2017 International Law Update

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2017 International Law Update, Volume 23, Number 4 (October – November - December)

DISCOVERY

Where a party seeks evidence under Section 1782 for use in a foreign proceeding, Eleventh Circuit addresses jurisdictional issue—here, Appellant did not appeal the district court’s order granting the § 1782 application; instead, Appellant appealed the denial of its subsequent motion to quash 

The following case involves a jurisdictional issue regarding Section 1782 discovery. Furstenberg Finance SAS and Marc Batallion (“Applicants”) applied to the U.S. District Court for the Southern District of Florida pursuant to 28 U.S.C. § 1782 for an order requiring Litai Assets, LLC (“Litai” or “Appellant”) to produce certain discovery for use in a Luxembourg proceeding. The district court granted the request and issued subpoenas, Litai moved to quash. Litai now appeals the district court’s denial of its motion to quash.

The U.S. Court of Appeals for the Eleventh Circuit affirms because it concludes that an order denying a motion to quash a subpoena is a final, appealable order in proceedings brought under § 1782. Other Circuits have found that an order granting or denying a § 1782 application is immediately appealable. Here, however, the issue is more specific: Litai did not appeal the district court’s order granting the § 1782 application, but instead appealed the denial of its subsequent motion to quash.

The Court first reviews the jurisdiction issue. This Court has never addressed, in a published opinion, whether an order denying a motion to quash a subpoena is a final, appealable order in proceedings brought under § 1782. It does conclude, however, that an order denying a motion to quash a subpoena is a final, appealable order in proceedings brought under § 1782. The Ninth Circuit has addressed an analogous situation, and concluded that had jurisdiction over an appeal from the denial of a protective order in a proceeding under § 1782, because the protective order “effectively would have quashed the subpoena.” See In re Premises Located at 840 140th Ave. NE, Bellevue, Wash., 634 F.3d 557, 562, 567 (9th Cir. 2011).

After finding jurisdiction, the Court turns to the merits. The four statutory requirements for a Section 1782 request are: (1) the request must be made “by a foreign or international tribunal” or by “any interested person”; (2) the request must seek evidence, be it the testimony or statement of a person or the production of a document or other thing; (3) the evidence must be “for use in a proceeding in a foreign or international tribunal”; and, finally, (4) the person from whom discovery is sought must reside or be found in the district of the district court ruling on the application for assistance. In re: Clerici, 481 F.3d 1324, 1331 (11th Cir. 2007). 

The Court rejects Litai’s arguments that the first and third requirements were not met. Applicants stated that would file a criminal complaint in Luxembourg with a claim for damages, which will trigger a criminal investigation by a judge. Such investigations are proceedings within the meaning of § 1782, and Applicants qualify as an interested person.

Citation: Application of Furstenberg Finance SAS v. Litai Assets LLC, Case Number 16-15664/16-60266 (11th Cir. 2017).

SOVEREIGN IMMUNITY

Where ICSID panel issued an award against Venezuela and creditors brought ex parte action for recognition of award under New York law, federal district court denied Venezuela’s subsequent motion to vacate judgment; Second Circuit reverses because FSIA is the sole basis for federal court jurisdiction over foreign sovereigns in actions to enforce ICSID awards 

In the following case, the Second Circuit harmonizes the ICSID Convention and its enabling statutes, 22 U.S.C. Section 1650a, with the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. Sections 1330, 1391(f), 1441(d), 1602-1611.

Between 1962 and 1965, the World Bank spearheaded the development of the ICSID Convention, a multilateral treaty aimed at encouraging and facilitating private foreign investment in developing countries. The Convention established an international organization, the International Centre for Settlement of Investment Disputes, based in Washington, D.C. (the “Centre” or “ICSID”). Under ICSID, arbitration panels may be convened to adjudicate disputes between international investors and host governments in “Contracting States” (countries who have adopted the ICSID Convention). The Centre convenes arbitral tribunals upon request by either a member state or a national of a member state. At the conclusion of a proceeding, the panels issue written awards that address “every question submitted to the Tribunal,” and “state the reasons upon which [the award] is based.” ICSID Convention Art. 48. Note that Article 53 of the Convention provides that a party dissatisfied with an award may challenge it on various grounds, but may do so only through proceedings at the Centre and not collaterally in the courts of member states. The Convention envisions that participating sovereign states retain their sovereign immunity.

