In re the Foreign Sovereign Immunities Act: how the 9/11 litigation shows the shortcomings of FSIA as a tool in the war on global terrorism.

Author:Hennessy, Sean

TABLE OF CONTENTS INTRODUCTION I. OVERVIEW OF FSIA AND THE TERRORISM EXCEPTION A. History and Adoption of FSIA B. Enacting the Terrorism Exception II. FSIA's TERRORISM EXCEPTION AS A CML LITIGATION TOOL A. Executive Decision: Designating State Sponsors of Terrorism. B. A Critique of the Current Jurisdictional Grant C. A Proposal for Reforming the Terrorism Exception III. FSIA's NON-COMMERCIAL TORT EXCEPTION AS n CIVIL LITIGATION TOOL A. Case Background: In re Terrorist Attacks on September 11, 2001 B. Statutory Misinterpretation: Why the Second Circuit Got it Wrong C. A Legislative Proposal to Amend FSIA 's Non-Commercial Tort Exception CONCLUSION INTRODUCTION

September 11, 2001 will forever be remembered as one of the darkest days in American history. On that day, militant terrorists mounted a coordinated attack, taking control of three commercial airliners and using them as high-speed missiles aimed at the Pentagon and two of America's most symbolic and important financial buildings, the Twin Towers. (1) The result was the most horrific terrorist act ever on American soil. (2) The planes destroyed the Twin Towers, severely damaged the Pentagon, inflicted massive property damage, and shook the American psyche. Most tragically, nearly 3,000 victims lost their lives in the attacks on 9/11. (3)

Most Americans vividly remember the U.S. military response to the terrorist attacks. On September 20, 2001, President George W. Bush addressed a joint session of Congress and declared a "War on Terror" promising to go after Osama bin Laden and his Al Qaeda terrorist network as well as any country that harbored or supported international terrorists. (4) America then launched joint military campaigns in Iraq and Afghanistan and the war on terror commenced in force.

What many Americans are far less familiar with is a new front in the War on Terror that emerged domestically in U.S. courtrooms. While the military campaign was raging on the battlefields of Iraq and Afghanistan, the victims of 9/11 were taking the fight to terrorists by mounting civil lawsuits against international terror organizations such as Al Qaeda, state sponsors of terrorism, and terrorist financiers. (5) Litigants brought these suits under a number of statutes, including the Foreign Sovereign Immunities Act (FSIA).

These lawsuits play an extremely important role in battling global terrorism and preventing future attacks. Richard Posner, a highly respected judge from the U.S. Court of Appeals for the Seventh Circuit explained that "[s]uits against financiers of terrorism can cut the terrorist's lifeline" and that "the imposition of civil liability at every point along the causal chain of terrorism is necessary to deter the flow of terrorism's lifeblood." (6) Stuart Levey, the Treasury Department's Undersecretary for Terrorism and Financial Intelligence observed that "the terrorist operative who is willing to strap on a suicide belt is not susceptible to deterrence, but the individual donor who wants to support violentjihad may well be." (7)

One high-profile case in the litigation-based War on Terror was a lawsuit brought by those injured in the attacks on 9/11, families of the deceased, as well as insurers and property owners who incurred substantial damage. (8) The targets of the lawsuit were the Kingdom of Saudi Arabia, a Saudi government agency, and Saudi princes acting in their official capacities as government employees. (9) The plaintiffs' case was founded upon the theory that these defendants provided material and logistical support to Al Qaeda through charitable contributions, while possessing the knowledge that Al Qaeda planned to carry out terrorist attacks against the United States. (10)

What many people will find surprising about this case is that it could not be brought under FSIA's terrorism exception, the provision of the statute that abrogates sovereign immunity of foreign states that provide material support to terrorist organizations, because Saudi Arabia was not designated as a state sponsor of terrorism. (11) Moreover, the Court of Appeals for the Second Circuit recently dismissed that case, finding that the court lacked jurisdiction under both FSIA's terrorism exception and its non-commercial tort exception.(12) If the victims of one of the most significant terrorist attacks in U.S. history are left without a judicial remedy against a state accused of sponsoring these acts, this presents serious questions about the effectiveness of civil litigation as a tool in the war on global terrorism.

