Suing the Saudis, Suing the Israelis

The Forthcoming JASTA Trials

Salem Witch Trials

Saudi Arabia in the Dock: The JASTA Trials

On September 28, 2016, the 114th Congress voted to strip Saudi Arabia of its sovereign immunity and permit lawsuits against that nation to proceed in U.S. courts.

This is what we can expect from any trial of Saudi Arabia under Senate Bill 2040, known by its acronym JASTA, the Justice Against Sponsors of Terrorism Act, — Stat. — (2016), P.L. 114–222(?), 9/28/2106.(official citation unavailable)

History teaches that sovereigns do poorly when judged in the courts of another. Vercingetorix, King of the Gauls, was executed by the Romans after a trial in Rome. A trial was afforded Atahualpa, king of the Incas, before he was put to death by Pizarro. Mary, Queen of Scots, fared poorly in the courts Elizabeth and ended on the executioner’s block as well. More recently, General Noriega lost his country and his freedom after an illegal invasion of his country. What lies in store for the Kingdom of Saudi Arabia in an American courtroom?

JASTA, the Justice Against Sponsors of Terrorism Act, was the first law passed by the 114th Congress over a presidential veto. The name of the law reveals its purpose: justice will be wielded as a weapon, “against” perceived enemies. The law grows out of the convergence of two currents of thought: first, that Saudi Arabia is responsible for 9/11; and second, the need of plaintiff attorneys to find a deep pocket to pay a judgment. The 9/11 Commission found “no credible evidence” of Saudi support for the terrorists, but no matter: twelve more or less random citizens will be pulled off the street and asked what they think. If these citizens are in agreement with, or have even heard of, the conclusions of the Commission, they will be excluded from the jury.

The ideal juror will know nothing of these things; a fine candidate would be someone who has a only a vague memory of 9/11, who limits their television to Toddlers and Tiaras and Keeping up with the Kardashians, who limits their reading to train schedules and who rarely watches network news. There are such people in a big city like New York and the judge and attorneys will do their very best to find them. Having an opinion on these matters is an immediate disqualifier unless a potential juror agrees that he can wipe his mind clean and only consider whatever information that is thrown at him within the confines of the courtroom.

In 2003 I attended a Continuing Legal Education seminar in Miami presented by one of the plaintiff’s attorneys. At that time the U.S. courts had not decided the issue of jurisdiction; the problem of service of process on a foreign state for non-commercial activities was a non-trivial question. The personal liability of Saudi officials was in doubt and deposing officials who enjoyed diplomatic immunity was a thorny problem. How oaths could be administered outside the territorial jurisdiction of the court would be a contentious issue. Using letters rogatory to obtain judicial assistance and the impact of international treaties were all subjects for such a seminar.

International litigation is never simple. Judge Norman Roettger, once chief judge in the Southern District of Florida was a distinguished German-speaking judge who had once been prevented from traveling to Luxembourg to preside over a deposition with the agreement of the parties to a civil suit by the Eleventh Circuit Court of Appeals. How would that court react to the development of evidence in Saudi Arabia and the deposition of officials under the Islamic shari’a? I was hoping that the seminar would explore these and other issues relevant to the upcoming trials.

None of these subjects were raised at the seminar. Not one.

Instead, films were played of the airplanes striking the building; the horror of the collapse of both Towers, film of doomed firefighters inside the first Tower hit, oblivious to their fates. Then there were the interviews of the bereaved and stories of how the loss of their loved ones had devastated their families. How they lived their lives every day in sadness; how they had not recovered, how they would never recover. In George Orwell’s book 1984, citizens gather to join in a communal hate of the international criminal Goldstein who is responsible for all of the state’s woes. Goldstein’s face on the screen turns into a sheep while the citizens scream and shake their fists, venting their hate.

If that seminar is any indication, the jurors in the JASTA case will be invited to let their emotions run wild. They will be incited to hatred. Remember that the film I saw was shown to (supposedly somber and non-emotional) attorneys and approved for legal education by the Florida Bar. Imagine then, what will be shown to these twelve random distracted strangers?

Part II

Discovery of Saudi Documents — Sanctions for Violating Court Orders — 
Who will sit at counsel table? — 404(b) Evidence — Joinder of 3000 Claims
Individualization of Claims during Trial — The Length of the Trials

Discovery” in a federal trial is a word that lawyers use to describe the process under which parties to a lawsuit exchange information with each other. This exchange, called “production,” is compelled by the court and the Rules of Procedure.

