Opinion
21-cv-3503 (CBA)
2023-09-28
Adam Goldstein, Geoffrey P. Eaton, Pro Hac Vice, Ryan Sparacino, Pro Hac Vice, Sparacino PLLC, Washington, DC, Eli Johnson Kay-Oliphant, Sparacino PLLC, Chicago, IL, for Plaintiffs Stephanie Zobay, Lindsay Everhart, Abdul Ghaffar Mughal, Sitorai Khasanzod, Khalid Mughal, Hamid Mughal, Angela Mughal, N.M., by and through Abdul Ghaffar Mughal, M.M., by and through Abdul Ghaffar Mughal, Wayne Newby, Theresa Hart, Nathan Newby, Jason Rzepa, Cassandra Rzepa, C.R., by and through Cassandra Rzepa, K.R., by and through Adrian Davis, Tyler N. Ogden, William M. Chinn, Sean M. Niquette, Lauren Niquette, Thomas Niquette, Mary Niquette, Ed Elliott, Brian C. Alldridge, Joann Alldridge, Ronald Alldridge, Dianna Alldridge, Andrew Major, Ashley Major, Alyssa Major, Marcus Jamil Sullen, David Eugene Hickman, Veronica Hickman, Devon F. Hickman, Tammie Frost, Madison Frost, Crystal Frost, Amanda Frost, Waiel El-Maadawy, Bilqis Aidara Adjei, Alexis Grant, Malik Elmaadawy, G.E., by and through Latasha Elmaadawy, Zeinab El-Maadawy, Ihab El-Maadawy, Tamer El-Maadawy, Mohammed El-Maadawy, Mustafa El-Maadawy, Amr Mohamed, Brenda Mohamed, Stephen S. Everhart, Russell Frost, Todd Jeffrey Alldridge. Adam Goldstein, Geoffrey P. Eaton, Pro Hac Vice, Sparacino PLLC, Washington, DC, Eli Johnson Kay-Oliphant, Sparacino PLLC, Chicago, IL, for Plaintiffs Cedric Paul Kamaleson, Jason Barlow, Sunderraj Mark Kamaleson, Nicole Kamaleson, Barclay Kamaleson, John Gregoire, Sr., J.D.G., by and through his next friend ShuShawndra Gregoire, ShuShawndra Gregoire, L.R.G., by and through her next friend John Gregoire Sr., C.L.K., by and through his next friend Grace Kreischer, Aldene Lee, Gabriel Elmaadawy, Cade Kamaleson, Grace Aubrey Kreischer, Brianne Barlow. Kimberly Helene Zelnick, Timothy P. Harkness, Scott A. Eisman, Freshfields Bruckhaus Deringer U.S. LLP, New York, NY, Micaela McMurrough, Covington & Burling LLP, New York, NY, Alexandra Widas, Pro Hac Vice, U.S. Department of Justice, Washington, DC, David Meir Zionts, Pro Hac Vice, Covington & Burling LLP, Washington, DC, Jordan L. Moran, Goodwin Procter LLP, Washington, DC, Benjamin Sherwood Haley, Pro Hac Vice, Covington & Burling (Pty) Ltd., Johannesburg, South Africa, Michael Goudey, Hyattsville, MD, for Defendant MTN Group Limited.
Adam Goldstein, Geoffrey P. Eaton, Pro Hac Vice, Ryan Sparacino, Pro Hac Vice, Sparacino PLLC, Washington, DC, Eli Johnson Kay-Oliphant, Sparacino PLLC, Chicago, IL, for Plaintiffs Stephanie Zobay, Lindsay Everhart, Abdul Ghaffar Mughal, Sitorai Khasanzod, Khalid Mughal, Hamid Mughal, Angela Mughal, N.M., by and through Abdul Ghaffar Mughal, M.M., by and through Abdul Ghaffar Mughal, Wayne Newby, Theresa Hart, Nathan Newby, Jason Rzepa, Cassandra Rzepa, C.R., by and through Cassandra Rzepa, K.R., by and through Adrian Davis, Tyler N. Ogden, William M. Chinn, Sean M. Niquette, Lauren Niquette, Thomas Niquette, Mary Niquette, Ed Elliott, Brian C. Alldridge, Joann Alldridge, Ronald Alldridge, Dianna Alldridge, Andrew Major, Ashley Major, Alyssa Major, Marcus Jamil Sullen, David Eugene Hickman, Veronica Hickman, Devon F. Hickman, Tammie Frost, Madison Frost, Crystal Frost, Amanda Frost, Waiel El-Maadawy, Bilqis Aidara Adjei, Alexis Grant, Malik Elmaadawy, G.E., by and through Latasha Elmaadawy, Zeinab El-Maadawy, Ihab El-Maadawy, Tamer El-Maadawy, Mohammed El-Maadawy, Mustafa El-Maadawy, Amr Mohamed, Brenda Mohamed, Stephen S. Everhart, Russell Frost, Todd Jeffrey Alldridge.
Adam Goldstein, Geoffrey P. Eaton, Pro Hac Vice, Sparacino PLLC, Washington, DC, Eli Johnson Kay-Oliphant, Sparacino PLLC, Chicago, IL, for Plaintiffs Cedric Paul Kamaleson, Jason Barlow, Sunderraj Mark Kamaleson, Nicole Kamaleson, Barclay Kamaleson, John Gregoire, Sr., J.D.G., by and through his next friend ShuShawndra Gregoire, ShuShawndra Gregoire, L.R.G., by and through her next friend John Gregoire Sr., C.L.K., by and through his next friend Grace Kreischer, Aldene Lee, Gabriel Elmaadawy, Cade Kamaleson, Grace Aubrey Kreischer, Brianne Barlow.
Kimberly Helene Zelnick, Timothy P. Harkness, Scott A. Eisman, Freshfields Bruckhaus Deringer U.S. LLP, New York, NY, Micaela McMurrough, Covington & Burling LLP, New York, NY, Alexandra Widas, Pro Hac Vice, U.S. Department of Justice, Washington, DC, David Meir
Zionts, Pro Hac Vice, Covington & Burling LLP, Washington, DC, Jordan L. Moran, Goodwin Procter LLP, Washington, DC, Benjamin Sherwood Haley, Pro Hac Vice, Covington & Burling (Pty) Ltd., Johannesburg, South Africa, Michael Goudey, Hyattsville, MD, for Defendant MTN Group Limited.
MEMORANDUM & ORDER
AMON, United States District Judge:
Plaintiffs are a group of American citizens killed or injured by terrorist attacks in Iraq and Afghanistan between 2011 and 2019, or their families. Plaintiffs filed this action against several telecommunications companies, seeking damages pursuant to the Anti-Terrorism Act ("ATA"), 18 U.S.C. § 2333, as amended by the Justice Against Sponsors of Terrorism Act ("JASTA"), Pub. L. No. 114-222, 130 Stat. 852 (2016). A subset of the captioned defendants now move to dismiss Plaintiffs' Amended Complaint: MTN Group Limited and MTN Dubai Limited ("MTN" or the "MTN Defendants"); ZTE (USA) Inc., and ZTE (TX) Inc. ("ZTE" or the "ZTE U.S. Defendants"); and Huawei Technologies USA Inc., Huawei Device USA Inc., and Futurewei Technologies, Inc. ("Huawei" or the "Huawei U.S. Defendants") (collectively with MTN and ZTE, "Defendants"). Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), for lack of personal jurisdiction, and 12(b)(6), for failure to state a claim.
For the reasons set forth below: MTN's motion to dismiss is GRANTED as to MTN Dubai Limited and DENIED as to MTN Group Limited; ZTE's motion to dismiss is GRANTED; and Huawei's motion to dismiss is GRANTED.
In light of this ruling, I decline to hold in abeyance the MTN Defendants' motion to dismiss as requested in their Letter to the Court dated August 30, 2023. (ECF Docket Entry ("D.E.") # 127.)
SUMMARY OF COMPLAINT
The following facts arc taken from Plaintiffs' Amended Complaint and are assumed true for purposes of this motion. I draw all reasonable inferences in Plaintiffs' favor. Vietnam Ass'n of Agent Orange v. Dow Chem. Co., 517 F.3d 104, 115 (2d Cir. 2008).
Plaintiffs or their family members were injured in a series of terror attacks (the "Attacks") in Iraq between 2011 and 2017 and in Afghanistan in 2019. (D.E. # 52 ("Amended Complaint" or "AC") ¶ 1.) The attacks in Iraq were committed, planned, or authorized by "joint cells" of Hezbollah, Jaysh al-Mahdi, and Qods Force operatives. (Id. ¶ 1393.) The attacks in Afghanistan were committed, planned, or authorized by a "syndicate" made up of al-Qaeda, the Taliban, the Haqqani Network. Lashkar-e-Taiba, and Jaysh-e-Mohammed. (Id. ¶ 1553). Defendants are large, multinational telecommunications companies that allegedly conspired with known "fronts" for the Islamic Revolutionary Guard Corps ("IRGC") to provide funding, embargoed American technologies, and logistical support to the terrorist proxies supported by and aligned with the IRGC. Plaintiffs allege that Defendants knowingly contracted with IRGC fronts and entered into agreements to aid the IRGC's "security" objectives, which Plaintiffs maintain is a euphemism for terrorist campaigns against Americans worldwide. (Id. ¶ 234.) Through those business arrangements, Plaintiffs allege that Defendants funneled money and
There is one exception: the April 29, 2017 attack in Nineveh, Iraq, was committed by either al-Qaeda and Ansar al-Islam or by ISIS, all of which Plaintiffs allege were Sunni terrorist proxies of Hezbollah. (AC ¶ 1546.)
dual-use technologies through the IRGC and Hezbollah to the terrorist groups that perpetrated the Attacks.
I. The Parties to the Conspiracy
A. IRGC
The IRGC was established after the 1979 Iranian Revolution as part of the Iranian government. (AC ¶ 163-64.) The IRGC has a long history of supporting anti-American terrorism as part of Iran's foreign policy, (id. ¶¶ 41, 160), and the U.S. State Department formally designated Iran as a State Sponsor of Terrorism in 1984, (id. ¶ 364). In 2007, the U.S. Senate passed a nonbinding resolution condemning IRGC terror activities. (D.E. # 82-9.)
The IRGC has three component parts: "Regular" IRGC, the Hezbollah Division, and the Qods Force. (AC ¶¶ 95-99.) The "Regular IRGC" is the IRGC's division responsible for maintaining fronts and/or cover companies—such as charities or commercial entities—to aid the IRGC's mission. (Id. ¶ 99.) The second component part, the Hezbollah Division, "has the same meaning as Lebanese Hezbollah," and serves as the IRGC's "lead terrorist agent." (Id. ¶¶ 97, 160, 175.) Finally, the Qods Force is "the IRGC's Iranian-staffed external 'Security' Operations Division," which works in close partnership with Hezbollah. (Id. ¶ 98.) The Qods Force operates exclusively outside of Iran and is "Iran's primary mechanism for cultivating and supporting terrorists abroad." (Id. ¶ 176.) On October 25, 2007, the U.S. Treasury Department designated the Qods Force as a Specially Designated Global Terrorist ("SDGT") group. (Id. ¶ 211.)
By "Lebanese Hezbollah," Plaintiffs appear to refer to the terrorist group Hezbollah that has been designated as a Foreign Terrorist Organization ("FTO") since 1997. (AC ¶ 97.) It is not entirely clear from the Amended Complaint whether the Hezbollah Division of the IRGC is the same entity as the FTO-designated Lebanese terrorist group—which Plaintiffs also describe as "the IRGC's lead agent for conducting 'External 'Security' operations," (id.)—or if the IRGC's Hezbollah Division is a separate group that coordinates with and directs Lebanese Hezbollah as its agent. Because the Amended Complaint defines the Hezbollah Division as "Hezbollah" and considers their operations as one, (see id. ¶¶ 97, 160). I understand them to be the same group and refer to both as "Hezbollah."
The IRGC engages in terrorist "tradecraft" with several common markers, including: concealment and cover (through front companies and corporate allies), (id. ¶¶ 226-42); slush funds for off-books terrorist financing, (id. ¶¶ 243-44); corruption as a tool of terror, (id. ¶¶ 245-47); and required donations (khums) from all IRGC members, (id. ¶¶ 248-51). These required donations equaled ten to twenty percent of a person or entity's income on every transaction, meaning that the IRGC consistently collected donations (or taxes) from all their profit-generating activities. (Id. ¶¶ 248-51.) These taxes flowed through IRGC-controlled fronts to the IRGC, and then to Hezbollah. (Id.)
On April 15, 2019, the U.S. State Department designated the IRGC as an FTO. (Id. ¶ 189); see 84 Fed. Reg. 15,278-01 (Apr. 15, 2019). In announcing the designation, U.S. government officials explained that "the IRGC actively participates in, finances, and promotes terrorism as a tool of statecraft," including through Hezbollah, and has done so "[f]or 40 years." (AC ¶¶ 189-90.)
B. Hezbollah
Hezbollah has been a designated FTO since 1997. (Id. ¶¶ 97, 171.) Although it is a Lebanon-based terrorist group, "Hezbollah has pledged fealty to Iran's Supreme header." (Id. ¶¶ 181-82, 197.) The IRGC provides weapons, training, and financial support in the form of "hundreds of millions of
dollars per year" to Hezbollah. (Id. ¶¶ 175, 185.) Hezbollah often acts through terrorist "proxy" groups to commit terrorist attacks. During the relevant time periods, the Qods Force and Hezbollah worked together as the IRGC's terrorist proxy specialists to organize anti-American "resistance" attack campaigns across the Middle East. (Id. ¶ 98.)
C. IRGC-Funded Proxy Groups: "Joint Cells" and the "Syndicate"
The IRGC has long provided support— routed through Hezbollah—for terrorist attacks against American military forces and contractors in Iraq. (Id. ¶ 183.) In the relevant time periods, this support took the form of a "joint cell" approach to terrorism. By 2007, Hezbollah and the Qods Force had organized terror cells with a unified command in dozens of countries on six continents. (Id. ¶¶ 258, 289.)
The IRGC's support for terrorist proxies crossed sectarian lines, meaning that Hezbollah and the Qods Force operated in joint cells with both Shiite and Sunni terrorist proxies (the "Joint Cells"). (Id. ¶¶ 264-67.) First, consistent with Iran and Hezbollah's Shiite ideology, the IRGC tasked Hezbollah with developing a Shiite terror group in Iraq called Jaysh-al-Mahdi ("JAM"). (Id. ¶¶ 277-80.) Joint Cells comprised of operatives from Hezbollah, JAM, and the Qods Force were formed to execute a shared goal of driving the United States out of Iraq. (Id. ¶¶ 34, 280-82, 300.) Hezbollah, funded and logistically supported by the IRGC, trained JAM to create and use sophisticated Improvised Explosive Devices ("IEDs"), Explosively Formed Penetrators ("EFPs"), rockets, and other advanced weaponry. (Id. ¶¶ 282-84, 301, 329, 339-54.)
Second, despite their Shiite ideology. Hezbollah and the Qods Force identified Sunni terrorist groups that—though their sects were opposed—"could serve as allies of convenience for their shared terrorist agenda against the United States." (Id. ¶ 267.) The IRGC Sunni terrorist proxies included: al-Qaeda, an FTO since 1999, (id. ¶ 375); the Taliban, an SDGT since 2002, (id. ¶ 418), and its Haqqani Network, an FTO since 2012, (id. ¶ 423); al-Qaeda-in-Iraq (later ISIS), an FTO since 2004, (id. ¶ 560); and Ansar al-Islam, an FTO since 2004, (id. ¶ 575). "Although al-Qaeda and the Taliban were nominally separate groups, they acted together in a terrorist 'syndicate' that planned and authorized terrorist violence throughout Afghanistan" (the "Syndicate"). (Id. ¶¶ 366-70, 390.) Through Hezbollah, the IRGC and its Qods Force provided these terror cells with money, weapons, training, secure cell phones, logistical support, safehouses inside Iran, and technical assistance. (Id. ¶¶ 268-73, see also id. ¶¶ 365-66, 449, 466. 496, 643, 649-60, 691, 702-03.)
Plaintiffs allege that during the period on or about 2013 to 2016, al-Qaeda-in-Iraq did not participate in the conspiracy because they "halted all cooperation" to kill members of other terrorist groups, but resumed their cooperation on or about 2017. (AC ¶ 267 & n.53.) Although Plaintiffs acknowledge that there are "religious differences between the Shiite Iranian regime and the Sunni Taliban organization," they allege those differences have not deterred the IRGC from supporting Sunni terrorist activities against Americans in the region because they share the "core geopolitical aim" of expelling the United States from the region. (Id. ¶ 443.)
Although reference to the Syndicate here includes just al-Qaeda and the Taliban, other allegations in the Amended Complaint suggest that the Syndicate also includes other "allied FTOs" such as al-Qaeda-in-Iraq, Ansar al-Islam, Laskhar-e-Taiba, and Jaish-e-Mohammed. (Id. ¶¶ 371, 412, 519, 628.)
II. The Object and Methods of the Conspiracy
Plaintiffs allege that the IRGC arranged a sweeping transnational terrorist alliance
that stretched throughout the Middle East over decades. (Id. ¶ 33.) The IRGC established this conspiracy after 9/11, and its object was the "'security' mission of expelling the United States from the Middle East, including Iraq and Afghanistan." (Id. ¶¶ 7, 94.) The alleged conspiracy continued until the end of the war in Afghanistan. (Id. ¶ 7.)
The IRGC's alliance depended on robust access to the United States because of its supply of "the world's best technology, personnel, and service providers," (D.E. # 86 ("MTN Opp'n") 8), including American-made secure, encrypted smart phones and network computers, (AC ¶¶ 711, 734-59). In the decade prior to the U.S. invasion of Iraq in 2003, the technological gap between the IRGC and U.S. counterterrorism units grew from large to vast. (Id. ¶ 734.) The IRGC knew by early 2004 that it "needed to overhaul the terrorists' communications, computing, internet, and cyber capabilities to enable Iran to continue supporting attacks against Americans in Iraq and Afghanistan." (Id. ¶ 756.)
However, the IRGC was subject to sanctions that prevented it from obtaining the "gold standard" American technologies itself. (Id. ¶¶ 255-56. 711.) In December 2010, the U.S. Treasury Department noted that "[t]he IRGC continues to be a primary focus of U.S. and international sanctions against Iran because of the central role it plays in," among other things, "support for terrorism." (Id. ¶ 255 (full quote not in original).) Accordingly, to execute its "security" objectives, the IRGC needed a network of cover, or "front" companies, in the corporate world, to procure the embargoed communications equipment and dual-use technologies necessary to upgrade the IRGC's systems. (Id. ¶¶ 708, 743-46, 753.) Because the IRGC needed to source "tens of thousands of untraceable mobile phones every year to ensure the secure and untraceable communication lines" between Hezbollah, the Qods Force, and their local proxy terrorist allies, "lawful purchases of American phones inside U.S. markets ... was impossible at the commercial scale necessary for the conspiracy to succeed." (Id. ¶¶ 750-51.) As a result, the IRGC needed to partner with civilian companies to procure illicit acquisition of critical American technologies. (Id. ¶¶ 753, 760.)
