Honickman v. Blom Bank SAL ( 2021 )

20-575
Honickman v. Blom Bank SAL
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
______________
August Term 2020
(Argued: December 10, 2020 | Decided: July 29, 2021)
Docket No. 20-575
MICHAL HONICKMAN, INDIVIDUALLY AND FOR THE ESTATE OF
HOWARD GOLDSTEIN, EUGENE GOLDSTEIN, LORRAINE GOLDSTEIN,
RICHARD GOLDSTEIN, BARBARA GOLDSTEIN INGARDIA, MICHAEL
GOLDSTEIN, CHANA FREEDMAN, DAVID GOLDSTEIN, MOSES STRAUSS,
PHILIP STRAUSS, BLUMA STRAUSS, AHRON STRAUSS, ROISIE
ENGELMAN, JOSEPH STRAUSS, TZVI WEISS, LEIB WEISS, INDIVIDUALLY
AND FOR THE ESTATE OF MALKA WEISS, YITZCHAK WEISS, YERUCHAIM
WEISS, ESTHER DEUTSCH, MATANYA NATHANSEN, INDIVIDUALLY AND
FOR THE ESTATE OF TEHILLA NATHANSEN, CHANA NATHANSEN,
INDIVIDUALLY AND FOR THE ESTATE OF TEHILLA NATHANSEN,
YEHUDIT NATHANSEN, S.N., A MINOR, HEZEKIAL TOPOROWITCH,
PEARL B. TOPOROWITCH, YEHUDA TOPOROWITCH, DAVID
TOPOROWITCH, SHAINA CHAVA NADEL, BLUMY ROM, RIVKA
POLLACK, RACHEL POTOLSKI, OVADIA TOPOROWITCH, TEHILLA
GREINIMAN, YISRAEL TOPOROWITCH, YITZCHAK TOPOROWITCH,
HARRY LEONARD BEER, INDIVIDUALLY AND AS THE EXECUTOR OF THE
ESTATE OF ALAN BEER AND ANNA BEER, PHYLLIS MAISEL, ESTELLE
CAROLL, SARRI ANNE SINGER, JUDITH SINGER, ERIC M. SINGER, ROBERT
SINGER, JULIE AVERBACH, INDIVIDUALLY AND FOR THE ESTATE OF
STEVEN AVERBACH, TAMIR AVERBACH, DEVIR AVERBACH, SEAN
AVERBACH, ADAM AVERBACH, MAIDA AVERBACH, INDIVIDUALLY
AND FOR THE ESTATE OF DAVID AVERBACH, MICHAEL AVERBACH,
EILEEN SAPADIN, DANIEL ROZENSTEIN, JULIA ROZENSTEIN SCHON,
ALEXANDER ROZENSTEIN, ESTHER ROZENSTEIN, JACOB STEINMETZ,
INDIVIDUALLY AND FOR THE ESTATE OF AMICHAI STEINMETZ,
DEBORAH STEINMETZ, INDIVIDUALLY AND FOR THE ESTATE OF
AMICHAI STEINMETZ, NAVA STEINMETZ, ORIT MAYERSON, NETANEL
STEINMETZ, ANN COULTER, FOR THE ESTATE OF ROBERT L. COULTER,
SR., DIANNE COULTER MILLER, INDIVIDUALLY AND FOR THE ESTATE
OF JANIS RUTH COULTER, ROBERT L. COULTER, JR., INDIVIDUALLY AND
FOR THE ESTATE OF JANIS RUTH COULTER, LARRY CARTER,
INDIVIDUALLY AND AS THE ADMINISTRATOR OF THE ESTATE OF
DIANE LESLIE CARTER, SHAUN CHOFFEL, RICHARD BLUTSTEIN,
INDIVIDUALLY AND FOR THE ESTATE OF BENJAMIN BLUTSTEIN,
KATHERINE BAKER, INDIVIDUALLY AND FOR THE ESTATE OF
BENJAMIN BLUSTEIN, REBEKAH BLUTSTEIN, NEVENKA GRITZ,
INDIVIDUALLY AND FOR THE ESTATE OF DAVID GRITZ AND NORMAN
GRITZ, JACQUELINE CHAMBERS, INDIVIDUALLY AND AS THE
ADMINISTRATOR OF THE ESTATE OF ESTHER BABLAR, LEVANA COHEN,
INDIVIDUALLY AS THE ADMINISTRATOR OF THE ESTATE OF ESTHER
BABLAR, ELI COHEN, SARAH ELYAKIM, JOSEPH COHEN, GRETA GELLER,
AS THE ADMINISTRATOR OF THE ESTATE OF HANNAH ROGEN, ILANA
DORFMAN, AS THE ADMINISTRATOR OF THE ESTATE OF HANNAH
ROGEN, REPHAEL KITSIS, AS THE ADMINISTRATOR OF THE ESTATE OF
HANNAH ROGEN, TOVA GUTTMAN, AS THE ADMINISTRATOR OF THE
ESTATE OF HANNAH ROGEN, TEMINA SPETNER, JASON
KIRSCHENBAUM, ISABELLE KIRSCHENBAUM, INDIVIDUALLY AND FOR
THE ESTATE OF MARTIN KIRSCHENBAUM, JOSHUA KIRSCHENBAUM,
SHOSHANA BURGETT, DAVID KIRSCHENBAUM, DANIELLE TEITELBAUM,
NETANEL MILLER, CHAYA MILLER, AHARON MILLER, SHANI MILLER,
ADIYA MILLER, ALTEA STEINHERZ, JONATHAN STEINHERZ, TEMIMA
STEINHERZ, JOSEPH GINZBERG, PETER STEINHERZ, LAUREL STEINHERZ,
GILA ALUF, YITZHAK ZAHAVY, JULIE ZAHAVY, TZVEE ZAHAVY,
BERNICE ZAHAVY,
Plaintiffs-Appellants,
v.
BLOM BANK SAL,
2
Defendant-Appellee. †
______________
Before:
POOLER, WESLEY, CARNEY, Circuit Judges.
