On Monday, the Supreme Court issued its decision in Opati v. Republic of Sudan opening the door to victims of the 1998 U.S. embassy bombings in Nairobi and Dar es Salaam to pursue retroactive punitive damages against Sudan. Not only does the unanimous opinion of the Court reinstate as much as $4.3 billion in damages, but it may have wide-ranging consequences for the protections foreign states receive in U.S. courts and the ability of victims to bring claims against sovereign and private parties more broadly.
In addition to Sudan, the decision most directly implicates ongoing litigation against Saudi Arabia for the attacks on Sept. 11, the crafting of congressional legislation to allow civil actions against China related to coronavirus, and the ability of companies to escape liability for supporting actors who engaged in terrorism.
The 1998 Embassy Bombings
For a case in which certiorari was granted only on a technical question, the opinion for the Court (with Justice Kavanaugh recused) opens with a particularly emotional appeal. Justice Gorsuch writes: “In 1998, al Qaeda operatives simultaneously detonated truck bombs outside the United States Embassies in Kenya and Tanzania. Hundreds died, thousands were injured.” However, al-Qaeda does not seem to have acted alone. Plaintiffs alleged that the Sudanese government back then assisted al-Qaeda in perpetrating these attacks.
At the time of the bombings, Sudan was already considered a state sponsor of terrorism. Its involvement in the 1998 attack was observed in the findings of the District Court for D.C. which issued a default judgment (at that stage, Sudan had not appeared to contest the litigation):
Sudan harbored and provided sanctuary to terrorists and their operational and logistical supply network. Bin Laden and al Qaeda received the support and protection of the Sudanese intelligence and military from foreign intelligence services and rival militants. Sudan provided Bin Laden and al Qaeda hundreds of Sudanese passports. The Sudanese intelligence service allowed al Qaeda to travel over the Sudan-Kenya border without restriction, permitting the passage of weapons and money to supply the Nairobi terrorist cell.
The State Sponsor of Terrorism Exception to Foreign Sovereign Immunity
This case found itself in U.S. courts because of a series of amendments to the Foreign Sovereign Immunities Act (FSIA), which provide an exception for state sponsors of terrorism. Congress first established the exception in 1996, two years before the embassy bombings in Kenya and Tanzania. However, the 1996 amendment was interpreted as having withdrawn only immunity from state sponsors of terrorism without creating a new federal cause of action. The only avenue available to all plaintiffs, then, was state causes of action.
Congress responded in the National Defense Authorization Act (NDAA) for Fiscal Year 2008 by removing state sponsors of terrorism from the FSIA’s general list of exempt entities and inserting a separate section for this category of defendants. The new section 1605A created a federal cause of action for U.S. citizens, members of the U.S. armed forces, U.S. government employees and contractors, and the legal representatives of these groups. 1605A also provided that such plaintiffs could seek punitive damages.
Retroactive Punitive Damages
The FSIA generally bars punitive damages in suits proceeding under the act’s exceptions for foreign sovereign immunity. Even the 1996 addition of state sponsors of terrorism to the list of exceptions barred punitive damages against such entities. So the addition in 2008 of punitive damages to 1605A marked a decisive change.
While accepting that the 1996 amendment meant it was not entitled to immunity, Sudan argued that the FSIA’s ban on punitive damages applied up until the 2008 NDAA was passed. This reading would make punitive damages available only for terrorist attacks that took place after section 1605A’s creation.
One of the key cases in the parties’ briefs and oral arguments was Landgraf v. USI Film Products, which rejected retroactive application of compensatory and punitive damages under the Civil Rights Act of 1991. Landgraf and subsequent cases outline a general presumption that Congress legislates prospectively when creating new legal consequences, giving actors the opportunity to tailor their conduct accordingly. To overcome that presumption, there must be an “expression of [Congress’s] clear intent that the statute be applied retroactively.” A unanimous three-judge panel of the DC Court of Appeals found that the legislation failed to satisfy the test.