III. Defendants Enter the Alleged Conspiracy
The alleged link between Defendants and the IRGC-funded and Hezbollah-trained terrorist proxies are stakes in Iranian telecommunications companies that are controlled by the IRGC. The IRGC partnered with Defendants to "illicitly source" state-of-the-art American technologies without revealing the IRGC's involvement. (Id. ¶¶ 225, 761.)
A. Defendants
MTN Group is a South African telecommunications company that serves a range of countries in Africa and a few countries in the Middle East. (Id. ¶ 71; D.E. # 82 ("MTN Br.") 4.) MTN Group's principal place of business is in South Africa, and it does not operate in the United States. (MTN Br. 4-5.) MTN Dubai is a wholly owned subsidiary of MTN Group. (AC ¶ 73.)
ZTE Corp. is a Chinese corporation with a principal place of business in China. (Id. ¶ 74.) ZTE (USA) and ZTE (TX) (collectively, "ZTE U.S.") are wholly owned subsidiaries of ZTE Corp., and both are United States corporations. (Id. ¶¶ 75-76.) Although ZTE Corp. (the parent company) is listed as a defendant, the instant motion is brought by the ZTE U.S. Defendants only.
The Huawei U.S. Defendants include Huawei Technologies USA Inc. ("Technologies
USA"), Huawei Device USA Inc. ("Device USA"), and Futurewei Technologies, Inc. ("Futurewei"), wholly owned U.S. subsidiaries of Huawei Technologies Co. ("Huawei Co."). (Id. ¶¶ 78-80). Huawei Co. is a Chinese company with its principal place of business in China. (Id. ¶ 77.) Huawei Co. is "named as a defendant but apparently not yet served." (D.E. # 102-1 ("Huawei Br.") 5.) Plaintiffs also name Skycom Tech Co., Ltd. as a defendant, but the alleged former affiliate of Huawei Co. apparently ceased to exist in 2017. (Id. at 6 n.3.)
B. Defendants Partner with Alleged IRGC Fronts
1. Irancell
Irancell (also referred to as MTN Irancell) was launched in 2005 as a joint venture between MTN Group and the Iran Electronic Development Company ("IEDC"). (AC ¶ 764.) MTN Group had 49% ownership of Irancell and IEDC had 51% ownership. (Id. ¶ 798.)
IEDC is made up of two shareholders, the Bonyad Mostazafan (the "Bonyad") and Iran Electronics Industries ("IEI"), which Plaintiffs allege were and are fronts for the IRGC. (Id. ¶¶ 773, 791.) The Bonyad was established after the Islamic Revolution and has served as a central hub for fundraising, weapons development and acquisition, computing, and communications infrastructure for the IRGC's terrorist enterprise. (Id. ¶¶ 99, 774.) The Bonyad was commanded by Mohammad Forouzandeh, the former Chief of Staff for the IRGC. (Id. ¶¶ 99, 939.) Plaintiffs further allege through media reports between 1995 and 2008 that the Bonyad was widely understood as a front for the procurement of military goods and prohibited technology for Iran, and particularly the IRGC. (Id. ¶¶ 776-82.) Although the organization is ostensibly a charitable one, the Bonyad "primarily serves as a front for terror and performs little legitimate charitable work." (Id. ¶¶ 786-87 (quoting U.S. Treasury Department statement from 2020).)
Plaintiffs allege that IEI's "express purpose was and is to raise funds and obtain weapons" for the IRGC's terrorist operations through its commercial transactions. (Id. ¶ 792.) In 2008, the U.S. Treasury Department designated IEI for its role in Iran's nuclear and ballistic missile programs, noting that IEI is "owned or controlled by Iran's [Ministry of Defense]" and has been implicated in illicit transactions concerning dual use, missile-related items. U.S. Treasury Dep't, Treasury Designates Iranian Military Firms (Sept. 17, 2008), https://home.treasury.gov/news/press-releases/hp1145. IEI produces military products that include communications equipment and missile launchers. Id.
MTN allegedly joined the IRGC conspiracy "on or about 2005, when MTN Group's President and CEO" executed an agreement to enter the joint venture (the "Letter Agreement"). (AC ¶ 111.) Plaintiffs allege that the Letter Agreement "is replete with indicia" that it was drafted by the IRGC, including the statement: "The cooperation between MTN and Iranian shareholders should be in the line of defensive, security and political cooperation." (Id. ¶¶ 941-42.) Plaintiffs assert that "security" is a known euphemism for terrorism against enemies of Iran, i.e., the United States. (Id. ¶ 879.)
MTN concealed the fact that its President and CEO signed the Letter Agreement, (id. ¶ 952), and referred to the Iranian venture as "Project Snooker" in internal documents, (id. ¶ 955). Prior to the Letter Agreement, MTN made corrupt payments to government officials to secure the Irancell license, including a $400,000 payment—disguised as a sham consultancy payment—to an Iranian government
operative. (Id. ¶ 957.) The purpose of the payment was to encourage the Iranian government to replace another company that had been awarded the Irancell license, Turkcell, with MTN, "in exchange for defence co-operation." (Id. ¶ 964.)
Leaked whistleblower documents have revealed that MTN Group "openly discussed circumventing U.S. sanctions to source American tech equipment for MTN Irancell." (Id. ¶¶ 976-77.) MTN procured these technologies through U.S. agents, including a company called "Exit40," by knowingly evading U.S. sanctions. See infra, From 2005 to the present, Plaintiffs allege that Irancell "provided tens of millions of dollars annually in illicit funds, weapons, and operational support to Hezbollah, [JAM], and the IRGC." (Id. ¶ 990.)
2. Telecommunications Company of Iran ("TCI")
In 2009, the IRGC publicly assumed a majority stake—again, 51% ownership—in an Iranian telecom company, TCI. (Id. ¶ 769.) TCI is the parent company of the Mobile Communication Co. of Iran ("MCI"). (Id. ¶ 805.) Plaintiffs allege that both TCI and MCI are fronts for the IRGC. (Id. ¶¶ 804-07.) ZTE Corp. and its subsidiaries contracted with TCI, and from 2010 to 2016, ZTE "secured contracts worth hundreds of millions of dollars" and exported over 20 million U.S.-origin items to the IRGC. (Id. ¶¶ 1126, 1128, 1134(vii).) Plaintiffs allege that ZTE's U.S. subsidiaries were involved in sourcing U.S. technology for ZTE Corp. (and therefore for the IRGC). (Id. ¶¶ 1125-26.)
In 2012, the United States Office of Foreign Assets Control ("OFAC") began investigating ZTE Corp.'s business with Iranian companies. (Id. ¶ 1205.) On March 7, 2017, ZTE Corp. pleaded guilty to violating trade sanctions by sending U.S. origin goods to Iran. (Id. ¶ 1125.) The same day, ZTE Corp. executed a settlement agreement with OFAC. (Id. ¶¶ 75-76, 1134.) In the agreement, ZTE Corp. admitted to knowingly participating in a scheme of at least 251 transactions to illegally transfer over $39 million in embargoed U.S. goods to Iran. (D.E. # 83-2 ("Gopal Decl.") Ex. C ("OFAC Settlement Agreement") 2, 6-7.)
The OFAC Settlement Agreement details ZTE Corp.'s attempted concealment of the scheme. Specifically, ZTE Corp.'s senior leadership engaged in a "companywide scheme" to evade trade sanctions by using third-party companies, called "isolation companies," to conceal and facilitate its business of shipping U.S.-origin goods to Iran. (Id. at 2.) In May 2012, ZTE USA's former general counsel, Ashley Kyle Yablon, gave the FBI an affidavit in which he alleged that ZTE had plotted to cover up the Iran sales of U.S.-origin goods. (AC ¶ 1146.) Yablon allegedly instructed ZTE USA employees not to destroy evidence regarding the subsidiary's exports of such goods. (Id.)
Plaintiffs also allege that Huawei Co. and its subsidiaries contracted with TCI, MCI, and Irancell. (Id. ¶¶ 1217, 1256.) Many of the Huawei-based allegations mirror the ZTE-based allegations; namely, that Huawei Co. conspired with its U.S. subsidiaries to acquire U.S. technologies for its Iranian business partners, as detailed in a 2018 federal grand jury indictment. (Id. ¶¶ 1219, 1227.) Huawei entities also allegedly misappropriated U.S.-origin technologies and intellectual property from competitors and lied to government authorities and destroyed evidence regarding Huawei's activities in Iran. (Id.)
Through these schemes, Plaintiffs allege that ZTE Corp., Huawei Co., and their subsidiaries provided millions of dollars, embargoed technologies, and technical aid to TCI and MCI, which in turn allegedly
funneled money and technologies to Hezbollah and terrorist proxies. (Id. ¶¶ 1135-38, 1274.)
3. Exit40
Exit40 is a company with letter box offices in the United Arab Emirates, Florida, India, and Switzerland. (Id. ¶ 856.) Plaintiffs allege, on information and belief, that Exit40 was a front company "created by or for" Hezbollah and the Qods Force and that Defendants—or "an operative, employee, agent, or cut-out from" Defendants, "or another IRGC-controlled entity" —each paid millions of U.S. dollars to Exit40 to procure the embargoed American technologies that were identified by the IRGC as necessary to their terrorist enterprise. (Id. ¶¶ 860-76.) As to MTN specifically, MTN Group and MTN Dubai "had a business relationship with Exit40" and employees were instructed not to mention Exit40 over the phone or in emails. (Id. ¶¶ 858-59.)
C. Funds Are Routed from IRGC Fronts to Terrorist Proxies
Pursuant to IRGC policy, all IRGC front companies and operatives "share a percentage of all income they realize with the IRGC." (Id. ¶ 839.) This decree was allegedly conveyed via a 2003 directive that was issued to escalate the flow of funding supporting the IRGC's terrorist proxy groups in Iraq and Afghanistan. (Id.) Plaintiffs allege that the IRGC also diverts much of the technology and revenue it acquires from its business with Western companies to terrorism, including arming and training Hezbollah. (Id. ¶ 822.) Through the routing of funds and embargoed encryption technologies, Defendants allegedly helped the IRGC better conceal their communications with terrorist operatives, (id. ¶¶ 1009-10), and increased the efficacy of Hezbollahdesigned IEDs and EFPs, (id. ¶ 1011).
D. MTN Group Issues "Protection" Payments to the Taliban
Despite U.S. and Afghan government opposition, MTN also supported the Taliban in Afghanistan by (1) issuing protection payments and (2) deactivating its cell towers at the Taliban's request. (Id. ¶¶ 1041-67.) The Taliban asked MTN Group and other telecom companies to pay monthly protection fees in each province— usually in the range of $2,000 per tower— or else face attacks on its staff and network. (Id. ¶¶ 1040-41.) During the relevant period, MTN Group agreed to these security "taxes" "[r]ather than invest in expensive security for its transmission masts," and MTN Afghanistan (with the support and approval of MTN Group) deactivated cell towers at specific times of night in response to the Taliban's demands. (Id. ¶¶ 1044-61.) The Taliban wanted nighttime service in certain quadrants to shut down to impede the Coalition forces' ability to locate Taliban operatives, and the tower shutdowns in fact did so. (Id. ¶¶ 1055, 1066.)
IV. The Attacks
Plaintiffs or their family members were injured or killed in ten attacks in Iraq (in 2011, 2016, and 2017), and two attacks in Afghanistan (in 2019). (Id. ¶¶ 1405-1588.) The 2011 and 2016 attacks that injured Plaintiffs in Iraq were committed by a Joint Cell composed of Hezbollah, Jaysh al-Mahdi, and Qods Force operatives, and were allegedly planned and authorized by Hezbollah. (Id. ¶ 287.) The 2017 attack was committed by al-Qaeda and Ansar al-Islam. (Id. ¶¶ 1545-46.) In Afghanistan, one attack was jointly committed by al-Qaeda, the Haqqani Network, and Lashkar-e-Taiba, and the other "by the Taliban and its Haqqani Network," (id. ¶¶ 1557, 1569), with indirect support from Hezbollah, (id. ¶¶ 266-69). STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of a complaint for "lack of personal jurisdiction." The plaintiff has the burden of demonstrating personal jurisdiction. Troma Ent., Inc. v. Centennial Pictures Inc., 729 F.3d 215, 217 (2d Cir. 2013). "[W]hen the issue is decided initially on the pleadings and without discovery, the plaintiff need show only a prima facie case" of personal jurisdiction. Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir. 1984). "[I]n considering a Rule 12(b)(2) motion, the pleadings and affidavits are to be construed in the light most favorable to plaintiff, the non-moving party, and all doubts are to be resolved in plaintiff's favor." Pisani v. Diener, No. 07-cv-5118 (JFB) (ARL), 2009 WL 749893, at *5 (E.D.N.Y. Mar. 17, 2009). I do not, however, "draw argumentative inferences in the plaintiff's favor," Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994), or "accept as true a legal conclusion couched as a factual allegation." Jazini v. Nissan Motor Co., 148 F.3d 181, 185 (2d Cir. 1998) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)).
Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint that "fail[s] to state a claim upon which relief can be granted." A complaint will be dismissed unless the plaintiff states a claim that is "plausible on its face" by alleging sufficient facts for "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A court must dismiss a claim if the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct." Id. at 679, 129 S.Ct. 1937. Although courts will not credit "conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." id. at 678, 129 S.Ct. 1937, the court must accept as true all material factual allegations and draw all reasonable inferences in the plaintiff's favor. Johnson v. Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013).
DISCUSSION
Defendants move to dismiss Plaintiffs' Amended Complaint under Rule 12(b)(2), for lack of personal jurisdiction, and Rule 12(b)(6), for failure to state a claim. For the reasons set forth below, Defendants' motions to dismiss are GRANTED IN PART and DENIED IN PART.
I. Personal Jurisdiction
"To resolve jurisdictional issues, [courts] may consider affidavits and other materials beyond the pleadings, but [] cannot rely on conclusory or hearsay statements contained in the affidavits." Cooke v. United States, 918 F.3d 77, 80 (2d Cir. 2019); Colliton v. Bunt, 709 F. App'x 82, 83 (2d Cir. 2018) (summary order). The allegations in the complaint are presumed true "to the extent they are uncontroverted by the defendant's affidavits," MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012) (citation omitted), and all factual disputes are resolved in the plaintiff's favor, see DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001).
Before a court may exercise personal jurisdiction over a defendant, three requirements must be met: (1) "the plaintiff's service of process upon the defendant must have been procedurally proper"; (2) "there must be a statutory basis for personal jurisdiction that renders such service of process effective"; and (3) "the exercise of personal jurisdiction must comport with constitutional due process principles."
Waldman v. Palestine Liberation Org., 835 F.3d 317, 327 (2d Cir. 2016) (quoting Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59-60 (2d Cir. 2012)). Because the parties do not dispute that Defendants were properly served, I turn to the second two requirements.
A. ZTE USA and ZTE TX
Plaintiffs invoke Federal Rule of Civil Procedure 4(k)(1)(C) as the basis for statutory personal jurisdiction over the ZTE U.S. Defendants. ZTE's U.S. subsidiaries move to dismiss for lack of jurisdiction and assert that Plaintiffs cannot invoke the ATA's "nationwide service" provision for purposes of Rule 4(k)(1)(C) because some plaintiffs cannot satisfy the statute's preconditions and, in any event, such invocation does not survive due process scrutiny. (See D.E. # 83 ("ZTE Br.") 49.) Although I conclude that the ATA's nationwide service provision properly confers a statutory basis for personal jurisdiction, because Plaintiffs do not satisfy constitutional due process, ZTE U.S.'s motion to dismiss for lack of jurisdiction is granted.
1. Nationwide Service under 18 U.S.C. § 2334(a)
Federal Rule of Civil Procedure 4(k)(1)(C) provides that service of a summons may establish personal jurisdiction "when authorized by a federal statute." "Where a federal statute authorizes nationwide service of process, this provision permits the exercise of personal jurisdiction over parties properly served anywhere in the United States." Cohen v. Facebook, Inc., 252 F. Supp. 3d 140, 152 (E.D.N.Y. 2017).
The ATA's "General Venue" clause provides:
Any civil action under section 2333 of this title against any person may be instituted in the district court of the United States for any district where any plaintiff resides or where any defendant resides or is served, or has an agent. Process in such a civil action may be served in any district where the defendant resides, is found, or has an agent.
18 U.S.C. § 2334(a). The last sentence of this section clearly confers nationwide service of process and therefore jurisdiction under Rule 4(k)(1)(C). See, e.g., Weiss v. Nat'l Westminster Bank PLC, 176 F. Supp. 3d 264, 284 (E.D.N.Y. 2016); Strauss v. Credit Lyonnais, S.A., 175 F. Supp. 3d 3, 26-27 (E.D.N.Y. 2016). The ZTE U.S. Defendants do not contest that they were served in the United States, and accordingly, statutory jurisdiction is properly conferred as to those defendants.
To the extent that the preceding sentence addressing venue is considered a precondition to nationwide service of process, as ZTE appears to contend, I find that venue is satisfied here as to all Plaintiffs. In ATA cases, venue is proper in "any district where any plaintiff resides," and I find no reason to revise "any plaintiff" to "all plaintiffs" for purposes of venue or personal jurisdiction. See Francisco v. NYTex Care, Inc., No. 19-cv-4606 (PKC) (ST), 2019 WL 6716634, at *2 (E.D.N.Y. Dec. 10, 2019) ("Statutory interpretation begins with the text of the statute, looking to its plain language and the specific context in which the language is used."); United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) ("The plain meaning of legislation should be conclusive, except in the rare cases in which the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters." (internal quotation marks omitted)).
2. Due Process
Even if a statutory basis for personal jurisdiction exists, however, I
must still determine whether Plaintiffs satisfy due process. See Cohen, 252 F. Supp. 3d at 153. Due process considerations require that the defendant "have certain minimum contacts [with the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotation marks omitted). Minimum contacts may be satisfied through either general or specific jurisdiction. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). Plaintiffs do not contend that any Defendant is subject to general jurisdiction in New York. Accordingly, I turn to specific jurisdiction, which is also conferred only if the defendant's in-forum contacts "gave rise to the episode-in-suit," (i.e., are sufficiently suit-related). Id. at 923, 131 S.Ct. 2846.
And indeed, general jurisdiction is plainly inapplicable here. A corporation is subject to general jurisdiction only where it is "essentially at home." Daimler AG v. Bauman, 571 U.S. 117, 122, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (quoting Goodyear, 564 U.S. at 919, 131 S.Ct. 2846). The Second Circuit has held that "except in a truly 'exceptional' case, a corporate defendant may be treated as 'essentially at home' only where it is incorporated or maintains its principal place of business." Brown v. Lockheed Martin Corp., 814 F.3d 619, 627 (2d Cir. 2016). All three Defendants are foreign companies that are neither incorporated in nor maintain their principal place of business in New York.