Plaintiffs-Appellants sued BLOM Bank SAL (“BLOM Bank”) for aiding and
abetting Hamas, designated as a foreign terrorist organization by the United
States, in carrying out attacks in which Plaintiffs-Appellants and their relatives
were injured or killed. They allege BLOM Bank aided and abetted Hamas’s attacks
in violation of the Anti-Terrorism Act (“ATA”), 18 U.S.C. § 2333, as amended by
the Justice Against Sponsors of Terrorism Act (“JASTA”), by providing financial
services to customers affiliated with Hamas. The district court granted BLOM
Bank’s motion to dismiss for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6) (“Rule 12(b)(6)”), concluding that Plaintiffs-Appellants did not
plausibly allege BLOM Bank aided and abetted Hamas’s attacks. Plaintiffs-
Appellants argue that the district court misapplied the standard for JASTA aiding-
and-abetting liability, and that their complaint suffices to survive a Rule 12(b)(6)
dismissal. Although we agree that the court did not apply the proper standard,
Plaintiffs-Appellants’ complaint nonetheless fails to state a claim. Accordingly,
we AFFIRM the judgment of the district court.
_________________
MICHAEL J. RADINE (Gary M. Osen, Ari Ungar, Aaron A.
Schlanger, Dina Gielchinsky, on the brief), Osen LLC,
Hackensack, NJ, for Plaintiffs-Appellants.
LINDA C. GOLDSTEIN (Michael H. McGinley, Ryan M. Moore, Selby
P. Brown, Dechert LLP, Philadelphia, PA, on the brief), Dechert
LLP, New York, NY, for Defendant-Appellee.
_________________
†
The Clerk of the Court is directed to amend the official caption as set forth above.
3
WESLEY, Circuit Judge:
Plaintiffs-Appellants and their family members (collectively, “Plaintiffs”) 1
were injured or killed in attacks carried out by Hamas, which the United States
has designated as a foreign terrorist organization. They sued BLOM Bank SAL
(“BLOM Bank”) for aiding and abetting Hamas’s attacks by providing financial
services to customers affiliated with Hamas, in violation of the Anti-Terrorism Act
(“ATA”), 18 U.S.C. § 2333, as amended by the Justice Against Sponsors of
Terrorism Act (“JASTA”), id. § 2333(d)(2). The United States District Court for the
Eastern District of New York (Matsumoto, J.) granted BLOM Bank’s motion to
dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6),
concluding that Plaintiffs failed to plausibly allege BLOM Bank aided and abetted
Hamas’s attacks in violation of JASTA. Plaintiffs argue on appeal that the district
court erred in dismissing their complaint because it applied the wrong standard
for JASTA aiding-and-abetting liability. Although we agree that the court did not
apply the proper standard, we affirm its judgment because Plaintiffs’ complaint
fails to state a claim under the correct standard.
1
As alleged, Plaintiffs brought this action on behalf of themselves and as representatives
of the estates of their family members who died in the attacks.
4
BACKGROUND
The United States government has designated Hamas 2 as a foreign terrorist
organization (“FTO”) since 1997. 3 Between December 1, 2001 and August 19, 2003,
Hamas carried out a series of attacks, including shootings and bombings, in Israel
and the Palestinian territories in which Plaintiffs were injured or killed. BLOM
Bank is a Lebanese bank that operates internationally. Plaintiffs sued BLOM Bank
for damages under the ATA for allegedly aiding and abetting Hamas’s attacks by
providing financial services to three customers affiliated with Hamas: the Sanabil
Association for Relief and Development (“Sanabil”), Subul al-Khair, and the Union
of Good (collectively, the “Three Customers”).
I. Plaintiffs’ Complaint
As alleged, Hamas operates a “civilian infrastructure” called the “da’wa,”
which translates in Arabic to “the call to the believers to shelter beneath the faith”
2“‘Hamas’ is an acronym for the Arabic phrase ‘Harakat al-Muqawama al-Islamiya,’
sometimes translated as the ‘Islamic Resistance Movement.’ . . . In accordance with
common usage, we refer to it here as ‘Hamas.’” Linde v. Arab Bank, PLC, 706 F.3d 92, 97
n.6 (2d Cir. 2013) (internal citation omitted).
3
The U.S. Secretary of State “is authorized to designate an organization as a foreign
terrorist organization” if it “engages in terrorist activity” or “retains the capability and
intent to engage in terrorist activity” and “the terrorist activity . . . threatens the security
of United States nationals or the national security of the United States.” 8 U.S.C.
§ 1189(a)(1).
5
and provides “social welfare activities.” J.A. 141, 141 n.6. One of the founders of
Hamas explained in an interview in 1998 that “[s]ocial work is carried out in
support of [Hamas’s aim to liberate Palestine from Israeli occupation], and it is
considered to be part of the [Hamas] movement’s strategy.” Id. at 141. In the early
1990s, Hamas pursued a “three-pronged strategy” to strengthen its influence:
(1) improving its military capacity, (2) “intensify[ing] its efforts to systematically
gain control” of institutions important to the Palestinian public, and (3)
“accelerat[ing] the development of its world-wide fundraising network.” Id. at
143.
A. The Three Customers: Sanabil, Subul al-Khair, and Union of
Good
Hamas established Sanabil in 1994 “with the unofficial goal of competing
with H[i]zbollah’s [(a designated terrorist organization’s)] social welfare
infrastructure.” Id. at 152. Sanabil was Hamas’s “da’wa headquarters in Lebanon
until late 2003.” Id. at 154. It distributed funds it received from Hamas’s
fundraising network to Palestinian refugee camps in Lebanon “to build [Hamas’s]
support within that community.” Id. at 154. Its board members were well-known
leaders of Hamas in Lebanon. In August 2003, a Lebanese newspaper reported
that pursuant to an order by a Hamas political leader, Sanabil had opened offices
6
in all of the Palestinian refugee camps in Lebanon. “Sanabil regularly distributed
small sums in cash from its accounts to hundreds (if not thousands) of individual
dependents in the Palestinian refugee camps under the categories of ‘Orphan
Sponsorships,’ ‘Student Sponsorships,’ ‘Needy Sponsorships’ and ‘Family
Sponsorships.’” Id. at 159. As a Lebanese publication reported in 2004, Sanabil
“sponsored 1,200 Palestinian families and spent around $800,000 on orphans and
$55,000 on needy patients.” Id.On August 22, 2003, the U.S. Department of the Treasury designated Sanabil
as a Specially Designated Global Terrorist (“SDGT”), 4 finding that it is “part of a
web of charities raising funds on behalf of [Hamas] and using humanitarian[]
purposes as a cover for acts that support [Hamas].” Id. at 147. The Treasury
Department explained in a press release:
[Hamas] recruits permanent members from the religious and the
poor by extending charity to them from organizations such as
Sanabil. . . . After starting by providing basic necessities the charity
eventually began asking poor families within the camps to fill out
application forms, particularly those who had worked with the
Islamic Movement . . . and [Hamas].
