RUDOLPH CONTRERAS, United States District Judge.
Plaintiffs in this case are the family members of Electronic Warfare Technician First Class Kevin Shawn Rux, who was killed along with sixteen other American sailors in the 2000 terrorist bombing of the U.S.S. Cole in Yemen, carried out by Al-Qaeda. In 2010, Plaintiffs filed a lawsuit under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602 et seq., against Syria, Iran, Sudan, and several of those foreign states' agents and political subdivisions, alleging that those defendants provided material support to Al-Qaeda which caused the U.S.S. Cole bombing. Although they were served with process in January 2011, the Iranian and Sudanese defendants never appeared. The Clerk of Court entered default against those parties on October 31, 2012, and this Court held an evidentiary hearing on August 12, 2014, to determine whether Plaintiffs had "establishe[d] [their] claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). The Court concluded that the Plaintiffs had and, on March 31, 2015, issued a lengthy opinion setting forth the Court's Findings of Fact and Conclusions of Law. See generally Flanagan v. Islamic Republic of Iran, 87 F.Supp.3d 93 (D.D.C.2015). The Court awarded Plaintiffs $18,750,000.00 in compensatory damages and $56,250,000.00 in punitive damages.
Two months later — and over four years after Sudan had been served with process — Sudan finally entered an appearance and filed a motion to set aside the default judgment. See Sudan's Mot. to Set Aside Default J., ECF No. 55 [hereinafter "Sudan's Mot."]. Sudan now raises several belated defenses which, it claims, establishes "good cause" under Federal Rule of Civil Procedure 55(c) to set aside the default judgment. Several of these arguments were recently considered by another judge in this district in seven related cases in which Sudan sought to set aside default judgments arising out of the 1998 bombings of the United States embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. See Owens v. Republic of Sudan, 174 F.Supp.3d 242, No. 01-2244, 2016 WL 1170919 (D.D.C. Mar. 23, 2016), appeal docketed, No. 16-7048 (D.C.Cir. Apr. 22, 2016). In many respects the Court finds the opinion in Owens instructive, and will rely on that decision's analysis where persuasive and relevant. As explained below, the Court will grant in part and deny in part Sudan's motion, and will vacate the portion of the default judgment awarding punitive damages, without definitively determining, at this stage, whether punitive damages are available to Plaintiffs in this case.
The Court made substantial Findings of Fact and Conclusions of Law when entering a default judgment against Iran and Sudan. See generally Flanagan, 87 F.Supp.3d at 93-127. The Court assumes familiarity with its prior opinion and revisits only those facts and statutory provisions particularly relevant for present purposes.
The FSIA "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." OBB Personenverkehr AG v. Sachs, ___ U.S. ___, 136 S.Ct. 390, 393, 193 L.Ed.2d 269 (2015) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989)). The FSIA starts with a general presumption of immunity for foreign states. See, e.g., Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993); TMR Energy Ltd. v. State Prop. Fund of Ukr., 411 F.3d 296, 299 (D.C.Cir.2005). That presumption of immunity controls unless one of several statutorily prescribed exceptions applies. See 28 U.S.C. § 1604 ("[A] foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of [Title 28]."). Federal district courts' jurisdiction over FSIA claims are similarly tied to the question of immunity: 28 U.S.C. § 1330(a) provides that district courts "shall have original jurisdiction ... of any nonjury civil action against a foreign state" only insofar as the plaintiff asserts a claim for relief "with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of [Title 28] or under any applicable international agreement." 28 U.S.C. § 1330(a). As a result, this Court's "[s]ubject matter jurisdiction is ... intertwined with immunity," Owens, 174 F.Supp.3d at 249, 2016 WL 1170919, at *2, because "subject matter jurisdiction in any such action depends on the existence of one of the specified exceptions to foreign sovereign immunity," Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983).
One of those exceptions, first enacted by Congress in 1996, is referred to as the "terrorism exception" to foreign sovereign immunity. See Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. No. 104-132, § 221, 110 Stat. 1214, 1241-43. Although that exception was previously codified as one of the many exceptions to foreign sovereign immunity listed in 28 U.S.C. § 1605(a), see 28 U.S.C. § 1605(a)(7) (2006 ed.), in 2008 Congress amended the terrorism-related provisions as part of the National Defense Authorization Act,
Id. § 1605A(a)(1). A claim may only be heard under section 1605A, however, if, among other requirements, the foreign state was "designated as a state sponsor of terrorism at the time the act described in paragraph (1) occurred, or was so designated as a result of such act." Id. § 1605A(a)(2)(A)(i)(I).
Subsection (c) also created a federal private right of action against "[a] foreign state that is or was a state sponsor of terrorism" or "any official, employee, or agent of that foreign state" while acting in an official capacity. Id. § 1605A(c). Those foreign states or individuals may be liable to "a national of the United States," or her "legal representative" (among other classes of individuals) "for personal injury or death caused by acts described in subsection (a)(1) [the immunity provision] ..., for which the courts of the United States may maintain jurisdiction under this section for money damages." Id. A plaintiff suing under that provision may recover "economic damages, solatium, pain and suffering, and punitive damages." Id.
In September 2010, Plaintiffs filed this lawsuit, invoking section 1605A(c)'s cause of action. See generally Compl., ECF No. 3. The plaintiffs are Kevin Rux's mother ("Doe Victim A") and his four brothers ("Doe Victim B," "Doe Victim C," "Doe Victim D," and "Doe Victim E"). See First Am. Compl. ¶¶ 4-8, ECF No. 18. Plaintiffs alleged that each of the Defendants, including Sudan and its agencies and instrumentalities,
The Clerk entered defaults against the Iranian and Sudanese defendants on October 31, 2012. See Clerk's Entry of Default, ECF No. 26; Clerk's Entry of Default, ECF No. 27. At that time — and to date — Plaintiffs claim that they have been unable to effectuate service of process against the Syrian defendants, and therefore elected to proceed only against the Iranian and Sudanese defendants. See Pls.' Status Report, ECF No. 28; see also Pls.' Status Report on the Syrian Defs., ECF No. 51. The FSIA prohibits an entry of a default judgment "unless the claimant establishes his claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). Consequently, the Court held an evidentiary hearing regarding liability and damages on August 12, 2014, and accepted evidence in the form of live testimony, affidavits, and documentary evidence.
Following that evidentiary hearing, the Court issued its Findings of Fact and Conclusions of Law. Relying in large part on the expert testimony, the Court found that Hassan al Turabi, the head of the Sudanese political party the National Islamic Front, offered Osama Bin Laden and Al-Qaeda refuge in Sudan from 1991 until 1996, when Bin Laden was expelled from Sudan. See Flanagan, 87 F.Supp.3d at 99. The Court also found that even after 1996, and in "[e]ach year from 1997 through 2000, Sudan continued to serve as a meeting place, safe haven, and training hub for Al-Qaeda and other terrorist groups." Id. The Court found that Sudan's safe haven allowed the organization to "`plan more freely.'" Id. at 101 (quoting Hr'g Tr. at 112:5-113:12 (testimony of Dale L. Watson)).
Beyond providing a safe haven for Bin Laden and Al-Qaeda, generally, the Court found that Sudan had provided material support in three more concrete ways. First, Bin Laden had "established several joint business ventures with the Sudanese regime," which he maintained "even after his expulsion from Sudan." Id. These business interests flourished and allowed Al-Qaeda "to funnel money for terrorist activities through Sudanese banks and Sudanese-based legitimate businesses, therefore overcoming the difficulties in transferring funds the group would have otherwise faced." Id. (quoting Vidino Aff. ¶ 35). Second, the Court found that Sudan had provided support for training, in part because Bin Laden had financed at least three terrorist training camps in Sudan and because the Sudanese had allowed his organization to operate freely in the country. Id. at 102. Finally, the Court found that Sudan had facilitated Bin Laden's and Al-Qaeda's travel by providing its members with Sudanese travel documentation and passports, avoiding stamping non-Sudanese passports with a stamp from Sudan (which "would have raised the attention of immigration officials in other countries"), and exempted Al-Qaeda and its members from paying taxes or import duties (which permitted the organization to bring containers into Sudan without inspection). Id. (quoting Vidino Aff. ¶ 42) (internal quotation mark omitted). Ultimately, the Court concluded that "Bin Laden and Al-Qaeda would not have been able to carry out the attack on the Cole without the support of the Sudanese defendants," id. at 103, because Sudan's material support "was indispensable" for Al-Qaeda "not just to survive but also to then develop the expertise, technical knowledge and wide network of contacts that allowed it to flourish as a terrorist organization and carry out the USS Cole bombing," id. at 103 (quoting Vidino Aff. ¶ 81).
