The Justice Against Sponsors of Terrorism Act: A Cure Worse than the Disease
In 2015, the U.S. District Court for the Southern District of New York granted a motion to dismiss by the Kingdom of Saudi Arabia in a suit seeking damages for losses suffered as a result of the terrorist attacks of September 11, 2001.1 The motion was granted because the Kingdom had successfully claimed immunity under the Foreign Sovereign Immunities Act (“FSIA”).2 In 2016, Congress enacted the Justice Against Sponsors of Terrorism Act (“JASTA”), creating an exception to the FSIA for civil claims against countries for their support of international terrorism.3 Then, in 2018, the same court denied the same motion by the same defendant on the same facts.4 While it is commendable to hold state sponsors of terrorism accountable directly to victims, JASTA is an imperfect solution in at least two ways: it undermines the separation of government powers and deters foreign investment.
The recognition of foreign governments is a power that belongs exclusively to the executive branch.5 This power includes the recognition of belligerency.6 Acknowledging this power, Congress has passed three statutes that condition the applicability of sanctions to a foreign country on a determination by the Secretary of State that the government of that country has “repeatedly provided support for acts of international terrorism.”7
By contrast, JASTA does not condition the imposition of sanctions on the independent actions of the Secretary of State, or any other member of the executive branch.8 It simply removes sovereign immunity from foreign countries in cases involving acts of “international terrorism” – a term the statute defines in murky language.9 In a dispute, when sovereign immunity is removed in this way, a U.S. court will deny a motion to dismiss for lack of subject matter jurisdiction. This will create uncertainty for foreign sovereigns with ties to the United States – a harmful encroachment on the recognition power, as, in the words of the Supreme Court, “Foreign countries need to know, before entering into diplomatic relations or commerce with the United States . . . whether their officials will be immune from suit in federal court . . . . These assurances cannot be equivocal.”10
The equivocation introduced by JASTA is already affecting commerce. In March 2016, before JASTA was enacted, Saudi Arabia threatened to sell off $750 billion in U.S.-located assets if the bill were to become law and expose such holdings to a freeze.11 While this threat never quite materialized,12 Saudi Aramco, an energy company majority-owned by the Saudi government, reportedly concluded during preparations for its recent IPO that it would not consider a U.S. listing unless the company was offered sovereign immunity.13 This signals a departure from the Kingdom’s traditionally eager and robust approach to U.S. investment,14 a departure that can be attributed at least in part to JASTA. Foreign state accountability for terrorist attacks on U.S. soil is an issue that demands bold and creative solutions. JASTA’s flaw is that it is too bold. By attempting to address this issue through the courts, Congress has compromised the separation of powers and undermined a key incentive for foreign investment.
Marcus Thomas is a staff member of Fordham International Law Journal Volume XLIII. This is a student blog post and in no way represents the views of the Fordham International Law Journal.1 In re Terrorist Attacks on Sept. 11, 2001, 134 F. Supp. 3d 774, 778 (S.D.N.Y. 2015), vacated, No. 15-3426, 2017 WL 8776686, at *1 (2d Cir. Feb. 7, 2017).
2 Id. at 777-78.
3 28 U.S.C. § 1605B (2018).
4 In re Terrorist Attacks on Sept. 11, 2001, 298 F. Supp. 3d 631, 640 (S.D.N.Y. 2018).
5 Zivotofsky ex rel. Zivotofsky v. Kerry, 135 S. Ct. 2076, 2086 (2015).
6 Baker v. Carr, 369 U.S. 186, 212 (1962).
7 22 U.S.C. § 2371(a) (2018); 22 U.S.C. § 2780(d) (2018); 50 U.S.C.A. § 4813(c)(1)(A)(i) (West 2018).
8 28 U.S.C. § 1605B (2018).
9 18 U.S.C. § 2331(1) (2018).
10 Zivotofsky, 135 S. Ct. at 2086.
11 Mark Mazetti, Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill, N.Y. Times (April 15, 2016), https://www.nytimes.com/2016/04/16/world/middleeast/saudi-arabia-warns-ofeconomic-fallout-if-congress-passes-9-11-bill.html.
12 See, e.g., Liz McCormick, Saudi Arabia’s Buying of U.S. Treasuries is Soaring Under Trump, Bloomberg (June 30, 2019, 6:05 PM), https://www.bloomberg.com/news/articles/2019-06-30/saudi-buying-of-treasuries-is-soaring-under-trump.
13 Rania El Gamal et al., Exclusive: Saudi Aramco Board Sees Too Many Risks for New York IPO – Sources, Reuters (August 30, 2019, 7:26 AM), https://www.reuters.com/article/us-saudi-aramco-ipo-exclusive/exclusive-saudi-aramco-board-sees-too-many-risks-for-new-york-ipo-sources-idUSKCN1VK1BD.
14 See e.g., McCormick supra note 12; Natasha Turak, Massive Saudi Wealth Fund Zeros in on China, Plans to Open New Asia Office, CNBC (May 1, 2019, 1:43 AM), https://www.cnbc.com/2019/05/01/saudi-public-investment-fund-zeros-in-on-china-despite-us-investments.html.