Wildman v Deutsche Bank

Justice Against Sponsors of Terrorism Act
Wildman v. Deutsche Bank
Date: Aug. 17, 2023

Issue: Whether Deutsche Bank, Danske Bank, and Standard Chartered Bank violated the Justice Against Sponsors of Terrorism Act (JASTA).

Case Summary: ABA and trade groups (Amici) filed an amicus brief urging the Second Circuit to affirm the district court’s dismissal of claims against Danske Bank, Deutsche Bank and Standard Chartered Bank (the banks) under JASTA.

A group of U.S. citizens and family members injured by terrorism (plaintiffs) sued various groups for committing the attacks. Congress enacted the Anti-Terrorism Act (ATA) to enable U.S. citizens who are victims of terrorism to obtain compensation for their injuries. In 2016, Congress amended the law by enacting JASTA. JASTA imposes liability on those who aid-and-abet or conspire with terrorists. Plaintiffs alleged the banks provided services to customers who allegedly supported a terrorist group by facilitating financial services. Plaintiffs contended the banks were liable under the ATA for aiding-and-abetting the attacks.

The district court dismissed the lawsuit against the banks. According to the court, plaintiffs’ pleadings failed on two key elements needed to assert a claim under JASTA. Plaintiffs failed to prove the banks had a general awareness of their roles in illegal activity or that the financial institutions substantially assisted that illegal activity. After the district court issued its decision, the U.S. Supreme Court ruled in Twitter v. Taamneh, another JASTA case. In Twitter, the Court determined under JASTA, aiding-and-abetting claims require plausible allegations that the defendant “consciously, voluntarily, and culpably” participated in the terrorist attack which injured the plaintiff. Plaintiffs appealed the district court’s dismissal.

Amici filed its amicus brief supporting the banks. Amici emphasized it strongly condemns all acts of terrorism and individuals who commit heinous acts and those who participate should be brought to justice. However, Amici asserted plaintiffs did not sue those parties, rather they are seeking to impose aiding-and-abetting liability on financial institutions based on an impermissibly expansive interpretation of the ATA.

First, Amici argued Twitter adopted a more demanding pleading standard for JASTA’s “knowingly providing substantial assistant” element than the test previous applied by the Second Circuit. Amici also reiterated a plaintiff did not prove that the banks consciously, voluntarily, and culpably participated in the terrorist attack which injured Plaintiffs.

Second, Amici argued Plaintiffs bear a particularly heavy burden when asserting JASTA aiding-and-abetting claims against legitimate businesses. According to Amici, Twitter requires allegations supporting a plausible inference of highly culpable conduct for claims against legitimate businesses. Amici also contended “Know Your Customer” (KYC) standards provide no basis for subjecting banks to more expansive aiding-and-abetting claims. Amici emphasized Twitter prevents Plaintiff’s attempt to satisfy the “truly culpable conduct” required for aiding-and-abetting liability by pointing to KYC requirements.

Finally, Amici argued reversal would inflict serious harm on legitimate businesses and U.S. foreign policy interests. Amici emphasized banks operating in and outside the United States would be subject to suit involving funds transfers and U.S. dollar clearing transactions. Amici also asserted adopting such an expansive view of aiding-and-abetting liability would subject businesses to unwarranted, costly, and invasive discovery. Finally, Amici asserted businesses may be forced to “de-risk” to avoid large litigation expenses and exposure to damages. De-risking occurs when businesses stop providing services to certain regions or clients due to the threat of litigation.

Bottom Line: Plaintiffs’ reply brief is due Sept. 29, 2023.

Download the amicus brief to read the full text.