Nearly two months later — and over four years after being served with a copy of the summons and complaint in this case — Sudan belatedly appeared in this action. Sudan has now filed a motion to vacate the default judgment.
As a threshold matter, the Court must determine whether Rule 55's "good cause" standard or the more stringent requirements of Rule 60 govern the Court's consideration of Sudan's motion. Although the resolution of this issue is somewhat uncertain, particularly in the FSIA context, the Court ultimately concludes that Sudan has the better argument and that Rule 55(c) applies here. The Court then proceeds to apply that test. Although the Court rejects the bulk of Sudan's motion, the Court will grant Sudan's motion with respect to the punitive damages award.
The parties first dispute whether the Court should consider Sudan's motion under Federal Rule of Civil Procedure 60(b) or Rule 55(c). Plaintiffs argue that the standard under Rule 60(b) for setting aside a final judgment applies, while Sudan contends that Rule 55(c)'s "good cause" standard applies.
Under Rule 55(c), a defendant's default may be set aside for "good cause."
A final default judgment, by contrast, can be set aside only under the more stringent standard of Rule 60(b). See Fed. R. Civ. P. 60(b); Fed. R. Civ. P. 55(c) ("The court ... may set aside a final default judgment under Rule 60(b)."); accord Jackson, 636 F.2d at 835. Rule 60(b) states that a district court "may relieve a party... from a final judgment" in six identified circumstances, including where there has been "mistake, inadvertence, surprise, or excusable neglect," where "the judgment is void," or if the court identifies "any other reason that justifies relief." Fed. R. Civ. P. 60(b)(1)-(6). The standard is a more rigorous one because it more deeply implicates issues of finality even though, under certain prongs, a court must consider some of the same factors as under Rule 55. See Jackson, 636 F.2d at 835; Int'l Painters & Allied Trades Union & Indus. Pension Fund v. H.W. Ellis Painting Co., 288 F.Supp.2d 22, 26 (D.D.C.2003); see also Shatsky v. Syrian Arab Republic, 795 F.Supp.2d 79, 82 (D.D.C.2011) ("The Rule 55(c) standard is notably less strict than the standard for vacating a default judgment under Rule 60(b).").
The largest hurdle for a defendant seeking to set aside a default judgment under Rule 60(b) is that a defendant is, for the most part, foreclosed from challenging the underlying merits of the plaintiff's claims. For example, the Supreme Court has held that a judgment is not void under Rule 60(b)(4) "`simply because it is or may have been erroneous'"; instead, the judgment must be "so affected by a fundamental infirmity that the infirmity may be raised even after the judgment becomes final." United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270, 130 S.Ct. 1367, 176 L.Ed.2d 158 (2010) (quoting Hoult v. Hoult, 57 F.3d 1, 6 (1st Cir.1995)). The D.C. Circuit has likewise explained — in the FSIA context, no less — that a defendant who fails to appear may assert a jurisdictional objection under Rule 60(b). Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1547 (D.C.Cir.1987). But, as a consequence of his default, the defendant "ordinarily forfeits his right to defend on the merits," and if he "loses on the jurisdictional issue ... his day in court is normally over." Id.
Sudan argues that the more lenient Rule 55(c) "good cause" standard applies here because the default judgment entered against it is not final and appealable, as it did not "adjudicate all claims of all parties, namely those against Defendant Syrian Arab Republic and the Agencies and Instrumentalities of the Syrian Arab Republic." Sudan's Mot. at 4. Federal Rule of Civil Procedure 54(b) instructs that, typically, an order or decision that adjudicates the liabilities of fewer than all parties "does not end the action as to any of the
In response, Plaintiffs point to an exception that the D.C. Circuit has recognized for unserved defendants. As the Circuit has explained, "defendants that have not been subject to effective service are not `parties' within the meaning of Rule 54(b)." Cambridge Holdings Grp., Inc. v. Fed. Ins. Co., 489 F.3d 1356, 1360 (D.C.Cir.2007); see 15A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 3914.7, at 553-54 (2d ed. 1992) ("It is widely agreed that defendants who have not been served with process are not counted; a disposition as to all those who have been served is final."). In such circumstances, "a district court order disposing of all claims against all properly served defendants satisfies the requirements of Rule 54(b), even if claims against those not properly served remain unresolved." Cambridge Holdings Grp., 489 F.3d at 1360-61. Plaintiffs urge that because the judgment entered against Iran and Sudan resolved the claims against all defendants who had been served, the Court's judgment was final and appealable when entered, and Sudan must now meet the Rule 60(b) standard to set that judgment aside.
At first blush, then, it would seem that Rule 60(b) continues to apply. In its Reply, however, Sudan raises two grounds for concluding otherwise. See Sudan's Reply at 1-4, ECF No. 61.
First, Sudan claims that "unbeknownst to Plaintiffs, they have in fact effectuated service against the Syrian Defendants." Id. at 1. Specifically, they note that Plaintiffs attempted to serve Syria under 28 U.S.C. § 1608(a)(3), which provides for service "by sending a copy of the summons and complaint ..., by any form of mail requiring a signed receipt, ... to the head of the ministry of foreign affairs of the foreign state concerned." 28 U.S.C. § 1608(a)(3). Sudan notes that when Plaintiffs thereafter requested that the Clerk provide documents to the State Department for diplomatic service under section 1608(a)(4), Plaintiffs attached notifications from DHL which state that the "Recipient refused delivery" of the Syria documents. See ECF No. 19, Ex. A. Sudan cites several cases for the proposition that, when a defendant has refused delivery of the summons, service has nevertheless been effectuated and personal jurisdiction has been acquired. See, e.g., Nikwei v. Ross Sch. of Aviation, Inc., 822 F.2d 939, 945 (10th Cir.1987) (citing cases and explaining that "courts view service by registered or certified mail as being complete when such is refused though the act of the defendant").
The Court rejects this contention. For one thing, the statute is silent on whether a refused mailing is sufficient to effectuate service under the FSIA. Whatever the applicability of the principle that refused service is effective service in a typical case, the Court is reticent to read one into the FSIA context. The Supreme Court has cautioned that, because "foreign sovereign immunity is a matter of grace and comity rather than a constitutional requirement," it has "`consistently ... deferred to the decisions of the political branches ... on whether to take jurisdiction' over particular actions against foreign
Furthermore, Sudan has pointed to no case applying this principle in the FSIA context. In fact, the weight of authority cuts decisively against Sudan. There exist at least half a dozen cases in which courts note that service under section 1608(a)(3) was ineffective precisely because service was refused. See Ben-Rafael v. Islamic Republic of Iran, 540 F.Supp.2d 39, 52 (D.D.C.2008) (noting that service under section 1608(a)(3) was "not possible here" because "[p]laintiffs attempted service on August 18, 2006, under § 1608(a)(3), but the recipients refused delivery on August 26, 2006, and the package was returned"); Opati v. Republic of Sudan, 978 F.Supp.2d 65, 67 (D.D.C.2013) (explaining that "Plaintiffs were unsuccessful in effecting service under section 1608(a)(3)" because "[e]ach mailing was refused by the defendants, and the summonses returned unexecuted"); see also, e.g., Murphy v. Islamic Republic of Iran, 740 F.Supp.2d 51, 67 (D.D.C.2010); Valore v. Islamic Republic of Iran, 700 F.Supp.2d 52, 70 (D.D.C.2010); Nikbin v. Islamic Republic of Iran, 471 F.Supp.2d 53, 60 (D.D.C.2007); Doe v. Holy See, No. 13-128, 2014 WL 3909136, at *3 (E.D.La. Aug. 11, 2014).