In the cases that have been filed so far, there has been no discovery. The reason for this is because Saudi Arabia and the codefendants had successfully moved to dismiss the cases on the grounds of sovereign immunity. JASTA changes all that.

The plaintiffs will now be able to serve interrogatories on Saudi Arabia, require them to produce documents and to admit or deny the truth of facts. Part of the discovery process is making responsible officers available to undergo pre-trial interrogation by the plaintiffs at a proceeding called a “deposition.” The purpose of the “deposition” is to preserve testimony and to uncover evidence which may be admissible at trial.

The extraordinary nature of JASTA and the spectacular nature of the tort, that is, the wrongful act, means that the discovery process will be long and involved.

It is unlikely that the plaintiffs have an intimate knowledge of the inner workings of the Saudi state. At this stage, it is unlikely that they know what to ask the Saudi’s for.

When General Noriega was indicted, the prosecution team believed that the Panama Canal ran East to West (it doesn’t) and were unaware that a U.S. agency was in charge of running ships through the Canal. But they learned very, very quickly.

The 9/11 plaintiffs will learn quickly as well. The plaintiffs probably don’t even know the name of the Kingdom’s intelligence services, the Mubahith. Initial discovery requests are broad. It would make sense to request, at a minimum, the Mubahith’s files on 9/11, on Osama bin Laden, on former Saudi Ambassador Prince Bandar and his wife’s dealings with Riggs Bank. Of course the Saudis will claim immunity and executive privilege. The former claim was eliminated by JASTA, it is unlikely that the latter would prevail.

It is likely that the Saudis will ignore the court’s discovery orders and so the court will order crippling sanctions. In United States v. Nova Scotia Bank, 740 F.2d 817 (11th Cir. 1984), a $1.8 million dollar fine (imposed at the rate of $25,000 per day) was upheld for discovey non-compliance. The daily fine imposed against Saudi Arabia is likely to be much, much higher.

Who will sit at counsel table alongside Saudi Arabia’s lawyers? While this is a small point, it was considered significant enough so that in criminal cases, the designation of a special agent is permitted to sit at counsel table in order to humanize the prosecution; that is, so that “the government” is less of an abstraction. The Saudi defendants will have to carefully choose the personnel they choose to staff the courtroom.

Trial management of the 3000 or so claims will be a contentious issue. Each plaintiff is entitled to individualized consideration of his case by the trier of fact. U.S. criminal jurisprudence asserts that juries are capable of providing such individualized consideration even when many cases are joined.

Each of the claims contains common facts and so all of them could be consolidated under the federal rules. However, each claim, like each defendant is unique. The trial of 3000 claims would be extraordinarily lengthy. If each claimant is given only one day — and such a restriction would hardly be appropriate in all of the claims — the damages portion of the trial would take fifteen years, assuming trial weeks of four days each, as is the custom in many districts for lengthy trials.

One solution might be bifurcation of the liability and damages portion of the trials using multiple juries. But thirty juries would be required if each only hears 100 cases. There are no courtrooms in the country large enough to accommodate thirty juries sitting at once. Finding enough qualified jurors (see Part I) will not be easy. Logistical arrangements, left to the discretion of the trial judge, will be a nightmare.

And then there is 404(b) evidence. Such evidence is admissible at trial in order to show, in essence, that if a defendant acted badly once, he will do it again; that he acted this time “in conformity therewith” his previous conduct. Saudi policy disagreements with the United States and other countries will be conflated to evidence of such bad behavior.

The pundits seem to believe that since the 9/11 Commission found that the Saudi government was not responsible for 9/11, the Saudis will find smooth sailing and calm seas at trial. The pundits are wrong. The Saudis are sailing into a hurricane though they have not realized it yet.

The findings of the Commission will be irrelevant. At a trial of the Saudis, in a very real sense, the facts won’t matter.

In O’Keefe v. Loewen Group, Inc., №91–67–423 (Miss. Circ. Ct. 1st Jud. Dist., Hinds County 1995), a Canadian funeral home chain was sued for bad faith in the acquisition of a single funeral home in Mississippi. The jury verdict against the defendant was $500 million dollars.

How was this possible?

“O’Keefe hired a well-known trial lawyer named Willie Gary…Gary spent little time addressing the intricacies of tort or contract law during the proceedings. Instead he and his associates targeted three main issues: (1) Ray Loewen’s nationality; (2) his purported racism and deceitfulness; and (3) his wealth…Gary also used large numbers liberally and without reference to factual materials, admonishing the jury by the end of the trial to teach Ray Loewen and his company a lesson by bringing back a punitive damage award of $1 billion…The Gary team also compared the dispute to the Japanese attack on Pearl Harbor and to alleged unfair trade practices by Canadian farmers.”, Matiation, Arbitration with Two Twists, 24U.Pa.J.Int’lEcon.L.451(2003).

