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Waldman v. Palestine Liberation Organization

United States Court of Appeals, Second Circuit

August 31, 2016

Eva Waldman, Revital Bauer, individually and as natural guardian of plaintiffs Yehonathon Bauer, Binyamin Bauer, Daniel Bauer and Yehuda Bauer, Shaul Mandelkorn, Nurit Mandelkorn, Oz Joseph Guetta, minor, by his next friend and guardian Varda Guetta, Varda Guetta, individually and as natural guardian of plaintiff Oz Joseph Guetta, Norman Gritz, individually and as personal representative of the Estate of David Gritz, Mark I. Sokolow, individually and as a natural guardian of Plaintiff Jamie A. Sokolow, Rena M. Sokolow, individually and as a natural guardian of plaintiff Jaime A. Sokolow, Jamie A. Sokolow, minor, by her next friends and guardian Mark I. Sokolow and Rena M. Sokolow, Lauren M. Sokolow, Elana R. Sokolow, Shayna Eileen Gould, Ronald Allan Gould, Elise Janet Gould, Jessica Rine, Shmuel Waldman, Henna Novack Waldman, Morris Waldman, Alan J. Bauer, individually and as natural guardian of plaintiffs Yehonathon Bauer, Binyamin Bauer, Daniel Bauer and Yehuda Bauer, Yehonathon Bauer, minor, by his next friend and guardians Dr. Alan J. Bauer and Revital Bauer, Binyamin Bauer, minor, by his next friend and guardians Dr. Alan J. Bauer and Revital Bauer, Daniel Bauer, minor, by his next friend and guardians Dr. Alan J. Bauer and Revital Bauer, Yehuda Bauer, minor, by his next friend and guardians Dr. Alan J. Bauer and Revital Bauer, Rabbi Leonard Mandelkorn, Katherine Baker, individually and as personal representative of the Estate of Benjamin Blutstein, Rebekah Blutstein, Richard Blutstein, individually and as personal representative of the Estate of Benjamin Blutstein, Larry Carter, individually and as personal representative of the Estate of Diane (

          Argued: April 12, 2016

         The defendants-appellants-cross-appellees ("defendants") appeal from a judgment of the United States District Court for the Southern District of New York (Daniels, J.) in favor of the plaintiffs-appellees-cross-appellants ("plaintiffs"). A jury found the defendants---the Palestine Liberation Organization and the Palestinian Authority---liable under the Anti-Terrorism Act ("ATA"), 18 U.S.C. § 2333(a), for various terror attacks in Israel that killed or wounded United States citizens. The jury awarded the plaintiffs damages of $218.5 million, an amount that was trebled automatically pursuant to the ATA, 18 U.S.C. § 2333(a), bringing the total award to $655.5 million. The defendants appeal, arguing that the district court lacked general and specific personal jurisdiction over the defendants, and, in the alternative, seek a new trial because the district court abused its discretion by allowing certain testimony by two expert witnesses. The plaintiffs cross-appeal, asking this Court to reinstate claims the district court dismissed.

         We vacate the judgment of the district court and remand the case with instructions to dismiss the action because the federal courts lack personal jurisdiction over the defendants with respect to the claims in this action. We do not reach the remaining issues.

          KENT A. YALOWITZ, Arnold & Porter, LLP, for Plaintiffs-Appellees-Cross-Appellants.

          GASSAN A. BALOUL (Mitchell R. Berger, Pierre H. Bergeron, John A. Burlingame, Alexandra E. Chopin, on the brief), Squire Patton Boggs (US), LLP, for Defendants-Appellants-Cross-Appellees.

          David A. Reiser, Zuckerman Spaeder, LLP, and Peter Raven-Hansen, George Washington University Law School, on the brief for Amici Curiae Former Federal Officials in Support of Plaintiffs-Appellees-Cross-Appellants.

          James P. Bonner, Stone, Bonner & Rocco, LLP, and Steven R. Perles, Perles Law Firm, on the brief for Amici Curiae Arthur Barry Sotloff, Shirley Goldie Pulwer, Lauren Sotloff, and the Estate of Steven Joel Sotloff in Support of Plaintiffs-Appellees-Cross-Appellants.

          Before: Leval and Droney, Circuit Judges, and Koeltl, District Judge. [*]

          JOHN G. KOELTL, DISTRICT JUDGE.