In August 1966, after ratifying the Convention, Congress adopted legislation to implement it. The Sovereign Immunities Act of 1976 (FSIA), Pub. L. 94-583, 90 Stat. 2891 (1976), governs the jurisdiction of United States courts over actions against foreign sovereigns. The FSIA provides that, “[s]ubject to existing international agreements to which the United States is a party,” foreign sovereigns “shall be immune from the jurisdiction of the courts of the United States and of the States” except as provided by one of the FSIA’s exceptions to jurisdictional immunity. Federal courts, when presented with requests to enter federal judgments upon ICSID awards against foreign sovereigns, have adopted various approaches to “recognition” and “enforcement” of ICSID awards. There are two distinct approaches. The first approach permits entry of judgment on an ICSID award through an ex parte proceedings like the one at issue here. The district courts adopting this approach interpret the Convention and Section 1650a to require some sort of summary procedure to recognize the ICSID award, and generally look to state law for the appropriate procedure. The second approach requires award-creditors to pursue a plenary action in compliance with the FSIA’s personal jurisdiction, service, and venue requirements in order to enforce an ICSID award. 

Here, the parties do not dispute the basic facts giving rise to the ICSID panel award. During the 1990s, Mobil (acting through subsidiaries) invested in two oil development ventures in Venezuela involving the government that went sour. On October 9, 2014, after lengthy arbitral proceedings in which both Mobil and Venezuela participated, a panel of ICSID arbitrators issued a unanimous award in Mobil’s favor. The day after the ICSID panel announced the Award, Mobil filed an ex parte petition in the Southern District of New York, asking the court to “recognize” the Award “pursuant to 22 U.S.C. § 1650a,” and to enter judgment directly on that Award in the amount of the full $1.6 billion, plus accrued interest at the rate specified in the Award. Immediately after the judgment was entered, Mobil electronically delivered to Venezuela’s legal counsel notice of the judgment together with a demand for immediate payment. Venezuela moved to vacate the judgment.

The federal district court briefly addressed Venezuela’s argument that the court lacked subject matter jurisdiction in this case. The court, however, concluded that two exceptions to immunity in the FSIA, the waiver and arbitration exceptions to immunity, confer subject matter jurisdiction over actions arising from ICSID awards, citing Blue Ridge Investments, 735 F.3d at 83-84, in support of the conclusion. Further, the district court found that, looking to the text of the Convention and Section 1650a, that neither the Convention nor the statute specifies “the procedural mechanism by which an arbitral award is to be converted into a federal judgment.” District Court at 579. The district court found that it could enter the requested judgment against Venezuela ex parte, without requiring Mobil to comply with the FSIA procedural requirements for actions against foreign sovereigns. The district court therefore denied Venezuela’s motion to vacate the judgment. After Venezuela moved to vacate the judgment, it also applied to ICSID for an annulment of the Award. The ICSID Secretary-General stayed enforcement of the award pending determination of the annulment request. Likewise, the district court stayed enforcement of the award pending ICSID’s resolution of Venezuela’s request. Venezuela timely appealed the district court’s denial of its motion to vacate the ex parte judgment.

The U.S. Court of Appeals for the Second Circuit reverses. The Court acknowledges that the Southern District of New York has in some instances entered judgments against foreign sovereigns based on “ex parte” proceedings, but other district courts have not. The Court notes that the correct view should be that ICSID award-creditors must pursue federal court judgments to enforce their awards against a foreign sovereign in compliance with the FSIA. Here, the district court lacked jurisdiction over Venezuela under the FSIA.

On appeal, Venezuela argues that the district court should have required Mobil to bring a plenary action before entering judgment on the Award; that the district court lacked subject matter jurisdiction and personal jurisdiction over Venezuela under the FSIA; and that the federal interest rate on judgments established by 28 U.S.C. § 1961 governs the Award (not the rate set by the ICSID panel and adopted by the district court). In March 2016, the United States joined as amicus curiae to support Venezuela’s position that the FSIA is the sole source of subject matter jurisdiction over an action to enforce an ICSID award against a foreign sovereign, and that the FSIA’s procedural rules must be followed in such proceedings. When the United States enacted Section 1650a, it required the federal courts to accord ICSID awards “full faith and credit as if the award were a final judgment of ... one of the several States.” 22 U.S.C. § 1650a(a).

The Court notes that enforcement proceedings need not be protracted. That such is referred to as “plenary” rather than “summary” does not mean that the district court must entertain all manner of substantive defenses, or even defenses cognizable under the Federal Arbitration Act. In this context, the word “plenary” denotes the need for commencing an action under the Federal Rules of Civil Procedure, service of the complaint in compliance with Rule 4 (as modified by the FSIA), and the opportunity for the defendant sovereign to appear and file responsive pleadings. Requiring compliance with the FSIA facilitates an enforcement regime for ICSID awards that has a greater prospect of consistency across the nation. That actions to enforce ICSID awards against foreign sovereigns must comply with the FSIA’s service and venue provisions is consistent with the United States’ obligations under the ICSID Convention.

