The prevailing opinion of federal courts is that tort claims require proof of “but-for” causation – that the plaintiff’s injury would not have occurred in the absence of the defendant’s behavior. The U.S. Supreme Court recently underscored this holding in two separate decisions. Additionally, two federal district court judges in the Second Circuit and two Second Circuit Court of Appeals panels (made up of six different judges) previously issued similar rulings on the burdens required for tort claims brought under the Anti-Terrorism Act (ATA). But, in Arab Bank v. Linde, PLC, the District Court ruled that “but-for causation cannot be required” for civil litigation under the ATA, and that plaintiffs’ injuries need only be a reasonably foreseeable—not a direct—consequence of the Bank’s conduct. With this standard, the plaintiffs were, in effect, relieved of their obligation to prove a causal link between Arab Bank’s business operations and the acts of terrorism that injured the plaintiffs. Specifically, the Supreme Court ruled:
- University of Texas Southwestern Medical Center v. Nassar: On June 24, 2013, the Supreme Court held in University of Texas Southwestern Medical Center v. Nassar that Title VII retaliation claims require the same proof of but-for causation that is required in tort claims. According to the opinion, “In defining the proper causation standard for Title VII retaliation claims, it is presumed that Congress incorporated tort law’s causation in fact standard – i.e., proof that the defendant’s conduct did in fact cause the plaintiff’s injury….” The opinion defines this standard as requiring the plaintiff to show “‘that the harm would not have occurred’ in the absence of – that is, but for – the defendant’s conduct.” According to the decision, causation in fact “is a standard requirement of any tort claim.”
- Burrage v. United States: In a unanimous decision issued on February 28, 2014, the Supreme Court reaffirmed in Burrage v. United States that “the phrase, ‘by reason of,’ requires at least a showing of ‘but for’ causation.”
In light of the Supreme Court’s opinions in Nassar and Burrage, it is now clear that the ATA requires plaintiffs to prove that Arab Bank’s conduct was the “but for” cause of their injuries, rather than a “nonessential” contributing factor. Moreover, even before the Supreme Court issued opinions in these two cases, a number of federal judges in the Second Circuit – in which the Linde Court resides – issued similar decisions on the direct proximate causation standards under the ATA.
- John Patrick O’Neill, Jr., et al. v. Al Rajhi Bank, et al.: On June 30, 2014 the Supreme Court denied certiorari in an appeal by plaintiffs to the decision by Second Circuit Court of Appeals on April 16, 2013. That decision, which the Supreme Court decision leaves in place, dismissed claims brought by victims of the September 11, 2001 terrorist attacks against individuals and commercial parties, including banks, for allegedly providing material support to Al Qaeda. In dismissing these claims, the Court of Appeals ruled that “a defendant cannot be liable under the [ATA] on an aiding-and-abetting theory of liability.” The Second Circuit Court of Appeals also held that plaintiffs had failed to adequately allege proximate causation. In reaching this conclusion, the Court held that the language used by Congress in drafting the ATA traditionally requires “a showing that the defendant’s violation not only was a ‘but for’ cause of his injury, but was the proximate cause as well.” In conclusion, the Court held that “[w]e also are not persuaded that providing routine banking services to organizations and individuals said to be affiliated with al Qaeda—as alleged by plaintiffs—proximately caused the September 11, 2001 attacks or plaintiffs’ injuries.” This decision upheld the July 14, 2011 ruling by Judge George B. Daniels of the Southern District Court.
- Rothstein v. UBS: On February 14, 2013, the Second Circuit Court of Appeals upheld the District Court’s dismissal of this case, ruling that the ATA requires proof of proximate cause (and is not a strict liability standard), which plaintiffs had not shown, and that the ATA does not provide for aiding and abetting claims. In its opinion, the Second Circuit Court of Appeals wrote, “We doubt that Congress, having included in the ATA several express provisions with respect to aiding and abetting in connection with the criminal provisions, can have intended [Section] 2333 to authorize civil liability for aiding and abetting through its silence.” The appellate ruling upholds an August 24, 2009 decision by Judge Jed S. Rakoff of the Southern District Court who dismissed Rothstein v. UBS saying that the case was based on an “extended chain of inferences.” Further, Judge Rakoff stated that the plaintiffs failed to show that injuries were fairly traceable and to establish that UBS’ banking activities were the proximate cause of the injuries.
- Gill v. Arab Bank: On September 12, 2012, Senior Judge Jack B. Weinstein of the Eastern District Court dismissed the plaintiff’s aiding and abetting claim against Arab Bank, finding that the ATA did not provide for secondary liability. On November 6, 2012, Judge Weinstein granted Arab Bank’s motion for summary judgment and dismissed the case in its entirety. Judge Weinstein’s opinion found that the ATA requires proof of knowledge and proximate cause, stating, “the evidence does not prove that the Bank acted with an improper state of mind or proximately caused plaintiff’s injury.” He concluded his opinion stating: “Hamas is not the defendant; the Bank is. And the evidence does not prove that the Bank acted with an improper state of mind or proximately caused plaintiff’s injury.” This decision marked the first time in which the Court evaluated the entire record against Arab Bank and rendered a decision on the merits of the case.