"Minimum contacts" sufficient to confer specific jurisdiction exist if "the defendant purposefully availed itself of the privilege of doing business in the forum and could foresee being haled into court there." Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 170 (2d Cir. 2013) (quoting Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 127 (2d Cir. 2002)). Courts typically conduct this inquiry under two separate prongs: (1) the "purposeful availment" prong, "whereby the court determines whether the entity deliberately directed its conduct at the forum"; and (2) the "relatedness" prong, "whereby the court determines whether the controversy at issue arose out of or related to the entity's inforum conduct." Gucci Am., Inc. v. Weixing Li, 135 F. Supp. 3d 87, 97 (S.D.N.Y. 2015).
As an initial matter, the proper "forum" for assessing minimum contacts under § 2333(a) is the United States as a whole, not the local district. See Cohen, 252 F. Supp. 3d at 153 ("[When applying] the ATA's nationwide service provision, courts have consistently held that defendants are subject to personal jurisdiction for civil claims under that act where they have minimum contacts with the United States as a whole."); Nutriband, Inc. v. Kalmar, No. 19-cv-2511 (NGG) (SJB), 2020 WL 4059657, at *3 (E.D.N.Y. July 20, 2020) ("In federal question cases brought under a statute where Congress has provided for worldwide service of process, a defendant's aggregate contacts with the United States govern the minimum contacts inquiry."); see also Chew v. Dietrich, 143 F.3d 24, 28 n.4 (2d Cir. 1998).
The ZTE U.S. Defendants contend that at most, Plaintiffs have shown minimum suit-related contacts by ZTE Corp., the parent corporation, and a parent company's conduct cannot be attributed to its subsidiaries if they have not been shown to be alter egos. (ZTE Br. 52.) Plaintiffs respond that personal jurisdiction can be properly conferred because ZTE Corp.'s sanctions-evasion scheme utilized U.S. contacts and it did so "in collaboration with and with the assistance of its U.S. subsidiaries. (AC ¶ 1125.) The alleged evidence of
the subsidiaries' involvement in the scheme is that the 2017 OFAC Settlement Agreement, which accompanied ZTE Corp.'s guilty plea to export control violations, was executed by, and binds, "ZTE and its subsidiaries and affiliates." (OFAC Settlement Agreement 1; AC ¶¶ 75-76.) In the Agreement, ZTE admits to knowingly participating in a scheme to illegally transfer millions of dollars in U.S. goods to TCI, which Plaintiffs allege is a front for the IRGC. (OFAC Settlement Agreement 2.)
The key first question, then, is whether Plaintiffs have sufficiently alleged ZTE USA and ZTE TX's participation in the sanctions-evasion scheme through the OFAC Settlement Agreement, or if, as ZTE maintains, the allegations are at best limited to ZTE Corp. "[A] plaintiff is required to establish personal jurisdiction separately over each defendant." In re Aegean Marine Petro. Network, Inc. Sec. Litig., 529 F. Supp. 3d 111, 135 (S.D.N.Y. 2021). "Allegations in the form of a group pleading are insufficient, even for affiliated corporate entities." In re SSA Bonds Antitrust Litig., 420 F. Supp. 3d 219, 233 (S.D.N.Y. 2019).
The OFAC Settlement Agreement and accompanying documents undermine Plaintiffs' argument that ZTE USA and ZTE TX were implicated in ZTE Corp.'s scheme. Neither subsidiary was a signatory to the Agreement, and the accompanying documents were explicit in identifying the (other) entities involved in ZTE Corp.'s violations. (See Gopal Decl. Ex. A ("Factual Resume"), Ex. B ("Guilty Plea Agreement").) For example, the Factual Resume details ZTE Corp.'s scheme to illegally cause the export of goods from the United States to Iran and names ZTE Corp.'s co-conspirators. (Factual Resume ¶ 3.) The only named co-conspirator that is a ZTE subsidiary is ZTE Parsian, based in Tehran. (Id. ¶¶ 3-4, 32-33, 45, 50.) The Factual Resume also names the co-conspirator companies that acted as vehicles for ZTE Corp. in hiding its shipments of U.S. origin items to Iran: Beijing 8 Star Co. International ("8S") and Chinese Company A ("CCA"). (Id. ¶¶ 5-6.) The document describes 8S, and later CCA, as "isolation companies" through which ZTE Corp. purchased the embargoed equipment from suppliers to conceal ZTE Corp.'s role. (Id. ¶ 24.) ZTE USA, on the other hand, is mentioned only as ZTE Corp.'s U.S. subsidiary and is not described as playing a role in the export control violations. (Id. ¶ 4.) At most, the Factual Resume points out that U.S. government agencies served ZTE USA with subpoenas, and the FBI sought documents and records related to all sales to Iran and conducted searches of various ZTE USA offices. (Id. ¶¶ 43. 57.) From this, Plaintiffs infer that "all the evidence supporting the prosecution of ZTE was obtained from ZTE USA." (D.E. # 87 ("ZTE Opp'n") 21.) But notably, these subpoenas were sent when Reuters reported in March 2012 that ZTE Corp. was selling systems with U.S.origin component parts to Iran; in other words, when those agencies began their investigations into ZTE Corp.'s misconduct. (Factual Resume ¶¶ 43, 57.) Plaintiffs also point out that the Guilty Plea Agreement allows the United States to seize assets of ZTE USA if ZTE Corp. does not pay its forfeiture money judgment. (Guilty Plea Agreement § 13(c).)
The Factual Resume is a stipulation of facts that was agreed to by ZTE Corp. and the U.S. Attorney's Office and could be used in support of ZTE Corp.'s guilty plea. (See Factual Resume 1.)
Although I make all reasonable inferences in Plaintiffs' favor, I need not draw argumentative inferences, Robinson, 21
F.3d at 507, and the allegations in the complaint are presumed true only "to the extent they are uncontroverted by the defendant's affidavits," MacDermid, 702 F.3d at 727 (internal quotation omitted). Although the underlying trade sanctions documents reference ZTE USA, none of those documents ultimately implicate ZTE USA in wrongdoing. That the U.S. government used ZTE USA, its U.S. subsidiary, as a vehicle to investigate ZTE Corp.'s criminal activity makes sense. And the fact that ZTE USA was searched and investigated but the Factual Resume—the culmination of that investigation—does not assert that ZTE USA aided. ZTE Corp.'s sanctions-evasion scheme makes Plaintiffs' allegations implausible. The seizure-of-assets provision also does not support Plaintiffs' contentions; ZTE Corp. is a foreign company, and Plaintiffs do not challenge ZTE's assertion that it is most straightforward for the government to target U.S.-based assets. Nor does backing up ZTE Corp.'s money judgment imply that the subsidiary was involved in the underlying crimes.
Importantly, the Factual Resume controverts Plaintiffs' allegations that ZTE USA served as an agent for ZTE Corp. in sourcing embargoed U.S. goods because the government's investigation revealed that two other companies, 8S and CCA, played that role. Although it is not inconceivable that ZTE USA also sourced goods for ZTE Corp., the otherwise detailed Factual Resume omits any mention of them doing so. The document also makes clear that the purpose of such "isolation companies" would be to distance ZTE Corp. from the transaction, and a parent utilizing its U.S. subsidiaries as instruments for illegality would not do so. See Bordeaux v. One-Coin Ltd., 561 F. Supp. 3d 379, 397 (S.D.N.Y. 2021) (no personal jurisdiction where the plaintiffs "attempt[ed] to extend an allegation levied against one particular Defendant to the remaining Defendants in the group" through "speculative and conclusory allegations").
ZTE TX is not mentioned anywhere in the OFAC Settlement Agreement or accompanying documents. (ZTE Br. 5.) Plaintiffs assert in conclusory fashion that even though ZTE TX was not formed until at least 2013, the entity participated in the scheme after its formation. (AC ¶ 1126.) The documents belie this contention, and the allegations are unsupported. Plaintiffs appear to maintain that because ZTE TX was founded in 2013, after the FBI began investigating the sanctions-evasion scheme, and given 'that ZTE Corp. had allegedly been using ZTE USA for sourcing U.S. goods before that point, it is plausible to infer that ZTE TX was created for the purpose of continuing that role. (ZTE Opp'n 20 n.3.) But "[p]leading a fact that is 'merely consistent with a defendant's liability' does not satisfy the plausibility standard." Abu Dhabi Com. Bank v. Morgan Stanley & Co. Inc., 651 F. Supp. 2d 155, 170 (S.D.N.Y. 2009) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937). Accordingly, the allegations of misconduct in the OFAC Settlement Agreement are not properly attributed to either ZTE USA or ZTE TX.
Nor do Plaintiffs' other allegations concerning ZTE USA's former general counsel, Ashley Yablon, suggest a different conclusion. In May 2012, Yablon gave the FBI an affidavit in which he alleged that ZTE had plotted to cover up the Iran sales of U.S.-origin goods. (AC ¶ 1146.) Yablon also instructed ZTE USA employees not to destroy evidence regarding the company's exports of such goods. (Id.) But even if Yablon knew about ZTE Corp.'s sanctions violations, and especially if he passed on information to U.S. authorities, it does not explain why ZTE USA was not implicated in the Factual Resume. Without additional supporting facts and in light of ZTE's controverting
evidence, Plaintiffs fail to meet their burden to make a prima facie showing. Plaintiffs' allegations are—at most— consistent with ZTE USA's involvement, but that is not sufficient to plausibly plead such involvement. See Abu Dhabi Com. Bank, 651 F. Supp. 2d at 170. As a result, Plaintiffs do not plead the requisite minimum suit-related U.S. contacts.
Because Plaintiffs have not shown "minimum contacts," I need not reach the separate reasonableness requirement.
In the alternative, Plaintiffs request jurisdictional discovery. "District courts have broad discretion to decide whether to allow jurisdictional discovery and, if so to what extent." In re MS Angeln GmbH & Co. KG, No. 10-cv-4820 (GBD), 2012 WL 1080300, at *7 (S.D.N.Y. Mar. 29, 2012). "If a plaintiff has identified a genuine issue of jurisdictional fact, jurisdiction[al] discovery is appropriate even in the absence of a prima facie showing as to the existence of jurisdiction." Daventree Ltd. v. Republic of Azerbaijan, 349 F. Supp. 2d 736, 761 (S.D.N.Y. 2004). Plaintiffs request "jurisdictional discovery into the two subsidiaries' role in the overall scheme." (ZTE Opp'n 60.) Plaintiffs' request for jurisdictional discovery is overly broad. "Requests for limited discovery to help establish components of jurisdiction should be denied where the discovery 'goes as much to the heart of [the] plaintiff['s] claims on the merits as it does the jurisdictional issues.'" Doe 1 v. Congregation of the Sacred Hearts of Jesus & Mary, No. 21-cv-6865 (VSB), 2022 WL 2901403, at *3 (S.D.N.Y. July 22, 2022) (quoting Sonterra Cap. Master Fund Ltd. v. Credit Suisse Grp. AG, 277 F. Supp. 3d 521, 599 (S.D.N.Y. 2017)); Zurich Am. Life Ins. Co. v. Nagel, 571 F.Supp.3d 168, 182 (S.D.N.Y. 2021) (denying jurisdictional discovery where proposed requests were "not narrow; they instead appear[ed] to be an attempt to conduct discovery that goes as much to the merits as it does to jurisdiction"). Plaintiffs' discovery request goes to the heart of their claims because their arguments for liability under JASTA are also predicated on ZTE USA and ZTE TX's involvement in sourcing U.S. goods to be sent to Iran. Plaintiffs' request for jurisdictional discovery is therefore denied and their claims against the ZTE U.S. Defendants are dismissed for lack of personal jurisdiction.
B. Huawei U.S.
As with ZTE, Plaintiffs invoke Rule 4(k)(1)(C) as their basis for statutory jurisdiction over the Huawei U.S. Defendants. Huawei argues that (1) all Plaintiffs cannot satisfy the venue precondition for purposes of personal jurisdiction, and (2) the proper forum against which a defendant's minimum contacts should be judged is the local district, not the United States as a whole. (Huawei Br. 57-59.) For the reasons given above, see supra Part I.A.1, I do not find either argument persuasive.
Huawei's motion to dismiss challenged two additional bases for personal jurisdiction: Rule 4(k)(2) and Rule 4(k)(1)(A). Plaintiffs did not address either argument in their opposition to Huawei's motion, so I consider those grounds for jurisdiction abandoned. See Robinson v. Fischer, No. 09-cv-8882 (LAK) (AJP), 2010 WL 5376204, at *10 (S.D.N.Y. Dec. 29, 2010) ("Federal courts have the discretion to deem a claim abandoned when a defendant moves to dismiss that claim and the plaintiff fails to address in their opposition papers defendants' arguments for dismissing such a claim.").
Turning to due process, the Huawei U.S. Defendants do not contest that they have suit-related minimum contacts with the United States. Instead, they argue that finding jurisdiction here offends reasonableness principles because the U.S. Defendants
and Plaintiffs' claims lack connection to New York, and all the evidence and relevant parties are outside of New York. (Huawei Br. 59-60.) Thus, other than asserting generally that the burden on Huawei in terms of evidence and witnesses is higher than it would be elsewhere in the United States, Huawei merely repeats its argument that the proper forum for assessing minimum contacts—despite the nationwide service provision—is New York. In any event, "[t]he reasonableness inquiry is largely academic in non-diversity cases brought under a federal law which provides for nationwide service of process' because of the strong federal interests involved." Nutriband, 2020 WL 4059657, at *3 (citation omitted). Accordingly, the Huawei U.S. Defendants' motion to dismiss for lack of personal jurisdiction is denied.
C. MTN
As a threshold matter, and contrary to Plaintiffs' contention, (MTN Opp'n 38), MTN did not waive its objection to personal jurisdiction by moving to transfer "nearly identical" litigation from the U.S. District Court for the District of Columbia to this Court. Waiver requires the "intentional relinquishment or abandonment of a known right," United States v. Quinones, 511 F.3d 289, 321 n.21 (2d Cir. 2007) (quoting United States v. Olano, 507 U.S. 725, 733, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)), and here. MTN moved to transfer the D.C. cases but maintained that personal jurisdiction was not proper in any U.S. court, see Mot. To Transfer Venue 12-14, Davis v. MTN Telecomms. Servs. Co., No. 22-cv-829 (D.D.C. May 26, 2022) (ECF No. 23).
Plaintiffs invoke a different statutory basis for personal jurisdiction for MTN: the federal long-arm statute. The federal long-arm statute confers jurisdiction over federal law claims where defendants are—as MTN is—"not subject to jurisdiction in any state's courts of general jurisdiction." Fed. R. Civ. P. 4(k)(2)(A). Rule 4(k)(2) requires that "exercising jurisdiction [be] consistent with the United States Constitution and laws," id., meaning that the exercise of jurisdiction must "comport[] with the limits imposed by federal due process," Walden v. Fiore, 571 U.S. 277, 283, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) (citation omitted). MTN does not contest that Rule 4(k)(2) provides a statutory basis for jurisdiction: instead, MTN argues that its contacts do not satisfy due process.
"The inquiry [of] whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relationship among the defendant, the forum, and the litigation." In re del Valle Ruiz, 939 F.3d 520, 528 (2d Cir. 2019) (citation omitted). Because Plaintiffs invoke the federal long-arm statute, the relevant contacts are MTN's contacts with the United States as a whole. See Dardana Ltd. v. A.O. Yuganskneftegaz, 317 F.3d 202, 207 (2d Cir. 2003). Plaintiffs raise two theories for how MTN purposefully established suit-related minimum contacts with the United States: (1) MTN "purposefully availed" itself of the benefits of the United States by procuring embargoed U.S. technologies for Irancell, and (2) MTN "expressly aimed" its tortious conduct at the United States. (MTN Opp'n 17-34.) For the following reasons, MTN Dubai's motion to dismiss for lack of jurisdiction is granted, and MTN Group's motion to dismiss for lack of jurisdiction is denied.
1. Purposeful Availment
Plaintiffs advance several theories of MTN's contacts with the United States that generally fall into two categories: (1) MTN directed agents to source embargoed U.S. technologies for Irancell; and (2) MTN utilized the U.S. financial system. (MTN Opp'n 16.) I view those alleged contacts
in the aggregate for purposes of due process. See Mucha v. Volkswagen Aktiengesellschaft, 540 F. Supp. 3d 269, 282 (E.D.N.Y. 2021).
Sourcing Embargoed U.S.-Origin Components for Irancell
Plaintiffs argue that MTN purposefully availed itself of the privileges of the United States by sourcing embargoed U.S. goods for Irancell. Personal jurisdiction rules "provide[] defendants with fair warning" that allow them to "structure [their] primary conduct to lessen or avoid exposure to a given [forum's] courts." Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 592 U.S. 351, 141 S. Ct. 1017, 1025, 209 L.Ed.2d 225 (2021) (internal quotation marks and citations omitted). A defendant can have minimum contacts with a forum where it "deliberately 'reached out beyond' its home—by, for example, 'exploi[ting] a market' in the forum State or entering a contractual relationship centered there." Id. (alteration in original) (quoting Walden, 571 U.S. at 285, 134 S.Ct. 1115). "The contacts must be the defendant's own choice and not 'random, isolated, or fortuitous.'" Id. (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984)).
Courts have found personal jurisdiction to be properly conferred where foreign defendants source goods from the forum. See Atchley v. AstraZeneca UK Ltd., 22 F.4th 204, 233 (D.C. Cir. 2022) (exercising personal jurisdiction over foreign defendants who "[c]ontinuously over a period of years ... reached into the United States to source goods manufactured here to fulfill the Iraqi contracts"). Here, Plaintiffs allege MTN Group's participation in, and direction of, a United States-centric procurement scheme. According to a Reuters report, "internal [MTN Group] documents" "show that MTN [Group] employees created presentations for meetings and wrote reports that openly discussed circumventing U.S. sanctions to source American tech equipment for MTN Irancell." (AC ¶ 977; see also id. ¶¶ 976, 983.) MTN Group "maintained 'a lengthy spreadsheet of '3rd party' equipment... that list[ed] hundreds of U.S. components" to be sourced for Irancell. (Id. ¶¶ 981-83; see also id. ¶ 1007; D.E. # 82-35 (Steve Stecklow, Special Report: Documents Detail How MTN Funneled U.S. Technology to Iran ("Special Report") (Aug. 30, 2012) ("The equipment included products from Sun Microsystems Inc., Oracle Corp, International Business Machines Corp, EMC Corp, Hewlett Packard Co. and Cisco Systems Inc., and was used to provide such services as wiretapping, voice mail and text messaging, [MTN internal] documents show.")).)
Plaintiffs further allege that the U.S.origin items were needed both because of MTN's familiarity with them, (AC ¶ 976), and because they were requested by their business partners, the Iranian shareholders, (id. ¶¶ 935, 976. 1006, 1615). The IRGC "relied upon American-designed, protected, manufactured, and/or assembled technologies, including but not limited to, mobile phones, smartphones, enterprise level servers, computer networking technologies, and software, because they have been the gold standard from 9/11 through today." (Id. ¶ 711.) Plaintiffs allege that no other country made publicly available secure encrypted smartphones that could be sourced for the joint venture. (Id.); see Atchley, 22 F.4th at 237 ("[W]hereas the money used in Licci to violate the statute incidentally flowed through the United States, here, the goods used to violate the ATA originated in the forum and were specially desired by the terrorist organization because of that source.").