The Court notes that Rule 60(b) of the Federal Rules of Civil Procedure provides an avenue to relief from a final judgment when the judgment is “void.” Fed. R. Civ. P. 60(b)(4).

This appeal requires the Court to reconcile the ICSID Convention and Section 1650a with the FSIA, so that the Court may determine the appropriate procedures for converting an ICSID award into a federal judgment. Mobil argues that federal courts may enter judgment on ICSID awards summarily, according to the procedures used in the state courts of the forum state (here: New York law, applied in an ex parte petition by the award-creditor). Venezuela and the United States argue that award-creditors must file a complaint seeking entry of judgment on the award; serve the complaint on the foreign sovereign award-debtor; and comply with the venue requirements of the FSIA. Resolution of this dispute requires the Court to answer whether Section 1650a provides an independent source of jurisdiction over a foreign sovereign award-debtor, or whether the later-enacted FSIA offers the sole basis for federal courts’ jurisdiction over foreign sovereigns. In the end, the Court agrees with Venezuela and the United States as amicus curiae that the FSIA controls actions to enforce ICSID awards.

Mobil argues that Section 1650a provides its own independent grant of subject matter jurisdiction because an ICSID award “shall create a right arising under a treaty of the United States” and provides federal district courts with “exclusive jurisdiction” over such action. Venezuela does not contest that Section 1650a could serve as a grant of subject matter jurisdiction over some actions to enforce ICSID awards. It argues, however, that Section 1650a cannot confer subject matter jurisdiction on federal courts when the ICSID award-debtor is a foreign sovereign. The district court found that, if the FSIA applied to this case, subject matter jurisdiction could arise from two exceptions to sovereign immunity found in the FSIA.

The Supreme Court’s decision in Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989), suggests that, even if Section 1650a once granted subject matter jurisdiction, after passage of the FSIA, Section 1650a cannot fairly be read to serve as an independent source of subject matter jurisdiction over a foreign sovereign. Further, although the question is not free from doubt, the Second Circuit is not persuaded by Mobil’s argument that FSIA Section 1604’s carve-out for “existing international agreements” includes the Convention. Section 1650a’s legislative history undermines the argument that FSIA Section 1604 exempts the ICSID Convention and Section 1650a from the FSIA’s jurisdictional provisions. Section 1650a does not “distinguish” among classes of private defendants: it states broadly that “[t]he district courts of the United States ... shall have exclusive jurisdiction over actions and proceedings” to enforce ICSID awards. 22 U.S.C. § 1650a(b). Combined with the legislative history that suggests that Congress expected actions under Section 1650a to be subject to sovereign immunity, Amerada Hess in its holding as well as in its language confirms the Second Circuit’s interpretation that Section 1650a does not constitute an independent grant of subject matter jurisdiction over a foreign sovereign.

The district court’s contrary reasoning also derived from the notion that “recognition,” and not just “enforcement,” was part of the district court’s task. The district court viewed “recognition,” like confirmation in the context of other arbitral proceedings, as a mere ministerial act preliminary to enforcement. As noted above, Article 54 of the Convention requires member states to “recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award.” ICSID Convention art. 54 (1)-(2). In contrast to the Convention, Section 1650a(a) refers to enforcement, but not to recognition. It directs only that “[t]he pecuniary obligations imposed by such an award shall be enforced and shall be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States.” 22 U.S.C. § 1650a(a) (emphasis added). It makes no mention of recognition as a separate, additional judicial action, and the Second Circuit takes the view that this was intentional. Other language from Section 1650a confirms this conclusion.

Section 1650a directs that “[t]he Federal Arbitration Act ... shall not apply to enforcement of awards rendered pursuant to the [ICSID Convention].” 22 U.S.C. § 1650a(a). This exemption carries two resonances of import here. First, the FAA specifically provides for confirmation of domestic arbitral awards by court order, not through an “action” or “proceeding.” 9 U.S.C. § 9 (“[A]t any time within one year after the award is made any party to the arbitration may apply ... for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed [elsewhere in] this title.” (emphasis added)). Second, the FAA prescribes grounds for vacating an arbitral award where the award was tainted by, among other things, fraud, corruption, or misconduct by the arbitrator. See 9 U.S.C. § 10. Our reading of Section 1650a thus suggests that Congress did not contemplate federal court “recognition” of ICSID awards; it contemplated only enforcement. And enforcement should proceed, the statute directs, “as if the award were a final judgment of a [state court]” for which enforcement were sought in federal court and which is owed full faith and credit. 22 U.S.C. § 1650a.