         In this case, eleven American families sued the Palestine Liberation Organization ("PLO") and the Palestinian Authority ("PA") (collectively, "defendants")[1] under the Anti-Terrorism Act ("ATA"), 18 U.S.C. § 2333(a), for various terror attacks in Israel that killed or wounded the plaintiffs-appellees-cross-appellants ("plaintiffs") or their family members.[2]

         The defendants repeatedly argued before the District Court for the Southern District of New York that the court lacked personal jurisdiction over them in light of their minimal presence in, and the lack of any nexus between the facts underlying the plaintiffs' claims and the United States. The district court (Daniels, J.) concluded that it had general personal jurisdiction over the defendants, even after the Supreme Court narrowed the test for general jurisdiction in Daimler AG v. Bauman, 134 S.Ct. 746 (2014). See Sokolow v. Palestine Liberation Org., No. 04-cv-397 (GBD), 2014 WL 6811395, at *2 (S.D.N.Y. Dec. 1, 2014); see also Sokolow v. Palestine Liberation Org., No. 04-cv-397 (GBD), 2011 WL 1345086, at *7 (S.D.N.Y. Mar. 30, 2011).

         After a seven-week trial, a jury found that the defendants, acting through their employees, perpetrated the attacks and that the defendants knowingly provided material support to organizations designated by the United States State Department as foreign terrorist organizations. The jury awarded the plaintiffs damages of $218.5 million, an amount that was trebled automatically pursuant to the ATA, 18 U.S.C. § 2333(a), bringing the total award to $655.5 million.

         On appeal, the defendants seek to overturn the jury's verdict by arguing that the United States Constitution precludes the exercise of personal jurisdiction over them. In the alternative, the defendants seek a new trial, arguing that the district court abused its discretion by allowing certain testimony by two expert witnesses. The plaintiffs cross-appeal, asking this Court to reinstate non-federal claims that the district court dismissed, and reinstate the claims of two plaintiffs for which the district court found insufficient evidence to submit to the jury.

         We conclude that the district court erred when it concluded it had personal jurisdiction over the defendants with respect to the claims at issue in this action. Therefore, we VACATE the judgment of the district court and REMAND the case to the district court with instructions to DISMISS the case for want of personal jurisdiction. Accordingly, we do not consider the defendants' other arguments on appeal or the plaintiffs' cross-appeal, all of which are now moot.

         I.

         A.

         The PA was established by the 1993 Oslo Accords as the interim and non-sovereign government of parts of the West Bank and the Gaza Strip (collectively referred to here as "Palestine"). The PA is headquartered in the city of Ramallah in the West Bank, where the Palestinian President and the PA's ministers reside.

         The PLO was founded in 1964. At all relevant times, the PLO was headquartered in Ramallah, the Gaza Strip, and Amman, Jordan. Because the Oslo Accords limit the PA's authority to Palestine, the PLO conducts Palestine's foreign affairs.

         During the relevant time period for this action, the PLO maintained over 75 embassies, missions, and delegations around the world. The PLO is registered with the United States Government as a foreign agent. The PLO has two diplomatic offices in the United States: a mission to the United States in Washington, D.C. and a mission to the United Nations in New York City. The Washington, D.C. mission had fourteen employees between 2002 and 2004, including two employees of the PA, although not all at the same time.[3] The Washington, D.C. and New York missions engaged in diplomatic activities during the relevant period. The Washington, D.C. mission "had a substantial commercial presence in the United States." Sokolow, 2011 WL 1345086, at *4. It used dozens of telephone numbers, purchased office supplies, paid for certain living expenses for Hassan Abdel Rahman, the chief PLO and PA representative in the United States, and engaged in other transactions. Id. The PLO also retained a consulting and lobbying firm through a multi-year, multi-million-dollar contract for services from about 1999 to 2004. Id. The Washington, D.C. mission also promoted the Palestinian cause in speeches and media appearances. Id.

         Courts have repeatedly held that neither the PA nor the PLO is a "state" under United States or international law. See Klinghoffer v. S. N.C. Achille Lauro, 937 F.2d 44, 47-48 (2d Cir. 1991) (holding the PLO, which had no defined territory or permanent population and did not have capacity to enter into genuine formal relations with other nations, was not a "state" for purposes of the Foreign Sovereign Immunities Act); Estates of Ungar v. Palestinian Auth., 315 F.Supp.2d 164, 178-86 (D.R.I. 2004) (holding that neither the PA nor the PLO is a state entitled to sovereign immunity under the Foreign Sovereign Immunities Act because neither entity has a defined territory with a permanent population controlled by a government that has the capacity to enter into foreign relations); see also Knox v. Palestine Liberation Org., 306 F.Supp.2d 424, 431 (S.D.N.Y. 2004) (holding that neither the PLO nor the PA was a "state" for purposes of the Foreign Sovereign Immunities Act).

         While the United States does not recognize Palestine or the PA as a sovereign government, see Sokolow v. Palestine Liberation Org., 583 F.Supp.2d 451, 457-58 (S.D.N.Y. 2008) ("Palestine, whose statehood is not recognized by the United States, does not meet the definition of a 'state, ' under United States and international law . . . .") (collecting cases), the PA is the governing authority in Palestine and employs tens of thousands of security personnel in Palestine. According to the PA's Minister of Finance, the "PA funds conventional government services, including developing infrastructure; public safety and the judicial system; health care; public schools and education; foreign affairs; economic development initiatives in agriculture, energy, public works, and public housing; the payment of more than 155, 000 government employee salaries and related pension funds; transportation; and, communications and information technology services."