Although these cases do not explicitly discuss the issue, in each case the court noted that service was effectuated only after the Secretary of State served the defendant through diplomatic channels pursuant to section 1608(a)(4). See, e.g., Valore, 700 F.Supp.2d at 70 (noting that, after "service was refused" under § 1608(a)(3), plaintiffs requested that "the Secretary of State transmit[ ] one copy of the documents to Iran via a diplomatic note though the Embassy of the Swiss Confederation while returning the other copy to the clerk," and therefore that plaintiffs had "properly served defendants
In the face of this implicit authority — and absent any contrary indication in the statute — the Court believes it unlikely that Congress envisioned service would be accomplished under section 1608(a)(3), and personal jurisdiction would attach over a foreign state, when service is returned as refused. See Cambridge Holdings Grp., 489 F.3d at 1361 ("[U]nless the procedural requirements of effective service of process have been satisfied, the court lacks personal jurisdiction to act with respect to that defendant at all."). In such circumstances it is, at best, a tenuous assumption that the relevant foreign official even has actual notice of the lawsuit.
Accordingly, the Court finds that Syria remains unserved, and turns to Sudan's second contention. Sudan highlights a footnote in the D.C. Circuit's decision in Cambridge in which the court noted that it took "no position" on a limitation the Ninth Circuit has added to the rule that an unserved defendant should be discounted for finality purposes. 489 F.3d at 1360 n. 2. In that footnote, the D.C. Circuit explained that the Ninth Circuit has "qualified the other circuits' approach by holding that an order disposing of all claims only against served parties is not final if `it is clear from the course of proceedings that further adjudication is contemplated' by the district court." Id. (quoting Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 871-72 (9th Cir.2004)). As evidence that additional proceedings are anticipated in this case, Sudan points to the Plaintiffs' express intention to reserve their claims against Syria until they are able to properly serve them in the future.
With misgivings — and without the guidance of any on-point authority discussing unserved defendants in the FSIA context — the Court finds that Sudan's argument controls. While the D.C. Circuit did not expressly endorse that exception in Cambridge, it did rest its interpretation of Rule 54(b) on the fact that a court's "failure to dispose of a claim against a served party renders an order unappealable because such a claim will necessarily involve further action by the parties or the district court." 489 F.3d at 1361 (emphasis added). The circuit contrasted that situation with those circumstances in which "only an unserved defendant remains" because, in the latter circumstance, "there is generally no reason to anticipate additional proceedings before the district court."
At the same time, the Court notes that it may well be appropriate to apply a different rule in the FSIA context. It is well established that "the requirement of finality is to be given a `practical rather than a technical construction.'" Gillespie v. U.S. Steel Corp., 379 U.S. 148, 152, 85 S.Ct. 308,
But because service on a foreign state is expressly exempted from Rule 4(m)'s time limit, see Fed. R. Civ. P. 4(m) ("This subdivision (m) does not apply to service in a foreign country under Rule 4(f) or 4(j)(1)."), it is more likely in a FSIA case that a plaintiff will retain the option of serving an unserved defendant by the time a default judgment is entered, or even thereafter. And because default judgments appear to be a frequent phenomenon in FSIA cases — particularly those seeking to waive immunity under § 1605A(a)(1) — this temporal reality has practical consequences for FSIA plaintiffs and defendants alike. For plaintiffs, whether Rule 55(c) or Rule 60 applies, and therefore the ease with which a foreign state who has defaulted (even willfully) may set aside the default judgment, will on occasion depend on the fortuitous and somewhat arbitrary fact that the plaintiffs have named a foreign co-defendant against whom they are unable to effectuate service for a period of time. Unlike many situations in which a plaintiff fails to serve a defendant under Rule 4, the plaintiff's ability (or inability) to serve a foreign state may be out of her control. See Pls.' Status Report ¶ 1, ECF No. 23 (explaining that the State Department informed Plaintiffs that, "due to the `deteriorating security situation' in Syria, Poland, the United States' protecting power in Syria, has suspended its embassy operations there").
The difference may also be outcome determinative: as the Court indicates below, it would rule against Sudan on all fronts if Rule 60(b) applies, see infra notes 21 & 27, and another court has rejected the same argument on which Sudan succeeds here, largely because that court applied Rule 60(b), see Owens, 174 F.Supp.3d at 288, 2016 WL 1170919, at *34 (rejecting Sudan's argument that the punitive damages awards should be vacated because Sudan "completely failed to explain why" those claims of "nonjurisdictional legal error," "even if persuasive, come within the ambit of Rule 60(b)(6)"). For defendants, on the other hand, the ability to immediately appeal a FSIA judgment is implicated. Indeed, there is considerable irony in that fact that, under Sudan's preferred rule, a foreign state that does appear and defend on the merits will be precluded from appealing
These practical realities may lead one to question whether a court should consider the possibility of future adjudication as heavily in a FSIA case. Nevertheless, the Court at present will adhere to the spirit of the D.C. Circuit's logic in Cambridge. Plaintiffs indicate that they plan to serve the Syrian defendants when diplomatic service under section 1608(a)(4) becomes possible, and now represent that they are in the process of seeking such service; future action in this case is therefore likely, and the Court's default judgment against Iran and Syria was not final and appealable.
The Court first considers whether Sudan's default was willful. "The boundary of willfulness lies somewhere between a case involving a negligent filing error, which is normally considered an excusable failure to respond, and a deliberate decision to default, which is generally not excusable." Int'l Painters, 288 F.Supp.2d at 26. Sudan presents two basic arguments for why its default should be excused as not willful: it claims (1) that it was preoccupied by civil unrest and political turmoil at home and (2) that it lacked an understanding of the United States litigation process and the gravity of the consequences that might follow from its failure to appear. See Sudan's Mot. at 27-28. Yet, Sudan was absent from this action for an exorbitant period of time. Coupled with Sudan's history of litigating, and abandoning, other FSIA actions against it, the record paints a decidedly different picture. As a result, the Court concludes that Sudan's default in this case constituted a "deliberate decision to default." Int'l Painters, 288 F.Supp.2d at 26.
First, Sudan has identified no case in which a court found a defendant's default not willful after the defendant was absent for such a lengthy period of time. Service was effectuated on Sudan on January 30, 2011. See Return of Service Aff., ECF No. 15. For over four years Plaintiffs' case continued apace. The Clerk entered default against Sudan on October 31, 2012. See ECF No. 27. The Court then held an evidentiary hearing on August 12, 2014, three-and-a-half years after Sudan was served, and issued a lengthy opinion on March 31, 2015. Only after two more months had elapsed did Sudan finally appear and file the present motion. This time period is not comparable to those that were excused in the cases Sudan cites — in many of which the court, in any event, found the defendant's default willful but set aside the entry of default for other reasons. See, e.g., Shatsky, 795 F.Supp.2d at 81-82 (finding default willful, but nevertheless setting aside default, when motion was filed two and a half years after default was entered, but before a default judgment was entered); Gilmore v. Palestinian Interim Self-Gov't Auth., 675 F.Supp.2d 104,
Second, Sudan's explanation that it was preoccupied by troubles at home is unpersuasive. Sudan has provided a declaration from its ambassador to the United States, Ambassador Maowia O. Khalid, which explains that its failure to appear was "principally during periods of well-known civil unrest and political turmoil in Sudan, in addition to times of natural disaster." Decl. of Ambassador Maowia O. Khalid ¶ 4, ECF No. 55-2 [hereinafter "Khalid Decl."]. In addition, Ambassador Khalid asserts that "the cession of [S]outh Sudan and the attendant and protracted diplomatic moves and negotiations completely pre-occupied the Government of Sudan and necessitated the diversion of all meager legal and diplomatic personnel to that process." Id. Courts have considered whether domestic circumstances hindered a foreign state's ability to respond in a timely manner, and have held in foreign states' favor when the failure to file a response "was in considerable measure out of the [foreign state]'s control." FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 447 F.3d 835, 840 (D.C.Cir. 2006). Yet, even absolving Sudan of any responsibility for its domestic turmoil,
Sudan also contends that, because the FSIA was amended in 2008 to allow plaintiffs to collect punitive damages for the first time, "Sudan could not possibly have anticipated or understood the ramifications of these unprecedented amendments." Sudan's Reply at 21. Yet, for purposes of this Court's jurisdiction or Sudan's immunity, the 2008 Amendments did not herald the dramatic change Sudan claims. The FSIA immunity exception Plaintiffs rely upon here previously existed in subsection 1605(a)(7). When that subsection was recodified in section 1605A, the immunity exception was not substantially changed except that it created a new federal cause of action, provided for punitive damages, and provided for recovery by military service members and government contractors. Moreover, Sudan had already participated in litigation claiming, and courts had issued opinions holding, that Sudan lacked
In sum, the Court concludes that Sudan's default in this case was willful.