A preview of the plaintiffs’ strategy in homage to Willie Gary’s success was seen at the Continuing Legal Education seminar in Miami. Loewen eventually lost his company to bankruptcy and the case became a significant issue in the relationship between the United States and Canada under NAFTA. Because Loewen’s company was acquired by an American company in bankruptcy, Canada’s NAFTA claim of unfair prejudice and denial of due process was denied.

What is the likely amount of punitive damages to be awarded by an American jury against Saudi Arabia for 9/11? An amount no less than $1 TRILLION dollars is unavoidable. Adding the individual claims, the total judgment is likely to be much, much more.

PART III

Third-Party Practice

Many believe that JASTA is a “Saudi-only” law and are subsequently surprised to learn that Saudi Arabia is not mentioned in the law. Sovereign immunity is denied any country that has aided and abetted terroristic behavior.

Third-party practice refers to claims not made directly by plaintiffs in a lawsuit, but claims made amongst the defendants or against third-parties who were not sued by the plaintiffs. The technical term for such cases is impleader. Thus, a defendant may implead another party if that party is wholly or in part responsible for the original conduct complained of by the plaintiff.

In a JASTA lawsuit against Saudi Arabia, the plaintiffs will claim that Saudi Arabia aided and abetted or is directly responsible for the attacks. Under the Federal Rules of Civil Procedure, Saudi Arabia may implead a third party who they believe is responsible for the attacks. Saudi Arabian spokesman have in the past claimed that Israel is to blame for the attacks.
 While this claim may seem to most to be fantastic, there are evidentiary anomalies which the Saudis could use to try to prove Israeli involvement. Some believe the arrest and release of TBA Israeli men who were seen celebrating 9/11 in New Jersey, arrested by the State police is proof that the Israelis know more than they have disclosed. Then there is the strange, never explained behavior of the Israeli “art students” who were caught trying to penetrate U.S. federal buildings. And then there is 404(b) evidence — the conviction of Jonathan Pollard — showing that Israeli spies have indeed been active in the United States.

To be clear — I am not saying Israel is a 9/11 sponsor. But just as Saudi Arabia was denied sovereign immunity under JASTA, Israel lost that immunity as well. If Saudi Arabia impleads Israel, Israel will be forced to defend these allegations. 
 
9/11 Truthers

There are many who believe that 9/11 was an “inside job,” and that the U.S. Government was involved. The Saudis (or even the Israelis, if they are brought into the case) could implead the United States claiming — as the truthers do-that U.S. government elements are responsible for what they believe was a “false flag” operation. Of the many juries who hear these cases, it is likely that, especially after hearing the evidence, that some jurors will find these allegations to be credible. After all, the standard of proof is very low.

Interestingly in the JASTA context, the United States would be able to claim sovereign immunity since JASTA did not address the issue of U.S. immunity. The possibility that the United States would be considered a state sponsor of terrorism seems not to have occurred to JASTA’s drafters or sponsors.

Non-9/11 Lawsuits

As noted above, to qualify for denial of sovereign immunity and to be exposed to a lawsuit under JASTA, a plaintiff need only allege that a foreign country has aided or abetted the commission of an act of terrorism. Israel can expect to be named in lawsuits arising out of incidents in Gaza and the West Bank. Having won the fight against “universal jurisdiction,” Israel will now have to defend itself before American courts.

Israel will not be alone in this endeavor — to convert a controversial political act into an alleged act of terrorism requires only a plaintiff, an allegation and the payment of a filing fee. Russia’s seizure of the Crimea? Ethnica cleansing in Rwanda? The former Yugoslav republics? The 2014 murder of 43 college students in Mexico? The killing fields of the Khmer Rouge? If the prescriptive period (statute of limitations) starts to run upon the removal of immunity, then even historical events will be cognizable under JASTA — such as the Ottoman Empire’s treatment of the Armenians; even the Holocaust. 
 
No Double Recovery — Collateral Estoppel

A plaintiff may file multiple lawsuits arising out of the same cause of action — though these will probably be consolidated — but a plaintiff is only entitled to one recovery. As it turns out, many 9/11 plaintiffs have already sued Iran and won jugments against non-sovereign Iranian defendants. See, Havlish v. Islamic Republic of Iran et al., Case №03-MDL 1570 (GBD), (S.D.N.Y 2011) Under JASTA, the Havlish plaintiffs can return to court and obtain judgments under JASTA. But more interestingly from the Saudi point of view is that the plaintiffs have already alleged and proved that Iran is responsible for the 9/11 attacks, not Saudi Arabia, and more importantly, the district court so found.

