and collection of funds would be used to carry out terrorist attacks such as the Tel

Aviv bombing. Importantly, it is “not . . . necessary that the funds were actually used to carry

out a predicate act.” § 2339C(a)(3). BOC’s knowledge that they could be, even if they actually

were not, is enough.

Regardless of whether plaintiffs have pled facts as to the elements of a claim under

§ 2339C(a), a court cannot entertain such a claim unless it has jurisdiction as provided by

§ 2339C(b). Subsection (b) provides different rules for when a court may entertain claims for

offenses under subsection (a) depending on whether the offense took place within or outside the

United States. If within, a court has jurisdiction where, among other situations, an offense

“resulted in the carrying out of a predicate act against . . . a national of another state,”

§ 2339C(b)(1)(E)(i), an offense “resulted in the carrying out of a predicate act committed in an

attempt to compel another state or international organization to do . . . any act,”

§ 2339C(b)(1)(F), or an offense “resulted in the carrying out of a predicate act . . . outside the

United States,” § 2339C(b)(1)(G)(i). If outside, a court has jurisdiction where, among other

situations, an offense “resulted in the carrying out of a predicate act against . . . any national of

the United States,” § 2339C(b)(2)(C)(iii). Plaintiffs allege that BOC engaged in violations of

§ 2339C both within and outside the United States. FAC ¶ 69 (alleging BOC received and

transferred funds “through BOC’s branches in the United States” as well as through a branch in

Guanzhou, China).

Below, the Court discusses the causation requirement imposed by § 2333. See discussion

infra Part III.E.2.e.ii. As more fully discussed in that part, BOC’s provision of financial services,

including receipt and transfer of funds, proximately caused plaintiffs’ alleged injuries by

57

facilitating the Tel Aviv bombing. Accordingly, the Court is satisfied that plaintiffs have pled

allegations that BOC’s alleged offense under § 2339C(a)(1) “resulted in” the bombing, as that

term is used in § 2339C(b). As for the rest of the requirements of § 2339C(b), first, plaintiffs

plead that the bombing was carried out against, among others, Daniel Wultz and his father, both

U.S. citizens, FAC ¶ 3, 5, 87–88, thus satisfying both § 2339C(b)(1)(E)(i) and

§ 2339C(b)(2)(C)(iii). Second, plaintiffs plead that the purpose of the bombing was to compel

the Israeli government to accede to the PIJ’s demands, FAC ¶¶ 27, 82–85, thus satisfying

§ 2339C(b)(1)(F). Third, plaintiffs plead that the bombing took place in Tel Aviv, Israel, outside

the United States, FAC ¶ 1, thus satisfying § 2339C(b)(1)(G)(i). Plaintiffs have therefore pled

facts supporting jurisdiction under several provisions of § 2339(C)(b).

iii. Plaintiffs Adequately Plead Appearance of Intention to

Intimidate Civilians, Influence Government Policy, or

Affect Government Conduct.

After pleading violations of U.S. criminal law, plaintiffs must continue their allegations

that BOC committed an act of international terrorism by alleging the appearance of BOC’s

intention to intimidate civilians, influence government policy, or affect government conduct.

§ 2331(1)(B). Despite BOC’s protestation that such allegations “cross[] the line from

implausibility to absurdity,” BOC’s Mot. 22, the Court concludes that plaintiffs have adequately

pled these allegations.

To constitute an act of terrorism, an act dangerous to human life and violative of U.S.

criminal law must also “appear to be intended” to do one of three things: “intimidate or coerce a

civilian population”; “influence the policy of a government by intimidation or coercion”; or

“affect the conduct of a government by mass destruction, assassination, or kidnapping.”

§ 2331(1)(B). At first glance, it does seem remarkable that BOC—an internationally respected

58

financial institution with branches in this country—would actually intend to facilitate the

terroristic murder of American civilians by the PIJ. Unfortunately for BOC, actual subjective

intent is not what the ATA is concerned with. Instead, the law requires only that a defendant’s

acts “appear to be intended” to achieve one of the three enumerated items. § 2331(1)(B)

(emphasis added); Boim III, 549 F.3d at 694 (finding that satisfaction of § 2331(1)(B) is based on

