The Rule of Law is Only Relevant To Those Who Subscribe To It: The Failure of Punitive Damages in Terrorism as Tort Litigation.

AuthorSternlieb, Sarah M.
  1. How the State-Sponsor of Terrorism Exception to the FSIA Allows Suits For Punitive Damages 1. The Statutory Provisions Allowing For Suits Against Sponsors of Terrorism 2. Limitations on Suits Against Sponsors of Terrorism 3. The Award of Punitive Damages II. Punitive Damages Awarded Under the FSIA Fail to Fulfill Their Purpose and Aim 1. Punitive Damages Do Not Provide Deterrence Because They Do Not Deplete Terrorist Groups' Assets 2. The Grossly Excessive Punitive Damages Are Not Effective 3. Punitive Damages Do Not Send an Effective Warning 4. The Purpose and Effect of Punitive Damages Is Properly Made Under Compensatory Damages A new genre of legal warfare has emerged in the war against terror. The last two decades have seen the emergence of compensation for terrorist victims and the punishment of sponsors of terrorism through the use of tort law. Lawsuits may now be brought against state sponsors of terrorism, terrorist organizations, and individuals and entities that provide support for terrorist actions. (1) Through statutory schemes enacted by Congress, as well as some common law claims, terrorism as a tort is actionable against state sponsors of terrorism. (2) These claims may include punitive as well as compensatory damages.

    Plaintiffs typically sue under a state-sponsor of terrorism exception to the Foreign Sovereign Immunities Act (FSIA). Under the FSIA, recovery of punitive damages is available against state sponsors of terrorism. The 1996 amendments to the FSIA allowed for punitive damages with the express purpose of "altering] the conduct of foreign states." (3) However, the recovery of punitive damages face obstacles at every step of litigation, from procedural and jurisdictional challenges to the actual recovery of judgment. The realities of these lawsuits demonstrate that punitive damages are a long way from successfully deterring conduct or punishing terrorist funders.

    In the first part, this paper provides an overview of terrorism litigation and the statutory scheme enacted to provide a justiciable claim to litigants. Under the FSIA, recipients of punitive damages awards rarely obtain their judgments against their non-cooperative and defaulting defendants. This paper then considers the aims of punitive damages and their efficacy against state sponsors of terrorism.

    At first glance, it would seem that terrorist actions fit precisely within the definition of punitive damages. Punitive damages are awarded when "defendant[s] act[] with recklessness, malice, or deceit." (4) They are meant to punish and deter (5) bad behavior, such as terrorism, but are entirely separate and are not meant as compensation. (6) The punitive damages awarded under the FSIA rarely have this effect and remain largely uncollected. This paper argues that punitive damages for terrorism fail to fulfill the purpose of punitive damages, waste time and money and distort the aim of punitive damages. A judgment meant to "penalize[e] the wrongdoer or mak[e] an example to others" and "deter blameworthy conduct" (7) ultimately misses the mark when entered against countries already deemed 'state-sponsors of terrorism' for their reprehensible conduct.

  2. HOW THE STATE-SPONSOR OF TERRORISM EXCEPTION TO THE FSIA ALLOWS SUITS FOR PUNITIVE DAMAGES

    1. The Statutory Provisions Allowing For Suits Against Sponsors of Terrorism

      In the past twenty-five years, Congress has enacted legislation to enable lawsuits against state sponsors of terrorism. The primary vehicle used to obtain punitive damages judgments is through the FSIA and its exception for state-sponsors of terrorism. (8) The FSIA provides immunity to foreign sovereign nations as an important statement of comity in foreign relations. In 1996, Congress created the 'state-sponsored terrorism' exception to the FSIA. This exception abrogates the immunity from liability in civil lawsuits that certain foreign states formerly held when they sponsor terrorist activity.

      The lawsuits are brought against entities that provide support to perpetrators of terrorist actions. Criminal convictions are unlikely against a terrorist or terrorist sponsor, especially for acts occurring outside the United States. (9) Civil liability against those who funded terrorism may be the only plausible legal remedy for victims of terrorist attacks. Without the statutory exception, lawsuits may be prohibited due to the difficulty of obtaining personal jurisdiction over the defendants or a cause of action.