Sudan's willful abdication also posed not-insubstantial costs for Plaintiffs. To set aside the default judgments now would cause prejudice to Plaintiffs. In assessing prejudice, courts consider the possible, tangible harms that may flow from a party's delayed appearance in the case, including the "`loss of evidence, increased difficulties of discovery, and an enhanced opportunity for fraud or collusion.'" Gilmore, 675 F.Supp.2d at 110 (quoting Fed. Dep. Ins. Corp. v. Francisco Inv. Corp., 873 F.2d 474, 479 (1st Cir.1989)). As Sudan notes, "delay in and of itself does not constitute prejudice." Haskins, 755 F.Supp.2d at 130-31. But there is more than delay apparent in this case.
Plaintiffs posit that, during Sudan's absence, "critical witnesses have died or been killed, numerous personnel at all levels of the government have left their positions, and undoubtedly governmental records have been destroyed." Pls.' Opp'n at 14, ECF No. 60. Plaintiffs therefore argue that there "can be no doubt that the Plaintiffs will be materially and actually prejudiced in their effort to take discovery." Id. Sudan casts this argument as conclusory — and in some respects, it is. But, as the movant seeking to demonstrate "good cause," Sudan has the burden to show that setting aside the default judgment will pose no prejudice for Plaintiffs. And Sudan's complaint that Plaintiffs "identify no such witnesses or personnel," Sudan's Reply at 22, is rich. Of course Plaintiffs cannot identify particular, relevant personnel; as a consequence of Sudan's default, they
Furthermore, two additional types of prejudice are apparent in this case. First, Plaintiffs, who testified at the evidentiary hearing, would be forced to testify once again concerning the loss they suffered at the hands of Al-Qaeda. See Gilmore, 675 F.Supp.2d at 111 (finding prejudice where Plaintiffs would face an "enormous emotional cost" in being forced to testify again about their loss). Second, Plaintiffs would be prejudiced by the fact that the time and resources they expended litigating this case, preparing for and presenting evidence at the evidentiary hearing, and seeking a default judgment will be wasted. See Owens, 174 F.Supp.3d at 257, 2016 WL 1170919, at *10 (noting that "much of the plaintiffs' efforts preparing for and conducting the 2010 liability hearing will have been for naught — a serious waste that could have been avoided by Sudan's timely participation"). Sudan's response that setting aside the default judgment against it would not disturb the default judgment against Iran (unless or until Iran appears, of course), see Sudan's Mot. at 29, does not mitigate the fact that Plaintiffs have expended considerable effort litigating this case in Sudan's absence. Unlike other cases in which courts have found limited prejudice, this case has proceeded further than a nascent procedural stage. See Acree v. Republic of Iraq, 658 F.Supp.2d 124, 129 (D.D.C.2009) (finding no risk of prejudice in FSIA case where plaintiffs had "not yet expended any significant efforts to satisfy their burden of proof for default judgment"); see also Biton, 233 F.Supp.2d at 33 (finding no prejudice where case was "procedurally in its early stages" and no discovery had been conducted or motions filed). As a result, Plaintiffs would suffer prejudice were the court to set aside the default judgment entered against Sudan.
Sudan identifies several arguments that it claims constitute "meritorious defenses" warranting setting aside the default judgment. It casts three of these arguments as jurisdictional, claiming that the default judgment should be vacated for lack of subject-matter jurisdiction. The fourth ground relates to the availability of punitive damages under section 1605A for conduct that took place before that provision was enacted in 2008. As explained below, the Court finds that Sudan's jurisdictional arguments lack merit. But the Court will vacate the portion of the default judgment awarding Plaintiffs punitive damages.
Sudan first argues that the Court lacks subject-matter jurisdiction over Plaintiffs' claims because the bombing of the U.S.S.
As noted above, the FSIA removes a foreign state's immunity if a plaintiff seeks money damages "for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act." 28 U.S.C. § 1605A(a)(1). The FSIA further defines "extrajudicial killing" by cross-referencing the definition contained in the Torture Victim Protection Act ("TVPA"). See id. § 1605A(h)(7) ("[T]he terms `torture' and `extrajudicial killing' have the meaning given those terms in section 3 of the Torture Victim Protection Act of 1991."). And the TVPA, in turn, defines an "extrajudicial killing" as:
Torture Victim Protection Act of 1991, Pub. L. No. 102-256, § 3(a), 106 Stat. 73, 73 (codified at 28 U.S.C. § 1350 note) [hereinafter "TVPA"].
Sudan claims that both the language and the context of the TVPA indicate that, when Congress defined "extrajudicial killing," it "intended to adopt the international law meaning of the term," which is synonymous with a "summary execution." Sudan's Mot. at 7. As a result, Sudan claims that there is no basis "for the term `extrajudicial killing' to include a general act of terrorism." Id. at 8.
The Court acknowledges that various portions of the TVPA's legislative history indicate that Congress sought to closely align the TVPA's definition of "extrajudicial killing" with the prevailing meaning of "summary execution" under international law. For example, a House Report on the legislation notes that the TVPA "defines `torture' and `extrajudicial killing' in accordance with international standards," and that the "concept of `extrajudicial killings' is derived from article 3 common to the four Geneva Conventions of 1949." H.R. Rep. No. 102-367, at 4, 5 (1991). Similarly, a Senate Report states that the TVPA "incorporates into U.S. law the definition of extrajudicial killing found in customary international law," and that the "definition conforms with [the definition] found in the Geneva Convention." S. Rep. No. 102-249, at 6 (1991). Indeed, the TVPA's definition closely tracks the definition found in the Geneva Convention. Compare TVPA § 3(a) (defining an extrajudicial killing as "a deliberated killing not authorized by a previous judgment pronounced by a regularly constituted court affording all the judicial guarantees which are recognized as indispensable by civilized peoples"), with Geneva Convention Relative to the Treatment of Prisoners of War, art. 3, Aug. 12, 1949, 6 U.S.T. 3316, 75 U.N.T.S. 135 (prohibiting "the carrying out of executions without previous judgment pronounced by a regularly constituted court, affording all the judicial guarantees which are recognized as indispensable by civilized peoples").
As explained momentarily, Sudan does not cogently explain what features of a bombing like that of the U.S.S. Cole would render the event anything other than a deliberated killing, unauthorized by the judgment of a regularly constituted court affording indispensable judicial guarantees. But to the extent there is any difference between the TVPA's definition and the prevailing international law definition, the Court rejects Sudan's effort to
Had Congress wanted to anchor its definition exclusively to the international law definition, it knew how to expressly invoke that body of law. In fact, it did so in the very next sentence of the TVPA's definition. See TVPA § 3(a), 106 Stat. at 73 (stating that the statutory definition "does not include any such killing that, under international law, is lawfully carried out under the authority of a foreign nation"). And in other contexts, Congress has expressly incorporated international law definitions of certain terms, without qualification. See 18 U.S.C. § 1651 (criminalizing "the crime of piracy as defined by the law of nations"). The fact that Congress chose not to do so when defining extrajudicial killing in the TVPA — and instead codified a more precise definition — adds further confirmation to the conclusion that Congress explicitly chose not to mirror the international law definition exactly or incorporate that definition by reference, even if Congress's own definition was derived from international law. See, e.g., Dep't of Homeland Sec. v. MacLean, ___ U.S. ___, 135 S.Ct. 913, 919, 190 L.Ed.2d 771 (2015) ("Congress generally acts intentionally when it uses particular language in one section of a statute but omits it in another."); cf. Dole Food Co. v. Patrickson, 538 U.S. 468, 476, 123 S.Ct. 1655, 155 L.Ed.2d 643 (2003) (finding it instructive that the statute at issue referred only to "ownership" while "[v]arious federal statutes refer to `direct and indirect ownership'" as demonstrating that "[w]here Congress intends to refer to ownership in other than the formal sense, it knows how to do so").
