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Siegel v. HSBC North America Holdings, Inc.

United States Court of Appeals, Second Circuit

August 8, 2019

Jeffrey Siegel, Administrator of the Estate of Moustapha Akkad, deceased, and Moustapha Akkad's heirs, Sooha Akkad, individually, Susan Gitelson, Special Administrator of the Estate of Rima Akkad Monla, deceased, and Rima Akkad Monla's heirs, Ziad Monla, and Michael Butler, Plaintiffs-Appellants,
v.
HSBC North America Holdings, Inc., and HSBC Bank USA, N.A., HBUS, Defendants-Appellees. [1]

          Argued: March 5, 2019

         The plaintiffs are victims, or the representatives of victims, of a series of terrorist attacks on November 9, 2005, in Amman, Jordan. The plaintiffs allege that the defendants, HSBC North America Holdings, Inc., and HSBC Bank USA, N.A., aided and abetted the attackers, in violation of the Justice Against Sponsors of Terrorism Act, 18 U.S.C. § 2333(d), by providing banking services to Al Rajhi Bank, Saudi Arabia's largest commercial bank, which was thought by some to have ties to al-Qaeda in Iraq, the terrorist organization responsible for the November 9 attacks. The district court (Denise L. Cote, Judge) granted the defendants' motion to dismiss for failure to state a claim, concluding that the plaintiffs had failed to plausibly allege that the defendants knowingly aided or abetted the November 9 attacks. We agree. We therefore AFFIRM.

          William T. Gibbs, Corboy & Demetrio, Chicago, IL, for Plaintiffs-Appellants.

          Andrew John Pincus, Mayer Brown LLP, Washington, DC (Mark G. Hanchet and Robert W. Hamburg, Mayer Brown LLP, New York, NY, on the brief), for Defendants-Appellees.

          Marc J. Gottridge, Hogan Lovells U.S. LLP, New York, NY (Lisa J. Fried, Benjamin A. Fleming, on the brief), filed a brief for The Institute of International Bankers, et al, as Amici Curiae.

          Before: Sack, Raggi, and Carney, Circuit Judges.

          Sack, Circuit Judge.

         The plaintiffs are victims, or representatives of victims, of a series of terrorist attacks on November 9, 2005, in Amman, Jordan. They sued the defendants, HSBC Bank USA, N.A. and HSBC North America Holdings, Inc., for violating the Antiterrorism Act of 1990 ("ATA"), 18 U.S.C. § 2333, as amended by the Justice Against State Sponsors of Terrorism Act ("JASTA"), Pub. L. No. 144-222, 130 Stat. 852 (Sept. 28, 2016), by providing financial services to Al Rajhi Bank, a prominent Saudi bank alleged to have links to terrorist organizations, including al-Qaeda in Iraq, the terrorist organization responsible for the November 9 attacks. The plaintiffs now appeal from a judgment of the United States District Court for the Southern District of New York (Denise L. Cote, Judge) dismissing this action for failure to state a claim. The plaintiffs argue that the defendants' willingness to do business with Al Rajhi Bank despite their knowledge of its links to terrorism is sufficient to expose the defendants to aiding-and-abetting liability under JASTA. They are wrong. Like the district court, we conclude that because the plaintiffs did not adequately allege in their operative pleading, the Third Amended Complaint (the "TAC"), that the defendants knowingly played a role in the November 9 attacks or provided substantial assistance to the terrorist organization that perpetrated it, they failed to state a plausible claim for relief under JASTA. We therefore affirm the judgment of the district court.

         BACKGROUND

         Factual Background[2]

         On November 9, 2005, suicide bombers attacked three hotels in Amman, Jordan, in a series of coordinated attacks (the "November 9 Attacks" or "Attacks"). The terrorist organization al-Qaeda in Iraq ("AQI") claimed responsibility. With support from al-Qaeda, AQI selected the Attacks' targets, recruited and trained the suicide bombers, constructed the bombs, and transported the bombs into Jordan.

         The plaintiffs are Americans who were injured, or the heirs or administrators of the estates of those killed, in the Attacks. The defendants, HSBC North America Holdings, Inc. ("HSNA") and HSBC Bank USA, N.A. ("HBUS," and together with HSNA, "HSBC"), are financial institutions. Each has its principal place of business in New York. HSNA is a financial institution holding-company and the parent company of HBUS. Unlike HSNA, HBUS provides banking services directly to individual customers. Until January 2005, HBUS maintained a commercial relationship with Al Rajhi Bank ("ARB"), Saudi Arabia's largest bank, with approximately $80 billion in assets and more than 500 branches worldwide.

         The plaintiffs allege the following:[3]

         ARB was, at all relevant times, involved in financing terrorist activity. In 2002, one of ARB's senior officials appeared on a list of investors who supported al-Qaeda, and The Wall Street Journal reported that the government of Saudi Arabia was monitoring ARB accounts for links to terrorist organizations. In 2003, the United States Central Intelligence Agency referred to ARB as a "conduit for terrorist transactions." Staff of S. Permanent Subcomm. on Investigations, U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist

         Financing: HSBC Case History 197 (July 17, 2012) [hereinafter HSBC Case History] (quoting 2003 report by the Central Intelligence Agency entitled, "Al Rajhi Bank: Conduit for Extremist Finance"). In 2004, the United States government designated several Saudi-based non-profit organizations-all clients of ARB-as terrorist organizations. And in February 2005, two persons unaffiliated with HSBC were indicted, charged with cashing $130, 000 in travelers checks at an ARB branch in Saudi Arabia and sending the money to suspected terrorists in Chechnya.

         HSBC was aware of ARB's links to terrorist organizations. The plaintiffs quote a 2012 report issued by the United States Senate Permanent Subcommittee ...


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