This Note will explore FSIA as a tool for combating global terrorism by focusing on two FSIA provisions: the terrorism exception (13) and the non-commercial tort exception. (14) Part I lays the foundation for the rest of this Note by describing the history of FSIA and the enactment of the terrorism exception. Part II focuses on FSIA's terrorism exception, explaining the way U.S. courts obtain jurisdiction under the terrorism exception, describing the weaknesses of the current statutory scheme, and presenting the author's proposal for reforming the jurisdictional grant. Part III focuses on FSIA's non-commercial tort exception as a civil litigation tool by describing the 9/11 litigation, arguing that the Second Circuit was wrong to eliminate the non-commercial tort exception as a tool against terrorism, and examining a congressional proposal to amend FSIA's non-commercial tort exception in response to the Second Circuit's decision. Of the two proposals to amend FSIA discussed in this Note, (15) the author believes that the proposal to amend FSIA's terrorism exception will most effectively achieve Congress' twin goals of compensating victims and deterring global terrorism.


    1. History and Adoption of FSIA

      Throughout much of its history, the United States afforded foreign sovereigns absolute immunity from suit in U.S. courts as a matter of common law. (16) In the mid-twentieth century, with the rise of Communism and the expansive growth of international trade and commercial activity, this policy of absolute immunity gave way to a more restrictive theory of sovereign immunity. (17) Under the restrictive theory of foreign sovereign immunity, the United States permitted suits arising out of a foreign state's commercial activities in U.S. courts. (18)

      The official shift from absolute immunity to the restrictive theory was documented in the Tate Letter on May 19, 1952, sent by Acting State Department Legal Adviser Jack B. Tate to the Acting Attorney General. (19) In the letter, Mr. Tate outlined the reasons for the move to the restrictive theory:

      [T]he Department feels that the widespread and increasing practice on the part of governments of engaging in commercial activities makes necessary a practice which will enable persons doing business with them to have their rights determined in the courts. For these reasons it will hereafter be the Department's policy to follow the restrictive theory of sovereign immunity in the consideration of requests of foreign governments for a grant of sovereign immunity. (20) Following the shift to the restrictive theory, the executive branch of the federal government continued to make formal suggestions of immunity in specific cases before the courts. (21) As a result, decisions about when to extend immunity to a particular foreign sovereign often involved foreign policy considerations and diplomatic calculus, and were subject to negotiation. (22) While the judicial branch made all final determinations, the executive branch retained a strong influence over the process. (23)

      In 1976, Congress enacted FSIA, codifying the restrictive theory of sovereign immunity and transferring the determination about foreign sovereign immunity from the executive branch to the judicial branch. (24) Under FSIA, foreign states are afforded general immunity from suit in the United States; this general immunity is subject to certain exceptions specifically enumerated in the statute. (25) The exceptions to this presumption of immunity include any case involving: [1] an explicit or implied waiver of immunity by a foreign state, [2] commercial activity of the foreign state in or directly affecting the United States, [3] non-commercial torts committed by a foreign state (including by its officials and employees), or [4] disputes involving certain real estate and real property. (26)

      FSIA provides U.S. district courts with personal and subject matter jurisdiction over foreign states and the agents, instrumentalities, and political subdivisions of foreign states in suits arising under one of the enumerated exceptions. (27) Foreign states may raise sovereign immunity as an affirmative defense, but have the burden of pleading that the case does not fall into one of the enumerated exceptions. Since its original enactment in 1976, Congress has amended FSIA several times and added enumerated exceptions, the most important of which for terrorist victims is the so called terrorism exception which was enacted in 1996 as part of the Antiterrorism and Effective Death Penalty Act. (28)

    2. Enacting the Terrorism Exception

      Throughout the 1980s and early 1990s, U.S. citizens were the victims of a number of highly publicized attacks at the hands of international terrorists. These attacks included the Iranian hostage crisis, the bombing of Pan Am flight 103, (29) and the terrorist kidnapping of Joseph Cicippio, a U.S. citizen working at the American University in Beruit. (30) Some of the victims of these attacks, including Mr. Cicippio, attempted to use FSIA to recover against the foreign states that sponsored these terrorist incidents. (31) However, Mr. Cicippio and many others soon learned that U.S. courts consistently refused to extend FSIA beyond commercial activities and therefore that foreign states were able to hide behind the shield of sovereign immunity for these violations of international law. (32)


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