Moreover, reading the TVPA's definition to exactly mirror the international law definition would render the second sentence of the TVPA's definition mere surplusage. It is a "cardinal principle of statutory construction that we must give effect, if possible, to every clause and word of a statute." Williams v. Taylor, 529 U.S. 362, 404, 120 S.Ct. 1495, 146 L.Ed.2d 389 (2000) (internal quotation marks and citation omitted). Yet, if Congress intended its definition of "extrajudicial killing" to be coterminous with the international law understanding of "summary execution," then there would have been no need for Congress to, in effect, create a safe harbor for "any such killing that, under international law, is lawfully carried out under the authority of a foreign nation." TVPA § 3(a), 106 Stat. at 73. That is because, under
Accordingly, the Court concludes that the statutory definition of "extrajudicial killing" must control, regardless of whether that definition diverges from the international law understanding in certain respects. And that definition is met here. The bombings were "killing[s]," and the coordination and planning required to carry them out indicate that they were "deliberated." See Mamani v. Berzain, 654 F.3d 1148, 1155 (11th Cir.2011) (considering in FSIA case whether the killing was "undertaken with studied consideration and purpose," in order to be "deliberated"); cf., e.g., People v. Wright, 39 Cal.3d 576, 217 Cal.Rptr. 212, 703 P.2d 1106, 1113-14 (1985) (quoting pattern jury instructions and explaining that "deliberate" in context of first degree murder, means "arrived at or determined upon as a result of careful thought and weighing of considerations for and against the proposed course of action"). The bombings were not authorized by any court judgment and Sudan does not suggest that they were permissible under international law.
More pertinently, Sudan does little to explain how the bombing of the U.S.S. Cole fails to meet the definition of an extrajudicial killing — under either the statutory definition or international law. Nowhere in its memorandum in support of its motion or in its reply does Sudan explain what it is about the deliberate bombing of a Navy destroyer, divorced from regularly constituted judicial proceedings in the most indisputable terms, that puts the attack outside the scope of an "extrajudicial killing" or "summary execution." Sudan claims that the TVPA is intended to refer to "summary execution," but that is where its analysis on this point ends. See Sudan's Mot. at 7-9; Sudan's Reply at 4-9. Simply "offering a synonym does not advance the analysis," Owens, 174 F.Supp.3d at 262, 2016 WL 1170919, at *14, however, and one will search Sudan's papers in vain for a more developed argument.
It may be that Sudan intends to hint that a summary execution can only be committed by a foreign state, and not a private group. Sudan's memorandum in support of its motion includes a passing citation to an Eastern District of Virginia case in which the court concluded that TVPA claims require state action. See Sudan's Mot. at 8 (citing In re XE Servs. Alien Tort Litig., 665 F.Supp.2d 569, 592-94 (E.D.Va.2009)). It is true that the court in that case noted that the TVPA requires individuals alleged to have violated the Act to have acted "under actual or apparent authority, or color of law, of any foreign nation." In re XE Servs. Alien Tort Litig., 665 F.Supp.2d at 593 (quoting TVPA § 2(a), 106 Stat. at 73); accord H.R. Rep. No. 102-367, at 5 (explaining that the TVPA's use of "`under actual or apparent authority, or color of law' makes clear that the plaintiff must establish some governmental involvement in the torture or killing to prove a claim," and therefore the Act "does not attempt to deal with torture
Instead, Sudan's contention seems to boil down to its assumption that, because one could characterize the U.S.S. Cole bombing as a "general act of terrorism," it is categorically outside the definition of an "extrajudicial killing" or "summary execution." Sudan's Mot. at 8 (arguing that "the text, structure, legislative history, and Supreme Court's treatment of the TVPA confirm its limited scope and do not provide a basis for the term `extrajudicial killing' to include a general act of terrorism"). Sudan points out that at the time Congress added § 1605(a)(7) (the predecessor to § 1605A(a)(1)) to the FSIA, it rejected a Senate version of the bill which would have withdrawn immunity from foreign states when the plaintiff sought recovery based on "an act of international terrorism ... which was committed or aided or abetted by a foreign state" designated as a state sponsor of terror. The Foreign Sovereign Immunities Act: Hearing Before the Subcomm. on Courts and Administrative Practice of the S. Comm. on the Judiciary, 103rd Cong. 27-28 (1994) (reproducing proposed Senate Bill 825); see Sudan's Mot. at 8-9. In addition, Sudan notes that elsewhere in the United States Code, in the Anti-Terrorism Act ("ATA"), Congress has adopted a statutory definition of international terrorism. See Sudan's Mot. at 10; see also 28 U.S.C. § 2331(1) (defining "international terrorism"). But while Congress adopted the ATA's definition of "material support" in the FSIA, it did not similarly incorporate the definition of "international terrorism." See Sudan's Mot. at 10; see also 28 U.S.C. § 1605A(h)(3) ("[T]he term `material support or resources' has the meaning given [to] that term in section 2339A of title 18."). Based on these indicia of legislative intent, Sudan generally claims that section 1605A "does not include `terrorism' as a predicate act." Id. at 10.
Insofar as Sudan claims that the FSIA does not reach any acts that might be described in common parlance as "terrorism," the Court disagrees. Indeed, it would be illogical to accept that argument. For one thing, Congress entitled section 1605A as the "Terrorism exception to the jurisdictional immunity of a foreign state." 28
Moreover, and contrary to Sudan's suggestion, the legislative history that Sudan cites readily bolsters this point. Sudan notes that certain commentators had objected to a proposed Senate bill stripping immunity for general acts of "international terrorism," on the basis that the definition of "international terrorism" was amorphous, subject to debate, and "vague and politically charged." See Sudan's Mot. at 9 (quoting The Foreign Sovereign Immunities Act: Hearing Before the Subcomm. on Courts and Administrative Practice of the S. Comm. on the Judiciary, 103rd Cong. 83 (1994) (statement of Abraham Sofaer)). But the very same individual who presented those criticisms noted that he favored an alternative House bill — which at that time proposed to strip immunity for acts of torture, extrajudicial killing, and genocide — because that bill provided more "clearly defined acts of international terrorism." See The Foreign Sovereign Immunities Act: Hearing Before the Subcomm. on Courts and Administrative Practice of the S. Comm. on the Judiciary, 103rd Cong. 81-82 (1994) (statement of Abraham Sofaer) (emphasis added). Thus, far from rejecting FSIA coverage for anything that might be labeled an act of "international terrorism," the legislative history indicates that Congress, at most, cabined the FSIA's reach to particular, concretely-defined acts that are internationally recognized.
The Court's conclusion is buttressed by the fact that, by 2008, courts had consistently construed "extrajudicial killing" in section 1605(a)(7) (the precursor to section
When Congress recodified that subsection in 2008 as part of section 1605A, it chose to employ — without alteration or qualification — the exact same language that had been used in section 1605(a)(7). Because "Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statute without change," Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978), the Court finds it informative that Congress made no effort to cast aside the unanimous consensus among federal district courts when it recodified the terrorism exception in section 1605A.
At bottom, Sudan's reference to acts of "international terrorism" is a red herring. Regardless of whether one might also label the bombing of the U.S.S. Cole an act of "terrorism," the relevant question is
Next, in a somewhat cursory argument, Sudan claims that the Court lacks subject-matter jurisdiction over claims of plaintiffs who are merely the relatives of deceased victims of terrorist acts, as each of the plaintiffs are here (plaintiffs Sudan refers to as "indirect-victims"). See Sudan's Mot. at 11. As explained above, subject-matter jurisdiction under the FSIA depends on the existence of one of the statutory exceptions to foreign sovereign immunity. See Verlinden B.V., 461 U.S. at 493, 103 S.Ct. 1962. Beyond requiring that the case be one "in which money damages are sought ... for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act," 28 U.S.C. § 1605A(a)(1), section 1605A(a) also provides that a claim will be heard only if "the claimant or the victim was, at the time the act described in paragraph (1) occurred," a United States national, a member of the armed forces, or an employee of the United States Government or performing a contract awarded by the government, id. § 1605A(a)(2)(A)(ii)(I)-(III). Sudan reads this subsection to withdraw immunity — and grant jurisdiction — only for claims brought by either (a) a "`victim' who was injured,'" or (b) a "claimant" that is "acting as the personal representative of" the victim. Sudan's Mot. at 11. Although Sudan does not explicitly link its reading with its conclusion that subject-matter jurisdiction is lacking here, presumably Sudan intends to imply that because Plaintiffs are neither victims nor suing as Kevin Rux's legal representatives, foreign sovereign immunity has not been waived for Plaintiffs' claims.