4
The “SDGT designation is distinct from the State Department’s FTO designation.” Weiss
v. Nat’l Westminster Bank PLC, 768 F.3d 202, 209 n.7 (2d Cir. 2014). The Treasury
Department is authorized to designate groups and individuals who “pose a significant
risk of committing[] acts of terrorism” or “are determined . . . to assist in, sponsor, or
provide financial, material, or technological support for . . . acts of terrorism” as SDGTs
under Executive Order 13224. See Exec. Order No. 13224, 3 C.F.R. § 13224 (2001).
7
Id. at 155. Sanabil was also “identified . . . as an unindicted co-conspirator” in the
U.S. government’s 2004 prosecution of the Holy Land Foundation (“HLF”), a
charity designated as an SDGT, which transferred money to Sanabil. Id. at 159.
Subul al-Khair was founded in 1998 in Beirut, Lebanon, and “functioned
much like Sanabil, but was more focused on [Hamas] supporters in the Beirut
area.” Id. at 161. It “regularly distributed small sums in cash from its accounts to
individual[s] under the categories of ‘Orphan Sponsorships’ and ‘Student
Sponsorships.’” Id. Subul al-Khair was not designated as an SDGT; however, it
was listed as an unindicted co-conspirator in HLF’s criminal trial.
Union of Good was founded in 2000 “as the umbrella organization for
[Hamas’s] global fundraising activity.” Id. at 162. It “originally began as a limited
101-day fundraising drive for emergency aid at the outset of what was later called
the Second Intifada.” 5 Id. Because of its success, Union of Good became a
permanent institution and “raise[d] tens of millions of dollars for [Hamas].” Id.5
The “Second Intifada” was “a period [in the early 2000s] of intensified violence by
Palestinian terrorist groups in the aftermath of failed peace negotiations between Israel
and the Palestinian Authority.” See Linde v. Arab Bank, PLC, 882 F.3d 314, 319 (2d Cir.
2018).
8
The U.S. Department of the Treasury designated Union of Good as an SDGT in
November 2008. 6 Id. at 163. The Treasury Department’s press release noted:
Union of Good acts as a broker for [Hamas] by facilitating financial
transfers between a web of charitable organizations––including
several organizations previously designated . . . for providing
support to [Hamas]––and [Hamas]-controlled organizations in the
West Bank and Gaza. The primary purpose of this activity is to
strengthen [Hamas’s] political and military position in the West
Bank and Gaza, including by: (i) diverting charitable donations to
support [Hamas] members and the families of terrorist operatives;
and (ii) dispensing social welfare and other charitable services on
behalf of [Hamas]. . . . In addition to providing cover for [Hamas]
financial transfers, some of the funds transferred by the Union of
Good have compensated [Hamas] terrorists by providing
payments to the families of suicide bombers.”
Id. at 163. The chairman of Union of Good, Sheikh Yusuf al-Qaradawi, gave
interviews in 2002 and later years commending Hamas’s suicide attacks and
martyrdom operations.
B. BLOM Bank’s Financial Services to the Three Customers
Each of the Three Customers held accounts at BLOM Bank. Sanabil held its
account at BLOM Bank “[d]uring the relevant period (1999-2003).” Id. at 156.
6
Israel also “designated” Union of Good in 2002 “in an order of the Minister of Defense
of the State of Israel, based on its being ‘part of the Hamas organization or supporting it
and strengthening its infrastructure.’” J.A. 162. The complaint does not specify what
designation Israel gave Union of Good.
9
Three organizations in Hamas’s fundraising network transferred money to
Sanabil’s account at BLOM Bank. Specifically:
(1) HLF, a charity based in the U.S., “transferred over $2 million . . .
through BLOM [Bank’s] correspondent bank accounts in New York
to Sanabil’s bank account(s) at BLOM [Bank] in Lebanon.” Id. The
last payment from HLF to Sanabil was on September 7, 2001. The
U.S. Department of the Treasury designated HLF as an SDGT on
December 4, 2001; the complaint does not allege BLOM Bank
processed any payments from HLF to Sanabil after HLF’s
designation.
(2) KindHearts, a charity based in the U.S. which “succeeded to
HLF’s fundraising for [Hamas] after HLF was designated,” “sent
an additional $250,000 to Sanabil’s accounts between July 2002 and
July 2003.” Id. at 158. BLOM Bank processed these transfers to
Sanabil’s account. The complaint does not allege KindHearts was
designated as an SDGT.
(3) The Al-Aqsa Foundation (“Al-Aqsa”), a charity based in
Germany, “transferred at least $50,000 into Sanabil’s accounts at . . .
BLOM [Bank] between April – May 2003.” Id. at 158–59 (emphasis
omitted). Al-Aqsa was designated as an SDGT on May 29, 2003;
BLOM Bank processed one transfer from Al-Aqsa to Sanabil the
day after Al-Aqsa’s designation. The complaint does not allege
BLOM Bank processed any later transfers from Al-Aqsa to Sanabil.
In an invoice attached as an exhibit to the complaint, the stated purpose of
the payment from Al-Aqsa to Sanabil’s account at BLOM Bank was “help
concerning orphan children.” Id. at 177–78.
Subul al-Khair also maintained an account at BLOM Bank and BLOM Bank
“deposited multiple transfers sent by HLF to Subul al-Khair.” Id. at 161. “HLF
10
sent Subul al-Khair over $500,000 between 1999 and 2001,” but the complaint does
not specify whether BLOM Bank processed that entire amount or some portion of
it. Id. The complaint does not provide dates or further information regarding the
financial services BLOM Bank provided for Subul al-Khair.
Union of Good held an account with BLOM Bank. The complaint does not
identify any dates for this account; nor does it note the transactions, if any, BLOM
Bank processed for Union of Good.