MTN Group also took a leadership role in the procurement scheme. An MTN executive
has stated that "MTN Group" "was directly involved in procuring U.S. parts for MTN Irancell," including by "represent[ng] the Iranian Shareholders as their purchasing agent," and that "[a]ll the procedures and processes around procurement were established by MTN." (AC ¶¶ 935, 1007.) MTN also understood that its role in the procurement scheme opened it up to liability from the U.S. government. MTN internal documents allegedly discussed the risks of the sanctions-evasion scheme, (id. ¶ 978), and noted that the "U.S. government could blacklist MTN" and thereby prevent other MTN operations "from sourcing products/services from U.S. based companies," (id. ¶ 980). MTN also attempted to cover up its role in the scheme by falsely assuring the U.S. government in 2010 or 2011 that it was not supplying the IRGC with any embargoed U.S. technology in violation of U.S. sanctions. ( See id. ¶ 986.) MTN's understanding that its role in the procurement scheme could lead to consequences from the U.S. government plausibly raises the inference that MTN had "fair warning" that it would be subject to jurisdiction in U.S. courts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
As an initial matter, I reject MTN's contention that Plaintiffs engage in improper group pleading in seeking to attribute the procurement scheme to MTN Group. (MTN Br. 20.) "For purposes of alleging that there is personal jurisdiction over each [f]orcign [d]efendant, plaintiffs may not refer to affiliated defendants by a conclusory collective name unless plaintiffs adequately allege that the conduct of one affiliate is attributable to another." Front-Point Asian Event Driven Fund, L.P. v. Citibank, N.A., No. 16-cv-5263 (AKH), 2017 WL 3600425, at *6 (S.D.N.Y. Aug. 18, 2017). Plaintiffs' allegations are occasionally inartful or ambiguous, but on the whole, suffice to identify MTN Group as the principal that directed agents to procure embargoed U.S. technologies. (See AC at 261 (heading: "MTN Group knowingly used Exit40 to finance Hezbollah and the Qods Force"); ¶¶ 862-63, 933, 935, 981-83 1001, 1007).
Plaintiffs' allegations are insufficient, however, with respect to MTN Dubai. The Amended Complaint does not attribute any specific conduct to MTN Dubai; rather, Plaintiffs argue their group-pleading allegations are appropriate because they "adequately allege that the conduct of one affiliate is attributable to another." Front-Point, 2017 WL 3600425, at *6. Hut as courts in this Circuit have found, a "list of conclusory allegations of intra-corporate affiliations" is insufficient to show the requisite control by a principal over its subsidiary. In re LIBOR-Based Fin. Instruments Antitrust Litig., No. 11-MDL-2262 (NRB), 2019 WL 1331830, at *10 (S.D.N.Y. Mar. 25, 2019). Here, most of Plaintiffs' allegations are precisely the kind of barebones recitation of the veil-piercing standard that I reject. For example, Plaintiffs allege that "MTN Dubai was an MTN Group subsidiary and shell company created for financial and tax purposes," and that MTN Dubai "contained no independent business operations from MTN Group, [and] was run by MTN Group employees." (AC ¶¶ 918-21.)
Plaintiffs come closest to factual specificity by alleging that MTN Dubai "agreed as part of a U.S.-based financing deal to assume responsibility for MTN Afghanistan's operations — including its interactions with the Taliban." (Id. ¶ 918.) However, Plaintiffs do not allege specific facts suggesting that MTN Afghanistan and MTN Group's conduct in making the payments or ordering the tower shutdowns should be attributed to MTN Dubai. See
Karabu Corp. v. Gitner, 16 F. Supp. 2d 319, 325 (S.D.N.Y. 1998) (dismissing complaint against certain defendants where it was "completely devoid of any factual specificity indicating how each of the six defendants participated in the allegedly tortious conduct or what role they each played"). Accordingly, all claims against MTN Dubai are dismissed for lack of personal jurisdiction.
MTN next challenges purposeful availment by arguing that Plaintiffs do not plead a proper agency relationship, which matters because Plaintiffs' theory is that MTN Group directed its agents to procure embargoed U.S. technologies for Irancell. I conclude that Plaintiffs have sufficiently alleged purposeful availment. "[A] defendant can purposefully avail itself of a forum through the action of a third party by directing its agents or distributors to take action there." Schwab Short-Term Bond Mkt. Fund v. Lloyds Banking Grp. PLC, 22 F.4th 103, 122 (2d Cir. 2021) (cleaned up). To plead jurisdiction on an agency theory, a plaintiff must allege facts showing that the purported agent acted "for the benefit of, with the knowledge and consent of, and under some control by, the nonresident principal." Schwab I, 883 F.3d at 85. The question of control turns on "the realities of the relationship" in question rather than the formalities of agency law. Hau Yin To, 700 F. App'x at 68 (quoting CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 366 (2d Cir. 1986)).
Although the Second Circuit quoted this language from a decision interpreting New York's long-arm statute, courts have applied it to constitutional due process analysis. See Charles Schwab Corp. v. Hank of Am. Corp. ("Schwab I"), 883 F.3d 68, 85 (2d Cir. 2018). Where the Second Circuit has "found personal jurisdiction based on an agent's contacts, [it] has never suggested that due process requires something more than New York law." Id. (citing Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 169 (2d Cir. 2010)). This likewise applies to the cases interpreting New York's long-arm statute that follow, including Hau Yin To v. HSBC Holdings, PLC, 700 F. App'x 66 (2d Cir. 2017) (summary order); Barron Partners, LP v. Lab123, Inc., No. 07-cv-111135 (JSR), 2008 WL 2902187 (S.D.N.Y. July 25, 2008); and Shpak v. Curtis, No. 10-cv-1818 (RRM) (JO), 2011 WL 4460605, at *9 (E.D.N.Y. Sept. 26, 2011).
Drawing all reasonable inferences in Plaintiffs' favor, the Amended Complaint alleges enough facts to infer that MTN Group directed agents to source technologies from U.S. markets. To make a prima facie showing of control, "a plaintiff's allegations must sufficiently detail the defendant's conduct so as to persuade a court that the defendant was a primary actor in the specific matter in question." Barron Partners, 2008 WL 2902187, at *10 (quoting Karabu Corp., 16 F. Supp. 2d at 324). The Second Circuit has noted that agency for jurisdictional purposes is given a "broad[] interpretation," and the element of control is satisfied where the non-resident defendant played an active role in directing the intermediary's activities. See Spetner v. Palestine Inv. Bank, 70 F.4th 632, 640, 645 (2d Cir. 2023) (finding that personal jurisdiction was authorized under New York's long-arm statute on an agency theory and concluding that due process was satisfied for the same reason).
Here, MTN Group allegedly served as purchasing agent for the IRGC by directing intermediaries to procure specific U.S.-origin components as requested by their Iranian counterparties. (See, e.g., AC ¶¶ 711, 935, 1006-07); see Spetner, 70 F.4th at 645 (indirect but purposeful access was sufficient for due process where the defendant "affirmatively directed" a third party to act in the United States); Shpak, 2011 WL 4460605, at *9 (plaintiffs adequately alleged agency relationship where nonresident
defendants were alleged to have directed intermediaries to take specific actions in furtherance of alleged fraud scheme). Plaintiffs identify types of equipment MTN sourced, (AC ¶¶ 711, 1007), allege that the procedures and processes for procurement were determined by MTN, (id. ¶ 1007), and describe the contents of internal documents evincing MTN Group's intent to procure U.S. goods for Irancell, (id. ¶¶ 976-78. 980. 983).
MTN contends that Plaintiffs have not adequately identified any intermediary through which MTN sourced the embargoed technologies because many of the key allegations are made upon information and belief. "When allegations are made upon information and belief, the plaintiff must support them by offering facts upon which that belief is founded." Brodie v. Green Spot Foods, LLC, 503 F. Supp. 3d 1, 13 (S.D.N.Y. 2020). As to one intermediary, Exit40, Plaintiffs allege that Exit40 had offices in the U.A.E., Florida, and elsewhere, "MTN Group and MTN Dubai had a business relationship with Exit40," and the MTN Defendants "have gone to extreme lengths to conceal" that relationship, including by instructing employees "not to mention Exit40 over the phone or in an email." (AC ¶¶ 856, 858-59.)
Although the explicit allegations connecting Exit40 to MTN's procurement scheme arc made on information and belief, (see id. ¶¶ 856-57, 860-62, 864), other allegations and incorporated sources provide important context for that belief. For example, an article detailing Reuters's 2012 investigation of MTN's procurement scheme explicitly names Exit40. (See Special Report.) To be sure, the source states that a Kuwait-based telecom-service provider called Shabakkat sourced U.S. products from Exit40, described as a "distributor in Dubai" that also has a Florida office. (Special Report 6.) But this statement is in the context of reporting on internal MTN Group documents purportedly describing MTN Group's illegal procurement of U.S. equipment for Irancell. ( See id. ; see AC ¶¶ 899, 981, 1002, 1008, 1114 (noting that MTN Group relied on Middle Eastern front companies to bypass U.S. sanctions and source goods to be delivered to Iran).) The Reuters article also suggests that MTN was the one working with Shabakkat because an internal MTN spreadsheet detailing "Outstanding issues" cited hardware to be delivered by Shabakkat. (See Special Report 8.)
United States Financial System
Plaintiffs also contend that MTN purposefully availed itself of the U.S. financial system. (MTN Opp'n 25.) The Second Circuit has held that "the selection and repeated use of New York's banking system, as an instrument for accomplishing the alleged wrongs" under the ATA is sufficient for personal jurisdiction. Licci, 732 F.3d at 171.
Some of Plaintiffs' allegations related to deliberate use of the U.S. financial system are conclusory or it is not evident that they relate to Plaintiffs' ATA claims. (See AC ¶¶ 1094, 1097. 1099.) The allegations concerning MTN's $400,000 bribe, however, do suggest deliberate use of the U.S. financial system. MTN allegedly paid a $400,000 bribe, in U.S. dollars, (id. ¶ 1026), cleared by a U.S. bank, (id. ¶¶ 85, 1104), and for the purpose of securing the Irancell license, (id. ¶¶ 957, 992-96, 1105). Plaintiffs allege that MTN paid the bribe to an Iranian government operative through another MTN subsidiary's account
According to allegations from another complaint against MTN, the bribe went to the Iranian Deputy Foreign Minister. (AC ¶ 1026.)
to keep the payment off of MTN Group's books, and that "MTN has never proffered a legitimate explanation for that payment." (Id. ¶¶ 926, 957). MTN contends that the bribe is "not of a high enough volume or frequency to support purposeful availment," (MTN Br. 28), but the $400,000 bribe does not constitute MTN's only relevant U.S. contact. Rather, I must consider MTN's procurement-based contacts and financial market contacts in the aggregate. See Mucha, 540 F. Supp. 3d at 282. Together, Plaintiffs' allegations are sufficient for minimum contacts as to MTN Group.
2. Conduct "Expressly Aimed" at the United States
Plaintiffs' second theory for specific personal jurisdiction is "targeting." Under a targeting theory, a defendant that acts outside the forum subjects itself to jurisdiction when the "effects" of its wrongful conduct are "expressly aimed" at the forum such that it should "reasonably anticipate being haled into court there." Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). The defendant's actions must be expressly aimed at the forum, not just at a forum resident. Walden, 571 U.S. at 285, 134 S.Ct. 1115. "Mere foreseeability of harm in the forum state is insufficient." In re Terrorist Attacks on September 11, 2001 ("Terrorist Attacks III"), 538 F.3d 71, 93 (2d Cir. 2008), abrogated on other grounds, Samantar v. Yousuf, 560 U.S. 305, 130 S.Ct. 2278, 176 L.Ed.2d 1047 (2010).
With respect to the two attacks in Afghanistan, Plaintiffs argue that MTN targeted the United States when it made protection payments to the Taliban and shut down cell towers at the terrorist group's request. (AC ¶¶ 1055-68.) MTN responds by noting that the magistrate judge in Cabrera v. Black & Veatch Special Projects Corp., No. 19-cv-3833, 2021 WL 3508091, at *12 (D.D.C. July 30, 2021) (rep. & recommendation) (the "R&R"), rejected an identical targeting theory. (MTN Br. 19.) In Cabrera, the magistrate judge found MTN's orders to shut down cell towers at the Taliban's behest "far too attenuated to establish personal jurisdiction in American courts." 2021 WL 3508091, at *12 (quoting Terrorist Attacks III, 538 F.3d at 95).
Plaintiffs also assert a targeting theory with respect to the Iraq attacks, but their argument is foreclosed by Terrorist Attacks III. See 538 F.3d at 95 (holding that "[p]roviding indirect funding to an organization that was openly hostile to the United States does not constitute" intentional conduct "expressly aimed" at the forum). However, as discussed in the preceding section, personal jurisdiction over MTN Group for the Iraq attacks is properly conferred on a purposeful availment theory.
I do not find Cabrera's reasoning persuasive. The R&R emphasizes that MTN was not a "primary participant" in the attacks and bases its opinion that MTN's protection payments and tower shutdowns were "far too attenuated" on the fact that MTN was financially motivated. Id. But this Circuit's caselaw does not link attenuation to motive; rather, attenuation concerns the directness of the support. See O'Neill v. Asat Tr. Reg. (In re Terrorist Attacks on Sept. 11, 2001), 714 F.3d 659, 677 (2d Cir. 2013) (emphasizing that the charitable defendants were "one step closer to al Qaeda when compared to the alleged support" in other cases). Providing money directly to a terrorist group and shutting down cell towers to aid terrorist operatives in escaping detection from Coalition forces is direct aid that does not suffer from the same "causal chain" issues identified by MTN for the
Iraq attacks. (AC ¶¶ 1055-56.) And MTN does not contest, nor could it, that the Taliban was known to be targeting United States forces.
Although MTN's intent is a relevant factor in determining whether its actions were "intentional" or the result of the "unilateral activity" of a third party, see Walden, 571 U.S. at 284, 134 S.Ct. 1115, they are distinct inquiries. Plaintiffs allege that MTN decided to heed the Taliban's demands in lieu of paying for security for their towers. (AC ¶ 1044.) Coalition leadership and the Afghan government "warned MTN Afghanistan that its business practices were supporting the insurgency and were threatening Coalition forces, and both entities instructed MTN to stop," but "MTN refused." (Id. ¶ 1049.) Even if that choice was purportedly made under duress, MTN has not cited caselaw for that kind of objection outside of Cabrera, nor has MTN shown that a bilateral bargain— even considering the power differential— constitutes the "unilateral activity" of the Taliban. Accordingly, Plaintiffs have shown sufficient minimum contacts based on MTN's protection payments as to the two Afghanistan attacks.
3. Relatedness
Even if MTN's activities were purposefully directed at the United States, I must still consider whether Plaintiffs' alleged injuries "arise out of or relate to those activities." Burger King, 471 U.S. at 472, 105 S.Ct. 2174. Contacts are sufficiently related where "a defendant uses forum contacts as an instrument for achieving the wrong alleged." Atchley, 22 F.4th at 234 (citing Licci, 732 F.3d at 171). "[T]he forum contacts need not themselves be unlawful." Id. The Supreme Court has clarified that it is not necessary to demonstrate "a strict causal relationship between the defendant's [in-forum] activity and the litigation." Ford, 141 S. Ct. at 1026. Nevertheless, the phrase "relate to" "incorporates real limits, as it must to adequately protect defendants foreign to a forum." Id.
The Taliban-related contacts are suit related because MTN used the payments and tower shutdowns as instruments for achieving the wrong alleged (aiding or conspiring to aid perpetrators of international terrorism). See Licci, 732 F.3d at 171. As to personal availment, however, Plaintiffs' theory hinges on the connection between the Irancell sanction-evasion scheme, the IRGC, and money tunneled through that scheme to Hezbollah and other terrorist proxies who perpetrated the Attacks. MTN, relying on the D.C. Circuit's decision in Bernhardt v. Islamic Republic of Iran, argues that Plaintiffs fail to "allege some relation between the sanctions evasion by the foreign defendants and the injuries suffered in the terrorist attack." 47 F.4th 856, 866 (D.C. Cir. 2022). MTN contends that here, as in Bernhardt, Plaintiffs cannot do so because Iran and Irancell both have "legitimate operations," so the Court cannot infer that MTN's conduct in helping the intermediary company evade sanctions would not "just as plausibly benefit its otherwise legitimate operations rather than" the terrorist groups. Id. at 865. Irancell has legitimate operations because it is "a mobile phone network serving millions of ordinary Iranians." (D.E. # 98 ("Defs.' Letter") 2.) Plaintiffs have plausibly pleaded a link between the IRGC and terrorism, and that the IRGC uses corporate fronts to provide aid to terrorist groups. (See AC ¶ 254.) Defendants do not contest that Plaintiffs have adequately pleaded some link between the IRGC and the terrorist proxies. (See Oral Arg. Tr. 11:23-12:2.) Therefore, the key link for jurisdictional purposes is between Irancell and the IRGC.
It cannot be true that where an alleged front has some legitimate operations, I am
precluded from finding ATA liability based on aid to that front. An entity without some cover of legitimacy would be an extremely poor choice for a terrorist front. As a result, the proper inquiry must be a matter of degree, and one that overlaps significantly with the general awareness inquiry under JASTA: is the front entity "so closely intertwined with [a terrorist group's] violent terrorist activities that one can reasonably infer that [the defendant] was generally aware ... that it was playing a role in unlawful activities from which [the terrorist group's] attacks were foreseeable[?]" Honickman v. BLOM Bank SAL, 6 F.4th 487, 499 (2d Cir. 2021) (citation omitted). Because the jurisdictional inquiry is intertwined with the merits of Plaintiffs' secondary liability claim, I decline to dismiss Plaintiffs' claims against MTN Group for lack of jurisdiction at this juncture. See AG Worldwide v. Red Cube Mgmt. AG, No. 01-cv-1228 (GEL), 2002 WL 417251, at *3 (S.D.N.Y. Mar. 15, 2002) (assessing merits issue as "the critical inquiry" where "personal jurisdiction issues [were] intertwined with the merits").
4. Reasonableness
"[M]inimum requirements inherent in the concept of 'fair play and substantial justice' may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities." Burger King, 471 U.S. at 477-78, 105 S.Ct. 2174. In determining reasonableness, I consider five factors: (1) the burden on the defendant; (2) the interest of the forum state in adjudicating the controversy; (3) the interest of the plaintiff in obtaining convenient and effective relief; (4) the interest of the interstate judicial system in obtaining the most efficient resolution of the dispute; and (5) the shared interest of the states in furthering fundamental social policies. Simon v. Philip Morris, Inc., 86 F. Supp. 2d 95. 128-29 (E.D.N.Y. 2000).
Conferring jurisdiction based on MTN's above contacts is reasonable under the Due Process Clause. At this stage of the due process analysis, a defendant "must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable," and "[m]ost such considerations usually may be accommodated through means short of finding jurisdiction unconstitutional." Burger King, 471 U.S. at 477, 105 S.Ct. 2174. MTN has not met this burden here.