“a matter of external appearance rather than subjective intent”). Plaintiffs allege that the

objective intent standard is satisfied “by the fact that subsequent to April 2005[,] BOC

knowingly continued to carry out the PIJ Transfers after being expressly warned of the

consequences of its actions and asked to desist.” FAC ¶ 111. Thus, defendant’s actions

allegedly “created the objective ‘external appearance’ . . . that BOC shared the PIJ’s goals of

intimidating and coercing a civilian population and of influencing the policy of a government by

intimidation and coercion.” Id.7

Plaintiffs thus adequately allege the objective appearance of intent by BOC. Based on

these allegations, the Court easily finds that the plaintiffs have sufficiently pled grounds from

which an objective observer could conclude defendant BOC intended to achieve any of the three

results set forth under § 2331(1)(B): the attack at issue in this case, by its nature and context,

appears to have been intended to intimidate or coerce the Israeli population, to influence the

policies of the Israeli government by intimidation and coercion, and to affect the conduct of the

7

The Court notes that plaintiffs additionally plead, “to the extent that § 2331(1)(B)

imposes a subjective state-of-mind requirement,” allegations to show that BOC actually intended

to intimidate civilians, influence government policy, or affect government conduct. FAC ¶ 112.

Plaintiffs thus allege that China, acting through BOC and “to strengthen its own position and

undermine that of the United States,” intentionally facilitated terrorist attacks against American

interests. Id. BOC hotly objects, accusing plaintiffs of “blithely ignoring the fundamental

implausibility, even irrationality,” of “such scurrilous accusations.” BOC’s Mot. 22; BOC’s

Reply 15. Because the Court concludes that the relevant state of mind is objective, not

subjective, the Court does not reach these arguments.

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Israeli government by mass destruction. Although directly attributable to the PIJ, a reasonable

person could easily infer similar intent of BOC by virtue of its having allegedly provided

material support to PIJ despite having allegedly been aware of a substantial probability that its

support would facilitate the planning, preparation for, and execution of terrorist attacks in Israel.

Cf. Boim III, 549 F.3d at 708 (noting that mere financial support of a Hamas-affiliated charity

without reason to impute intent from the charity to the financier did not create the requisite

appearance of intent). Plaintiffs have thus adequately pled appearance of intent by BOC to

achieve goals similar to those of the PIJ.

iv. Plaintiffs Adequately Plead Transcendence of National

Boundaries.

After pleading appearance of intent, plaintiffs must continue their allegations that BOC

committed an act of international terrorism by pleading allegations either that the activities at

issue “occur primarily outside the territorial jurisdiction of the United States, or transcend

national boundaries in terms of the means by which they are accomplished, the persons they

appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek

asylum.” Plaintiffs allege that defendant BOC executed fund transfers “by and through BOC’s

branches in the United States . . . [to an] account . . . in Guanzhou, China.” FAC ¶ 69. Plaintiffs

thus plead facts showing that the provision of financial services transcended national boundaries.

e. Plaintiffs Adequately Plead Ordinary Tort Requirements.

When evaluating primary liability under a federal tort statute, “the ordinary tort

requirements relating to fault, state of mind, causation, and foreseeability must be satisfied for

the plaintiff to obtain a judgment,” even if not specifically enumerated as elements of the statute.

Boim III, 549 F.3d at 692. When applied to an ATA claim, these traditional elements require

60

that a plaintiff show intentional misconduct and proximate causation. Id. at 692; Boim I, 291

F.3d at 1011–12. Plaintiffs have adequately pled both.

i. Plaintiffs Adequately Plead Intentional Misconduct.

Because § 2333(a) provides for the automatic trebling of damages, courts require proof of

“intentional misconduct” on the part of the tortfeasor. Boim III, 549 F.3d at 692. As the Seventh

Circuit has explained, “[w]hen the facts known to a person place him on notice of a risk, he

cannot ignore the facts and plead ignorance of the risk.” Id. at 693 (citing Makor Issues &

Rights, Ltd. v. Tellabs, Inc., 513 F.3d 702, 704 (7th Cir.2008)). Thus, proceeding in the same

manner after being notified of a risk will constitute intentional misconduct where the defendant

“knows that the consequences are certain, or substantially certain, to result from his act.” Id. at

694 (citing Restatement (Second) of Torts § 8(a), cmt. b.). If the defendant proceeds with the

action in spite of the risk, “he is treated by the law as if he had in fact desired to produce the

result.” Id.

