Victims and family members of victims who were injured by improvised explosive devices (“IEDs”) by terrorists in Afghanistan and Pakistan (the “injured parties”) sued a group of banks (the “banks”), alleging the banks aided and abetted terrorist organizations in violation of the Justice Against Sponsors of Terrorism Act ("JASTA"). The injured parties first claimed that the banks provided financial services to various non-terrorist individuals and entities affiliated with the terrorist organization, and the services indirectly aided and abetted the terrorist attacks. Specifically, the injured parties argued that the banks had assisted the terrorists by providing banking services to two Pakistani fertilizer companies that materially aided in the smuggling of fertilizer to terrorist groups, which supported the manufacturing of IEDs used in the attacks, and by facilitating value-added tax (VAT) fraud schemes and money laundering operations, which the banks knew terrorists commonly used for financing. Secondly, the injured parties alleged that the banks’ financial “services aided and abetted a terrorist ‘campaign’ engaged in a pattern of violent ‘racketeering’ activities” that were designed to violently “expel Americans.” The banks moved to dismiss the injured parties’ claims for failure to “sufficiently allege[] an aiding-and-abetting claim under JASTA,” and the district court granted the motion, finding no nexus between the banks’ services provided and the injuries to the injured parties. The injured parties appealed.
In Ashley v. Deutsche Bank Aktiengesellschaft, 144 F.4th 420 (2d Cir. 2025), the Second Circuit affirmed the district court’s dismissal. JASTA allows U.S. nationals who are injured to sue “those who aid and abet an act of terrorism … by knowingly providing substantial assistance.” 18 U.S.C. § 2333(d)(2). The court first outlined the elements for JASTA claims: (1) the party who the defendant aided and abetted must have performed a wrongful act resulting in injury; (2) the defendant must have been “generally aware” of its “role as part of an overall illegal or tortious activity at the time that he provided assistance”; and (3) the defendant must have ‘knowingly and substantially assist[ed] the principal violation.” Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983). However, the court went on to emphasize that the elements are not inflexible, and the Supreme Court has clarified that the framework for the JASTA claim is whether “the defendant consciously and culpably ‘participate[d]’ in a wrongful act so as to help ‘make it succeed.’” Twitter, Inc. v. Taamneh, 598 U.S. 471 (2023). The Second Circuit found that the injured parties’ complaint plausibly alleged the first two elements. The parties did suffer actual injury by the terrorist organizations, and the complaint plausibly alleged that the banks had a general awareness of their indirect role. The court explained that the general awareness element focuses on whether a bank was aware of its customers’ connections to terrorist organizations and the organizations’ violent attacks. The court found the banks “certainly became generally aware of its [customers’] connection,” explaining an article had been published connecting the fertilizer companies to the IEDs used by the terrorists and the banks had been told that the fertilizer companies’ products were the source for explosive materials used by the terrorists. However, the court found that the complaint did not allege that the banks provided “knowing and substantial assistance” to the terrorist activities through providing financial services to related entities. Specifically, the court found that the “complaint [did] not allege that the [banks] consciously or culpably sought to make the [terrorists’] bombings succeed.” The bank noted that the third element is highly fact intensive and depends on several factors, including: “‘(1) the nature of the act encouraged, (2) the amount of assistance given by defendant, (3) defendant’s presence or absence at the time of the tort, (4) defendant’s relation to the principal, (5) defendant’s state of mind, and (6) the period of defendant’s assistance.’” Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir. 2018). Here, the court explained that the banks merely provided routine banking services to the terrorist-related customers, and it may have come to a different decision if the banks had treated the customers differently than it treated other clients, because that would have possibly indicated a willingness to aid the terrorists’ activities. The court also found that it was not enough just to allege that the banks facilitating money laundering operations were the banks providing substantial support to the terrorists when those operations did not involve terrorist entities. Further, the court found no showing of a factual proximate cause linking the banks’ activities and specific terrorist incidents, whether directly or indirectly. In other words, , the injured parties had failed to show a “nexus” between the banks and the alleged terrorist acts causing the injuries. Wildman v. Deutsche Bank Aktiengesellschaft, No. 21-CV-04400 (HG) (RML), 2022 U.S. Dist. LEXIS 233172, at *29 (E.D.N.Y. Dec. 29, 2022). When a nexus to the terrorist attack is lacking, a plaintiff may instead show that a defendant’s participation was so “pervasive, systemic, and culpable” that the defendant can be said to have “aided every wrongful act.” Twitter, Inc. v. Taamneh, 598 U.S. 471 (2023). Here, the complaint requires “a high degree of speculation, particularly because of the disconnect between the [b]anks’ involvement and support for the terrorist attacks, which is insufficient to plead an aiding-and-abetting claim.” The injured parties’ causes of action basically were detailed descriptions of other criminal enterprises and activities. However, the injured parties did not plead facts showing the banks had knowingly aided and abetted or provided material support to terrorist campaigns. Thus, the complaint was dismissed for not pleading a claim on which a factual proximate cause could plausibly show that the banks directly or indirectly provided material support through financial services to terrorist organizations that resulted in harm.
By Will Strum [email protected]
Edited By Kristin Meurer [email protected]
Edited By Hayden Mariott [email protected]