II. Count One: Aiding-and-Abetting Liability under JASTA (Iraq Attacks)
I next turn to the merits of Plaintiffs' ATA claims for the surviving defendants, MTN Group and the Huawei U.S. Defendants. The ATA recognizes a private right of action in tort for U.S. nationals injured by acts of international terrorism. The ATA as originally enacted authorized suit by "[a]ny national of the United States injured in his or her person, property, or business by reason of an act of international terrorism." Atchley, 22 F.4th at 215 (quoting 18 U.S.C. § 2333(a)). Many courts, including the Second Circuit, interpreted this language as barring tort liability for aiders and abettors. See Rothstein v. UBS AG, 708 F.3d 82, 97 (2d Cir. 2013). In 2016, Congress amended the ATA through JASTA, which provides for secondary liability against "any person who aids and abets, by knowingly providing substantial assistance" to "an act of international terrorism." See 18 U.S.C. § 2333(d)(2); Pub. L. No. 114-222, § 2(b), 130 Stat. 852, 854 (2016) (Amendment). Plaintiffs assert secondary liability claims only, and their first
cause of action is for aiding and abetting the Iraq attacks.
Count One pertains solely to the Iraq attacks, meaning that Plaintiffs' allegations concerning MTN's protection payments and tower shutdowns in Afghanistan are pleaded only with respect to Count Three, addressed infra. (See AC ¶ 1629.)
To state a claim for JASTA aiding and abetting, Plaintiffs must plead three statutory elements: "(1) an injury arising from an act of international terrorism; (2) that the act was committed, planned, or authorized by a designated Foreign Terrorist Organization; and (3) that defendants aided or abetted an act of international terrorism by knowingly providing substantial assistance." Atchley, 22 F.4th at 216. The proper framework for determining aiding-and-abetting liability under JASTA is the decision of the U.S. Court of Appeals for the D.C. Circuit in Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983). See 18 U.S.C. § 2333 Statutory Note (Findings and Purpose § 2(a)(5)).
Defendants do not contest the allegations that Plaintiffs or their family members suffered injury from an act of international terrorism. Instead, they dispute whether Plaintiffs plausibly allege that an FTO "committed, planned, or authorized" the Attacks, that Defendants were generally aware of their role in the overall tortious activities, and that Defendants' business with Iranian telecommunications companies knowingly and substantially assisted the Attacks.
A. Attacks Committed, Planned, or Authorized by a Designated FTO
Although this section of the memorandum and order concerns Count One, which pertains to the Iraq attacks only, because this statutory element is common to all JASTA claims, I address the FTO requirement for the Afghanistan attacks as well.
Plaintiffs have carried their burden of alleging that the Attacks were "committed, planned, or authorized" by a designated FTO. See 18 U.S.C. § 2333(d)(2). Plaintiffs allege that Defendants aided and abetted attacks on U.S. forces in Iraq and Afghanistan between 2011 and 2019. (AC ¶¶ 1589-1600.) Plaintiffs attribute the Iraq attacks to Joint Cells composed of fighters from Hezbollah, the Qods Force, and JAM. (Id. ¶ 1591.) In Afghanistan, one attack is attributed to al-Qaeda, the Haqqani Network, and Lashkar-e-Taiba, and the other to "the Taliban and its Haqqani Network." (Id. ¶¶ 1557, 1569.) Although the Amended Complaint alleges that several attacks were committed by non-FTOs only, Plaintiffs adequately allege that Hezbollah, al-Qaeda, or the Haqqani Network "planned" or "authorized" each Attack, all of which were FTOs at the relevant time.
Defendants contend that Plaintiffs attempt to skirt the FTO requirement by referring to groups of FTOs and non-FTOs as "Joint Cells" and the "Syndicate" —i.e., by resorting to "pleading artifice." (MTN Br. 57-58.) The Joint Cells included operatives from Hezbollah, the Qods Force, JAM, and other local groups, and the Syndicate was comprised of the Taliban (including its Haqqani Network), al-Qaeda, al-Qaeda-in-Iraq (later ISIS), and Ansar al-Islam. See supra, Summary of Complaint. MTN contends that lumping together these groups is (1) contrary to the sources underlying the allegations (because certain militias were portrayed as "rivals" or "uncontrollable"), and (2) inconsistent with the U.S. government's decision to designate only some of the groups as official FTOs. (MTN Br. 58.)
Contrary to Defendants' assertions, Plaintiffs' allegations give rise to the reasonable inference that Hezbollah, al-Qaeda,
or the Haqqani Network were "responsible, at minimum, for authorizing" the Attacks. See Freeman v. HSBC Holdings PLC, 413 F. Supp. 3d 67, 96-97 (E.D.N.Y. 2019), aff'd on other grounds, 57 F.4th 66 (2d Cir. 2023) ("[T]aken as a whole, [the allegations] describe Hezbollah as deeply involved in supporting and coordinating an extensive campaign of terrorist activity against American citizens in Iraq."); see also King v. Habib Bank Ltd., No. 20-cv-4322 (LGS), 2022 WL 4537849, at *6 (S.D.N.Y. Sept. 28, 2022) ("[I]t is well known that terrorist organizations ... often operate by proxy.") (quoting Atchley, 22 F.4th at 216-17); (AC ¶¶ 258, 268-73, 289.)
But in any case, the Amended Complaint does not depend on allegations that the Joint Cells or the Syndicate are themselves quasi-FTOs that committed the attacks. See King, 2022 WL 4537849, at *6. Rather, as in Atchley and King, some attacks were committed by a non-FTO, but the Amended Complaint "allege[s] sufficiently deep operational coordination between the non-FTO and a separate FTO to satisfy the [] statutory element of JASTA secondary liability." Id. (citing Atchley, 22 F.4th at 217-19). Where "third party paramilitary groups" commit the relevant Attacks, allegations that an FTO trained the militias, controlled and directed those militias, planned the Attacks, and "designed and emplaced the weapons used in the Attacks" will suffice to establish the FTO's role for purposes of aiding-and-abetting liability. See Bartlett v. Société Générale de Banque Au Liban SAL, No. 19-cv-00007 (CBA) (VMS), 2020 WL 7089448, at *8 (E.D.N.Y. Nov. 25, 2020). Accordingly, the FTO requirement is met.
B. Knowing and Substantial Assistance
I next address whether Plaintiffs' allegations support their claim that MTN and Huawei aided and abetted acts of international terrorism "by knowingly providing substantial assistance." 18 U.S.C. § 2333(d)(2). As noted, Count One concerns the Iraq attacks only. (See infra Part IV for Count Three, concerning the Afghanistan attacks.) Halberstam identifies three elements of aiding-and-abetting liability: "(1) the party whom the defendant aids must perform a wrongful act that causes an injury; (2) the defendant must be generally aware of his role as part of an overall illegal or tortious activity at the time that he provides the assistance; (3) the defendant must knowingly and substantially assist the principal violation." Halberstam, 705 F.2d at 477.
MTN contends that Plaintiffs limited Count One to the Attacks committed by the Joint Cells in Iraq, (see MTN Br. 9 n.7), so the claim does not encompass the 2017 Iraq attack allegedly committed by Ansar al-Islam, (see AC ¶¶ 1545-46), a Sunni militia that is not a part of the defined Joint Cells. Although Plaintiffs reference only the Joint Coils in the Count One section, (id. ¶¶ 1589-99), they also incorporate the "above factual allegations," (id.), and other portions of the Amended Complaint show that Plaintiffs attribute the 2017 Iraq attack to one or more of the IRGC's "Sunni Terrorist Proxies," (see id. ¶¶ 140, 511, 1393, 1545). Like the "Shiia Terrorist Proxies," who were allegedly responsible for the 2011 and 2016 Iraq attacks, the 2017 attack perpetrators were supported by the IRGC under the same theory of abetting and abetting. Accordingly, I decline to cabin Count One as MTN suggests.
1. MTN
For the reasons set forth below, Plaintiffs have satisfied Halberstam's elements for establishing aiding-and-abetting liability as to MTN. Because MTN does not contest the first element—"the party whom the defendant aids must perform a wrongful act that causes an injury," Id. at 477—I begin with general awareness. General Awareness
In the Second Circuit, the general awareness requirement is satisfied if (1) the defendant was aware of the intermediary's connection to the terrorist organization, and (2) the intermediary is "so closely intertwined" with the terrorist organization's illegal activities that one can reasonably infer the defendant was generally aware of its role in terrorist activities. Honickman, 6 F.4th at 496-99 (quoting Kaplan v. Lebanese Canadian Bank, SAL ("Kaplan II"), 999 F.3d 842, 863 (2d Cir. 2021)). Unlike "awareness," which "normally denotes full recognition of the existence or qualities of an object or circumstance," "general awareness" "imparts ... a connotation of something less than full, or fully focused, recognition," Kaplan II, 999 F.3d at 863. "The defendant need not be generally aware of its role in the specific act that caused the plaintiff's injury; instead, it must be generally aware of its role in an overall illegal activity from which the act that caused the plaintiff's injury was foreseeable." Honickman, 6 F.4th at 496 (emphasis in original). In determining general awareness, I "bear in mind the challenges of establishing a defendant's state of mind without the benefit of discovery." Atchley, 22 F.4th at 220. "A complaint is allowed to contain general allegations as to a defendant's knowledge... because 'a plaintiff realistically cannot be expected to plead a defendant's actual state of mind.'" Kaplan II, 999 F.3d at 864 (citation omitted). "However, plaintiffs are required to include allegations of the facts or events they claim give rise to an inference of knowledge." Id.
The Second Circuit has emphasized that facially neutral acts (such as providing communications services) must be assessed "in the context of the enterprise they aided"—that is, against the historical background of the FTO's activities. Id. at 865 (quoting Halberstam, 705 F.2d at 488); see Atchley, 22 F.4th at 210-11 (noting that the defendant medical suppliers had a long history of using unlawful kickbacks to obtain contracts). Here, the relevant background as alleged by Plaintiffs is that the IRGC entered the telecommunications market for the purpose of closing the IRGC's communications gap. By 2004, Plaintiffs allege "the enormous technological gap between the IRGC" and the United States forced the IRGC to "bring in foreign companies to revolutionize Iran's computing and telecommunications infrastructure." (AC ¶¶ 40, 734-35, 755.) The IRGC needed the cooperation of non-U.S. companies because the large U.S. telecommunications companies "have been reliable partners of the U.S. government with respect to [counterterrorism]." (Id. ¶¶ 738, 740.) Although the IRGC desired non-U.S. companies as partners, it needed to source U.S.-origin technologies at "industrial scale." (Id. ¶ 739.) Those embargoed technologies were needed to facilitate the "free movement of key terrorist leaders, attack planners, fundraisers, and logisticians," (id. ¶ 747), and increase the efficacy and reliability of advanced weaponry like EFPs. Where the IRGC entered a commercial market, one of its purposes was to facilitate illicit conduct. See Press Release, U.S. Treasury Dep't, Fact Sheet: Treasury Sanctions Major Iranian Commercial Entities (June 23, 2011). https://home.treasury.gov/news/press-releases/tg1217, cited at AC ¶ 256 ("[T]he IRGC has expanded its reach into critical sectors of Iran's economic infrastructure ... to generate revenue and conduct business in support of Iran's illicit activities.").
These allegations are made plausible given the public sources connecting the IRGC to the telecommunications sector. For example, a 2007 news report noted that the IRGC and Qods Force had
"moved increasingly into commercial operations, earning profits and extending its influence in Iran in areas involving big government contracts, including ... providing cell phones." What is the Revolutionary Guard?, Montreal Gazette. 2007 WLNR 28659733, at 1 (Aug. 16, 2007), cited at AC ¶ 258. A 2010 Forbes article explained that "IRGC front companies" "have stakes in telecommunications" and the IRGC "diverts much of the technology and expertise [the IRGC] acquires from Western companies for seemingly innocuous projects to unsavory ends." Mark Dubowitz and Emanuele Ottolenghi (Foundation for Defense of Democracies), The Dangers Of Doing Business With Iran's Revolutionary Guards, Forbes (June 15, 2010), cited at AC ¶ 822. Those "unsavory ends" included "arming and training Hezbollah." Id.; (see also AC ¶ 819 (2007 source noting that scholars who have studied the IRGC have explained that telecommunications, an arena involving dual-use technology, would allow the Qods Force to obtain "clandestine sources of funding").) Plaintiffs also allege or incorporate sources indicating that MTN kept abreast of market conditions in areas in which they did business; in other words, MTN had reason to know of these public sources. (See, e.g., AC ¶¶ 897, 902, 1080.)
Plaintiffs then cite more specific public sources that situate the Iranian shareholders (and Irancell) within this context. At the pleading stage, Plaintiffs need not allege that MTN "knew or should have known of the public sources" used to show the defendant's connections to the terrorist group. Honickman, 6 F.4th at 501 (citing Kaplan II, 999 F.3d at 865). The sources must, however, be sufficient to support plausibly an inference that MTN had the requisite general awareness at the time that it provided the alleged assistance. See id. ; accord Halberstam, 705 F.2d at 477.
In 1995, Newsday reported that "current and former officers and directors [of the Bonyad Mostazafan] have been implicated in arms and technology shipments to Iran" and that "U.S. and European officials say that the Mostazafan Foundation of Iran has long been a front for the procurement of military and prohibited technology for Iran, particularly for the Revolutionary Guards." (AC ¶ 776 (citing Knut Royce & Kevin McCoy, N.Y. Foundation Linked to Iran's Islamic Militants, Seattle Times, 1995 WLNR 1308563 (May 26, 1995)).) The article notes that the Bonyad is "said to offer safe haven for those who support terrorist groups," including Hezbollah, and that it funds "fundamentalist extremist groups." Royce & McCoy, supra. Although the Bonyad insists that it is a charitable organization and has no ties to the Iranian government, Newsday's investigation confirmed that the foundation had previously served as a front for the IRGC, described as "dedicated zealots who suppress Iranian dissidents and who spy and obtain military technology from the United States and abroad." Id. Then, in a 1998 article, Newsday reported that the Bonyad "had been implicated in arms and technology shipments to Iran," and that the FBI believed it had served as a front for placement in the United States of Revolutionary Guards," Knut Royce, No Legal Recourse in Iranian's Case/Supreme Court Won't Reopen Suit, Newsday, 1998 WLNR 604387 (Dec. 8, 1998) (noting that the Bonyad "has been accused by western intelligence services of espionage, supporting terrorism and smuggling arms"), cited at AC ¶ 786. Reports, like these, that describe a defendant's business partner's connections with terrorist groups provide a defendant with notice of the stakes of doing business with that entity. See Atchley, 22 F.4th at 209.
Two additional sources—a 2011 article in a scholarly journal and a 2007 think-tank
publication—reported on the Irancell joint venture and described the Iranian shareholders as "Guards subsidiar[ies]" and "IRGC-operated," respectively. See Elliot Hen-Tov & Nathan Gonzalez, The Militarization of Post-Khomeini Iran: Praetorianism 2.0, Wash. Q. (Winter 2011), cited at AC ¶ 1328 & n.580; Ali Alfoneh, How Intertwined Are the Revolutionary Guards in Iran's Economy?, Am. Enter. Inst. For Pub. Pol'y Rsch. (Oct. 22, 2007), cited at AC ¶¶ 1327-28 & nn.579-80. The Washington Quarterly article noted that the IRGC has "'cashed in' since 2005," when the Irancell joint venture began, and explained that the IRGC had "used raw power" to nullify another company's (Turkcell's) winning bid to operate a mobile-phone network in Iran. Hen-Tov & Gonzalez, supra. The think-tank publication described the Iranian shareholders as follows: IEI was described as "IRGC-operated" and the Bonyad as "an independent financial body traditionally run by a retired IRGC commander and used by the state as a proxy to fund off-the-books IRGC operations." Alfoneh, supra.
Plaintiffs also cite to a WikiLeaks cable, released publicly in 2010, that describes the importance of "Bonyads, [i.e.,] statelinked foundations" to the IRGC. U.S. State Dep't Cable, U/S Levey Seeks Turkish Cooperation Against Iranian Terrorim Finance & Nuclear Proliferation (Dec. 18, 2006), cited at AC ¶ 790 & n.370. The cable goes on to state the IRGC's interference in the Irancell bidding process, and that "Irancell, Iran's leading telecom company, is fully owned by the IRGC and won parts of the telecom replacement contract along with a South African provider." (Id. (emphasis added).) Although these sources are not as robust as the detailed, numerous sources in Kaplan II, they are stronger than the sources found insufficient in Honickman. See 6 F.4th at 501-02 (declining to credit public sources dated after the last attack, undated sources, and designations from after the last attack). In view of these specific sources, the sources generally associating the IRGC with the telecommunications sector and the Bonyad with suspicious activity lend plausibility to Plaintiffs' allegations.
To the extent MTN questions whether a U.S.-based think-tank publication and scholarly journal would be likely to put a multinational corporation that does not operate in the United States on notice. I disagree. Other courts in this Circuit have cited think-tank publications as indications of a defendant's general awareness of their customer's ties to terrorist groups, Brown v. Nat'l Bank of Pakistan, No. 19-cv-11876 (AKH), 2022 WL 1155905, at *3 (S.D.N.Y. Apr. 19, 2022), and in any case, Plaintiffs have alleged that MTN had reason to know of such reports as pan of its corporate security and due diligence responsibilities. See Kaplan II, 999 F.3d at 865 (highlighting that the defendant banks' due diligence would uncover public reporting). Finally, several of these sources were reporting on MTN's own business deal, a subject of which MTN had considerable reason to be aware.
Plaintiffs also cite government designations as examples of public sources supporting their allegations that the Iranian shareholders were known IRGC fronts. Plaintiffs in ATA cases have successfully alleged connections between a defendant's customers and terrorist groups through government designations where they are published prior to the relevant attacks. See Bartlett, 2020 WL 7089448, at *9 (noting that courts "discount[]" even terrorism designations if "there was a temporal disconnect between the attacks and designations"). Here, Bonyad Mostazafan was not designated until 2020, years after the last relevant attack. (AC ¶ 786 & n.367.) The IRGC itself was also not designated as an FTO until 2019. (Id. ¶ 189.) However, in 2007, the Qods Force was identified as a branch of the IRGC and designated as an
SDGT for providing material support to terrorist groups in Iraq, including Hezbollah. (Id. ¶¶ 98, 211.) The press release noted that the designations serve to "notify the international private sector of the dangers of doing business with ... the many IRGC-affiliated companies that pervade several basic Iranian industries." Press Release, U.S. Treasury Dep't, Fact Sheet: Designation of Iranian Entities and Individuals for Proliferation Activities and Support for Terrorism (Oct. 25, 2007), https://home.treasury.gov/news/press-releases/hp644.
