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WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court on June 30 refused to hear the Kingdom of Saudi Arabia’s appeal of the Second Circuit U.S. Court of Appeals’ finding that a lower federal court erred in denying insurers’ motion to reopen a judgment that dismissed sovereign defendants pursuant to the Foreign Sovereign Immunities Act in a lawsuit arising from the Sept. 11, 2001, terrorist attacks (Kingdom of Saudi Arabia, et al. v. Federal Insurance Co., et al., No. 13-1146, U.S. Sup. [lexis.com subscribers may access Supreme Court briefs for this case].).
Sept. 11 Liability
On Sept 10, 2003, Federal Insurance Co. and other insurers filed an 80-page complaint against Al Qaeda and numerous defendants in the U.S. District Court for the Southern District of New York for trespass, wrongful death, survival action, assault and battery, intentional and/or negligent infliction of emotional distress, conspiracy, racketeering, aiding and abetting, violation of 18 U.S. Code Section 2333 and negligence, as well as a claim under the Torture Victim Protection Act. The insurers alleged that the Sept. 11, 2001, terrorist attacks were a "direct intended and foreseeable product of a larger conspiracy among the defendants to commit acts of international terrorism against the United States, its nationals and allies." The insurers further asserted that the damages suffered by plaintiffs and their assignors were the "direct and proximate result" of the conspiracy, trespass, racketeering, aiding and abetting and negligence claims. They sought more than $200 billion in punitive damages.
Defendants Kingdom of Saudi Arabia and the Saudi High Commission for Relief of Bosnia and Herzegovina (SHC) moved to dismiss the claims against them, arguing that they were immune from suit under the Foreign Sovereign Immunities Act,
The District Court found that the plaintiffs’ claims fell within the discretionary function limitation of the tort exception to immunity, dismissing the claims against the Kingdom and the SHC.
The plaintiffs appealed to the Second Circuit, which affirmed the District Court on different grounds. The Second Circuit found that the tort exception was not available to the plaintiffs and never reached the issue of whether the tort exception’s discretionary function limitation applied (Terrorist Attacks III [enhanced opinion available to lexis.com subscribers]).
Three years later, in Doe v. Bin Laden (663 F.3d 64, 70 n.10 [2d Cir. 2011]) [enhanced opinion], the Second Circuit overruled its ruling in Terrorist Attacks III by “mini-en banc.” The Doe panel found that even if the tort is a terrorism act, the tort exception is available when the terrorism exception is inapplicable.
The plaintiffs in the present lawsuit moved for relief from judgment under Federal Rule of Civil Procedure (FRCP) 60(b) in an effort to appeal the District Court’s alternative ground for finding sovereign immunity. Judge George B. Daniels denied the motion.
On Dec. 19, 2013, the Second Circuit found that the lower court erred and “extraordinary circumstances” warrant relief under FRCP Rule 60(b).
“Our incorrect decision in Terrorist Attacks III caused a disparity between the Terrorist Attacks plaintiffs and the Bin Laden plaintiff where none should ever have existed. We conclude that the circumstances of this case are “extraordinary,” warranting relief under Rule 60(b). Because we cannot reach the underlying merits of the judgment, we will not address the plaintiffs’ argument that the District Court should not have applied the discretionary function limitation or, at a minimum, should have granted jurisdictional discovery. Nor will we address the defendants’ arguments that the complaints should be dismissed because the ‘entire tort’ rule applies or because the plaintiffs have not sufficiently shown causation. All these issues may be considered by the District Court on remand. Accordingly, we REVERSE the order denying the Rule 60(b) motion and REMAND to the District Court for further proceedings consistent with this opinion,” the panel said.
On March 19, 2014, the Kingdom of Saudi Arabia filed a petition for a writ of certiorari in the U.S. Supreme Court.
The high court rejected the appeal. Justices Sonia Sotomayor and Elena Kagan took no part in the consideration of the petition.
Michael K. Kellogg of Kellogg Huber Hansen Todd Evans & Figel in Washington represents the petitioners.
Carter G. Phillips of Sidley Austin in Washington represents the respondents.
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