      The Antiterrorism and Effective Death Penalty Act of 1996 waives sovereign immunity under the FSIA in suits for monetary damages for "personal injury or death" caused by "an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources." (10) If a foreign state's officer, agency, or instrumentality engages in either an act of terrorism or the "provision of material support," the foreign state loses their privilege of sovereign immunity. (11)

      Congress created a cause of action for these suits through the passage of the Civil Liability for Acts of State-Sponsored Terrorism. (12) This statute specifically denotes the creation of an action for monetary damages, "including] economic damages, solatium, pain and suffering, and punitive damages." (13) If the action occurred in the foreign state, the claimant must allow the foreign state "reasonable opportunity to arbitrate the claim" first, and either the claimant or the victim must be a United States national. (14) Generally, federal common law is applicable for damages under the FSIA. (15) Whether an act of terrorism 'caused' the injury requires examination under other sources of law. (16) Courts have looked to the Restatement of Torts for guidance under this question. (17)

      The Alien Tort Claims Act (ATCA) allows aliens to sue for torts "committed in violation of the law of nations." (18) The Torture Victim Protection Act (TVPA) created a cause of action under the ATCA when the victims are connected to the U.S. in actions of torture or extrajudicial killings carried out under colour of the foreign nation's law. (19) While the ATCA provides jurisdiction in some terrorism cases, this paper primarily focuses on other actions because the ATCA provides jurisdiction to aliens in tort actions in violation of the law of nations or American law. (20) Terrorism claims under the ATCA also face challenges due to the political question doctrine, sovereign immunity, and other statutes, (21) as well as its requirement of exhaustion of remedies. (22)

    2. Limitations on Suits Against Sponsors of Terrorism

      Plaintiffs face a number of limitations in their ability to sue sponsors of terrorism under the statutes. Limitations include which countries they may sue, who within the countries they may sue, and how they litigate.

      Suits may only be brought against 'state-sponsors of terrorism.' The State Department must designate the state as a state-sponsor of terrorism in order to bring suit against the foreign state, or one of the agencies, instruments, or officials of that state. (23) The state must be on the list at the time of the event in question. (24) Currently, this list includes just four countries: Cuba, Iran, Sudan, and Syria. (25) Thus, while victims of the terrorist bombing of the USS Cole may bring suit against the Republic of Sudan for providing material support and assistance, (26) victims of the September 11,2001 World Trade Center attacks may not sue Saudi Arabia for their contributions to Al Queda. (27) The limited number of states on the list substantially limits the range of possible defendants and reflects the delicacy of the international relations.

      The abrogation of immunity under the state sponsor of terrorism exception to the FSIA extends to a "foreign state." A "foreign state" is statutorily defined as "a political subdivision of a foreign state or an agency or instrumentality of a foreign state." (28) In a recent decision, the Supreme Court held that the FSIA's definition does not include "an official acting on behalf of the foreign state." (29) This decision is both a blessing and a curse. On the one hand, after Samantar foreign officials do not have immunity under the FSIA and thus cannot use the usual sovereign immunity as a shield. (30) On the other hand, one of the benefits of the FSIA exception is its provision of automatic personal jurisdiction over the foreign state subject to the immunity exception (once process has been served). (31) Under the common law or under another action pled, the defendant may not be able to meet the procedural hurdles.

      In many cases, defendants do not defend the lawsuits. (32) In part, this may be due to the lack of deference the foreign states give to the lawsuits. (33) Thus, many cases have resulted in default judgments. (34) However, even without an opposing party the lawsuits remain contentious. (35) Despite the absence of an opposing party, courts still engage in intensive fact finding for liability. (36) Courts are compelled to make a more intensive inquiry rather than enter default judgment. (37) Default judgments can only be entered against a foreign state after the plaintiff "establishes his claim or right to relief that is satisfactory to the Court. (38) This heightened standard protects foreign states from decisions arising from procedural defaults. (39)

      The court must examine whether there is a sufficient causal link between the state and the terrorist entity. In Weinstein v. Islamic Republic of Iran, the court found a link between Hamas and Iran. (40) First, they established that Hamas, an organization dedicated to Jihad, "a holy war employing terrorism" against Israel publically claimed credit for the terrorist bombing of an Israeli bus at issue in the litigation. (41) The court then found the Islamic Republic of Iran supported Hamas. (42) An expert on Iran testified to Iran's monetary contributions to Hamas, as well as their material support in...

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