One of the Iranian shareholders, IEI, was timely designated as an SDGT in 2008, but MTN contends that IEI was not designated for ties to the IRGC or terrorism. (MTN Br. 11.) True, the designation states that IEI was "owned or controlled by Iran's MODAFL [Ministry of Defense for Armed Forces Logistics]," and supported "Iran's nuclear and ballistic missile programs." Press Release, U.S. Treasury Dep't, Treasury Designates Iranian Military Firms (Sept. 17, 2008), cited at AC ¶ 796. But it also explains that IEI and other "military firms" were used by Iran for illicit weapons procurement: "Iran attempts to shield its procurement activities behind a maze of entities, essentially hoodwinking those still doing business with Iran into facilitating illicit transactions for the transport of dual use, missile-related items." Id. The designation further states that IEI "offers a diversified range of military products including ... communication equipment, [and] telecommunication security equipment." Id. Thus, the designation lends plausibility to Plaintiffs' specific theory—that IEI served as a front for the IRGC to source dual-use telecommunications products fit for military use, And even if, as MTN contends, no designations exist that implicate MTN's business partners in terrorism. Kaplan II rejected the argument that general awareness can be gained no other way. See 999 F.3d at 864.
Even if Plaintiffs have plausibly pleaded that the Iranian shareholders were "known IRGC fronts," however, they must also allege that the shareholders and Irancell were "so closely intertwined with [the IRGC's] violent terrorist activities that one can reasonably infer that [MTN Group] was generally aware while it was" entering into the telecommunications venture "that it was playing a role in unlawful activities from which ... attacks were foreseeable." Honickman, 6 F.4th at 499. Plaintiffs have done so.
Plaintiffs' sources do not just tie the Iranian shareholders to the IRGC's more outwardly benign activities (economic investment), but also to the military side of the IRGC, which has been connected to support for terrorism. Plaintiffs' sources indicate that both the Iranian shareholders have served as fronts for procuring military and other prohibited technologies, see Royce & McCoy, supra, and several sources suggest that the IRGC supplies Hezbollah and other terrorist proxies with weapons, training, and funding. Other allegations also make clear that prior to the Attacks, international businesses were on notice that support for IRGC-controlled commercial entities would be used for terrorism. See, e.g., Press Release, U.S. Treasury Dep't, Treasury Targets Iran's Islamic Revolutionary Guard Corps (Feb. 10, 2010), https://home.treasury.gov/news/press-releases/tg539, cited at AC ¶ 253 ("The IRGC has a growing presence in Iran's financial and commercial sectors.... The profits from these activities are available to support the full range of the IRGC's illicit activities, including ... support for terrorism."). MTN was also allegedly on notice of the importance of cell phones in particular. (See AC ¶ 834.) Decades of media coverage allegedly alerted MTN to Hezbollah's use of cell phones as detonators and to provide key means of
communication and track enemy operatives. (Id. ¶ 836.)
The circumstances of MTN's negotiation of the Irancell joint venture further support the argument that MTN knew it was taking part in illegal activity from which terrorist attacks were foreseeable. The 2005 Letter Agreement was allegedly executed "in Tehran in the presence of one or more notorious IRGC terrorists," (id. ¶ 111), and thereafter concealed from MTN Group's shareholders, Board of Directors, outside counsel, and auditors, (id. ¶ 887). The Agreement obligated MTN to work with Bank Melli, (id. at Ex. A), and Plaintiffs' incorporated sources indicate that the bank was previously designated "as a key financier of ... the [IRGC] and the Quds Force, which has been linked to terrorist groups." (Id. ¶ 785.) "Bank Melli provides financial services ... for Iranian front companies," (D.E. # 82-10), and "[f]rom 2002 to 2006, Bank Melli was used to send at least $100 million to the Qods Force," Press Release, U.S. Treasury Dep't, Fact Sheet: Designation of Iranian Entities and Individuals for Proliferation Activities and Support for Terrorism (Oct. 25, 2007), cited at AC ¶ 211.
Plaintiffs elsewhere allege this fact on information and belief only, so I afford it relatively little weight in my analysis.
Plaintiffs cite the Letter Agreement's reference to "security" to show it was actually "drafted by the IRGC," (AC ¶ 941), arguing that "security" is a euphemism for terrorism, (see, e.g., id. ¶¶ 879, 883). Specifically, the Agreement called on MTN to "cooperat[e]" with the "Iranian shareholders" on "defensive, security and political" objectives "in South Africa." (Id. at Ex. A.) MTN contends that the reference to "security" in the context of the entire sentence meant MTN would encourage the South African government to sell military equipment to the Iranian Defense Ministry. ( See id. ¶ 1091; see also id. ¶ 966.)
Even accepting MTN's interpretation as the best fit for the text, though, it does not follow that the reference to "security" lends no support to Plaintiffs' argument that MTN knew the Agreement memorialized a nefarious venture. Throughout its papers. MTN insists that it knew only that it was investing in a civilian mobile phone company with two organizations with vast legitimate operations: IEI, described as a firm selling "many consumer goods," and the Bonyad, described as "a state-directed charitable and commercial enterprise." (MTN Br. 9-10.) But MTN elsewhere appears to concede that the Iranian shareholders were controlled by aspects of the Iranian military apparatus, just not the IRGC. And other allegations shed light on what "defence" cooperation meant here— encrypted military radios, sniper rifles, radar technology, helicopter parts—in other words, military products, not consumer goods. (See AC ¶¶ 938, 1026.) It is implausible to suggest that, as alleged, MTN knew it was participating in solely a civilian project. See Halberstam, 705 F.2d at 486 (inferring knowledge absent direct evidence because "it defie[d] credulity that [the defendant] did not know that something illegal was afoot"). This is true whether or not the Letter Agreement is best read as a business venture with a side agreement of international arms dealing or as an agreement to finance terrorism. Plaintiffs are entitled to plausible inferences, and in the context of the entire Amended Complaint and its incorporated sources, Plaintiffs plausibly plead that MTN knew it was taking part in an unlawful course of dealing from which terrorist attacks were foreseeable. See Kaplan II, 999 F.3d at 865 (district courts must "accept as true all permissible inferences that
could be drawn from the complaint as a whole").
MTN challenges general awareness on the same grounds as it challenged relatedness in the context of personal jurisdiction: because Irancell had extensive legitimate operations. MTN's investment does not support the inference that it was generally aware of playing a role in terrorism. (Defs.' Letter 2-3.) MTN again cites Bernhardt v. Islamic Republic of Iran as support. 47 F.4th at 868. With respect to two Iranian state-owned banks, the D.C. Circuit held that although the banks were previously designated for facilitating the transfer of money to other terrorist groups, and thus the allegations "connect[ed] the intermediary banks to terrorism generally," they "fail[ed] to support an inference that HSBC had general awareness it was playing a role in al-Qaeda's terrorist acts." Id. (first emphasis added). With respect to the third bank, Al Rajhi Bank ("ARB"), even if the court could infer that HSBC was aware of ARB's connections to al Qaeda, those connections were not "so close that HSBC had to be aware" that, "by doing business with" a Saudi bank with "extensive legitimate operations," billions in assets, and thousands of employees, it was assuming a role in a terrorist campaign. Id. at 868-69. In another case concerning ARB, Siegel v. HSBC North America Holdings, Inc., the Second Circuit found insufficient allegations that HSBC "was aware," based on "public reports," that ARB "was believed by some to have links to [al Qaeda] and other terrorist organizations," 933 F.3d 217, 224 & n.6 (2d Cir. 2019). "[C]rucially," however, in Siegel HSBC had ceased doing business with ARB at least ten months before the attacks. Id.
Plaintiffs distinguish Bernhardt and Siegel from cases like Atchley, in which the D.C. Circuit held that the plaintiffs stated a JASTA claim based on the defendant's aid to a state-owned medical supply company that had been captured by JAM terrorists, 22 F.4th at 228, or Kaplan II, in which an otherwise legitimate intermediary commercial bank had customers who were "openly, publicly, and repeatedly acknowledged" as "integral constituent parts of H[e]zbollah." 999 F.3d at 849-50. According to Plaintiffs, where the relevant intermediary is a "front," the chain of concerted action must be viewed differently. And here, Plaintiffs allege that Irancell is not a "principally legitimate business[]" that "may have a limited connection to terrorism," Bartlett, 2020 WL 7089448, at *12, but instead a commercial front for the IRGC's terrorism. As Plaintiffs noted at oral argument, ARB is a different kind of intermediary entity; it "has been around since 1957," it's a "huge Middle Eastern financial institution" that is not alleged to be controlled by or a front for terrorists, rather, "it's a bank that has connections with terrorists in a variety of contexts." (Oral Arg. Tr. 34:7-17.) So, in Bernhardt and Siegel, the defendant bank had a customer, ARB, which had connections to integral persons within al Qaeda and fronts for al Qaeda. But in Atchley and Kaplan II, defendants' customer (or business partner) was itself a front for a terrorist group, as Plaintiffs allege is the case here.
It is undisputed that Irancell has significant legitimate operations; the company grew into Iran's second-largest mobile phone operator, (AC ¶¶ 1007, 1018, 1020), and provides mobile phone services to millions of Iranian consumers, (see id. ¶¶ 966, 970, 1089). But our JASTA caselaw also reflects that all commercial fronts have at least some "legitimate" uses; otherwise, we would not need to parse whether defendants are generally aware of an entity's connection to terrorism. And because the touchstone of general awareness under Honickman is foreseeability, the question becomes whether—given the nature of the
intermediary and that entity's connections to a terrorist groups' violent activities—the defendant is generally aware that by aiding that intermediary, it has played a role in an unlawful enterprise from which terrorist attacks are foreseeable. Put differently, legitimate operations—while relevant —do not immunize a defendant from being generally aware of its role in a terrorist venture. See Averbach v. Cairo Amman Bank, No. 19-cv-0004 (GHW) (KHP), 2022 WL 2530797, at *8 (S.D.N.Y. Apr. 11, 2022) (finding general awareness element met even where the plaintiffs "concede[d] [that] these customers also engaged in legitimate charitable or non-violent activities for which they might have appropriate use of a [defendant] bank account").
In sum, Plaintiffs allege that the IRGC entered the telecommunications market for the purpose of closing the communications gap between its operatives and Coalition forces, and that in service of that purpose, the IRGC conscripted financially motivated foreign international businesses, like MTN, who would be willing to look the other way. As a sophisticated business with corporate security groups doing due diligence, MTN would have understood the nature of the market it was entering and in which it was continuing to do business, and MTN would have been at least "generally aware" that it was partnering with commercial fronts for the Iranian military apparatus, and more specifically, the IRGC. Based on publicly available information concerning the IRGC, its Qods Force, and Hezbollah, MTN allegedly would have been aware that the IRGC uses the fruits of its commercial fronts to support anti-American terrorist proxies. See Brown, 2022 WL 1155905, at *3 (defendant had general awareness beginning when a think tank published a report stating that the entity with which the individual had connections "openly carries out [terrorist] fund raising activities using legitimate banking channels").
It is worth repeating that unlike "awareness," which "normally denotes full recognition of the existence or qualities of an object or circumstance," general awareness "imparts ... a connotation of something less than full, or fully focused, recognition." Kaplan II, 999 F.3d at 863. And Halberstam teaches that context matters in secondary liability cases; outwardly benign services look very different through the lens of a suspicious, ongoing course of dealing. See Halberstam, 705 F.2d at 488. Here, MTN allegedly signed a secret agreement with militaristic implications, went into business with Iranian companies known for their tics to the IRGC's procurement activities and funding of terrorist ventures, and schemed to evade U.S. sanctions in order to obtain embargoed dual-use American technologies as requested by those business partners. Accordingly, Plaintiffs have plausibly pleaded general awareness.
Knowing and Substantial Assistance: Framework After Twitter v. Taamneh
Aiding-and-abetting liability requires that MTN "knowingly and substantially assist[ed] the principal violation." Halberstam, 705 F.2d at 477. In a recent unanimous decision, the Supreme Court clarified the pleading standard for knowing and substantial assistance under JASTA. Twitter v. Taamneh, 598 U.S. 471, 484-93, 143 S.Ct. 1206, 215 L.Ed.2d 444 (2023). In Taamneh, victims of the ISIS terrorist attack at the Reina nightclub in Istanbul brought JASTA aiding-and-abetting claims against three large social media companies: Twitter, Google, and Facebook. Id. at 479, 143 S.Ct. 1206. The plaintiffs' first theory of aiding and abetting was that the three companies were liable for failing to stop ISIS from using their platforms to post recruiting and propaganda videos. Id. at 498, 143 S.Ct. 1206. Their second theory, specific to Google's operation of YouTube,
was that Google was liable because it "reviewed and approved ISIS videos on YouTube as part of its revenue-sharing system and thereby shared advertising revenue with ISIS." Id. at 505, 143 S.Ct. 1206. The Court held that neither theory stated a claim for aiding-and-abetting liability. Id. at 505-07, 143 S.Ct. 1206.
Reasoning from the text of § 2333, the Court first addressed what it means for a defendant to have "aided and abetted" a tortious act. Id. at 484, 143 S.Ct. 1206. Drawing from the common law and Halberstam, it cautioned that lower courts must not "hew [too] tightly to the precise formulations" and facts in Halberstam. Id. at 493, 143 S.Ct. 1206. Instead, after ascertaining the "basic thrust" of Halberstam's elements, the Court held: "The phrase 'aids and abets' in § 2333(d)(2), as elsewhere, refers to a conscious, voluntary, and culpable participation in another's wrongdoing." Id. at 487, 493, 143 S.Ct. 1206. "Both JASTA and Halberstam's elements and factors rest on the same conceptual core": "that the defendant consciously and culpably 'participate[d]' in a wrongful act so as to help 'make it succeed.'" Id. at 493, 143 S.Ct. 1206 (quoting Nye & Nissen v. United States, 336 U.S. 613, 619, 69 S.Ct. 766, 93 L.Ed. 919 (1949)).
Although the Court did not define "culpable," it provided examples to illuminate its meaning in this context. For example, conduct constituting "passive nonfeasance" is usually not culpable. Id. at 500, 143 S.Ct. 1206. As to the specific facts in Taamneh, the Court emphasized that the defendants' social media platforms were generally available to the public and that ISIS used those platforms on the same terms as billions of users. Id. at 500, 143 S.Ct. 1206. Defendants' business models were themselves passive; users uploaded content "with little to no front-end screening by defendants," and then the recommendation algorithms operated to match users with content in which they were likely to be interested while remaining agnostic about the subject matter of that content. Id. at 498, 143 S.Ct. 1206. The plaintiffs had also never alleged that defendants "gave ISIS any special treatment or words of encouragement." Id. Thus, the "mere creation of [social media] platforms" that are thereafter misused by bad actors does not constitute conscious, culpable participation in acts of international terrorism. Id. at 499, 143 S.Ct. 1206. On the other hand, tort law does sanction as culpable conduct that is properly classified as "bad acts" or "misfeasance." Id. at 489, 143 S.Ct. 1206 (citation omitted). Culpable acts are typically "more direct, active, and substantial"; for example, a defendant's acts might be sufficiently culpable "where the provider of routine services does so in an unusual way," "provides such dangerous wares that selling those goods to a terrorist group could constitute aiding and abetting a foreseeable terrorist attack," or possibly where "a [social media] platform consciously and selectively chose to promote content provided by a particular terrorist group." Id. at 502, 143 S.Ct. 1206.
The Taamneh Court further clarified that the "knowing" subelement of "knowing and substantial assistance" is not "a carbon copy" of the general awareness inquiry. Id. at 503-04, 143 S.Ct. 1206. Instead, the "knowing" inquiry is "designed to capture the defendants' state of mind with respect to their actions and the tortious conduct." hi at 504. The knowledge and substantial assistance components "should be considered relative to one another as part of a single inquiry designed to capture conscious and culpable conduct." Id. at 503-04, 143 S.Ct. 1206. "In other words, less substantial assistance require[s] more scienter before a court could infer conscious and culpable assistance," whereas "if the assistance were direct and extraordinary, then a court might more
readily infer conscious participation in the underlying tort." Id. at 492, 143 S.Ct. 1206. Halberstam's six factors for substantial assistance were grounded in this same balancing. Id. at 492-93, 143 S.Ct. 1206.
The Court next addressed "what" the defendant must have aided and abetted to give rise to liability under § 2333. Id. at 493-95, 143 S.Ct. 1206. "[I]t is not enough ... that a defendant have given substantial assistance to a transcendent 'enterprise' separate from and floating above all the actionable wrongs that constitute it." Id. at 495, 143 S.Ct. 1206. Instead, a defendant must have aided and abetted another person "in the commission of ... an act of international terrorism." Id. But importantly, "in appropriate circumstances, a secondary defendant's role in an illicit enterprise can be so systemic that the secondary defendant is aiding and abetting every wrongful act committed by that enterprise." Id. at 496, 143 S.Ct. 1206.
Under the Taamneh framework, courts must therefore consider the attenuation or nexus between a defendant's assistance and the act of international terrorism. If the relationship between a defendant's assistance and the ultimate tortious act is attenuated, then plaintiffs "need some other very good reason to think that defendants were consciously trying to help or otherwise 'participate in' the [specific] attack." Id. at 500, 143 S.Ct. 1206 (citation omitted). Although "direct nexus" is not required, "the more attenuated the nexus, the more courts should demand that plaintiffs show culpable participation through intentional aid that substantially furthered the tort." Id. at 506, 143 S.Ct. 1206. Although a direct nexus would always support liability, "even more remote support can still constitute aiding and abetting in the right case," and defendants "who aid and abet a tort can be held liable for other torts that were 'a foreseeable risk' of the intended tort." Id. at 496, 143 S.Ct. 1206 (quoting Halberstam, 705 F.2d at 488).
Applying this framework to plaintiffs' first theory of liability, the Supreme Court emphasized the lack of affirmative conduct by defendants to support ISIS. Id. at 498, 143 S.Ct. 1206. The only such conduct, which was not directed at ISIS, "was creating their platforms and setting up their algorithms to display content relevant to user inputs and user history." Id. Because defendants' aid constituted "mere passive nonfeasance" and plaintiffs failed to make the requisite "strong showing of assistance and scienter," plaintiffs failed to state a claim. Id. at 500, 143 S.Ct. 1206. The Court then briefly addressed the revenue-sharing allegations specific to Google, affirming the Ninth Circuit's holding that the allegations failed to state a JASTA claim. The Court reasoned that the complaint alleged "nothing about the amount of money that Google supposedly shared with ISIS, the number of accounts approved for revenue sharing, or the content of the videos that were approved." Id. at 505, 143 S.Ct. 1206.
Knowing and Substantial Assistance: Application to MTN
Plaintiffs here have plausibly pleaded general awareness, and therefore that MTN "knew they were playing some sort of role in [a terrorist] enterprise." Id. at 497, 143 S.Ct. 1206. As in Taamneh itself, the key question is whether Plaintiffs have alleged conscious and culpable participation in acts of terrorism. I find that Plaintiffs have sufficiently pleaded conscious and culpable assistance; that Plaintiffs have pleaded a sufficiently concrete nexus to the Iraq Attacks; and, in the alternative, that the alleged assistance MTN provided was so pervasive that it suffices to establish liability for each IRGC-led attack during the period of assistance. Id. at 502, 143 S.Ct. 1206. With respect to conscious and culpable assistance, the Court in Taamneh made it clear that this determination involves a balancing act, considering "the nature and amount of assistance" on the one hand, and "the defendant's scienter" on the other. Id. at 492-93, 143 S.Ct. 1206. That is, "less substantial assistance require[s] more scienter before a court could infer conscious and culpable assistance," whereas "if the assistance were direct and extraordinary, then a court might more readily infer conscious participation in the underlying tort." Id. at 492, 143 S.Ct. 1206. I find that Plaintiffs have alleged the requisite conscious and culpable participation with respect to MTN.