         B.

         The plaintiffs sued the defendants in 2004, alleging violations of the ATA for seven terror attacks committed during a wave of violence known as "the al Aqsa Intifada, " by nonparties who the plaintiffs alleged were affiliated with the defendants. The jury found the plaintiffs liable for six of the attacks.[4] At trial, the plaintiffs presented evidence of the following attacks.

         i. January 22, 2002: Jaffa Road Shooting

         On January 22, 2002, a PA police officer opened fire on a pedestrian mall in Jerusalem. He shot "indiscriminately at the people who were on Jaffa Street, " at a nearby bus stop and aboard a bus that was at the stop, and at people in the stores nearby "with the aim of causing the death of as many people as possible." The shooter killed two individuals and wounded forty-five others before he was killed by police. The attack was carried out, according to trial evidence, by six members of the PA police force who planned the shooting. Two of the plaintiffs were injured.

         ii. January 27, 2002: Jaffa Road Bombing

         On January 27, 2002, a PA intelligence informant named Wafa Idris detonated a suicide bomb on Jaffa Road in Jerusalem, killing herself and an Israeli man and seriously wounding four of the plaintiffs, including two children. Evidence presented at trial showed that the bombing was planned by a PA intelligence officer who encouraged the assailant to conduct the suicide bombing, even after the assailant had doubts about doing so.

         iii. March 21, 2002: King George Street Bombing

         On March 21, 2002, Mohammed Hashaika, a former PA police officer, detonated a suicide bomb on King George Street in Jerusalem. Hashaika's co-conspirators chose the location because it was "full of people during the afternoon." Hashaika set-off the explosion while in a crowd "with the aim of causing the deaths of as many civilians as possible." Two plaintiffs were grievously wounded, including a seven-year-old American boy. Evidence presented at trial showed that a PA intelligence officer named Abdel Karim Aweis orchestrated the attack.

         iv. June 19, 2002: French Hill Bombing

         On June 19, 2002, a seventeen-year-old Palestinian man named Sa'id Awada detonated a suicide bomb at a bus stop in the French Hill neighborhood of Jerusalem. Awada was a member of a militant faction of the PLO's Fatah party called the Al Aqsa Martyr Brigades ("AAMB"), which the United States Department of State had designated as a "foreign terrorist organization" ("FTO"). The bombing killed several people and wounded dozens, including an eighteen-year-old plaintiff who was stepping off a bus when the bomb exploded.

         v. July 31, 2002: Hebrew University Bombing

         On July 31, 2002, military operatives of Hamas---a United States-designated FTO---detonated a bomb hidden in a black cloth bag that was packed with hardware nuts in a café at Hebrew University in Jerusalem. The explosion killed nine, including four United States citizens, whose estates bring suit here.

         vi. January 29, 2004: Bus No. 19 Bombing

         On January 29, 2004, in an AAMB attack, a PA police officer named Ali Al-Ja'ara detonated a suicide vest on a crowded bus, Bus No. 19 traveling from Malha Mall toward Paris Square in central Jerusalem. The suicide bombing killed eleven people, including one of the plaintiffs. The bomber's aim, according to evidence submitted at trial, was to "caus[e] the deaths of a large number of individuals."

         C.

         In 2004, the plaintiffs filed suit in the Southern District of New York. The defendants first moved to dismiss the claims for lack of personal jurisdiction in July 2007. The district court denied the motion, subject to renewal after jurisdictional discovery. After the close of jurisdictional discovery, the district court denied the defendants' renewed motion, holding that the court had general personal jurisdiction over the defendants. See Sokolow, 2011 WL 1345086, at *7.

         The district court concluded, as an initial matter, that the service of process was properly effected by serving the Chief Representative of the PLO and the PA, Hassan Abdel Rahman, at his home in Virginia, pursuant to Federal Rule of Civil Procedure 4(h)(1)(B) (providing that a foreign association "must be served[ ] . . . in a judicial district of the United States . . . by delivering a copy of the summons and of the complaint to an officer, a managing or general agent . . . ."); see also 18 U.S.C. § 2334(a) (providing for nationwide service of process and venue under the ATA); Sokolow, 2011 WL 1345086, at *2.

         The district court then engaged in a two-part analysis to determine whether the exercise of personal jurisdiction comported with the due process protections of the United States Constitution. First, it determined whether the defendants had sufficient minimum contacts with the forum such that the maintenance of the action did not offend traditional notions of fair play and substantial justice. Sokolow, 2011 WL 1345086, at *2 (citing Frontera Res. Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d 393, 396 (2d Cir. 2009)).