Section 1650a of Title 22 requires federal courts to enforce ICSID awards as if they were final judgments of state courts. Since the District Court did not have subject matter jurisdiction under Section 1650a and that the FSIA governs all aspects of this action, it follows that the District Court’s judgment was void. The District Court’s order denying Venezuela’s motion to vacate is reversed, the judgment is vacated, and the cause is remanded with instructions to dismiss the petition without prejudice to renewal in an action commenced in compliance with the Foreign Sovereign Immunities Act.

Citation: Mobil Cerro Negro Ltd. v. Bolivarian Republic of Venezuela, 863 F. 3d 96 (2d. Circuit 2017).

SOVEREIGN IMMUNITY

Considering challenges to default judgments holding Sudan liable for the injuries suffered by victims of the 1998 al Qaeda embassy bombings in Kenya and Tanzania, District of Columbia Circuit interprets FSIA terrorism exception

The following long and detailed opinion of the U.S. Court of Appeals for the District of Columbia Circuit considers Sudan’s challenges to default judgments holding it liable for terrorist acts of al Qaeda. After its review, the Court (1) affirms the district court’s findings of jurisdiction; (2) affirms the district court’s denial of vacatur; (3) vacates all awards of punitive damages; and (4) certifies a question of state law to the District of Columbia Court of Appeals: “whether a plaintiff must be present at the scene of a terrorist bombing in order to recover for IIED.”

On August 7, 1998 truck bombs exploded outside the United States embassies in Nairobi, Kenya and in Dar es Salaam, Tanzania. The explosions killed more than 200 people and injured more than a thousand. Many of the victims of the attacks were U.S. citizens, government employees, or contractors. Starting in 2001 victims of the bombings began to bring suits against the Republic of Sudan and the Islamic Republic of Iran, alleging that Sudan, its Ministry of the Interior, Iran, and its Ministry of Information and Security materially supported al Qaeda during the 1990s. From 1991 to 1996, al Qaeda and its leader, Usama bin Laden, maintained a base of operations in Sudan. During this time, al Qaeda developed the terrorist cells in Kenya and Tanzania that would later launch the embassy attacks. Specifically, the plaintiffs contended Sudan provided a safe harbor to al Qaeda and that Iran, through its proxy Hezbollah, trained al Qaeda militants. In bringing these cases, the plaintiffs relied upon a provision in the Foreign Sovereign Immunity Act (FSIA) that withdraws sovereign immunity and grants courts jurisdiction to hear suits against foreign states designated as sponsors of terrorism. 28 U.S.C. § 1605(a)(7).

When first enacted, the FSIA generally codified the “restrictive theory” of sovereign immunity, which had governed sovereign immunity determinations since 1952. None of the original exceptions in the FSIA created a substantive cause of action against a foreign state. Rather, the FSIA provided “the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances” except that it prohibited the award of punitive damages against a sovereign.

Until 1996, the FSIA provided no relief for victims of a terrorist attack. This changed with the passage of the Antiterrorism and Effective Death Penalty Act (AEDPA) of 1996, Pub. L. No. 104-132, 110 Stat. 1214, which added a new exception to the FSIA. The AEDPA also set a filing deadline for suits brought under the new exception at ten years from the date upon which a plaintiff’s claim arose. 28 U.S.C. § 1605(f). Initially, there was some confusion about whether the new exception created a cause of action against foreign sovereigns. In Cicippio-Puleo v. Islamic Republic of Iran, the court had rejected this approach, holding that “neither 28 U.S.C. § 1605(a)(7) nor the Flatow Amendment, nor the two considered in tandem, creates a private right of action against a foreign government.” 353 F.3d 1024, 1033 (D.C. Cir. 2004). Thus, a plaintiff proceeding under the terrorism exception would follow the same pass-through process that governed an action under the original FSIA exceptions. 

The new FSIA exception withdrew immunity, granted jurisdiction, and authorized suits against state sponsors of terrorism for “personal injury or death” arising from the same predicate acts—torture, extrajudicial killing, aircraft sabotage, hostage taking, and the provision of material support—as had the old exception. 28 U.S.C. § 1605A(a)(1). Most important, the new exception authorized a “[p]rivate right of action” against a state over which a court could maintain jurisdiction under § 1605A(a). 28 U.S.C. § 1605A(c). By doing so, the Congress effectively abrogated Cicippio-Puleo and provided a uniform source of federal law through which plaintiffs could seek recovery against a foreign sovereign.

This appeal follows 15 years of litigation against Sudan triggered by the 1998 embassy bombings. In October 2001, plaintiff James Owens filed the first lawsuit against Sudan and Iran for his personal injuries. In March 2005 the district court granted, in part, Sudan’s motion to dismiss and vacated the order of default. The court, however, allowed the plaintiffs to amend their complaint in order to develop more fully their allegations of material support. The plaintiffs then did amend their complaint, and Sudan again moved to dismiss. Sudan once again argued the complaint had not sufficiently alleged material support and that any support it provided was not a legally sufficient cause of the embassy bombings. In 2014, the district court entered final judgments in favor of the various plaintiffs. The damages awarded against Sudan came to more than $10.2 billion. Family members, who outnumbered those physically injured by the bombing, received the bulk of the award—over $7.3 billion. Of the total $10.2 billion, approximately $4.3 billion was punitive damages. 