I begin my analysis of culpability where the Supreme Court began in Taamneh: by "recall[ing] the basic ways" that MTN allegedly assisted the IRGC. Id. at 498, 143 S.Ct. 1206. As previously discussed at length, these allegations amount to "affirmative misconduct"—in short, violating U.S. law to spearhead procurement efforts for embargoed dual-use technologies that assisted terrorist campaigns, in addition to facilitating a steady flow of funds to the IRGC—as opposed to mere "passive nonfeasance," id. at 500, 143 S.Ct. 1206, a crucial point of departure between Taamneh and this case. As discussed above, the Iranian shareholders' and Irancell's ties to the IRGC were well-reported. See Elliot Hen-Tov & Nathan Gonzalez, The Militarization of Post-Khomeini Iran: Praetorianism 2.0, Wash. Q. (Winter 2011), cited at AC ¶ 1328 & n.580; Ali Alfoneh, How Intertwined Are the Revolutionary Guards in Iran's Economy?, Am. Enter. Inst. For Pub. Pol'y Rsch. (Oct. 22, 2007), cited at AC ¶ 1327 & n.579. Plaintiffs have also alleged that the IRGC's commercial ventures like Irancell were linked to its military activities and that funds from such ventures flowed to terrorist groups. (See AC ¶ 253.) Even after the IRGC was officially designated as an FTO in 2019, MTN retained its commercial ties to the organization. With respect to the Letter Agreement itself, MTN does its best to downplay its terms and the circumstances surrounding its signing, but the Agreement references "security" and mandates that MTN "cooperat[e]" with the "Iranian shareholders" on "defensive, security and political" objectives "in South Africa," (AC Ex. A), and Plaintiffs allege that it was executed "in Tehran in the presence of one or more notorious IRGC terrorists." (AC ¶ 111.) Viewed in conjunction with Plaintiffs' allegations that MTN entered into the Letter Agreement with a "known IRGC front," (AC ¶ 51), this militaristic-coded language takes on new and plausibly sinister meaning. In addition, MTN allegedly broke United States anti-terrorism laws—certainly a "culpable" course of action—to procure embargoed American technology for an IRGC front. (AC ¶¶ 977-78.)
Plaintiffs have therefore pleaded a paradigmatic case of a defendant providing "routine services ... in an unusual way," such that the defendant may have acted to aid and abet a "foreseeable terror attack." Taamneh, 598 U.S. at 502, 143 S.Ct. 1206; see also id. at 496, 143 S.Ct. 1206 ("[P]eople who aid and abet a tort can be held liable for other torts that were "a foreseeable risk" of the intended tort." (quoting Halberstam, 705 F.2d at 488)). "Unusual" is a charitable descriptor for, among many other allegations previously recounted, MTN's allegedly intentional evasion of U.S. sanctions; the terms of the 2005 Letter Agreement; and the fact that the second floor of MTN's Iran offices was allegedly "populated by military intelligence officials." (See AC ¶¶ 111, 938, 976-77, 1029.) It was foreseeable based on these unusual business arrangements that goods and funds would flow to proxy groups and that acts of terror would result. Plaintiffs, therefore, have sufficiently alleged that MTN consciously and culpably
aided and abetted acts that were "practically certain" to follow from the Irancell joint venture. See United States v. U.S. Gypsum Co., 438 U.S. 422, 445, 98 S.Ct. 2864, 57 L.Ed.2d 854 (1978).
Indeed, only after determining that the Taamneh plaintiffs' claims rested on "mere passive nonfeasance" did the Court decide that "a strong showing of assistance and scienter would [] be required." Taamneh, 598 U.S. at 500, 143 S.Ct. 1206. Here, I need not be so "leery" to impose aiding-and-abetting liability because Plaintiffs have alleged affirmative misconduct, the traditional predicate for liability in tort. Id. Therefore, I am satisfied, given the "direct and extraordinary" assistance that Plaintiffs describe, that MTN's alleged role was sufficiently conscious and culpable to satisfy Taamneh.
With respect to scienter in particular, the Court noted that "[t]he 'knowing' pan of [the knowing and substantial assistance] inquiry is therefore designed to capture the defendants' state of mind with respect to their actions and the tortious conduct (even if not always the particular terrorist act)." Id. at 504, 143 S.Ct. 1206 (emphasis added).
As for nexus, I find that Plaintiffs have pleaded allegations sufficient to hold MTN liable for this "definable subset" of terrorist acts (the ten Iraq Attacks) and, in the alternative, that they have pleaded such "pervasive and systemic aid" that MTN can be said to have aided and abetted each IRGC-led attack during the period of the alleged assistance. Id. at 502, 506, 143 S.Ct. 1206.
First, Plaintiffs' theory of nexus is far stronger than that alleged in Taamneh. As an initial matter, the Court in Taamneh is clear that there need not always be a "strict nexus between the alleged assistance and the terrorist act." Id. at 497, 143 S.Ct. 1206. A close nexus to the specific act may be helpful, but "even more remote support can still constitute aiding and abetting in the right case." Id. at 496, 143 S.Ct. 1206. In Taamneh, nexus was lacking because the social media companies provided generally available services that incidentally benefitted terrorist customers in addition to millions of other users. Id. at 498-99, 143 S.Ct. 1206. Plaintiffs there failed entirely to connect the attack at issue to ISIS' use of defendants' social media platforms. Id. ("Notably, plaintiffs never allege that ISIS used defendants' platforms to plan or coordinate the Reina attack; in fact, they do not allege that Masharipov himself ever used Facebook, YouTube, or Twitter."). By contrast, MTN's relationship with the alleged IRGC fronts was as a business partner directing procurement of specific goods. This points to a relationship that is both far less passive and far less attenuated than what plaintiffs were able to allege in Taamneh. Any suggestion of an attenuated chain between MTN, the terrorist groups, and the Attacks themselves collapses based on Plaintiffs' well-pleaded allegations that MTN entered into a joint venture with a known terrorist front: MTN allegedly invested in a venture with two shareholder entities with significant connections to the IRGC and provided embargoed U.S. goods important to the IRGC's aims to the venture to help make it succeed. Plaintiffs allege that MTN knew that the IRGC uses commercial entities it controls, like Irancell, as fronts to funnel money, dual-use goods, and technical aid to entities like the Qods Force and FTOs like Hezbollah. Hezbollah then allegedly funds, trains, and equips terrorist proxies in Iraq for the purpose of expelling Coalition forces from the Middle East. MTN even conceded at oral argument that Plaintiffs had sufficiently alleged the links between the IRGC and these proxy groups. (See Oral Arg. Tr. 11:23-12:2.) Moreover, in addition to the flow of embargoed U.S. goods and funds already discussed, Plaintiffs do better than the plaintiffs in Taamneh to link MTN's alleged aid to the Iraq Attacks by alleging that the dual-use technologies MTN procured were of particular importance to terrorist activities. Plaintiffs allege that cell phones can serve as detonators for specific kinds of weapons, that cell phones were of particular importance to communications infrastructure, and that cell phones were used to track enemy operatives. (AC ¶ 836.) In addition, all EFPs used by Jaysh al-Mahdi in Iraq, which are implicated in four of the Iraq Attacks, were supplied by Hezbollah using IRGC-supplied components, (id. ¶¶ 181, 184, 209, 35-55, 480), and Jaysh al-Mahdi's rockets, which are implicated in three of the Iraq Attacks, were manufactured and provided by the IRGC, (id. ¶¶ 181, 185, 356.)
Even if this nexus were not sufficiently concrete as to the ten Iraq Attacks for the purposes of Taamneh, "in appropriate circumstances, a secondary defendant's role in an illicit enterprise can be so systemic that the secondary defendant is aiding and abetting every wrongful act committed by that enterprise." Taamneh, 598 U.S. at 496, 143 S.Ct. 1206. I find that Plaintiffs' allegations satisfy this standard. MTN is alleged to have provided the IRGC (and through it. Hezbollah and other terrorist proxy groups) with pervasive, substantial assistance constituting many millions of dollars in funding, embargoed dual-use technologies, and operational or technical support. (AC ¶¶ 60, 831, 839.) This is the type of aid that could plausibly assist each and every IRGC-led terrorist attack. Taamneh, 598 U.S. at 502, 143 S.Ct. 1206. MTN Group is alleged in having taken a leadership role in a procurement scheme, including by "represent[ng] the Iranian Shareholders as their purchasing agent," and establishing "[a]ll the procedures and processes around procurement." (AC ¶¶ 935, 1007.) All the while, MTN is alleged to have known that a significant portion of Irancell's annual profits would flow to the IRGC and ultimately be used to fund terrorist operations. MTN's role is thus sufficiently pervasive and systemic that it has aided and abetted every IRGC-led attack during the period of assistance.
Finally, the six substantiality factors from Halberstam also weigh against dismissal of Plaintiffs' aiding-and-abetting claim with respect to MTN. The Taamneh Court clarified that the six factors should not be regarded "as a sequence of disparate, unrelated considerations without a common conceptual core"; instead, the factors are meant to "capture the essence of aiding and abetting: participation in another's wrongdoing that is both significant and culpable enough to justify attributing the principal wrongdoing to the aider and abettor." 598 U.S. at 504, 143 S.Ct. 1206. There, the lower court had erred by "focusing... primarily on the value of defendants' platforms to ISIS, rather than whether defendants culpably associated themselves with ISIS' actions." Id. (emphasis in original). Thus, although a terrorist venture would undeniably benefit from long term infusions of capital and dual-use goods, the precise question is instead whether the terrorists' ability to benefit from Irancell is properly "attributable to any culpable conduct of defendants directed toward" them. Id. Focusing on the conceptual core of aiding-and-abetting liability, these factors point to significant and culpable action by MTN.
The first factor, nature of the act encouraged, assesses whether the alleged aid "would be important to the nature of the injury-causing act"—here, a series of terrorist attacks. Honickman, 6 F.4th at 500. MTN is alleged to have provided the IRGC (and through it, Hezbollah and other terrorist proxy groups) with millions
of dollars in funding, embargoed dual-use technologies, and operational or technical support. (AC ¶¶ 60, 831.) Although I do not need to focus solely on the value of MTN's financial assistance to the terrorist organizations, "[f]inancial support is 'indisputably important' to the operation of a terrorist organization, and any money provided to the organization may aid its unlawful goals." Gonzalez v. Google, 2 F.4th 871, 905 (9th Cir. 2021) (citation omitted) (quoting Halberstam, 705 F.2d at 488). Courts will also consider the blameworthiness of the assisted act, which is relevant because "a court might well reason that culpability for the same amount of assistance would increase with an increase in either the blameworthiness of the tortious act aided or the seriousness of the foreseeable consequences." Kaplan II, 999 F.3d at 857. Because here, the IRGC and Hezbollah's terrorist campaign was extraordinarily blameworthy, "even 'relatively trivial' aid could count as substantial." Atchley, 22 F.4th at 222 (quoting Halberstam, 705 F.2d at 484 n.13). This factor weighs in favor of finding substantial assistance.
In Bartlett, I distinguished the provision of financial services to an FTO "singularly dedicated to terrorism" from "cases in which the bank's customers also performed non-terrorist activities, meaning any assistance would potentially have supported legitimate purposes." 2020 WL 7089448, at *12. It remains true that it will be easier for a plaintiff to demonstrate substantial assistance when the act assisted is perpetrated by an entity with no non-terroristic purpose, but I have never found a "singular purpose" to be required.
I next consider the "amount [and kind] of assistance given [to] the wrongdoer." Halberstam, 705 F.2d at 484 (alteration in original). Unlike in Taamneh, the assistance MTN is alleged to provide is not "generally available to the ... public," and so the IRGC's ability to benefit was not "merely incidental" to the availability of a preexisting platform, Taamneh, 598 U.S. at 504, 143 S.Ct. 1206. Instead, Plaintiffs have alleged that MTN "culpably associated" itself with the IRGC. Id. Plaintiffs allege that a primary form of MTN's aid to the IRGC was money. The Supreme Court has recognized that "[m]oney is fungible" and that foreign terrorist organizations "do not maintain legitimate Financial firewalls between those funds raised for civil, nonviolent activities, and those ultimately used to support violent, terrorist operations." Holder v. Humanitarian L. Project, 561 U.S. 1, 31, 130 S.Ct. 2705, 177 L.Ed.2d 355 (2010) (cleaned up). Plaintiffs allege that Irancell reaped hundreds of millions of dollars per year in annual revenue. (AC ¶ 47), and that IRGC fronts were required to divert ten to twenty percent of their cash flow ("taxes" or "khums") from profit-generating activities to Iran's anti-American terror campaign. (See, e.g. id. ¶¶ 47, 248-51, 1354-55.) Plaintiffs allege that these diversions amounted to tens of millions of dollars annually. (Id. ¶ 990.) The D.C. Circuit found millions of dollars over a period of several years to be sufficient for a finding of knowing and substantial assistance in Atchley. See 22 F.4th at 210 (defendants gave the terrorist-dominated Ministry "millions of dollars of cash and cash-equivalents over a period of many years"); cf. Bernhardt, 47 F.4th at 871 (alleged support "was not significant" where the plaintiff "fail[ed] to allege how much (if any) of that money indirectly flowed to al-Qaeda").
MTN also allegedly provided the IRGC with embargoed dual-use technologies, such as: "advanced American-made encryption technologies," including smart phones, as well as "computers, communications gear, enterprise data management solutions, and essential logistical support." (Id. ¶¶ 832, 1010-11, 1360-63.) Through these technologies, MTN improved "the
terrorists' ability to securely communicate with one another," the "ability to better surveil kidnapping targets," and the "ability to build more powerful and accurate roadside bombs and rockets" that were necessary to puncture American armor. (Id. ¶ 50; see also id. ¶¶ 62, 344, 1009, 1361.) Hezbollah allegedly used these secure phones to increase the effectiveness of IEDs and EFPs in Iraq by making it easier for terrorists to detonate them and harder for American counter-IED technologies to prevent their detonation by "jamming" them." (Id. ¶ 1011.) Plaintiffs allege that many of the Attacks were committed via EFP or other advanced rockets or bombs. (Id. ¶ 1396-99.) Finally, Plaintiffs allege that MTN attempted at least some level of concealment of the scheme by falsely assuring U.S. government officials in 2010 or 2011 that it was not supplying the IRGC with embargoed U.S. technologies. (Id. ¶¶ 986, 1012.) Taken together, these allegations are sufficient for the second factor to weigh towards substantiality.
The third factor, defendant's presence or absence at the time of the tort, is likely neutral. Although Plaintiffs do not allege that MTN was physically present during the Attacks, the D.C. Circuit has noted that some courts "have read Halberstam's 'presence' requirement more broadly in light of the ATA's context, which attaches liability to all 'persons.' including corporations." Bernhardt, 47 F.4th at 871 (quoting 18 U.S.C. § 2333(d)(1); 1 U.S.C. § 1). Because corporations cannot be physically present for an act of international terrorism, "presence" might be understood "in a transactional sense," which would include involvement with [the terrorist group] before and leading up to the" relevant Attack. Id. at 872. Because MTN allegedly had an ongoing business relationship up to and through the time period of the Attacks, 1 could consider them "transactionally" present, but in any event, this factor is not normally entitled to much weight in this context. See Bartlett, 2020 WL 7089448 at *13.
The fourth factor, defendant's relation to the principal, tracks the nexus analysis conducted above and "is useful for determining the defendant's capacity to assist." Honickman, 6 F.4th at 500 (citing Halberstam, 705 F.2d at 484). As previously discussed, Plaintiffs allege that MTN had a direct contractual relationship with intermediaries (the Iranian shareholders) that were allegedly dominated by the IRGC. And MTN concedes that Plaintiffs have plausibly alleged a link between the IRGC and the terrorist proxies, which further collapses the chain. (See Oral Arg. Tr. 11:23-12:2.) But even if this factor cut against substantiality, per Halberstam, I give the fourth factor a "low[er] priority." See 705 F.2d at 488.
The fifth factor, state of mind, assesses whether the defendant's conduct "evidences a deliberate long-term intention to participate in an ongoing illicit enterprise." Id. at 484, 488. MTN contends that this factor does not support finding substantial assistance because "MTN Group's involvement in Irancell was motivated by commercial interests." (MTN Br. 54.) The Supreme Court in Taamneh found that this factor weighed in favor of defendants in part because of "their undisputed lack of intent to support ISIS." Taamneh, 598 U.S. at 504, 143 S.Ct. 1206. But the Court also focused on "defendants' arms-length relationship with ISIS," id., where here, MTN was an active business partner allegedly procuring goods for an IRGC front.
Finally, the sixth factor assesses the defendant's duration of assistance. This factor goes to the "quality and extent of their relationship and probably influences the amount of aid provided as well." Halberstam, 705 F.2d at 484. Plaintiffs allege that MTN's investment in Irancell
lasted approximately from 2005, when the Letter Agreement was signed, until 2020, when MTN announced that it would exit Irancell in four or five years, (AC ¶ 1014.) Plaintiffs emphasize that MTN stayed in the joint venture even after the IRGC was designated as an FTO. (Id.); see King, 2022 WL 4537849, at *9 (in analyzing the sixth factor, emphasizing that the defendant "doubled down" on its relationship with the customer connected to terrorism), MTN argues that the length of its investment does not properly measure the length of its assistance to terrorism because of Irancell's legitimate operations, (see MTN Br. 54), but even if every cent to Irancell would not have plausibly benefitted terrorism, Plaintiffs still plausibly allege that a "substantial" amount of aid would have been diverted. As in Atchley, "[t]he allegations do not describe a one-off transaction by a firm unfamiliar with its counterparty, but a set of enduring, carefully cultivated relationships consisting of scores of transactions over a period of years." 22 F.4th at 224. This factor weighs in favor of finding substantial assistance.
In sum, the Halberstam factors—particularly the first and second factors—militate towards substantial assistance. In light of the totality of the foregoing analysis, I conclude that Plaintiffs have plausibly stated a claim for aiding-and-abetting liability against MTN Group.
2. Huawei U.S.
Plaintiffs theorize that the Huawei U.S. subsidiaries (Technologies USA, Device USA, and Futurewei), under the "control[] and direct[ion]" of Huawei Co., (AC ¶ 1247), sent "misappropriate[d] intellectual property" and other embargoed U.S. technologies to Iran, (id. ¶ 1361), which flowed through IRGC fronts to the IRGC, which then funneled them to the terrorist proxy groups, (id. ¶ 1265; see id. ¶¶ 1219, 1237, 1239-46, 1265, 1267, 1270-73.) In sum, Plaintiffs allege that the Huawei U.S. Defendants are liable for aiding and abetting because they assisted their parent corporation, Huawei Co., in a procurement scheme similar to MTN's. Huawei Co. has not made a motion before me. As a result, I need not decide whether the Huawei Co.-based sanctions-evasion allegations are sufficient to plead aiding and abetting because the Amended Complaint does not adequately tie the Huawei U.S. subsidiaries to the scheme. Huawei U.S.'s motion to dismiss Count One is granted.