The question of statutory interpretation Sudan raises is ultimately irrelevant, however. In focusing on who is asserting a claim against the foreign state, Sudan has conflated subject-matter jurisdiction with the distinct question of whether plaintiffs have stated a valid cause of action. As the D.C. Circuit has explained, "[t]here is a clearly settled distinction in federal law between statutory provisions that waive sovereign immunity and those that create a cause of action." Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024, 1033 (D.C.Cir.2004). Subsection (a)(2)(A)(ii)'s description of when a claim will be heard — and, thus, when immunity will be withdrawn — does not focus solely on the "claimant" who is asserting the claim. Instead, the subsection is phrased in the alternative. It states definitively that "a claim" under section 1605A will be heard if either "the claimant or the victim" was a United States national at the time of the act. 28 U.S.C. § 1605A(a)(2)(A)(ii) (emphasis added). And here, regardless of whether Plaintiffs can validly state a cause of action under any substantive provision of state or federal law (and thus might be described as "claimants"),
The case upon which Sudan relies for support, Cicippio-Puleo v. Islamic Republic of Iran, No. 01-1496, 2002 WL 34408105 (D.D.C.2002), clarifies this distinction and therefore only weakens Sudan's argument. In that case, the district court had dismissed the claims asserted by the relatives of a man who had been held hostage by Hezbollah for over five years. After surveying the case law regarding plaintiffs' ability to recover for emotional injuries, the court concluded that the FSIA was not intended to require foreign states "to compensate non-victim plaintiffs for damages for which not even a domestic terrorist would be liable in most U.S. jurisdictions," and therefore dismissed the plaintiffs' complaint. Cicippio-Puleo, 2002 WL 34408105, at *2-3. On appeal, the D.C. Circuit noted that there was some confusion over whether the district court's decision had rested on the plaintiffs' failure to state a claim or a lack of subject matter jurisdiction; the district court had cited both Rule 12(b)(6) and Rule 12(h)(3) of the Federal Rules of Civil Procedure in its opinion. See Cicippio-Puleo, 353 F.3d at 1030. But the circuit went on to conclude that the jurisdictional ground was "inapposite, for it is clear that the District Court had jurisdiction pursuant to the statutory waiver of sovereign immunity." Id. The circuit's opinion then considered whether, notwithstanding the waiver of sovereign immunity, the plaintiffs could validly assert a cause of action directly against a foreign state defendant under then-existing section 1605(a)(7). The circuit concluded that plaintiffs could not, because the Flatow amendment that first codified a cause of action under 1605(a)(7) had limited that cause of action to a foreign state's officials, employees, and agents acting in their personal capacities. See id. at 1033-34. That conclusion was not fatal to the court's jurisdiction, however. As the circuit explained, it would "remand the case to allow plaintiffs an opportunity to amend their complaint to state a cause of action under some other source of law, including state law." Id. at 1036.
Obviously, because section 1605A's jurisdictional requirement focuses alternatively on the claimant or the victim, the distinction between jurisdiction and the substantive cause of action means that section 1605A might afford subject-matter jurisdiction irrespective of whether the claimant can assert a valid cause of action under subsection 1605A(c). Sudan claims that this distinction "produces the counterintuitive result that the scope of jurisdiction under
Subsection 1605A(a)(2)(A)(ii)'s reference to "the claimant or the victim" is conclusive, on its own, to support the Court's subject-matter jurisdiction and to reject Sudan's argument. But, to the extent that Sudan's true intent is to attack the viability of Plaintiffs' cause of action — despite consistently labeling its argument in both its memorandum in support and its reply as a challenge to the Court's "jurisdiction" — the Court rejects that argument, too. Sudan points to subsection (c)(4), which states that a foreign state may be liable to "the legal representative of a person described in paragraph (1), (2), or (3)" of that subsection. 28 U.S.C. § 1605A(c)(4). Sudan contends that only direct victims of a terrorist attack who meet the criteria listed in paragraphs (1) through (3), or their legal representatives, can assert a claim under subsection 1605A(c).
There is nothing in the statute to support this reading, however. Congress's use of the disjunctive "or" in subsection (a)(2)(A)(ii) suggests that a claimant need not be a victim herself. Moreover, Congress's use of the more general term "claimant," in lieu of the more specific term "legal representative" — which Congress expressly chose to use in subsection (c)(4) — indicates that a claimant can be broader than simply a victim's legal representative. Indeed, subsection (c) itself contains nothing limiting the cause of action to victims or their legal representatives. Had Congress wanted to limit the cause of action in subsection (c) only to victims or their legal representatives, it could have expressly said so. It could have written subsection (c) to instruct that a foreign state or its agents are only "liable to a victim" who is a United States national, armed forces member, or an employee of the government or performing on a government contract — or, under paragraph (4), the "legal representative of a person" (and therefore, a victim) "described in paragraph (1), (2), or (3)." Yet, Congress conspicuously chose not to so limit the
Because the purported distinction Sudan attempts to draw is irrelevant for jurisdictional purposes and, in any event, Plaintiffs can validly assert a cause of action under section 1605A(c), Sudan's statutory argument regarding indirect-victim claims fails to assert a meritorious defense.
Sudan's third proffered defense relates to the evidence demonstrating that the extrajudicial killing of Kevin Rux was "caused by" Sudan's material support for Al-Qaeda. Section 1605A(a)(1)'s immunity provision provides that a foreign state is not immune if money damages are sought "for personal injury or death that was caused by" a foreign state or its agent's act of extrajudicial killing, or the provision of material support or resources for that act. 28 U.S.C. § 1605A(a)(1). The substantive cause of action under subsection (c)(1) similarly makes foreign states and their agents liable for those acts or material support. Id. § 1605A(c). Sudan claims that Plaintiffs failed to produce satisfactory and sufficient evidence to satisfy the causation element.
Yet again, Sudan appears to frame its argument exclusively as one of "subject-matter jurisdiction." See, e.g., Sudan's Mot. at 13, 25; Sudan's Reply at 12. If that is the entirety of Sudan's defense, then it is plainly unavailing. Here, the elements Plaintiffs must prove to prevail on the merits of their substantive claim under subsection (c) directly mirror the jurisdictional elements under subsection (a)(1).
Here, Plaintiffs' claim cannot be called frivolous. Plaintiffs have asserted, and proffered evidence to show, a multitude of connections between Sudan, Al-Qaeda, and Bin Laden. Even if "`Plaintiffs' allegations are somewhat imprecise as to the temporal proximity of Sudan's actions to and their causal connection with the' terrorist act and `do not chart a direct and unbroken factual line between Sudan's actions' and the terrorist act, this `imprecision is not fatal for purposes of jurisdictional causation so long as the allegations, and the reasonable inferences drawn therefrom, demonstrate a reasonable connection' between the foreign state's actions and the terrorist act." Owens, 531 F.3d at 895 (quoting Rux, 461 F.3d at 474 (upholding denial of motion to dismiss for lack of subject matter jurisdiction in case involving the U.S.S. Cole bombing)).
Despite Sudan's continued insistence that it challenges the default judgment only to the extent that Plaintiffs failed to prove the "jurisdictional requirements," see Sudan's Reply at 12-13, Sudan does assert that Plaintiffs failed to prove the causation element with sufficient evidence to support a default judgment under section 1608(e), see id. at 14. One therefore gets the sense that Sudan's asserted defense really questions whether Plaintiffs provided sufficient evidence to support the causation element of their cause of action. If that is Sudan's argument, the Court similarly rejects it.