Sudan’s last jurisdictional challenge was directed at the “Intentional Infliction of Emotional Distress” (IIED) claims of the family members of those physically injured or killed by the bombings (more about this issue below).

After a consolidated hearing, the district court denied the motions to vacate in all respects. Owens v. Republic of Sudan, 174 F.Supp.3d 242 (D.D.C. 2016) (Owens V). On appeal, Sudan challenges the default judgments on various grounds.

The U.S. Court of Appeals for the District of Columbia Circuit affirms the district court’s findings in most respects, such as FSIA jurisdiction; affirms the default judgments; but certifies a question of state law to the District of Columbia Court of Appeals, namely “whether a plaintiff must be present at the scene of a terrorist bombing in order to recover for IIED.”

Sudan first argues that the 1998 embassy bombings were not “extrajudicial killings” within the meaning of the FSIA terrorism exception. Because this argument poses a challenge to the court’s subject matter jurisdiction, it was not forfeited by Sudan’s failure to appear in the district court. Section 1605A(h)(7) of the FSIA provides that the term “extrajudicial killing” has the meaning given to it in § 3(a) of the Torture Victim Protection Act of 1991. On its face, this definition contains three elements: (1) a killing; (2) that is deliberate; and (3) is not authorized by a previous judgment pronounced by a regularly constituted court.

Sudan argues that the Geneva Conventions and international law proscribe killings only when committed by a state agent, not when perpetrated by a non-state actor. If Sudan means to say the TVPA incorporates the prohibition against a “summary execution” in the Geneva Conventions, then it must show what was meant by that term in the Geneva Conventions themselves. Sudan, however, principally relies upon U.N. documents published more than a quarter century after the ratification of the Geneva Conventions in 1949, rather than the deliberations over the proposed Conventions, which Sudan does not cite at all. The role of the state in an extrajudicial killing appears unclear. The Court doubts that Congress intended categorically to preclude state liability for killings by non-state actors by adopting a definition of “extrajudicial killing” similar to that of a “summary execution” in the Geneva Conventions.

Even if Sudan’s interpretation of the Geneva Conventions and international law is correct, its argument fails because the TVPA does not appear to define an “extrajudicial killing” coextensive with the meaning of a “summary execution” (or any similar prohibition) under international law. Due to the substitution of “deliberated” killings for “the passing of sentences and the carrying out of executions,” the inference of direct state involvement is much less strong in the TVPA than in the Geneva Conventions. 

Sudan points to two phrases that, it contends, impose a state actor requirement upon the definition of an extrajudicial killing in the TVPA. First, Sudan notes that an extrajudicial killing must not be one “authorized by a previous judgment pronounced by a regularly constituted court.” As Sudan would have it, the “only killings that can be reasonably be imagined to be authorized by a ‘previous judgment’ are those by state actors.” Regardless whether Sudan is right on this point, the argument does not imply what Sudan intends. 

Similarly, Sudan argues the second sentence in the definition of an “extrajudicial killing” in the TVPA anchors the meaning of the first sentence in international law which, in Sudan’s view, prohibits only summary executions by state actors. Therefore, Sudan’s interpretation would make superfluous the reference to killings “lawfully carried out” “under international law,” contrary to the “cardinal principle of statutory construction that must give effect, if possible, to every clause and word of a statute.” See Williams v. Taylor, 529 U.S. 362, 404, 120 S.Ct. 1495, 146 L.Ed.2d 389 (2000) (internal quotation marks and citation omitted). Moreover, the reference to international law in the second sentence of § 3(a) of the TVPA highlights its omission in the first sentence. Had Congress intended the definition of an “extrajudicial killing” to track precisely with that of a “summary execution” under international law, § 3(a) could have expressly referenced international law in both the prohibition and its limitation.

The plaintiffs provide another persuasive reason why Sudan’s arguments are flawed. The TVPA authorizes an action only for harms arising from the conduct of a state actor. See TVPA § 2(a) (providing a cause of action against an “individual who, under actual or apparent authority, or color of law, of any foreign nation” engages in torture or extrajudicial killing). Sudan argues the state actor requirement for a suit under the TVPA is “necessarily incorporated” in § 3(a) and therefore applies to those actions arising from “extrajudicial killings” under the FSIA. As the plaintiffs observe, the TVPA and the FSIA share a similar structure. Each statute defines the predicate acts that give rise to liability in one section—TVPA § 3 and FSIA § 1605A(h)—and then limits who may be subjected to liability in another—TVPA § 2 and FSIA §§ 1605A(a)(1) and (c). Both statutes also require a plaintiff to show a certain type of nexus to a foreign sovereign. For example, § 1605A(a) would extend jurisdiction over a sovereign that did not directly commit an extrajudicial killing only if an official of the defendant state materially supported a killing committed by a state actor from a different state. Court seriously doubt the Congress intended the exception to immunity for materially supporting an extrajudicial killing to be so narrow.