As an initial matter, many of Plaintiffs' allegations are deficient because they refer amorphously to "Huawei" or to all Defendants without differentiating each corporate defendant's conduct. (See, e.g., AC ¶¶ 20-22, 48, 908, 1140); Ochre LLC v. Rockwell Architecture Plan. & Design, P.C., No. 12-cv-2837 (KBF), 2012 WL 6082387, at *6 (S.D.N.Y. Dec. 3, 2012) (dismissing claims supported by "a number of undifferentiated allegations" that "d[id] not allege which of the defendants or agents of those defendants engaged in the [violative] activities"). Other allegations lump the Huawei defendants together without facts indicating that parallel conduct is properly attributed to the intra-corporate entity. (See, e.g., AC ¶¶ 1219, 1265, 1267.) Most of the remaining Huawei allegations refer to the conduct of Huawei Co., the parent corporation, (see, e.g., id. ¶¶ 49, 51, 57, 60, 62, 815, 829, 835), but those allegations are insufficient to show that the U.S. subsidiaries served as Huawei Co.'s agent with respect to that conduct (i.e., the sanctions-evasion scheme). Instead. Plaintiffs allege in conclusory fashion that "Huawei" "work[ed] with and through" its U.S. subsidiaries to procure embargoed technology. (Id. ¶ 88; see id. ¶ 1220.) And even if Plaintiffs had adequately pleaded an agency relationship, many of the crucial allegations situating Huawei Co. itself in the scheme are made upon information and belief. (Id. ¶¶ 871,
874 (alleging, on information and belief, that Huawei Co. "had a business relationship with Exit40" and caused the retention of Exit40 by either Huawei Co. "or another Huawei subsidiary, affiliate, or agents").) These allegations are not supported by specific facts asserting the basis for those beliefs. See Brodie, 503 F. Supp. 3d at 13.
Consequently, I will analyze the relatively few allegations dealing specifically with the conduct of the Huawei U.S. Defendants to determine if Plaintiffs have stated an ATA claim against them. The contours of the Huawei-Skycom scheme, as alleged, are as follows. Huawei Co. did "significant business" with MCI and Irancell, (id. ¶ 1232), and because those companies required U.S.-origin technology subject to export controls, Huawei "set up subsidiaries disguised as un-related Iranian 'partners' and use[d] those subsidiaries to hide Huawei's business with [the IRGC]," (id. ¶ 1225). Skycom, based in Iran, was one of these "partners," and Huawei went to great lengths to conceal its ownership and control of Skycom. (Id. ¶ 1226.) Huawei internal company records from 2010 reflect that Huawei shipped Hewlett-Packard equipment (U.S.-origin technology) to MCI via Skycom. (Id. ¶ 1235.) Plaintiffs theorize that in addition to Skycom, Huawei Co. reached into the United States to obtain embargoed technology for TCI, MCI, and Irancell "through various U.S. agents, including but not limited to Huawei Device USA, Huawei [Technologies] USA, and Futurewei." (Id. ¶ 1301.) Plaintiffs support these allegations through the federal grand jury indictment filed against Huawei Co., Device USA, Futurewei. and Skycom. See Third Superseding Indictment. United States v. Huawei Techs. Co., No. 18-cr-457 (E.D.N.Y. Feb. 13, 2020) (ECF No. 126) [hereinafter Third Superseding Indictment].
Huawei Technologies USA is not implicated in the indictment. See id. at 38-49. In their opposition, Plaintiffs assert that Huawei Technologies USA was involved in the scheme because it produced documents in response to a government subpoena seeking "information related to Huawei's and Huawei Device USA's purported activities in Iran." (D.E. # 105 ("Huawei Opp'n") 12.) However, even if that information had been pleaded, potentially possessing relevant evidence related to other corporate affiliates' conduct is insufficient to plausibly plead a different subsidiary's involvement. See Starr v. Sony BMG Music Ent., 592 F.3d 314, 321 (2d Cir. 2010) ("[F]actual allegations must be enough to raise a right to relief above the speculative level...." (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955)). Accordingly, Plaintiffs' claims against Huawei Technologies USA are dismissed.
As to Device USA and Futurewei, most of the allegations based on the indictment cannot be connected to Huawei Co.'s sanctions-evasion scheme. Plaintiffs allege that Device USA and Futurewei misappropriated and/or reverse engineered U.S.-origin equipment and technology and suggest that either (1) technology from the misappropriation scheme or (2) profits from it constituted substantial assistance to the IRGC (through Irancell. TCI, and/or MCI). (Huawei Opp'n 24-25.) The indictment accuses Huawei Co., Device USA, and Futurewei of stealing intellectual property from competitors, thereby allowing these defendants to "grow [Huawei's] worldwide business" and save on research and development costs. Third Superseding Indictment ¶ 8. Plaintiffs suggest that because these defendants "agreed to use the proceeds derived from the theft of intellectual property to establish and operate ... [Huawei's business] in the United States and abroad," the funding must have been sent, via Huawei's Iranian business partners,
to the IRGC. Id. ¶ 16. But a plausibly stated claim may not "require an interlocking chain of inferences built on inferences." Khapesi v. City of New York, No. 13-cv-4391 (KBF), 2014 WL 2605342, at *8 (S.D.N.Y. June 10, 2014). There are no allegations in the indictment that the IP-misappropriation scheme was connected to the separate Skycom scheme to ship Huawei goods and services to users in sanctioned countries like Iran. Third Superseding Indictment ¶¶ 68-79. The procurement scheme is instead attributed to Huawei Co., through "local affiliates in the sanctioned countries, such as Skycom in Iran." See id. ¶ 68. Accordingly, Plaintiffs' allegations concerning the IP-misappropriation scheme are insufficient to connect the Huawei U.S. Defendants to Plaintiffs' ATA claim.
Plaintiffs do allege Device USA and Futurewei's specific involvement in the context of their attempts to conceal Huawei Co.'s sanctions-evasion scheme. The indictment accuses the two companies of concealing "other criminal activity, including the nature and extent of business in high-risk jurisdictions such as Iran," through material misrepresentations to U.S. governmental bodies from whom Huawei "sought regulatory authorization that would help grow [their] U.S.-based business." Third Superseding Indictment ¶ 17. Those misrepresentations were allegedly made to grow Huawei's worldwide business and avoid regulatory interference. Id. Plaintiffs also allege that when Huawei Co. and Device USA became aware of the U.S. government's criminal investigation, they "made efforts to move witnesses with knowledge about Huawei's Iran-based business to the PRC ... and to destroy and conceal evidence in the United States of Huawei's Iran-based business." Id. ¶ 87. Huawei Co. and Device USA were charged with one count of conspiracy to obstruct justice.
Even if Plaintiffs' concealment allegations are sufficient to show Device USA and Futurewei provided some assistance to their parent, Huawei Co.—who in turn supported its Iranian business partners, who are allegedly a front for the IRGC— the key question is whether, given this attenuated chain, plaintiffs have alleged "culpable participation through intentional aid that substantially furthered the tort." Taamneh, 598 U.S. at 506, 143 S.Ct. 1206. Plaintiffs assert that the concealment "conduct allowed the equipping and funding of the IRGC to continue for years after it would otherwise have been revealed," (D.E. # 123 at 15), but as noted in Taamneh, it would be error to focus primarily on the value of the assistance to the terrorist group as opposed to focusing on whether Huawei U.S. culpably associated itself with the terrorist group's actions. 598 U.S. at 503, 143 S.Ct. 1206. Huawei U.S.'s conduct was geared toward protecting itself from government interference and the terrorist groups associated with Huawei Co.'s sanctions-evasion scheme incidentally benefitted as a result. In addition, similar to the allegations specific to YouTube in Taamneh, here it is not apparent how much assistance Device USA and Futurewei provided, particularly with respect to Futurewei because it is not charged in the obstruction count in the indictment. See id. at 505, 143 S.Ct. 1206 (lack of substantial assistance where complaint alleged "nothing about the amount of money that Google supposedly shared with ISIS, the number of accounts approved for revenue sharing, or the content of the videos that were approved"). Although the indictment states that the defendants (including Huawei Co., Device USA, and Futurewei) made "material representations" and "conspired" to obstruct the criminal investigation, thereby attempting some amount of concealment, it is not evident what those statements were
or how successful they were in concealing Huawei's misconduct for any amount of time. Given the attenuated chain, "plaintiffs would need some other very good reason to think that defendants were consciously trying to help or otherwise 'participate in' the [Iraq] attack[s]." Id. at 500, 143 S.Ct. 1206 (citation omitted). Plaintiffs have not provided such a reason here. Accordingly, Count One against Device USA and Futurewei is dismissed.
III. Count Two: Civil Conspiracy Liability under JASTA
Plaintiffs' second cause of action against Defendants is for conspiracy under JASTA. Section 2333(d)(2) permits claims for secondary liability "as to any person ... who conspires with the person who committed... an act of international terrorism" as set forth in section 2333(a). 18 U.S.C. § 2333(d)(2). The scope of the alleged conspiracy is broad: Plaintiffs allege that from 2001 "until the end of the war in Afghanistan," the IRGC led a conspiracy involving Hezbollah and Sunni and Shiite terrorist proxy groups in a "transnational alliance with all the same functionalities as NATO to successfully prosecute a global terror campaign against Americans." (AC ¶¶ 6-11, 259-61, 264-67, 1616-17; see MTN Opp'n 40.) According to the Amended Complaint, the conspirators' common goal "was to finance, arm, and logistically support the IRGC, including its Hezbollah Division and Qods Force" in its campaign to "force the United States to withdraw from Iraq. Afghanistan, and the rest of the Middle East." (AC ¶¶ 1605, 1607.) Plaintiffs allege that each Defendant conspired with "one another" to support the IRGC's ultimate objective. (Id. ¶ 1602).
As with aiding-and-abetting liability, the D.C. Circuit's decision in Halberstam provides "the proper legal framework" for assessing conspiracy liability under § 2333(d). Pub. L. No. 144-222, § 2(a)(5), 130 Stat. at 852. To plead a civil conspiracy claim, a plaintiff must allege: "(1) an agreement between two or more persons; (2) to participate in an unlawful act"; "(3) an injury caused by an unlawful overt act performed by one of the parties to the agreement; (4) which overt act was done pursuant to and in furtherance of the common scheme." Halberstam, 705 F.2d at 477.
Plaintiffs' conspiracy claim fails because they have not adequately alleged an agreement in furtherance of a common scheme. An "agreement" in the context of an ATA conspiracy requires that the defendant "conspire[] with the person who committed such an act of international terrorism" (i.e., "an act of international terrorism committed, planned, or authorized by an organization that had been designated as a foreign terrorist organization"). 18 U.S.C. § 2333(d)(2). Plaintiffs theorize that by contracting with Irancell and TCI, Huawei and MTN conspired with fronts for the IRGC, and therefore the IRGC itself. (AC ¶¶ 301, 306, 311.) Although Plaintiffs do not allege that the IRGC "committed" the acts of terrorism, (see id. ¶¶ 1546, 1557, 1569, 1620), the Second Circuit has recently clarified that a plaintiff need not allege that the defendants conspired directly with the person who committed, planned, or authorized a terrorist attack. Freeman v. HSBC Holdings, PLC, 57 F.4th 66, 77-79 (2d Cir. 2023), cert. pending. However, Plaintiffs' allegations are insufficient to plausibly suggest Defendants reached an agreement with either intermediary—the Iranian shareholders or the IRGC—to carry out a common scheme to commit an act of international terrorism. See id. at 75, 79-80: Bernhardt v. Islamic Republic of Iran, No. CV 18-2739 (TJK), 2020 WL 6743066, at *7 (D.D.C. Nov. 16, 2020), aff'd, 47 F.4th 856 (D.C. Cir. 2022) ("In short, 'to be subject to secondary liability under JASTA on the basis of a conspiracy, a defendant must have conspired to commit an act of international terrorism.'") (quoting O'Sullivan v. Deutsche Bank AG, No. 17 CV 8709-LTS-GWG, 2019 WL 1409446, at *9 (S.D.N.Y. Mar. 28, 2019)). In Freeman, the court held that in order to plead a JASTA conspiracy claim, a plaintiff must "allege that the coconspirators were 'pursuing the same object.'" 57 F.4th at 79 (quoting Halberstam, 705 F.2d at 487). The plaintiffs there did not satisfy this requirement because they did not allege that the defendant and terrorist groups shared a common intent or were "engaged in a common pursuit." Id. at 80. Here, Plaintiffs allege as a common objective "expelling the United States from the Middle East" through the commission of terrorist acts (AC ¶¶ 7, 94), but the allegations do not plausibly support that Defendants shared in that goal. It is therefore not plausible to infer that "the terrorist attacks that killed or injured the service members were in furtherance of the conspiracy" to which Defendants allegedly agreed. See Freeman, 57 F.4th at 75, 80-81; see also Bernhardt, 47 F.4th at 873 (holding that the plaintiffs' "conspiracy claim [against HSBC] is inadequate" because "[t]he complaint states that HSBC was trying to make substantial profits by evading sanctions, whereas al-Qaeda sought to terrorize the U.S. into retreating from the world stage" (internal quotation marks omitted)). Other than conclusory allegations that Defendants "each shared a common specific intent" to cause money and technology to flow through to terrorist campaigns, (AC ¶ 829), the Amended Complaint does not raise an inference of a common scheme to commit an act of international terrorism to "force the United States to withdraw from Iraq, Afghanistan, and the rest of the Middle East." (Id. ¶ 1607); see also Freeman, 57 F.4th at 80 ("Nowhere in the Complaint, however, do Plaintiffs plead that the Banks intended to kill or injure U.S. service members in Iraq...."). Accordingly, Plaintiffs cannot state a claim for conspiracy liability under JASTA.
Because I lack personal jurisdiction over the ZTE Defendants, I need not reach the merits of Plaintiffs' claims against them. However, were I to address the merits, I would dismiss Plaintiffs' conspiracy claim against ZTE for the same reasons as I dismiss Plaintiffs' conspiracy claims against Huawei U.S. and MTN.
With respect to my holding that Plaintiffs have pleaded an aiding-and-abetting claim as to MTN Group. I note that the Court in Taamneh observed that aiding-and-abetting liability, tinder some circumstances, "begins to blur with conspiracy liability," but that "aiding and abetting lacks the requisite agreement that justifies ... extensive conspiracy liability." 598 U.S. at 496, 1, 143 S.Ct. 1206 find that, notwithstanding MTN's pervasive, conscious, and culpable assistance, Plaintiffs have failed to plead the existence of an agreement to carry out a common scheme.
Because Plaintiffs have failed to plausibly plead conspiracy, they also cannot rely on conspiracy-based jurisdiction. To plead conspiracy jurisdiction, Plaintiffs must allege that "(1) a conspiracy existed; (2) [Defendants] participated in the conspiracy; and (3) a coconspirator's overt acts in furtherance of the conspiracy had sufficient contacts with [the United States] to subject that co-conspirator to jurisdiction [here]." Berkshire Bank v. Lloyds Banking Grp., PLC, No. 20-1987, 2022 WL 569819, at *2 (2d Cir. Feb. 25, 2022) (summary order).
IV. Count Three: Aiding and Abetting under JASTA (Afghanistan Attacks)
Plaintiffs' third cause of action seeks to hold MTN liable for injuries arising from two 2019 attacks in Afghanistan. (See AC ¶¶ 1556-57, 1568-69, 1622-31.) Rather than
alleging that MTN aided and abetted those specific attacks, as they did in Count One, Plaintiffs claim that MTN assisted an "IRGC-Taliban-al-Qaeda Campaign," i.e., a multiyear criminal enterprise that violated the federal racketeering statute (RICO), of which the attacks were allegedly a part. (Id. ¶¶ 1624-26.) Plaintiffs advance two theories for how MTN aided and abetted the "IRGC-Taliban-al-Qaeda Campaign" that forms the basis of their RICO allegations. First, MTN's joint venture with the Iranian shareholders to provide money and embargoed technologies to Irancell was used to support the Afghan insurgency. (AC ¶ 1629.) Second, MTN aided and abetted the Taliban's attacks in Afghanistan by paying protection payments to the Taliban and shutting down its cell towers in response to Taliban demands to do so.
Plaintiffs' RICO claim fails because pleading a multi-year enterprise as the predicate "act" of terrorism is inconsistent with the plain language of the ATA. To state any aiding-and-abetting claim under the ATA, a plaintiff must allege that he was injured by an "act of international terrorism." 18 U.S.C. § 2333(d)(2) (emphasis added). The ATA defines act of "international terrorism" as an act that is violent or dangerous to human life and would violate U.S. criminal law if committed within the jurisdiction of the United States. Id. § 2331(1). The "act" of terrorism here, i.e., the predicate violent crime, was not the 2019 attacks, but a pattern of racketeering that comprised numerous crimes over many years. (See AC ¶¶ 1622-31.)
I agree with the courts to have decided the question that a RICO "campaign" of terrorism is not a valid theory of liability under the ATA. See Wildman v. Deutsche Bank Aktiengesellschaft, No. 21-cv-4400 (HG), 2022 WL 17993076, at *27 (E.D.N.Y. Dec. 29, 2022); Atchley v. AstraZeneca UK Ltd., 474 F. Supp. 3d 194, 212 (D.D.C. 2020), rev'd on other grounds, 22 F.4th 204 (D.C. Cir. 2022); Cabrera, 2021 WL 3508091, at *26. MTN suggests that Plaintiffs pleaded the Afghanistan attacks differently "to bypass the ATA's FTO requirement, since the Taliban is not an FTO." (MTN Br. 56.) Because Plaintiffs are unable to allege that al-Qaeda—which is an FTO—"committed, planned, or authorized" both attacks pursuant to JASTA, they allege that al-Qaeda authorized a multiyear enterprise. (AC ¶ 1630.) Plaintiffs are correct that in at least some cases, a statutory "act" can be interpreted as plural, but here, it would be "quite unnatural" to interpret the statutory language of "act" as a collection of hundreds of attacks spanning many years as opposed to the particular attack in which a plaintiff was injured. Atchley, 474 F. Supp. 3d at 212. Moreover, such an interpretation would undermine the ATA's restriction of liability to attacks "committed, planned, or authorized" by a specific kind of designated entity—an FTO. Accordingly. Count Three is dismissed.
The Haqqani Network, which Plaintiffs assert is part of the Taliban, is also an FTO. (AC ¶ 423.) Plaintiffs do not appear to contest MTN's assertion that the Amended Complaint pleads al-Qaeda as "committing" the Afghanistan attacks for purposes of their RICO argument. (See MTN Opp'n 55-56.)
CONCLUSION
For the foregoing reasons, MTN's motion to dismiss is GRANTED as to MTN Dubai Limited and DENIED as to MTN Group Limited; ZTE's motion to dismiss is GRANTED; and Huawei's motion to dismiss is GRANTED.
SO ORDERED.