Under the FSIA, a court may only enter a default judgment against a foreign state if "the claimant establishes his claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). There is no dispute that, in undertaking that inquiry, a court must draw its "`findings of fact and conclusions of law from admissible testimony in accordance with the Federal Rules of Evidence.'" Kim v. Democratic People's Republic of Korea, 774 F.3d 1044, 1049 (D.C.Cir.2014) (quoting Daliberti v. Republic of Iraq, 146 F.Supp.2d 19, 21 n. 1 (D.D.C.2001)). A burden shifting framework is also at play: the FSIA "begins with a presumption of immunity, which the plaintiff bears the initial burden to overcome by producing evidence that an exception applies." Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1183 (D.C.Cir. 2013). "[O]nce shown, the sovereign bears the ultimate burden of persuasion to show
Sudan attacks the sufficiency of Plaintiffs' evidence here on several grounds. First, Sudan claims that Plaintiffs' experts — Lorenzo Vidino and Dale Watson — merely served as conduits for the introduction of inadmissible hearsay. Federal Rule of Evidence 703 permits experts to base their opinions on information that "experts in the particular field would reasonably rely on ... in forming an opinion on the subject." Fed. R. Evid. 703. That information "need not be admissible for the opinion to be admitted." Id. But, although "[e]xpert opinions may be based on hearsay ... they may not be a conduit for the introduction of factual assertions that are not based on personal knowledge." Estate of Parsons v. Palestinian Auth., 715 F.Supp.2d 27, 33 (D.D.C.2010). Sudan claims that Plaintiffs offered "no independent evidentiary basis for the factual assertions made by their experts." Sudan's Mot. at 15.
The record does not support that contention. For starters, Sudan claims that during Mr. Watson's testimony counsel read lengthy passages from underlying source material, such as the 9/11 Commission Report and State Department and CIA reports and fact sheets. Sudan asserts that Mr. Watson's testimony consisted almost exclusively of simple, affirmative answers agreeing with the facts asserted in those hearsay materials. See Sudan's Mot. at 16-17. That characterization is directly at odds with the record, and obscures the testimony that followed those instances. In reality, Mr. Watson elaborated on the source material based on his own, personal experience as an FBI Investigator. Mr. Watson testified that his government employment involved monitoring Bin Laden's activities in Sudan and Sudan's activities related to terrorist organizations. See Hr'g Tr. at 106:5-13. Based on that experience, Mr. Watson was asked to explain the basis of his agreement with the source materials read to him, and Mr. Watson elaborated to explain how his personal experiences were consistent with what was reported in the open source material, or what the significance of those facts might be. See, e.g., Hr'g Tr. at 92:6-16, 108:20-109:10, 112:24-113:15; see also id. at 95:3-5 ("Based on your investigation of the Cole, do you agree with the depiction of the devastation to the boat reported in the attack?"). For example, at one point during his testimony, Mr. Watson was asked the following, with counsel quoting from the 9/11 Commission Report:
Hr'g Tr. at 108:6-22. The testimony did not end there, however. It continued as follows:
Id. at 108:23-110:4.
The fact that much, if not all, of the open source material upon which Mr. Watson relied in informing his opinion constituted hearsay is not problematic, despite Sudan's claim to the contrary.
Sudan further claims that Mr. Watson's testimony must be wholly discounted because he was "prohibited from offering testimony on the basis of" his experience leading the government's response to the U.S.S. Cole attack. See Sudan's Reply at 16. In doing so, Sudan misreads the Touhy letter the government provided to facilitate Mr. Watson's testimony. Mr. Watson was precluded only from "discuss[ing] or disclos[ing] the particulars of any investigations in which he was involved while an FBI employee, ... or any non-public material." Pls.' Ex. 30 at 2; see also Hr'g Tr. at 80:17-22, 82:20-83:4. Mr. Watson was also prohibited from making statements "that are portrayed, either explicitly or implicitly, as reflecting the views of the FBI or the Department of Justice, or the official position of the United States," and was authorized "only to offer his personal opinions based on non-classified, open source material." Pls.' Ex. 30 at 2. These limitations, however, did not prohibit Mr. Watson from testifying "based on his experience with the FBI's counterterrorism unit" during this period of time. Id. at 1 (emphasis added). And Mr. Watson's live testimony accords with this understanding: Mr. Watson would generally express his agreement or disagreement with the open source statement and then elaborate, based on his own experience, to explain why he considered that information accurate or how he believed it demonstrated that Sudan had provided material support for Al-Qaeda.
The Court similarly rejects Sudan's assertion that the Court's reliance on
Vidino Aff. ¶ 80. Dr. Vidino went on to conclude that:
Id. ¶ 81. That Dr. Vidino relied on evidence containing hearsay in arriving at these conclusions, again, does not undermine his opinion's admissibility. See Mueller & Kirkpatrick, supra, § 7:16, at 861-63.
Sudan fails to show that the link between Sudan's support for Al-Qaeda and the U.S.S. Cole bombing was unforeseeable or so attenuated as to constitute fortuity. Sudan contends that Plaintiffs failed to "bridge [the] temporal gap" between Sudan's expulsion of Bin Laden in 1996 and the attack on the U.S.S. Cole in 2000. See, e.g., Sudan's Mot. at 16, 18, 25. But, on its own, the support Sudan provided while Bin Laden and Al-Qaeda were afforded a safe haven in Sudan suffices to show proximate cause. Plaintiffs' expert testimony established that Sudan's support not only kept Al-Qaeda afloat, but allowed the organization to thrive, making it reasonably foreseeable to Sudan that the organization would develop the capacity to carry out sophisticated attacks like the U.S.S. Cole bombing.
In addition, Plaintiffs did bridge the temporal gap in some ways, and the record contains evidence that Sudan's provision of material support continued after Al-Qaeda and Bin Laden were formally expelled from the country. For example, Mr. Watson testified that Sudan continued to be used as a safe haven for Al-Qaeda and other terrorist groups after 1996. See Hr'g Tr. at 112:15-23. Mr. Watson explained that a safe haven helped the organization plan more freely, and that Sudan's provision of passports allowed terrorist operatives to travel more easily. Id. at 113:4-15. These same sources of evidence, and the factual findings encapsulating them, also rebut Sudan's claim that the Court's findings were vague and failed to identify "any specific instances [of support] reasonably connected to the U.S.S. Cole attack." Sudan's Mot. at 18; cf. Owens, 531 F.3d at 895 (holding, at motion to dismiss stage, that although the allegations did not "chart a direct and unbroken factual line between Sudan's actions and the terrorist act," the allegations sufficed because they, "and the reasonable inferences drawn therefrom, demonstrate a reasonable connection between the foreign state's actions and the terrorist act" (internal quotation marks omitted)).
The Court does not represent that every factual finding in its Findings of Fact and Conclusions of Law was supported by record evidence presented in a form that would be admissible at trial.
In addition, the Court notes that Sudan's motion focuses solely on Plaintiffs' ability to meet section 1608(e)'s "evidence satisfactory to the court" standard for a FSIA default judgment. For whatever reason, Sudan has not argued that, if the default judgment were vacated, it would have a meritorious defense to mount at trial or that Plaintiffs would be unable to prove their cause of action by the distinct preponderance of the evidence standard. What is clear, however, is that Plaintiffs undoubtedly met the standard for a default judgment under section 1608(e), and Sudan has proffered "no affirmative evidence ... to show that they fall outside the terrorism exception," nor have they presented evidence they would intend to introduce at trial denying that they had provided material support for these acts or breaking any causal chain of events leading up to the U.S.S. Cole attack. Kilburn, 376 F.3d at 1132 (concluding that Libya had "so far satisfied neither a burden of production nor their required burden of persuasion").
Accordingly, Sudan has cast no doubt on the sufficiency of the Plaintiffs' evidence for purposes of the default judgment. And, in any event, what limited defense Sudan has mounted is far outweighed by Sudan's willfulness in defaulting and the prejudice that would accrue to Plaintiffs if the default were vacated.
Finally, Sudan contends that section 1605A does not provide for the retroactive application of punitive damages for events that occurred before that section's enactment in 2008. Sudan urges that, "at a minimum, the judgments should be vacated to the extent of the punitive damages." Sudan's Mot. at 26; see Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir.1990) (vacating "that portion of the judgment providing for punitive damages," but affirming "for all other matters, the district court's entry of default and default judgment"); Murray v. Solidarity of Labor Orgs. Int'l Union Benefit Fund, 172 F.Supp.2d 1134, 1153 (N.D.Iowa 2001) (setting aside under Rule 60(b) "only that part of the default judgment awarding $2.5 million in punitive damages on [plaintiff's] libel claim"); cf. Rogers v. Hartford Life & Acc. Ins. Co., 167 F.3d 933, 935-36, 943 (5th Cir.1999) (affirming district court order that vacated only a portion of the court's default judgment in ERISA case, where the district court adjusted the default judgment to omit compensable medical damages the court had previously, and erroneously, awarded). On this score, the Court agrees that Sudan has raised a potentially meritorious defense and that, despite the willfulness of Sudan's default, Sudan has established "good cause."