II. Applicable Law
The ATA authorizes U.S. nationals “injured in his or her person, property,
or business by reason of an act of international terrorism” to sue for treble damages
as well as attorney’s fees and costs. 7 18 U.S.C. § 2333(a). “[I]nternational
terrorism” encompasses “activities that—(A) involve violent acts or acts
dangerous to human life that . . . would be a criminal violation if committed within
the jurisdiction of the United States or of any State,” “(B) appear to be intended—
to (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
7
Before the enactment of JASTA in 2016, the ATA did not specify which parties could be
sued. See 18 U.S.C. § 2333(a).
11
primarily outside the territorial jurisdiction of the United States.” Id. § 2331(1)(A)–
(C).
The ATA did not expressly permit relief against parties who aided the
primary perpetrator of the act of international terrorism. JASTA, Pub. L. No. 114-
222, 130 Stat. 852 (2016), amended the ATA to create a cause of action against “any
person who aids and abets, by knowingly providing substantial assistance, or who
conspires with the person who committed . . . an act of international terrorism.” 8
18 U.S.C. § 2333(d)(2). JASTA applies to “any civil action . . . pending on, or
commenced on or after, the date of [its] enactment . . . and . . . arising out of an
injury to a person, property, or business on or after September 11, 2001.” 130 Stat.
at 855. Congress was clear that its purpose in enacting JASTA was to:
[P]rovide civil litigants with the broadest possible basis, consistent
with the Constitution of the United States, to seek relief against
persons, entities and foreign countries, wherever acting and
wherever they may be found, that have provided material support,
directly or indirectly, to foreign organizations or persons that engage
in terrorist activities against the United States.
Id. at 853 (emphases added). Congress also specifically endorsed the reasoning of
the D.C. Circuit in Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983) in conducting
8
The term “person” includes corporations. See 18 U.S.C. § 2333(d)(1) (incorporating the
definition of “person” in 1 U.S.C. § 1).
12
the aiding-and-abetting analysis. Id. at 852. “Halberstam . . . provides the proper
legal framework for how [aiding and abetting] liability [under the ATA] should
function.” Id. (emphasis added).
Under Halberstam, there are three elements for aiding-and-abetting liability:
“(1) the party whom the defendant aids must perform a wrongful act that causes
an injury” (the “aiding party who causes injury” element); “(2) the defendant must
be generally aware of his role as part of an overall illegal or tortious activity at the
time that he provides the assistance” (the “general awareness” element); “(3) the
defendant must knowingly and substantially assist the principal violation” (the
“substantial assistance” element). 705 F.2d at 477 (emphases added).
III. The District Court’s Decision
The district court granted BLOM Bank’s motion to dismiss for failure to state
a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”),
concluding that Plaintiffs’ complaint did not plausibly allege that BLOM Bank
aided and abetted Hamas’s attacks. See Honickman for Est. of Goldstein v. BLOM
Bank SAL, 432 F. Supp. 3d 253, 271 (E.D.N.Y. 2020). In the court’s view, Plaintiffs
failed to allege the latter two elements of JASTA aiding-and-abetting liability:
“(1) that [BLOM Bank] was generally aware of its role as part of an overall illegal
or tortious activity at the time that it provided the assistance, and (2) that [BLOM
13
Bank] knowingly and substantially assisted the principal violation.” Id. at 263(alterations in original, internal quotation marks, and citation omitted).
As to general awareness, the court first found “Plaintiffs’ complaint does
not plausibly allege that BLOM [Bank] was generally aware of any connection
between the Three Customers and Hamas.” Id. at 265. It then concluded that
“even if Plaintiffs’ allegations plausibly alleged that BLOM [Bank] knew the Three
Customers were related to Hamas, ‘[e]vidence that [BLOM Bank] knowingly
provided banking services to [Hamas], without more, is insufficient to satisfy
JASTA’s scienter requirement.’ . . . Plaintiffs have not plausibly alleged that BLOM
[Bank] knew that by providing financial services to the Three Customers, it was
playing a role in Hamas’s violent activities.” Id. at 265–66 (second alteration in
original) (citation omitted). Regarding substantial assistance, the court analyzed
the six factors identified in Halberstam, discussed below, and ruled that “[t]he
complaint fails to establish that BLOM[] [Bank’s] provision of financial services to
the Three Customers amounted to providing ‘substantial assistance’ to Hamas.”
Id. at 268.
Plaintiffs argue on appeal that: (1) the district court applied the wrong legal
standard in evaluating the sufficiency of their complaint; and (2) their complaint
14
plausibly alleges that BLOM Bank was generally aware of its role in Hamas’s
illegal activities and that BLOM Bank knowingly provided substantial assistance
to Hamas.
DISCUSSION
“We review de novo a district court’s dismissal of a complaint under Rule
12(b)(6), accepting all of the complaint’s [non-conclusory] factual allegations as
true and drawing all reasonable inferences in the plaintiffs’ favor.” Giunta v.
Dingman, 893 F.3d 73, 78–79 (2d Cir. 2018). It is well established that:
[t]o survive a [Rule 12(b)(6)] 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. A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the
misconduct alleged. The plausibility standard is not akin to a
probability requirement, but it asks for more than a sheer
possibility that a defendant has acted unlawfully. Where a
complaint pleads facts that are merely consistent with a
defendant’s liability, it stops short of the line between possibility
and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citations
omitted).
15
I. The Standard for JASTA Aiding-and-Abetting Liability
The “Aiding Party Who Causes Injury” Element
The first element, that “the party whom the defendant aids must perform a
wrongful act that causes an injury,” Halberstam, 705 F.2d at 477, is straightforward.
It is satisfied when the party whom the defendant directly or indirectly aided
performed the injury-causing act. BLOM Bank argues that Plaintiffs’ complaint
falls short because “the only parties whom BLOM [Bank] allegedly ‘aided’ are the
[Three] Customers,” and “JASTA limits aiding-and-abetting liability to those
circumstances in which a defendant actually ‘aided and abetted . . . the person who
committed’ the relevant ‘act of international terrorism.’” Appellee’s Br. at 63
(emphasis omitted) (quoting 18 U.S.C. § 2333(d)(2)). We recently rejected the same
contention in Kaplan v. Lebanese Canadian Bank, SAL, 999 F.3d 842 (2d Cir. 2021),
holding that “[t]he language and purpose of JASTA are meant to allow an aiding-
and-abetting claim where the defendant’s acts aided and abetted the principal”
who committed the wrongful act “even where [the defendant’s] relevant
substantial assistance was given to an intermediary” of the principal. Id. at 856.