Sudan attempts to avoid the conclusion that the FSIA does not adopt the state-actor limitation in the TVPA in two ways. First, Sudan contends the introductory clause of § 3(a) implicitly incorporates the state actor limitation of § 2(a). This clause states that an “extrajudicial killing” is defined “[f]or the purposes of this Act.” That supposedly indicates the Congress intended to import the state actor limitation of § 2(a) into the definition of an extrajudicial killing in § 3(a). Second, Sudan contends the definition of an “extrajudicial killing” in the TVPA implicitly incorporates international law (and the supposed state-actor limitation therein) even without reference to the state-actor limitation in § 2(a). Indeed, the court later separately summarized the two provisions of the TVPA, distinguishing § 2(a), which “provides a cause of action” against an individual acting under state authority, from § 3, which “defines the terms ‘extrajudicial killing’ and ‘torture.’” Id. at 245. Sudan’s argument that the definitions in the TVPA incorporate international law is flawed as a matter of statutory interpretation. If the definition of an “extrajudicial killing” (and “torture”) in TVPA § 3(a) already had a state actor limitation from international law, then the additional state actor limitation in § 2(a) would be surplusage. See Gustafson v. Alloyd Co., 513 U.S. 561, 574, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995). In sum, Sudan’s textual arguments that an extrajudicial killing requires a state actor all fail.

Without a viable textual basis for its position, Sudan argues the purpose of the TVPA and the FSIA extend only to an “extrajudicial killing” committed by a state actor. Even if international law both motivated enactment of the TVPA and limits extrajudicial killing to a killing by state actor, Sudan’s argument about the purpose of the TVPA still would fail. The TVPA may well be intended to carry out certain international obligations, but this purpose is reflected in the TVPA as a whole, not in each individual provision viewed in isolation. In any event, the different purposes of the TVPA and the FSIA are plain on the face of those statutes. Sudan’s own arguments tacitly admit the FSIA serves a different purpose than the TVPA, but it again frames this purpose in terms of international law. To Sudan, the FSIA serves to withdraw sovereign immunity only for “certain universally defined and condemned acts” that are “firmly grounded in international law.” Once again Sudan contends, this excludes killings committed by nonstate terrorists because international law proscribes killings only when committed by a state actor. As the district court correctly recognized, § 1605A strives to hold designated state sponsors of terrorism accountable for their sponsorship of terror, regardless whether they commit atrocities themselves or aid others in doing so. Owens V, 174 F.Supp.3d at 262. Therefore, the purpose of the statute clearly embraces liability for the embassy bombings here in question.

Sudan next resorts to the legislative history of the FSIA and the TVPA to explain why an “extrajudicial killing” requires state involvement. Subsequent legislation, on the other hand, because it is enacted and not just compiled, may inform court’s understanding of a prior enactment with which it should be read in harmony. The Flatow Amendment responded to a suicide bombing in Israel, carried out by a nonstate terrorist group supported by Iran; it aimed to deter terrorism by making officials of states that sponsor terrorism liable for punitive damages. Court do not believe the Congress would provide a cause of action aimed at killings over which it had not authorized jurisdiction. Finally, after courts had applied the FSIA terrorism exception to terrorist bombings for over a decade, the Congress reenacted the same predicate acts in § 1605(a)(7) when authorizing the new FSIA exception under § 1605A. To summarize, the plain meaning of § 1605A(a) grants the courts jurisdiction over claims against designated state sponsors of terrorism that materially support extrajudicial killings committed by nonstate actors.

Sudan’s most important challenge to jurisdiction relates to the admissibility and sufficiency of the evidence that supported the district court’s finding of jurisdiction. In order to establish the court’s jurisdiction, the plaintiffs in this case must show (1) Sudan provided material support to al Qaeda and (2) its material support was a legally sufficient cause of the embassy bombings. See Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123, 1127 (D.C. Cir. 2004) (treating causation as a jurisdictional requirement). In its opinion rejecting Sudan’s motion to vacate the default judgments, the district court identified two bases upon which the plaintiffs established material support and causation for the purpose of jurisdiction. For plaintiffs proceeding under the federal cause of action in § 1605A(c), the court—following then-binding Circuit precedent—held the plaintiffs had established jurisdiction by making a “non-frivolous” claim that Sudan materially supported al Qaeda and that such support proximately caused their injuries.

