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United States: Supreme Court Rules Victims of State-Sponsored Terrorism May Recover Punitive Damages under Foreign Sovereign Immunities Act

(June 2, 2020) On May 18, 2020, the U.S. Supreme Court unanimously held that the Republic of Sudan could be held liable for $4.3 billion in punitive damages related to state-sponsored acts of terrorism that occurred in 1998. (Opati v. Republic of Sudan, No. 17-1268 (May 18, 2020).)

Case History

In 1998, al-Qaida orchestrated simultaneous attacks at U.S. embassies in Kenya and Tanzania. These attacks killed 224 people and injured another 5,000. Evidence later emerged that the Sudanese government had provided a safe haven to al-Qaida in the period leading up to the attacks, including giving members of the organization Sudanese passports and permitting the transportation of money and weapons across the Sudan-Kenya border to an al-Qaida cell in Kenya. On the basis of this information, a group of victims and family members of the decedents filed a lawsuit against Sudan in federal court under an exception to the Foreign Sovereign Immunities Act (FSIA).

Foreign Sovereign Immunities Act

The FSIA generally provides that foreign states are immune from jurisdiction in federal and state court. The statute at the time this litigation commenced had a number of exceptions to immunity, including an exception for state-sponsored acts of terrorism. Additionally, the act at that time allowed for certain damages, including economic damages and loss of consortium, but strictly barred punitive damages.

After multiple federal courts ruled that this exception to the FSIA waived immunity but did not create a new cause of legal action, Congress amended the FSIA in the 2008 National Defense Authorization Act. The amendments had multiple components. To start, the state-sponsored terrorism exception was moved to a new section of the U.S. Code, which freed it from the FSIA’s prohibition against punitive damages. Second, the amendments created a cause of action for certain individuals, including U.S. nationals, members of the armed forces, U.S. government employees and contractors, and their legal representatives. Next, Congress made this law retroactive, meaning that parties who were adversely affected by an inability to sue a foreign government under federal statutes before the law’s enactment could file a lawsuit for damages. Finally, the amendments granted individuals a brief window of time to file new lawsuits or claims on matters that were relevant to the act and had already been filed in court.

Application of the FSIA Amendments

After the amendments were enacted, the plaintiffs amended their complaint to include the new cause of action and added hundreds of new plaintiffs to the case. In a consolidated bench trial the United States District Court for the District of Columbia ruled that the Republic of Sudan was liable for the plaintiffs’ injuries and appointed seven special masters to assess damages. The District Court ultimately awarded $10.2 billion in damages, including $4.3 billion in punitive damages. Sudan appeared in the case and appealed to the United States Court of Appeals for the District of Columbia Circuit. The Court of Appeals reversed the District Court’s ruling, holding that the amendments to the FSIA did not expressly provide for punitive damages awards, thereby cutting that portion of the award. The U.S. Supreme Court granted review and reversed the Circuit Court’s decision.

The Supreme Court’s holding focused on the FSIA’s language related to punitive damages. Sudan argued, in part, that the statute’s amendments were ambiguous regarding punitive damages awards and asked the Court to adopt a “super-clarity” rule when Congress enacts legislation that applies retroactively. In rejecting Sudan’s arguments, the Supreme Court noted that “Congress was as clear as it could have been when it authorized plaintiffs to seek and win punitive damages for past conduct using [the statute’s] new federal cause of action.” (Opati, slip op. at 8–9.) The Court further remarked, “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.” (Slip op. at 9.)

The case has now been remanded to the Court of Appeals for further proceedings. Justice Neil Gorsuch authored the unanimous opinion. Justice Brett Kavanaugh took no part in this case.