Under a legal doctrine known as “collateral estoppel,” the Havlish plaintiffs will be prevented from going into court and arguing that the Saudis are responsible when they have already gone into court and won a judgment claiming that Iran is responsible. Still, if the plaintiffs can show evidence that, contrary to their previous position, Saudi Arabia was responsible, they will likely be permitted to prosecute their case against Saudi Arabia. 
 This puts the Havlish district judge in a difficult position, because the Saudi sovereign defendant could implead Iran and rely on the district court’s findings of fact holding Iran responsible.

The decisions of a single district court judge have no precedential value in another district court, even if that judge is deciding a similar case or controversy. But a judge’s reasoning and findings are nevertheless persuasive and may be cited for that purpose.

It is a basic rule of tort law that a plaintiff is only entitled to a single recovery for his injuries. Having won judgments against non-sovereign Iranian defendants, the Havlish plaintiffs will undoubtedly move for the entry of judgment against Iran itself since Iran no longer enjoys sovereign immunity under JASTA. If the plaintiffs execute on their judgments and are compensated, then they lose their right to sue Saudi Arabia. Instead, Iran could proceed to sue Saudi Arabia seeking indemnification on the theory that Saudi Arabia, and not Iran, was responsible for 9/11. Such an Iranian indemnification action could proceed in federal court under JASTA, since there is no requirement under JASTA that a plaintiff be an individual victim of terrorism.

Collection

Strangely, only one type of civil money judgments in the United States is self-enforcing, and that is judgments for child support. In all other cases, the plaintiff must go out to find and seize assets owned by the defendant. A judgment plaintiff will seek to seize bank accounts, aircraft, real propery and anything else of value owned by a defendant. It is not clear whether diplomatic missions owned by foreign sovereign JASTA defendants will be exempt from forced seizure given the loss of sovereign immunity. Certainly anything of value owned by foreign governments, such as U.S. Treasury bonds, securities or funds deposited with the federal reserve are subject to seizure.

Usually, a plaintiff may try to enforce an American judgment in a foreign country but not in these cases. A JASTA plaintiff may not maintain a collection action in any other country because in every other country the JASTA defendant will enjoy sovereign immunity. Collection efforts will thus be limited to the United States.

This is a very strong incentive to JASTA defendants to divest themselves immediately and in an orderly fashion (so as to not disrupt the markets) of any property owned in the United States. While prejudgment seizure is disfavored — to say the least — efforts by a JASTA defendant to dispose of property may, under the special circumstances which obtain here — lead a plaintiff to request and a district court to order a freeze of such assets. This would not be permitted in the normal course of tort cases, but might be permitted here. Even a temporary stay would roil markets. Saudi Arabia could well halt its plans for an initial public offering of Saudi Aramco if all the funds to be obtained from an IPO are paid instead to plaintiffs’ counsel.

Suspension of Actions

There is a little known provision of JASTA which requires district courts to suspend proceedings for 180 days whenever the Attorney General certifies that the defendant state is making provisions to compensate plaintiffs. The suspension may be renewed indefinitely.

For a variety of reasons, it is unlikely that this provision will be invoked. Politically, the administration in power will be attacked as “caving into “ the demands of the foreign state defendants and putting their interests over those of American families. This will be an extremely unpopular thing to do. A condition precedent for the suspension order will be the creation of commissions or judicial bodies to adjudicate victims of terrorism claims. This will be politically unpopular in the foreign state. In any event, the plaintiffs will argue that the foreign compensation awards are not “jury-type” awards and so are inadequate.

The Havlish plaintiffs’ judgment, rendered in 2011, is now worth, in their estimation, roughly $300 billion dollars. The suspension would apply, in my view, to any post-judgment collection efforts made against sovereign defendants. But in the absence of any efforts by foreign governments to pay, the Attorney General will be confronted with an important reality of litigation: before the U.S. district courts, the Attorney General is just another litigant and district judges abhor anyone who would try to tell them how to manage their cases or run their courts.

In effect, the Attorney General will have to represent the foreign state defendants and convince district judges that the foreign states are fully and completely funding plaintiffs’ claims. This is not likely, and in the case of the forthcoming Palestinian lawsuits against Israel, inconceivable in the absence of an overall peace settlement.

That Israel would compensate Hamas for its bombing of Gaza is inconceivable. In the long run, the suspension provisions of JASTA are therefore unlikely to be effective.