B. The “General Awareness” Element
The second (“general awareness”) and third (“substantial assistance”)
elements form the crux of most JASTA aiding-and-abetting cases. The “general
16
awareness” element requires the defendant to be “generally aware” of its role in
“an overall illegal or tortious activity at the time that [it] provides the assistance.” See
Halberstam, 705 F.2d at 477 (emphasis added). The defendant need not be generally
aware of its role in the specific act that caused the plaintiff’s injury; instead, it must
be generally aware of its role in an overall illegal activity from which the act that
caused the plaintiff’s injury was foreseeable. See id. at 477, 488.
Halberstam establishes this foreseeability principle. There, the D.C. Circuit
held that Linda Hamilton was civilly liable for aiding and abetting the murder of
Michael Halberstam during a burglary of his home by Bernard Welch, Hamilton’s
partner, even though she was unaware of Welch’s plan to burglarize or kill
Halberstam. See id. at 474, 488. Over the five years Hamilton and Welch lived
together, Welch acquired significant wealth by selling stolen goods that he
obtained through burglaries. Id. at 475. Although Hamilton was never present
during Welch’s burglaries and claimed she was unaware that they were occurring,
she performed the “secretarial work” for Welch’s illegal enterprise, such as typing
transmittal letters for sales of the stolen goods and keeping inventories of the
stolen goods that were sold. Id.17
The court concluded that the “sudden influx of great wealth” Hamilton and
Welch experienced, “the filtering of all transactions through Hamilton except
payouts for [the] goods” sold, and “Hamilton’s collusive and unsubstantiated
treatment of income and deductions on her tax forms . . . combine[d] to make the
district court’s inference that [Hamilton] knew [Welch] was engaged in illegal
activities acceptable, to say the least.” Id. at 486. Indeed, given the facts, “it
[would] def[y] credulity that Hamilton did not know that something illegal was
afoot.” Id.Hamilton’s “general awareness of her role in [Welch’s] continuing criminal
enterprise,” id. at 488, sufficed to establish her liability for aiding and abetting
Halberstam’s murder because the murder was a foreseeable consequence of Welch’s
illegal activity. As the court explained:
[U]nder an aiding-abetting theory, [the murder] was a natural and
foreseeable consequence of the activity Hamilton helped Welch to
undertake. It was not necessary that Hamilton knew specifically that
Welch was committing burglaries. Rather, when she assisted him, it
was enough that she knew he was involved in some type of personal
property crime at night—whether as a fence, burglar, or armed
robber made no difference—because violence and killing is a
foreseeable risk in any of these enterprises.
18
Id. (emphases added). 9 Foreseeability is thus central to the Halberstam framework,
and as a result, to JASTA aiding-and-abetting liability. 10
The district court, however, rejected the foreseeability principle, holding
that “it is not enough for Plaintiffs to plausibl[y] allege that BLOM [Bank] was
generally aware of [its] role in terrorist activities, from which terrorist attacks were
a natural and foreseeable consequence.” Honickman, 432 F. Supp. 3d at 264 (first
and third alterations in original) (emphasis, internal quotation marks, and citation
omitted). The court’s conclusion contravenes both Halberstam and Linde v. Arab
9
The Halberstam court extracted the foreseeability principle from American Family Mutual
Insurance Co. v. Grim, 201 Kan. 340 (1968), in which a group of teenagers broke into a
church at night looking for soft drinks in the kitchen. See Halberstam, 705 F.2d at 482. Two
of them failed to extinguish the torches they used to light their way to the attic, causing
the church to catch on fire. See id. The defendant, one of the teenagers, did not know
about the torches, did not enter the attic, and was not near the church when it caught on
fire. See id. Still, he was found liable for damages caused by the fire because as part of
the attempt to reach the church attic, “the need for adequate lighting could reasonably be
anticipated,” making the use of torches and subsequent fire foreseeable. See id. at 483(citation omitted).
10
Halberstam did not specifically attach foreseeability to the general awareness or
substantial assistance elements; it used foreseeability broadly for establishing the extent
of liability under an aiding-and-abetting theory. See 705 F.2d at 482–83. As a result, it is
more important that courts do not skip foreseeability altogether rather than apply it at a
precise stage of the JASTA aiding-and-abetting analysis.
19
Bank, PLC, 882 F.3d 314 (2d Cir. 2018), one of the first cases in which we interpreted
aiding-and-abetting liability under JASTA. 11
Linde was brought before JASTA was enacted. The plaintiffs alleged that a
defendant bank was liable as a principal under the ATA for committing an act of
terrorism by “knowingly providing” material support to an FTO in the form of
“financial services.” Linde, 882 F.3d at 318. At trial, the district court instructed
the jury that the “provision of material support to [an FTO in violation of a distinct
statute, 18 U.S.C. § 2339B] . . . necessarily proved the bank’s commission of an act
of international terrorism” under the ATA. Id. at 325. We held that this instruction
was erroneous because providing material support to an FTO does not qualify
under the definition of “an act of international terrorism.” Id. at 326. However,
the plaintiffs argued on appeal that the availability of aiding-and-abetting liability
under JASTA, enacted between the time of trial and the appeal, 12 made the error
in the jury instruction harmless. Id. at 328. Linde rejected their argument,
determining that:
11
We acknowledge that the district court’s decision came before our opinion in Kaplan
clarified the import of our earlier JASTA aiding-and-abetting precedents which may have
generated some ambiguity as to the proper standard.
12
We agreed that the plaintiffs were entitled to invoke JASTA on appeal because the act
applies retroactively. See Linde, 882 F.3d at 328.