In this case, plaintiffs have pled facts alleging that BOC actually knew it was providing

financial services to an agent of the PIJ, thus risking the use of those funds in the furtherance of

the PIJ’s terrorist attacks. FAC ¶ 77. Between July 2003 and April 17, 2006, the date of the Tel

Aviv bombing, BOC allegedly performed several wire transfers to and from the account of Said

al-Shurafa, whom plaintiffs allege is an agent of the PIJ. Id. ¶ 69. By pleading that Mr. Al-

Shurafa is a “senior officer and agent . . . of the PIJ” who acted “[p]ursuant to the PIJ’s

instructions,” plaintiffs have adequately pled facts alleging that provision of financial services to

Mr. Al-Shurafa constitutes the provision of financial services to the PIJ. Id. ¶¶ 69–70; see

Restatement (Third) of Agency § 1.01 (noting that a principal-agent relationship is that where

“the agent shall act on the principal’s behalf and subject to the principal’s control”); Nat’l

61

Council of Resistance of Iran v. Dep’t of State, 373 F.3d 157 (D.C. Cir. 2004) (“When one entity

so dominates and controls another that they must be considered principal and agent, it is

appropriate, under [the ATA], to look past their separate juridical identities and to treat them as

aliases.”).

BOC stresses that Mr. Al-Shurafa is an individual “who has never been designated as a

member of a terrorist organization by any Government agency, and has never appeared on the

OFAC list.” BOC’s Resp. to Pls.’ New Auth. 2. BOC thus claims that it had no knowledge that

it was effectively providing financial services to the PIJ. Id. Plaintiffs, however, allege that, in

April 2005, “officials of the counterterrorism division of the Office of the Prime Minister of the

State of Israel . . . met with officials of the PRC’s Ministry of Public Security and the PRC’s

central bank . . . regarding the PIJ Transfers.” FAC ¶ 77. In this meeting, the Israeli officials

allegedly told the Chinese officials that the transfers were being made by the PIJ and the money

transferred was being used to fund terror. Id. Israel allegedly demanded that China stop the

BOC from providing further services to Mr. Al-Shurafa, but that China demurred. Id.

Plaintiffs further allege that “the PRC officials notified the BOC of the Israeli officials’

statements that the PIJ Transfers were being made by the PIJ for the purpose of carrying out

terrorist attacks and that the PIJ Transfers enhanced the PIJ’s ability to plan, prepare for[,] and

carry out such attacks,” and that “the PRC officials also notified BOC of the Israeli officials’

demand the BOC halt the PIJ Transfers, but the BOC (with the approval of the PRC) ignored this

demand and continued to carry out further PIJ Transfers.” Id. The Court must assume the truth

of this allegation, which is plausible because it is reasonable to assume that, although BOC is not

directly owned by China, see discussion supra Part III.B.3., China does exert a measure of

control over the BOC through China’s central bank, the People’s Bank of China (PBC), PBC,

62

About PBC, http://www.pbc.gov.cn/publish/english/952/index.html (last visited Oct. 20, 2010)

(“[T]he PBC function[s] as a central bank.”). Such an assumption is buttressed by BOC’s

proclamation that is its “one of China’s largest state-controlled commercial banks.” BOC,

Annual Report 2008, supra, at 1 (emphasis added). Thus, BOC’s argument that plaintiffs have

not adequately alleged knowledge by BOC itself, rather than China, see BOC’s Mot. 26, is

unpersuasive.

The Court must take plaintiffs’ allegations to be true, and when doing so, plaintiffs’ claim

is facially plausible: if Israeli officials did inform China of the consequences of the provision of

financial services to Mr. Al-Shurafa by BOC, China told BOC, and BOC continued to provide

those services, plaintiffs make a valid claim under § 2333(a). See e.g., Goldberg, 660 F. Supp.