As the Supreme Court has explained, when a statute would "increase a party's liability for past conduct, or impose new duties with respect to transactions already completed," the statute operates "retroactively." Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994). The Court has long applied a presumption "declin[ing] to give retroactive effect to statutes burdening private rights unless Congress ha[s] made clear its intent." Id. at 270, 114 S.Ct. 1483. That presumption is "explained by reference to the unfairness of imposing new burdens on persons after the fact," id. and its aim "is to avoid unnecessary post hoc changes to legal rules on which parties relied in shaping their primary conduct," Republic of Austria v. Altmann, 541 U.S. 677, 696, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004). Therefore, "[a] statute may not be applied retroactively ... absent a clear indication from Congress that it intended such a result." INS v. St. Cyr, 533 U.S. 289, 316, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001). And the Court's "standard for finding such unambiguous direction is a demanding one." Id. Where the Court has found such retroactive effect authorized, the statutory language "was so clear that it could sustain only one interpretation." Id. at 316-17, 121 S.Ct. 2271 (quoting Lindh v. Murphy, 521 U.S. 320, 328 n. 4, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997)) (internal quotation mark omitted).
In Landgraf, for example, the Court considered the Civil Rights Act of 1991 which, for the first time, permitted plaintiffs to recover and courts to award compensatory and punitive damages for intentional discrimination under Title VII. See 511 U.S. at 252-53, 114 S.Ct. 1483. The statute provided in relevant part that "[i]n an action brought by a complaining party under section 706 or 717 of the Civil Rights Act of 1964 ... against a respondent who engaged in unlawful intentional discrimination ... the complaining party may recover compensatory and punitive damages." Id.; see also 42 U.S.C. § 1981a(a) (codified in present form). The
In this case, Sudan argues that section 1605A similarly contains no explicit statement authorizing punitive damages for preenactment conduct.
Plaintiffs, for their part, point to the history of section 1605A's passage, and note that Congress made accommodations for parties to refile or convert actions that had been asserted under section 1605(a)(7) into actions under section 1605A. Section 1605A's limitations provision does permit plaintiffs to maintain an action for conduct that predated the new cause of action's enactment, allowing plaintiffs to assert a claim under subsection 1605A(c) so long as the action is brought not later than "10 years after April 24, 1996" or "10 years after the date on which the cause of action arose." 28 U.S.C. § 1605A(b)(1)-(2). Similarly, the National Defense Authorization Act of 2008 provided that an action which had been brought under section 1605(a)(7), relied on that provision "as creating a cause of action," and remained before the courts "in any form," including on appeal or under a Rule 60(b) motion, could be "given effect as if the action had originally
Yet, while Congress clearly intended to salvage those actions in which plaintiffs had attempted to mount a federal cause of action against foreign states that proved illusory under the Flatow Amendment, it is not abundantly obvious that, in allowing those cases to move forward, Congress similarly intended to apply punitive damages retroactively. See Owens, 174 F.Supp.3d at 289, 2016 WL 1170919, at *35 (suggesting, in dicta, that "the mere fact that Congress has authorized plaintiffs to bring § 1605A(c) claims on the basis of pre-2008 conduct is not a clear statement that punitive damages are available for that subset of claims" (emphasis in original)). Plaintiffs are correct that, since 2008, several courts have awarded punitive damages in cases seeking relief for terrorist activities that took place before 2008. See, e.g., Valore v. Islamic Republic of Iran, 700 F.Supp.2d 52, 87-90 (D.D.C.2010); Murphy v. Islamic Republic of Iran, 740 F.Supp.2d 51, 56, 79-83 (D.D.C.2010). But those damages were similarly awarded as part of default judgments in cases where the defendants had not appeared. Likewise, although the D.C. Circuit held in Bakhtiar v. Islamic Republic of Iran that in order to "obtain[ ] the benefits of § 1605A and seek[ ] punitive damages" plaintiffs must comply with the National Defense Authorization Act of 2008, and seek to convert their lawsuit to a section 1605A case or refile their case, the circuit appeared to simply assume that such damages would be available for pre-2008 conduct, and its opinion contains no analysis of that issue. 668 F.3d 773, 775 (D.C.Cir. 2012).
The Court is not currently in a position to make a definitive ruling, and would be aided by additional briefing on the issue which, among other things, provides useful examples and caselaw concerning circumstances in which courts have found statutory language sufficiently clear to give a statute retroactive effect.
Ultimately, the Court concludes that Sudan has not established "good cause" under Rule 55(c) to vacate the bulk of the default judgment. Sudan defaulted willfully, and setting aside the default judgment would prejudice Plaintiffs. While a meritorious defense might overcome these factors, the Court concludes that Sudan's jurisdictional arguments are unavailing. But, with respect to the punitive damages that the Court awarded as part of the default judgment, Sudan has asserted a plausible legal argument that the FSIA does not clearly permit such an award for conduct that took place before 2008. Therefore, the Court concludes that Sudan has established "good cause" to set aside the punitive damages award, despite the willfulness of its default, and the Court will vacate that part of the default judgment.
For the foregoing reasons, Sudan's motion to set aside the default judgment is
The Court also notes that a court may "deny a motion to vacate based solely on a finding that the default was willful." Shatsky, 795 F.Supp.2d at 82. At the same time, courts may elect to set aside an entry of default or a default judgment even if there is some evidence indicating that the defendant defaulted willfully. See, e.g., Haskins v. U.S. One Transp., LLC, 755 F.Supp.2d 126, 131 (D.D.C.2010); Owens, 374 F.Supp.2d at 10 n. 5; see also Knox v. Palestine Liberation Org., 248 F.R.D. 420, 425-26 (S.D.N.Y.2008). Thus, Sudan is correct to argue that its motion may still be granted even if Sudan's default is deemed willful. See Sudan's Mot. at 28. But this simply confirms that whether to grant a motion to set aside a default judgment is a discretionary decision to be made by balancing each of the relevant factors. And here, as explained below, Sudan has also not proffered a meritorious defense with respect to three of the arguments it presses. The Court emphasizes that where it denies Sudan's motion, it does not do so solely because Sudan's default was willful.
But, in any event, the Court finds section 1606 irrelevant. That section states that, for any claim "with respect to which a foreign state is not entitled to immunity under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances; but a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages." 28 U.S.C. § 1606. Perhaps Sudan intends to argue that because section 1605A is not listed in section 1606, a plaintiff seeking to invoke jurisdiction under section 1605A(a)(1) is limited to the cause of action provided in subsection (c), and to the exclusion of alternative causes of action under state or foreign law an individual might assert "under like circumstances." If that is Sudan's argument, the Court would reject it for much the same reason as set forth in Owens. See 174 F.Supp.3d at 284-87, 2016 WL 1170919, at *32-33. The section reads most readily as simply a "limit[ation] on the liability that the applicable substantive law — whatever its source — can impose on the foreign sovereign." Id. at 286, 2016 WL 1170919, at *32. And there is no indication that if section 1606 did not exist at all, plaintiffs would be unable to assert state-law causes of action against foreign sovereigns or that federal courts would be without power to adjudicate any cases falling within the FSIA's subject matter jurisdiction. Id. at 286, 2016 WL 1170919, at *33. This Court is aware of "no authority suggesting that a grant of subject-matter jurisdiction is a nullity if Congress fails to expressly define the substantive law that applies." Id. "The upshot," then, "is that Congress's failure to add a cross-reference to § 1605A in § 1606 does not block state law from applying to claims for which subject-matter jurisdiction is provided by § 1605A(a)." Id.
While Sudan's argument regarding the retroactive application of punitive damages may raise a meritorious defense, in light of these authorities the Court fails to see how the argument is available to Sudan under Rule 60(b)(6). Accord Owens, 174 F.Supp.3d at 287-90, 2016 WL 1170919, at *34-35. As a result, if the Court is wrong that Rule 55(c) applies here, the Court would reject this argument and rule in favor of Plaintiffs on all grounds.