20
aiding and abetting an act of international terrorism requires more
than the provision of material support to a designated terrorist
organization. Aiding and abetting requires the secondary actor to
be ‘aware’ that, by assisting the principal, it is itself assuming a
‘role’ in terrorist activities. Halberstam[], 705 F.2d at 477. Such
awareness may not require proof of the specific intent demanded
for criminal aiding and abetting culpability . . . . Nor does
awareness require proof that Arab Bank [(the defendant)] knew of
the specific attacks at issue when it provided financial services for
Hamas. What the jury did have to find was that, in providing such
services, the bank was ‘generally aware’ that it was thereby playing
a ‘role’ in Hamas’s violent or life-endangering activities.
Halberstam[], 705 F.2d at 477. This is different from the mens rea
required to establish material support in violation of 18 U.S.C. § 2339B,
which requires only knowledge of the organization’s connection to
terrorism, not intent to further its terrorist activities or awareness that
one is playing a role in those activities. See Holder v. Humanitarian Law
Project, 561 U.S. 1, 16–17 . . . (2010).
Linde, 882 F.3d at 329–30 (some emphases omitted and others added) (footnotes
and internal citation omitted).
Here, the district court misread this passage from Linde to conclude that
applying the Halberstam foreseeability standard to the “general awareness”
element would contravene Linde by “replac[ing] the scienter for aiding-and-
abetting liability with the lower scienter required for [criminal] material support.”
Honickman, 432 F. Supp. 3d at 264. The court erred in equating the foreseeability
standard and the scienter required for criminal material support; the two are
21
distinct. In doing so, the court also implicitly perceived Linde as requiring more
than the Halberstam standard for general awareness, which we rejected in Kaplan.
“[N]othing in Linde repudiates the Halberstam standard that a defendant
may be liable for aiding and abetting an act of terrorism if it was generally aware
of its role in an ‘overall illegal activity’ from which an ‘act of international
terrorism’ was a foreseeable risk.” Kaplan, 999 F.3d at 860. Nor could it, of course,
given Congress’s unambiguous assignment of Halberstam as the appropriate legal
framework for JASTA aiding-and-abetting liability. Linde’s holding that aiding-
and-abetting “requires more than the provision of material support to a terrorist
organization,” 882 F.3d at 329, means only that allegations that a defendant
“knowingly provid[ed] material support to an FTO, without more, does not as a
matter of law satisfy the general awareness element.” Kaplan, 999 F.3d at 860
(emphasis added). That language “does not establish that [a defendant’s provision
of] material support to an FTO is never sufficient for [JASTA] aiding-and-abetting
liability.” Id. (emphasis added). Instead, “[w]hether a defendant’s material
support to an FTO suffices to establish general awareness is a fact-intensive
inquiry” depending on allegations that a defendant “was generally aware . . . that
22
it was playing a role in unlawful activities from which [terrorist] attacks were
foreseeable.” Id. at 860–61 (emphasis added).
On the other hand, we reject Plaintiffs’ attempt to equate the Halberstam
foreseeability standard with the “fungibility” theory in Holder v. Humanitarian Law
Project, 561 U.S. 1 (2010). Linde recognized that general awareness “is different
from the mens rea required to establish material support in violation of 18 U.S.C.
§ 2339B, which requires only knowledge of the organization’s connection to
terrorism . . . . See Holder[,] 561 U.S. [at] 16–17.” Linde, 882 F.3d at 329–30. In Holder,
a criminal material support case under § 2339B, the plaintiffs 13 knowingly
provided material support to FTOs but claimed they were “seek[ing] to facilitate
only the lawful, nonviolent purposes of those groups.” 561 U.S. at 7–8. The
Supreme Court determined that for the purpose of § 2339B, it did not matter that
the “[m]aterial support [was] meant to promote peaceable, lawful conduct”
because “[m]oney is fungible” and “there is reason to believe that foreign terrorist
organizations do not maintain legitimate financial firewalls between those funds
13
The plaintiffs were U.S. organizations and citizens who challenged the constitutionality
of the criminal material support statute (18 U.S.C. § 2339B) and sought an injunction to
prohibit its enforcement. See Holder, 561 U.S. at 10–11.
23
raised for civil, nonviolent activities, and those ultimately used to support violent,
terrorist operations.” Id. at 30–31 (internal quotation marks and citations omitted).
Plaintiffs urge us to adopt Holder’s “fungibility” rationale in assessing the
sufficiency of their complaint. They contend that Linde merely recognized that the
mens rea for aiding and abetting is “different” from criminal material support, not
that it is “higher.” Appellants’ Br. at 44. However, Linde determined that the facts
in Holder––adequate for criminal material support––fall short for the general
awareness element of JASTA aiding and abetting. 882 F.3d at 329–30. Indeed,
Linde could not have been clearer: aiding and abetting “requires more than the
provision of material support to a designated terrorist organization,” 882 F.3d at
329. Plaintiffs’ fungibility argument would displace the aiding-and-abetting
standard with the standard for criminal material support by making “knowingly
providing material support to an FTO, without more” sufficient “as a matter of
law” for the general awareness element. See Kaplan, 999 F.3d at 860. Not only
would this erase Linde’s distinction between general awareness and criminal
material support, but it would also evade Halberstam’s foreseeability standard. 14
14
Plaintiffs rely on Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685 (7th Cir. 2008),
a pre-JASTA case in which the Seventh Circuit held that the causation element of primary
liability under the ATA, 18 U.S.C. § 2333(a), is satisfied when the defendant knowingly
24
Accordingly, the relevant inquiry for the general awareness element is: did
Plaintiffs “plausibly allege[] the [Three] Customers were so closely intertwined
with [Hamas’s] violent terrorist activities that one can reasonably infer that [BLOM
Bank] was generally aware while it was providing banking services to those
entities that it was playing a role in unlawful activities from which [Hamas’s]
attacks were foreseeable[?]” 15 Kaplan, 999 F.3d at 860–61.
C. The “Substantial Assistance” Element
The last element for aiding-and-abetting liability requires that the defendant
“knowingly and substantially assist[ed] the principal violation.” Halberstam, 705
F.2d at 477. As the analysis in Halberstam reveals, the “principal violation” must
be foreseeable from the illegal activity that the defendant assisted; knowing and
substantial assistance to the actual injury-causing act––here, Hamas’s attacks––is
unnecessary. See id. at 488.
donated money to a terrorist organization because “[a]nyone who knowingly contributes
to the nonviolent wing of an organization that he knows to engage in terrorism is
knowingly contributing to the organization's terrorist activities.” 549 F.3d at 698. Boim
is inapposite. It was decided before Congress assigned Halberstam as the appropriate
framework for JASTA aiding-and-abetting liability claims and therefore lacks the
requisite analysis. Moreover, any persuasive value it might have is insufficient to
overcome the binding effects of Linde and Kaplan on us.