2d at 432–33 (holding that ATA liability extends to where the recipient of material support was

not formally designated as a foreign terrorist organization but the alleged violator either had

knowledge that the ultimate beneficiary was such an organization or that the direct recipient was

acting as an agent of the foreign terrorist organization); Strauss v. Credit Lyonnais, S.A., No. 06-

cv-702, 2006 WL 2862704, at *11 (E.D.N.Y. Oct. 5, 2006) (holding that allegations concerning

the provision of financial services to charitable branches of a foreign terrorist organization could

serve as a basis for liability under § 2333 where it was also alleged that the charitable branches

acted as agents of such organization). This conclusion is buttressed by comparison to similar

cases cited by BOC involving financial institutions. In the first case, the plaintiffs in Stutts v. De

Dietrich Group alleged that several banks, acting as domestic correspondents for foreign banks,

issued letters of credit that were used to fund the purchase of goods and services facilitating the

chemical weapons program of Saddam Hussein. No. 03-cv-4058 (ILG), 2006 WL 1867060, at

*1 (E.D.N.Y. June 30, 2006). The plaintiffs argued that the banks had or should have had

63

knowledge that they were funding terrorism because they would have had to review the letters of

credit before issuing them. Id. at *2. The court found that this speculative allegation was

insufficient under Twombly. Id. In the second case, Terrorist Attacks I, the court dismissed

claims against banks where “[p]laintiffs offered no factual allegations” supporting the banks’

alleged knowledge. 349 F. Supp. 2d at 831–34. Plaintiffs in this case, on the other hand, offer

specific and plausible allegations as to how BOC had the knowledge alleged.8

BOC’s alleged knowledge is all the more significant when compared with the sort of

knowledge alleged in Boim III. In that case, the court faced the difficulty of evaluating the

provision of financial assistance to a terrorist organization that also engages in peaceable

pursuits. 549 F.3d at 698 (“Hamas is . . . engaged not only in terrorism but also in providing

health, educational, and other social welfare services.”). In this case, the Court faces no such

difficulty: “the PIJ offers no social services”; it engages solely in terroristic violence. Fletcher,

supra. Therefore, once BOC allegedly knew that it was providing financial services to the PIJ

and continued to do so, BOC engaged in the sort of intentional misconduct prohibited by

§ 2333(a).

In addition to arguing that plaintiffs’ allegations of BOC’s knowledge are simply too

implausible, BOC argues that the act-of-state doctrine prohibits the Court from considering

allegations that China had been informed by Israel of the nature of the wire transfers. BOC’s

Mot. 25–26. This argument widely misses its mark. As the D.C. Circuit has explained:

The act-of-state doctrine “precludes the courts of this country from inquiring into

the validity of the public acts a recognized foreign sovereign power committed

8

BOC alerts the Court to its public denial that that the alleged meeting between Israeli

and Chinese officials ever took place. BOC’s Mot. 25 n.9 (citing James T. Areddy, Israeli

Victims of Terror File Suit Against Bank of China, Wall St. J., Aug. 28, 2008, at A5). The Court

must nonetheless assume plaintiffs’ allegations to be true.

64

within its own territory.” Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,

401 (1964). It is applicable when “the relief sought or the defense interposed

would [require] a court in the United States to declare invalid the official act of a

foreign sovereign performed within” its boundaries. W.S. Kirkpatrick & Co., Inc.

v. Envtl. Tectonics Corp., 493 U.S. 400, 405 (1990).

World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1165 (D.C. Cir. 2002).9

Plaintiffs do not ask the Court to inquire into the validity of any public act of China. They do

not, for example, ask the Court to say that China’s alleged refusal to stop BOC was illegal under

Chinese law. They merely plead that China did, as a matter of fact, know that BOC was funding

the PIJ, a fact which invites the Court to say nothing about the validity of any act of China. See,

e.g., W.S. Kirkpatrick, 493 U.S. at 406 (citing Sharon v. Time, Inc., 599 F. Supp. 538, 546

(S.D.N.Y. 1984) (“The issue in this litigation is not whether [the alleged] acts are valid, but

whether they occurred.”)).

Additionally, plaintiffs do not limit their allegations of BOC’s knowledge to only the

time period after the April 2005 meeting. “Even prior to the Israeli officials’ demand to halt the

PIJ Transfers, BOC knew and/or should have known that the PIJ Transfers were being made for

illegal purposes,” based on several alleged attributes of the transfers that “are universally

recognized by all professional bankers, including BOC and its employees, as typical indicia of

transactions made for illegal purposes.” FAC ¶¶ 78–79. For example, the transfers were made

in cash in large, round numbers, with no apparent legitimate business purpose. Id. ¶ 78. These

attributes allegedly put BOC on notice, based on its duty under the rules of the international

Financial Action Task Force and U.S. banking laws to “monitor, report[,] and refuse to execute

9

Although related to the political-question doctrine insofar as the act-of-state doctrine

grows out of separation-of-powers concerns, the act-of-state doctrine “provides foreign states

with a substantive defense on the merits,” rather than a defense to justiciability. Republic of

Austria v. Altmann, 541 U.S. 677, 700 (2004). Hence the Court’s treatment of this argument

here.