At the October 2010 evidentiary hearing, the plaintiffs presented evidence from a variety of sources. As is apparent from the opinions of the district court, the testimony of expert witnesses and al Qaeda operatives was of critical importance to its factual findings. First, the plaintiffs called terrorism consultant Evan Kohlmann to testify about the relationship between Sudan and al Qaeda in the 1990s. Kohlmann advised government and private clients on terrorist financing, recruitment, and history. Next, the court received a written expert report from Dr. Lorenzo Vidino on “Sudan’s State Sponsorship of al Qaeda.” The district court also received live testimony and a written report from Steven Simon, a security consultant and Special Advisor for Combatting Terrorism at the Department of State. The court also heard recorded trial testimony from three former al Qaeda operatives. In particular, the plaintiffs’ star witness, Jamal al Fadl, cast a long shadow over the proceedings. al Fadl was a Sudanese national and former senior al Qaeda operative turned FBI informant. Now in the witness protection program, in 2001 he testified at the criminal trial of Usama bin Laden and other terrorists arising from the African embassy bombings. The court also received transcripts of prior testimony from two other al Qaeda operatives: Essam al Ridi and L’Houssaine Kherchtou.

From the plaintiffs’ evidence, the district court found that Sudan had provided material support to al Qaeda and that such support caused the embassy bombings. This support was provided in several ways (here in a much-abbreviated form). First, the district court found Sudan provided al Qaeda a safe harbor from which it could direct its operations. Owens IV, 826 F.Supp.2d at 139-43. Once bin Laden had determined Sudan was a trustworthy partner, al Qaeda moved its operations there. All three experts described al Qaeda purchasing several properties in Sudan, including a central office and a guesthouse in Khartoum, and starting terrorist training camps on farms throughout the country. A State Department report from 1998, published after the embassy bombings, reinforced the conclusion that “Sudan continued to serve as a meeting place, safe haven, and training hub for a number of international terrorist groups, particularly Usama Bin Ladin’s al-Qaida organization.” U.S. DEP’T OF STATE, PATTERNS OF GLOBAL TERRORISM: 1998 (1999). On at least one occasion, Sudan allowed al Qaeda operative Kherchtou to smuggle $10,000 in currency—an amount above that permitted by law—to an al Qaeda cell in Kenya. This Kenyan cell ultimately carried out the bombing of the U.S. embassy in Nairobi in 1998. In addition to aiding al Qaeda’s movements directly, all three experts testified that the government provided al Qaeda members hundreds of passports and Sudanese citizenship. Finally, the district court identified several instances in which Sudan provided security to al Qaeda leadership. Owens IV, 826 F.Supp.2d at 145. From the expert testimony, trial transcripts, and government reports, the district court concluded that the plaintiffs had met their burden of demonstrating “to the satisfaction of the court” that Sudan had provided material support to al Qaeda and that such support was a legally sufficient cause of the embassy bombings.

Unlike the court’s conclusions of law, which are reviewed de novo, the Court reviews for abuse of discretion the district court’s satisfaction with the evidence presented. A district court abuses its discretion when it relies upon a clearly erroneous finding of fact. The district court also has an unusual degree of discretion over evidentiary rulings in a FSIA case against a defaulting state sponsor of terrorism. For example, courts have allowed plaintiffs to prove their claims using evidence that might not be admissible in a trial. Deference is especially appropriate when considering the lengthy history of the proceedings in the district court. 

Sudan challenges the admissibility of evidence supporting the district court’s findings of material support and jurisdictional causation. Reviewing the admissibility of evidence supporting a default judgment presents significant challenges.

In this case, Sudan principally challenges the admissibility of two types of evidence: (1) the plaintiffs’ expert testimony and (2) reports from the Department of State and the CIA. The Court finds no error in the district court’s reliance upon either.

In its opinions on liability and on Sudan’s Rule 60(b) motion, the district court discussed the experts’ testimony in great detail and concluded it sufficed to establish jurisdiction. Owens V, 174 F.Supp.3d at 276. Here, the plaintiffs face a state sponsor of terrorism that has refused to participate in the litigation. By skipping discovery and the evidentiary hearing, Sudan made it virtually impossible for the plaintiffs to get eyewitness accounts of its activities in the 1990s. Nor can the plaintiffs ordinarily subpoena members of al Qaeda, many of whom are dead or in hiding, to testify regarding the actions of the regime. Nevertheless, Sudan persists that expert testimony alone cannot establish jurisdiction and liability under the FSIA.