15
Contrary to BLOM Bank’s argument, the Three Customers do not themselves need to
be “engaged in . . . violent or terrorist acts.” See Appellee’s Br. at 32–34.
25
The district court appeared to impose a higher standard on the “knowing”
prong of “knowingly and substantially” assisted than required, concluding that
“Plaintiffs’ complaint fails plausibly to allege that any assistance BLOM [Bank]
provided––even if substantial––would have been knowing.” Honickman, 432 F.
Supp. 3d at 268. The “knowledge component” is satisfied “[i]f the defendant
knowingly––and not innocently or inadvertently––gave assistance.” 16 Kaplan, 999
F.3d at 864. For instance, Halberstam held that “the district court . . . justifiably
inferred that Hamilton assisted Welch with knowledge that he had engaged in
illegal acquisition of goods.” 705 F.2d at 488. It did not require Hamilton to
“know” anything more about Welch’s unlawful activities than what she knew for
the general awareness element.
How much aid qualifies as substantial assistance? Halberstam identified six
factors:
(1) the nature of the act encouraged, (2) the amount of assistance
given by defendant, (3) defendant’s presence or absence at the time
16 BLOM Bank argues in its post-argument letter brief that under Kaplan, “where a
complaint alleges that the assistance was indirect, it must allege (among other things) that
the defendant had ‘actual knowledge’ of the intermediary’s connection to the FTO.”
Appellees’ Letter Br. at 14. Kaplan did not so hold; instead, it asserted “the actual
knowledge component of the Halberstam standard requires that the defendant ‘know[ ]’
that it is providing ‘assistance,’ . . . whether directly to the FTO or indirectly through an
intermediary.” 999 F.3d at 863–64 (alteration in original) (citation omitted).
26
of the tort, (4) defendant’s relation to the principal, (5) defendant’s
state of mind, and (6) the period of defendant’s assistance.
Linde, 882 F.3d at 329 (citing Halberstam, 705 F.2d at 484–85). No factor is
dispositive; the weight accorded to each is determined on a case-by-case basis. See
Halberstam, 705 F.2d at 483; see also Kaplan, 999 F.3d at 856.
The district court misunderstood the first factor, “the nature of the act
encouraged,” to be a question of whether Plaintiffs plausibly alleged “that BLOM
[Bank] knowingly encouraged Hamas’[s] violent activities, such as those which
caused Plaintiffs’ injuries.” Honickman, 432 F. Supp. 3d at 268. However, the
“nature of the act involved dictates what aid might matter.” 17 See Halberstam, 705
F.2d at 484 (emphasis omitted). As a result, the factor requires assessing whether
the alleged aid (facilitating the transfer of millions of dollars to the Three
Customers) would be important to the nature of the injury-causing act (Hamas’s
terrorist attacks).
For the second factor, the “amount of assistance,” the district court held
“Plaintiffs make no non-conclusory assertions that any of the funds processed by
the Three Customers actually went to Hamas, or that BLOM [Bank], at the time it
17
For example, verbal encouragement of “physical acts of violence” may be important to
a principal’s commission of battery. See Halberstam, 705 F.2d at 484.
27
provided banking services to the Three Customers, was aware or intended that
Hamas would receive the corresponding funds.” Honickman, 432 F. Supp. 3d at
268. However, Plaintiffs did not need to allege the funds “actually went to
Hamas.” Factual allegations that permit a reasonable inference that the defendant
recognized the money it transferred to its customers would be received by the FTO
would suffice. See Kaplan, 999 F.3d at 866. In other words, if a plaintiff plausibly
alleges the general awareness element, she does not need to also allege the FTO
actually received the funds. Instead, the inquiry should focus on the amount and
type of aid the defendant provided. See Halberstam, 705 F.2d at 488.
Lastly, the fourth factor, the “defendant’s relation to the principal,” is useful
for determining the defendant’s capacity to assist. See id. at 484. The district court
erroneously construed this Court’s finding in Siegel v. HSBC N. Am. Holdings, Inc.,
933 F.3d 217 (2d Cir. 2019), that “the plaintiffs d[id] not plead any non-conclusory
allegations that [the defendant-bank] had any relationship with [the FTO]” to
mean that Plaintiffs must plead a direct relationship between BLOM Bank and
Hamas. Id. at 225; see Honickman, 432 F. Supp. 3d at 269. In Siegel, the defendant-
bank’s “relation to the principal” was several steps removed: it allegedly had a
commercial relationship with another bank that was linked to various terrorist
28
organizations including the FTO that caused the plaintiffs’ injuries. See 933 F.3d at
220–21. Although the relationship between the defendant and the FTO should not
be so attenuated as in Siegel, a direct relationship between the defendant and the
FTO is not required to satisfy this factor.
II. The Sufficiency of Plaintiffs’ Complaint
For Plaintiffs’ JASTA aiding-and-abetting claim to be viable, the complaint
must plausibly allege all three elements of the Halberstam standard for aiding-and-
abetting liability.
The first element, that the party whom the defendant aided performed the
injury-causing act, merits little attention. Plaintiffs plausibly allege that the party
whom BLOM Bank aided (indirectly), Hamas, committed attacks causing
Plaintiffs’ injuries. For the second element, general awareness, the complaint must
plausibly allege: (1) as a threshold requirement, that BLOM Bank was aware of the
Three Customers’ connections with Hamas before the relevant attacks; and (2) the
Three Customers were so closely intertwined with Hamas’s violent terrorist
activities that one can reasonably infer BLOM Bank was generally aware of its role
in unlawful activities from which the attacks were foreseeable while it was
providing financial services to the Three Customers. See Kaplan, 999 F.3d at 860.
29
For the final element of substantial assistance, the complaint must contain
sufficient factual allegations relating to the six factors identified above.