The Supreme Court’s opinion declared without any ambiguity that the 2008 NDAA satisfied Landgraf. Specifically, “Congress was as clear as it could have been when it authorized plaintiffs to seek and win punitive damages for past conduct … Congress proceeded in two equally evident steps: (1) It expressly authorized punitive damages under a new cause of action; and (2) it explicitly made that new cause of action available to remedy certain past acts of terrorism.”
This does not mean that punitive damages will be automatic under 1605A. In future cases, it will still be up to district courts to determine whether they are appropriate, as with any other cause of action where punitive damages are available. In this case, the Supreme Court declined to decide whether punitive damages were available to foreign-national family members to whom the federal cause of action under 1605A is not available. But it hinted strongly that they should:
The court of appeals refused to allow punitive damages awards for foreign-national family members proceeding under state law for “the same reason” it refused punitive damages for the plaintiffs proceeding under [the] federal cause of action. The court stressed that it would be “puzzling” if punitive damages were permissible for state claims but not federal ones. Having now decided that punitive damages are permissible for federal claims, and that the reasons the court of appeals offered for its contrary decision were mistaken, it follows that the court of appeals must also reconsider its decision concerning the availability of punitive damages for claims proceeding under state law.
Monday’s decision does not prevent constitutional challenges against the retroactivity of punitive damages under the FSIA, though. In particular, Justice Gorsuch acknowledged that “punitive damages aren’t merely a form of compensation but a form of punishment, and we don’t doubt that applying new punishments to completed conduct can raise serious constitutional questions.” The issue here is that Sudan did not explicitly challenge the constitutionality of the 2008 NDAA, but perhaps Sudan itself or another litigant will in the future.
Constitutional Protections for Foreign States
The success or failure of such constitutional challenges will turn on a question that has yet to be decided by the Supreme Court: whether foreign states are constitutionally protected “persons.” Beyond the facts of this case, one of the most significant outcomes of Monday’s decision may be its suggestion that foreign sovereigns are not protected in this way.
In addition to Landgraf, the other important precedent at play was Republic of Austria v. Altmann. In Altmann, the Court had already approved an element of retroactivity in the FSIA context — namely, that the FSIA’s waiver of sovereign immunity for cases involving “rights to property taken in violation of international law” applied retroactively. Discussing Altmann, the opinion describes foreign sovereign immunity as a “gesture of grace and comity” that “may be withdrawn retroactively without the same risk to due process and equal protection principles that other forms of backward-looking legislation can pose.”
Does this necessarily mean that foreign sovereigns aren’t entitled to constitutional protections in other respects? There are three reasons to believe the Court was gesturing to this outcome.
First, a number of lower court cases have held that foreign states are not protected by due process limitations on the exercise of personal jurisdiction over them. Instead of minimum contacts, the FSIA currently provides their only protection from being haled into federal courts. So, when FSIA protections are lifted “without the same risk to due process or equal protection principles,” it raises the question whether due process and equal protection were available in at all.
Second, the retroactivity at issue in Opati relates to punitive damages. Perhaps the issue of immunity in general does not relate to constitutional protections, but the retroactive application of punitive damages certainly does, as Landgraf indicates. Indeed, Gorsuch’s other remark about constitutional implications of punitive damages reflected this understanding as well (“punitive damages aren’t merely a form of compensation but a form of punishment, and we don’t doubt that applying new punishments to completed conduct can raise serious constitutional questions.”). What’s more, the Court’s refusal to consider any constitutional implications of retroactive punitive damages because Sudan did not challenge the 2008 NDAA as unconstitutional rings hollow.
The D.C. Circuit’s decision below cited constitutional concerns regarding this retroactive application. Sudan relied on this finding in its brief opposing certiorari and cited the constitutional concerns from Landgraf in its brief on the merits. Counsel for the victims also explicitly asserted at oral argument that foreign sovereigns are not protected by the Due Process Clause. With all this — and given the existing state of the law, which indicates at least in other contexts that foreign states are not afforded constitutional protections — it would seem the Court could have spoken up to indicate otherwise if it wanted to. The Court’s decision to avoid going down that path is not simply because Sudan did not raise a direct constitutional challenge to the statute.