65

suspicions and/or irregular banking transactions.” Id. ¶ 80–81.10 BOC takes issue with these

allegations of constructive knowledge and what should have been known, correctly arguing that

a civil action under § 2333(a) requires actual knowledge per the requirement of intentional

misconduct. BOC’s Mot. 27–28 (quoting Boim III, 549 F.3d at 693). As the Seventh Circuit has

pointed out, “it would not be enough to impose liability . . . for violating [§] 2333 . . . that the

average person or a reasonable person would realize that the organization he was supporting was

a terrorist organization, if the actual defendant did not realize it. That would just be negligence.”

Boim III, 549 F.3d at 693. Plaintiffs, however, do not intend or rely upon these allegations to

support their claim under the ATA; they are pled for the sake of plaintiffs’ claims under Israeli

law. Pls.’ Opp’n 19. Accordingly, the Court does not examine whether these allegations support

plaintiffs’ ATA claim.

ii. Plaintiffs Adequately Plead Proximate Causation.

To satisfy the ordinary tort requirement of causation and foreseeability, as well as the

textual requirement that injury be suffered “by reason of” an act of international terrorism,

plaintiffs must plead that an alleged act of international terrorism proximately caused their

injury. § 2333(a); Boim III, 549 F.3d at 691–98; Biton, 310 F. Supp. 2d at 182 (citing Boim I,

291 F.3d at 1011–12 (interpreting “by reason of” language of § 2333(a) as requiring showing

that defendant’s actions proximately caused plaintiffs’ injuries)). “Foreseeability is the

10

“The Financial Action Task Force (FATF) is an inter-governmental body whose

purpose is the development and promotion of policies, both at national and international levels,

to combat money laundering and terrorist financing.” FATF, About the FATF, http://www.fatf-

gafi.org/pages/0,3417,en_32250379_32236836_1_1_1_1_1,00.html (last visited Oct. 20, 2010).

Among the relevant U.S. banking laws that may apply is § 2339B(a)(2), which requires

that financial institutions, if and when an institution realizes it has terrorist funds, to hold such

funds and report them to the U.S. Department of the Treasury. Failure to do so, however, is not

civilly actionable under § 2333(a). Linde v. Arab Bank, P.L.C., 353 F. Supp. 2d 327, 331

(E.D.N.Y. 2004).

66

cornerstone of proximate cause, and in tort law, a defendant will be held liable only for those

injuries that might have reasonably been anticipated as a natural consequence of the defendant’s

actions.” Biton, 310 F. Supp. 2d at 182.

BOC could have reasonably anticipated plaintiffs’ injuries, assuming plaintiffs’

allegations to be true. BOC allegedly knew that it was providing financial services to an agent of

the PIJ, and that the PIJ would use those funds for the sole purpose of engaging in terroristic

violence against Jewish civilians in Israel. See discussion supra Part III.E.2.e.i. In light of these

allegations, and as the Court discussed more fully above when considering causation with respect

to standing, see discussion supra Part III.A.1.b., plaintiffs have adequately pled facts alleging

BOC’s proximate causation of plaintiffs’ injuries. See Weiss, 453 F. Supp. 2d at 632 (concluding

that plaintiffs pled proximate cause where they alleged that bank provided financial services to

terrorists before terrorist attack).

f. Conclusions Concerning Count Two.

Plaintiffs have pled facts supporting the long chain of incorporations necessary under the

ATA, alleging that they are eligible as the estate of and survivors of a U.S. citizen; that they

suffered physical, emotional, and financial injuries; that BOC’s provision of financial services to

an agent of the PIJ was dangerous to human life; that BOC provided financial services to the PIJ

knowing that funds transferred would be used to prepare for and carry out the murder of U.S.

citizens abroad, the use of a weapon of mass destruction against a U.S. citizen abroad, and the

detonation of an explosive device with the intent to kill and injure civilians; that BOC provided

financial services to the PIJ knowing that it was a designated terrorist organization that has

engaged in terrorist activity and terrorism; that BOC willfully conducted wire transfers knowing

that funds transferred would be used to carry out acts intended to kill and injure for the purpose

67

of intimidating Jewish civilians and compelling Israel to accede to the PIJ’s demands; that by

doing so, BOC appeared to have the intent to intimidate civilians, influence government policy,

or affect government conduct; that BOC’s provision of financial services transcended national

boundaries; that BOC acted knowingly and thus engaged in intentional misconduct; and that

BOC’s acts proximately caused plaintiffs’ injuries. Plaintiffs have therefore pled facts sufficient

to establish a claim of primary liability under the ATA upon which relief may be granted.