Sudan’s argument is both legally and factually flawed. Neither § 1608(e) nor any other provision of the FSIA requires a court to base its decision upon a particular type of admissible evidence. As long as the evidence itself is admissible, as expert testimony certainly may be, and the court finds it satisfactory, its form or type is irrelevant. Sudan next contends the experts recited facts based upon inadmissible hearsay and the district court improperly relied upon those facts to establish jurisdiction and to hold Sudan liable. Under Federal Rule of Evidence 703, a properly qualified expert may base his opinion upon otherwise inadmissible sources of information as long as those sources are reasonably relied upon in his field of expertise. Further, the expert may disclose to the factfinder otherwise inadmissible “underlying facts or data as a preliminary to the giving of an expert opinion.” See, e.g., FED. R. EVID. 705 advisory committee’s note. 

At the outset, court note the district court did not err—much less prejudicially err—in reciting potentially inadmissible facts in its 2011 opinion on liability. For their conclusions to be admissible and credible, the plaintiffs’ experts needed to disclose the factual basis for their opinions. In a supplemental filing, Sudan compares the experts’ opinions in this case to those held inadmissible in Gilmore v. Palestinian Interim Self-Government Authority, 843 F.3d 958 (D.C. Cir. 2016), but the gulf between the two cases is wide. In Gilmore, the plaintiff’s expert neither stated nor applied “a reliable methodology” from which he had derived his opinions. Id. at 972-73. Finally, Sudan belatedly challenges the reliability of the factual bases for the experts’ testimony. Of course, “the decision whether to qualify an expert witness is within the broad latitude of the trial court and is reviewed for abuse of discretion.” Haarhuis v. Kunnan Enters., 177 F.3d 1007, 1015 (D.C. Cir. 1999) (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999)). As previously stated, experts may rely upon hearsay evidence in forming their admissible, professional opinions. Indeed, it is hard to imagine what other than hearsay an expert on terrorism could use to formulate his opinion.

The Court concludes that the district court did not abuse its discretion in qualifying the experts, summarizing their testimony, or crediting their conclusions. On appeal, Sudan asks this Court to hold the expert opinions are inadmissible because the plaintiffs’ witnesses have not “reliably applied [their] principles and methods to the facts of the case.” The problem with this argument is that Sudan has not explained—either at the evidentiary hearing or on appeal—why these expert opinions are unreliable or clearly erroneous.

The district court did not rely solely upon expert testimony to establish jurisdiction and liability. Of particular importance, the plaintiffs marshaled nearly a decade of State Department reports that speak directly to Sudan’s support for terrorist groups, including al Qaeda. As with the expert testimony, Sudan contends these reports are inadmissible hearsay. The plaintiffs urge the State Department reports were admissible under the hearsay exception for public records. See FED. R. EVID. 803(8). Sudan objects on appeal to the “trustworthiness” of these reports, but that objection should have been made in the district court. Because Sudan, by defaulting in the district court, has not carried its burden of persuasion, the district court properly asserted jurisdiction over the cases.

Sudan’s second major challenge to the plaintiffs’ evidence. The inquiry into proximate cause contains two similar but distinct elements. First, the defendant’s actions must be a “substantial factor” in the sequence of events that led to the plaintiff’s injury. Rothstein v. UBS, 708 F.3d 82, 91 (2d Cir. 2013). Second, the plaintiff’s injury must have been “reasonably foreseeable or anticipated as a natural consequence” of the defendant’s conduct. Id.

Sudan offers two reasons why its actions were not a “substantial factor” in al Qaeda’s embassy bombings. Sudan contends it did not provide any material support at all to al Qaeda during the 1990s, making proximate causation impossible. Nevertheless, Sudan points to a number of events as to which it contends the district court erroneously found material support for al Qaeda. For example, Sudan criticizes the district court’s discussion of al Qaeda purchasing properties, starting businesses, and establishing terrorist training camps in Sudan. Owens IV, 826 F.Supp.2d at 141, 143-44. Sudan also disputes the district court’s finding that it provided financial support to al Qaeda. To the contrary, Sudan argues, al Qaeda financially supported 

Sudan by investing in Sudanese infrastructure. 

Finally, Sudan invokes the testimony of Simon, the former NSC staffer overseeing counterterrorism activities, that Sudan provided no “useful information on bin Laden’s” activities that “might have helped the U.S. unravel the plots to attack the two East African U.S. embassies.” Id. at 145. The district court’s finding of material support, Sudan argues, is unsustainable “without a showing that Sudan had useful intelligence and nonetheless elected not to share it.” Sudanese intelligence officers would have been privy to all this information because they frequented al Qaeda’s guesthouses, and al Turabi’s NIF shared offices with al Qaeda for a time. Sudan’s own actions also gave it knowledge of al Qaeda’s capabilities and aims.