We conclude that Plaintiffs’ aiding-and-abetting claim fails because the
allegations do not support an inference that BLOM Bank was aware of the Three
Customers’ ties with Hamas prior to the relevant attacks, thereby undermining the
second element of general awareness. In assessing this element, the district court
found that the complaint’s references to media articles and publications on the
Three Customers’ connection to Hamas were insufficient because “Plaintiffs
fail[ed] plausibly to allege that BLOM [Bank] . . . actually knew or should have
known of any of the cited sources.” Honickman, 432 F. Supp. 3d at 265. However,
as we explained in Kaplan, Plaintiffs did not need to allege that BLOM Bank knew
or should have known of the public sources at the pleading stage. See 999 F.3d at
865. Such a requirement at this juncture would be too exacting.
Nevertheless, the public sources cited in the complaint do not plausibly
support an inference that BLOM Bank had the requisite general awareness at the
time that it provided banking services to the Three Customers. See Halberstam, 705
F.2d at 477 (“[T]he defendant must be generally aware of [its] role . . . at the time
that [it] provides the assistance.”) (emphasis added). One of the news articles on
30
Sanabil referenced in the complaint was dated August 27, 2004, more than a year
after the last relevant attack, and reported only that Sanabil sponsored Palestinian
families and spent money on orphans. The Lebanese press’s coverage of Sanabil’s
center in Sidon closing due to “its links to [Hamas]” is undated. J.A. 159. The
complaint lacks any allegations that at the time of the interviews in which al-
Qaradawi––who chaired Union of Good––praised martyrdom and criticized the
United States’ designation of Hamas, it was public knowledge that al-Qaradawi
chaired Union of Good. 18 Indeed, the Treasury Department’s press release,
announcing the designation of Sanabil and similar organizations as SDGTs only
after the final attack at issue, describes these organizations as using
“humanitarian[] . . . purposes as a cover for acts that support [Hamas],” which the
Treasury Department unveiled only after developing “credible evidence” in an
investigation. J.A. 147 (emphasis added). That organizations like the Three
Customers maintained a “cover” in public undermines the plausibility of
18Plaintiffs argue that “the publicly available evidence [in the complaint] was largely
available before or during the relevant period or discussed facts that were previously
knowable.” Appellants’ Br. at 39, n.11. However, “publicly available” evidence is not the
same as public sources such as media articles. The latter, depending on their substance,
plausibly suggest a defendant’s knowledge which can be confirmed during discovery,
whereas the former requires the implausible inference that the defendant was aware of
those facts even before the news media.
31
Plaintiffs’ theory that BLOM Bank understood these organizations’ true nature
and activities from the public record at the time.
The limited public sources Plaintiffs cite pale in comparison to the detailed,
numerous sources that sufficed in Kaplan. See 999 F.3d at 864. The Kaplan
complaint alleged Hizbollah made public statements identifying the defendant-
bank’s customers as “integral parts of Hizbollah” prior to the relevant attacks
which were “specific as to the status of the speaker,” “the circumstances in which
the statements were made,” and “the other specific media in which they were
made,” including Hizbollah’s own websites. Id.
Plaintiffs’ remaining allegations also fail to suggest BLOM Bank was aware
of the connections between the Three Customers and Hamas. 19 The complaint
alleges certain leaders of Hamas were board members of the Three Customers but
does not aver that this was public knowledge during the relevant period. Sanabil
and Subul al-Khair were identified as unindicted co-conspirators in HLF’s
19
Plaintiffs referenced in their briefs and at oral argument a 2001 FBI report identifying
Sanabil as a “known front[]” for Hamas. See Appellants’ Br. at 32; Appellants’ Letter Br.
at 11. Their complaint contained no reference to this FBI report. Similarly, Plaintiffs
characterized BLOM Bank’s transactions for the Three Customers as “untraceable” for
the first time in their post-argument letter brief. See, e.g., Appellants’ Letter Br. at 8. “[A]
Rule 12(b)(6) motion tests the adequacy of the complaint . . . not the briefs.” Hack v.
President & Fellows of Yale Coll., 237 F.3d 81, 91 (2d Cir. 2000), abrogated on other grounds by
Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002), (internal citation omitted).
32
criminal trial and/or prosecution, but HLF was not indicted until 2004, after the
relevant period. Sanabil and Union of Good were not designated as SDGTs until
after the last relevant attack, and BLOM Bank did not transfer any funds from non-
customer charities after they were designated as SDGTs except for one transfer
from Al-Aqsa to Sanabil the day after Al-Aqsa’s designation. We agree with the
district court that this single post-designation transfer, standing alone, is
insufficient to suggest BLOM Bank was aware of Sanabil’s links to Hamas. 20
Because we conclude Plaintiffs failed to plausibly allege BLOM Bank was
aware the Three Customers were related to Hamas, we do not need to consider
whether they plausibly alleged the Three Customers were closely intertwined with
Hamas’s violent terrorist activities. 21 Nor do we need to address whether the
20
The allegation that Israel designated Al-Aqsa as a terrorist organization in 1998, without
specifying whether and where this was made public, is also unavailing. Moreover, even
if the complaint plausibly alleged it was public knowledge that Al-Aqsa, HLF, and
KindHearts were linked with Hamas, those entities were not BLOM Bank’s customers.
Without any further allegations, a defendant-bank’s transfers of funds from non-customers
associated with an FTO to the defendant’s customers does not compel an inference that
the defendant knew of its customers’ connections to that FTO.
21
However, we note that there is a meaningful difference between the alleged functions
of the Three Customers and those of the customers in Kaplan. In Kaplan, the plaintiffs’
theory was that the defendant-bank’s customers provided subsidies to the families of
Hizbollah suicide bombers––i.e., veterans’ funds for terrorists––and the defendant-bank
“permitted the laundering of money . . . in violation of regulatory restrictions meant to
hinder the ability of FTOs to carry out terrorist attacks.” 999 F.3d at 858, 865. By contrast,
33
complaint satisfies the substantial assistance element. The complaint’s failure to
support a reasonable inference that BLOM Bank knew of the Three Customers’
links to Hamas sounds the death knell of Plaintiffs’ JASTA aiding-and-abetting
liability action.
CONCLUSION
We AFFIRM the judgment of the district court.
Plaintiffs’ theory rests on the da’wa, Hamas’s social welfare program, and the Three
Customers were alleged only to have supported orphans in Palestinian refugee camps.
34