3. Plaintiffs Have Sufficiently Pled Count Three: Secondary Liability.

The Court must determine whether secondary liability for aiding and abetting the

commission of acts of international terrorism by others is actionable under the ATA—an issue on

which this Circuit has not ruled. BOC argues that is it not, but following a review of competing

caselaw—circuits are split on the issue—and the legislative structure and history of the ATA, the

Court concludes that plaintiffs may plead and have pled secondary liability.

a. Secondary Liability Exists Under the ATA.

In addition to their primary-liability claim, plaintiffs allege that BOC aided and abetted

the commission of an act of international terrorism—the Tel Aviv bombing—by the PIJ. FAC

¶¶ 116–25. In other words, under this theory, BOC should allegedly be held liable not because

its provision of financial services itself was an act of international terrorism, but rather because it

furthered the PIJ’s terrorist act. BOC argues that liability for aiding and abetting another’s

commission of an act of international terrorism is not actionable under the ATA because the

ATA does not specifically provide for a cause of action against secondary actors. BOC’s Mot.

28–29; BOC’s Reply 19. The Court disagrees.

As an initial matter, the Court is generally hesitant to imply secondary aiding-and-

abetting liability under the ATA in light of the Supreme Court’s ruling in Cent. Bank v. 1st

68

Interstate Bank of Denver, 511 U.S. 164 (1994). In Cent. Bank, the Supreme Court refused to

recognize the availability of implied private rights of action for aiding-and-abetting liability

under § 10(b) of the Securities Exchange Act of 1934. Id. at 164. The Court based its ruling on

the lack of an express private cause of action under § 10(b), id. at 173; analysis of express private

causes of action in the federal securities law, none of which imposed liability on aiders and

abettors, id. at 178–79; and the lack of evidence that Congress had intended to provide for aiding

and abetting liability under § 10(b), id. at 183–84.

“Congress has not enacted a general civil aiding and abetting statute. . . . Congress

instead has taken a statute-by-statute approach . . . .” Id. at 182. Cent. Bank thus stands for the

proposition that “when Congress enacts a statute under which a person may sue and recover

damages from a private defendant for the defendant’s violation of some statutory norm, there is

no general presumption that the plaintiff may also sue aiders and abettors.” Id. (citing Elec. Lab.

Supply Co. v. Cullen, 977 F.2d 798, 805–806 (3d Cir. 1992)). However, this is only a

presumption, and the Court held that the availability of a claim should ultimately be guided by

“whether aiding and abetting is covered by the statute.” Id. at 177. In this case, the presumption

is overcome because Congress expressly created a private right of action under the ATA,

Congress intended to incorporate common principles of tort law, and to refuse to recognize

aiding-and-abetting liability would stymie Congress’s intent. See generally Boim I, 291 F.3d at

1019–21; Brief for the United States as Amicus Curiae Supporting Affirmance, Boim v. Quranic

Literacy Inst., Nos. 01-cv-1969, 01-cv-1970, 2001 WL 34108081 (7th Cir. Nov. 14, 2001)

[hereinafter U.S. Amicus Br.].

First, § 2333(a) provides an express private civil cause of action, whereas § 10(b) does

not. Boim I, 291 F.3d at 1019. Thus, a cause of action for primarily liability under § 10(b) had

69

already been read into the securities laws, counseling against a further reading-in of secondary

liability. Id. Because Congress has already expressly provided for a private cause of action

under the ATA, the Court does not face a similar problem here. Id.

Second, Congress intended to incorporate general principles of tort law, including

secondary liability, into the cause of action under the ATA. The statute provides in relevant part:

Any national of the United States injured in his or her person, property, or

business 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 the damages he or she sustains and the cost of

the suit, including attorney’s fees.

18 U.S.C. § 2333(a). “This text contains all of the elements of a traditional tort: breach of a legal

duty (i.e., commission of an act of ‘international terrori

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