Finally, when read in light of justices’ questions at oral argument, Monday’s decision seems more clearly opposed to constitutional protections for foreign sovereigns. Three out of the eight justices cast doubt on the notion. Justice Alito asked, “In a case involving … a private defendant, rather than a sovereign nation, are there constitutional limits on Congress’s ability to make punitive damages retroactive?” Chief Justice Roberts challenged, “If Landgraf … is a sort of substantive interpretive canon that is based on constitutional concern, why would it apply at all in a case involving a foreign sovereign?” Justice Kagan expressed disbelief at the notion that a defendant foreign state could challenge retroactive legislation that didn’t include punitive damages — even though private parties can do precisely that on constitutional grounds. Justice Breyer was perhaps more open to the idea, quipping, “I guess if corporations are persons, maybe foreign countries are too.”
All of this is ultimately an exercise in reading tea leaves, since in fact the Court did not decide whether foreign sovereigns are constitutionally protected persons. But taken all together, those tea leaves seem to suggest the Court is not inclined to consider foreign sovereigns as “persons” after all.
Foreign States’ Accountability for Terrorist Attacks on and After 9/11
Due process protections — or the lack thereof — should not be foreign sovereigns’ only cause for concern in the decision, however, because the 2008 NDAA was not the end of the story with FSIA amendments. Take the 2016 Justice Against Sponsors of Terrorism Act (JASTA), which grew out of a federal fact-finding commission that looked into the planning, funding, and carrying-out of the 9/11 attacks. JASTA amended the FSIA and Anti-Terrorism Act to create a civil remedy for U.S. victims of terrorist attacks on or after 9/11 against both foreign states and private parties, including for aiding and abetting and civil conspiracy.
JASTA was passed in response to a case, which had been dismissed at the district court level, brought against the Kingdom of Saudi Arabia. The plaintiffs alleged that Saudi Arabia “directly and knowingly assisted the hijackers and plotters who carried out the [9/11] attacks” and indirectly funded and provided operational support to the attackers through charity organizations.
When the case returned to district court, after having been vacated and remanded by the circuit court in light of JASTA, Saudi Arabia raised concerns of retroactivity in its request that the case be dismissed. The district court found that, with the passage of JASTA, Congress “provide[d] courts with new legal principles to apply, retroactively and prospectively, in determining claims for sovereign immunity.”
Had yesterday’s decision in Opati come out the other way on retroactivity, finding that Congress had not been sufficiently clear in the 2008 NDAA, Saudi Arabia might have successfully argued that JASTA, too, was insufficiently clear to apply retroactively. Now, this line of argument is virtually unavailable, especially because of the opinion’s characterization of foreign sovereign immunity as something that can be relatively lightly revoked.
Multinational Companies and Support for Terrorism
Although the “grace and comity” argument is limited to foreign sovereigns, the implications of the Opati decision may go even further. Recall that JASTA applies to both foreign states and private parties.
Numerous complaints have already been filed against companies for supporting acts of terrorism that took place before JASTA was passed. For example, the plaintiffs in Atchley v. AstraZeneca UK Ltd. allege that Western medical-supply companies made corrupt payments to the Iraqi ministry in charge of importing medical goods, which then used those payments to support attacks on Americans in Iraq between 2005 and 2011.
Constitutional objections to JASTA may still be available to the Atchley defendants and other private parties in a way they are not available to foreign states. However, the Opati decision reversing the D.C. Circuit’s finding that Landgraf’s standard was not met in that case may be read as “water[ing] down” protections against retroactive applications of law and opening the door to a finding that JASTA also satisfies Landgraf with respect to private parties. Such a result would surely be troublesome for companies operating overseas, but welcome news to human rights advocates, who have seen liability in U.S. courts for abuses abroad substantially limited in recent years.