         The district court distinguished between specific and general personal jurisdiction---specific jurisdiction applies where the defendants' contacts are related to the litigation and general jurisdiction applies where the defendants' contacts are so substantial that the defendants could be sued on all claims, even those unrelated to contacts with the forum---and found that the district court had general jurisdiction over the defendants. Id. at *3. The court considered what it deemed the defendants' "substantial commercial presence in the United States, " in particular "a fully and continuously functional office in Washington, D.C., " bank accounts and commercial contracts, and "a substantial promotional presence in the United States, with the D.C. office having been permanently dedicated to promoting the interests of the PLO and the PA." Id. at *4.

         The district court concluded that activities involving the defendants' New York office were exempt from jurisdictional analysis under an exception for United Nations' related activity articulated in Klinghoffer, 937 F.2d at 51-52 (UN participation not properly considered basis for jurisdiction); see Sokolow, 2011 WL 1345086, at *5. The district court held that the activities involving the Washington, D.C. mission were not exempt from analysis and provided "a sufficient basis to exercise general jurisdiction over the Defendants." Id. at *6 ("The PLO and the PA were continuously and systematically present in the United States by virtue of their extensive public relations activities.").

         Next, the district court considered "'whether the assertion of personal jurisdiction comports with "traditional notions of fair play and substantial justice"---that is, whether it is reasonable under the circumstances of the particular case.'" Id. (quoting Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568 (2d Cir. 1996)). The court found that the exercise of jurisdiction did not offend "traditional notions of fair play and substantial justice, " pursuant to the standard articulated by International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), and its progeny. See Sokolow, 2011 WL 1345086, at *6-7. The district court concluded that "[t]here is a strong inherent interest of the United States and Plaintiffs in litigating ATA claims in the United States, " and that the defendants "failed to identify an alternative forum where Plaintiffs' claims could be brought, and where the foreign court could grant a substantially similar remedy." Id. at *7.

         In January 2014, after the Supreme Court had significantly narrowed the general personal jurisdiction test in Daimler, 134 S.Ct. 746, the defendants moved for reconsideration of the denial of their motion to dismiss.

         On April 11, 2014, the district court denied the defendants' motions for reconsideration, ruling that Daimler did not compel dismissal. The district court also denied the defendants' motions to certify the jurisdictional issue for an interlocutory appeal. See Sokolow, 2014 WL 6811395, at *1. The defendants renewed their jurisdictional argument in their motions for summary judgment, arguing that this Court's decision in Gucci America, Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014), altered the controlling precedent in this Circuit, requiring dismissal of the case. See Sokolow, 2014 WL 6811395, at *1. The district court concluded that it still had general personal jurisdiction over the defendants, describing the action as presenting "'an exceptional case, '" id. at *2, of the kind discussed in Daimler, 134 S.Ct. at 761 n.19, and Gucci, 768 F.3d at 135.

         The district court held that "[u]nder both Daimler and Gucci, the PA and PLO's continuous and systematic business and commercial contacts within the United States are sufficient to support the exercise of general jurisdiction, " and that the record before the court was "insufficient to conclude that either defendant is 'at home' in a particular jurisdiction other than the United States." Sokolow, 2014 WL 6811395, at *2.

         Following the summary judgment ruling, the defendants sought mandamus on the personal jurisdiction issue. This Court denied the defendants' petition. See In re Palestine Liberation Org., Palestinian Authority, No. 14-4449 (2d Cir. Jan. 6, 2015) (summary order).

         The case proceeded to trial in January 2015. During the trial, the defendants introduced evidence about the PA's and PLO's home in Palestine. The trial evidence showed that the terrorist attacks occurred in the vicinity of Jerusalem. The plaintiffs did not allege or submit evidence that the plaintiffs were targeted in any of the six attacks at issue because of their United States citizenship or that the defendants engaged in conduct in the United States related to the attacks.

         At the conclusion of plaintiffs' case in chief, the defendants moved for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), arguing, among other grounds, that the district court lacked personal jurisdiction over the defendants. The Court denied the motion. The defendants renewed that motion at the close of all the evidence and again asserted that the court lacked personal jurisdiction.

         During and immediately after trial, the District Court for the District of Columbia issued three separate decisions dismissing similar suits for lack of personal jurisdiction by similar plaintiffs in cases against the PA and the PLO. See Estate of Klieman v. Palestinian Auth., 82 F.Supp.3d 237, 245-46 (D.D.C. 2015), appeal docketed, No. 15-7034 (D.C. Cir. Apr. 8, 2015); Livnat v. Palestinian Auth., 82 F.Supp.3d 19, 30 (D.D.C. 2015), appeal docketed, No. 15-7024 (D.C. Cir. ...


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