Supreme Court Update: Opati v. Republic of Sudan (No. 17-1268)
The Court was back this week with another unanimous decision, Opati v. Republic of Sudan (No. 17-1268), the latest in a long line of cases dealing with the details of suits against state sponsors of terrorism. This time, the Court unanimously held that Sudan could be held liable for punitive damages for its role in facilitating al Qaeda’s 1998 bombing of U.S. embassies in Kenya and Tanzania.
This one is a bit technical, but we’ll try to simplify it as best we can. Under the 1976 Foreign Sovereign Immunities Act (“FSIA”) foreign states are immune from suit in U.S. court unless a specific statutory exception applies. One such exception is the terrorism exception, added to the law in 1996. It permits plaintiffs to sue foreign states for committing or supporting terrorism, provided they are designated by the U.S. State Department as a state sponsor of terror. As originally enacted, this exception did not allow for punitive damages, because it was codified in 28 U.S.C. 1605, and a separate provision of the FSIA (28 USC 1606) barred punitive damages for any suit proceeding under one of Section 1605’s exceptions.
Two years after this exception became law, al Qaeda carried out its attack on the U.S. embassies in Kenya and Tanzania. A group of plaintiffs sued Sudan in U.S. court, relying on the terrorism exception. Their suit raised some questions about just what Congress meant to do by enacting the exception: Did it create a federal cause of action for terrorism or did it just remove foreign states’ immunity for pre-existing state causes of action (whatever those were)? In 2008, Congress sought to address this uncertainty in the National Defense Authorization Act of 2008 (“NDAA”). The NDAA moved the terrorism exception out of Section 1605 and into its own section (making it so that Section 1606’s bar on punitive damages no longer applied). It also created a new federal cause of action for terrorism. And Congress included two separate provisions to permit plaintiffs to bring suit under this new cause of action for pre-2008 events.
Various plaintiffs responded by amending their pre-existing suits against Sudan and by bringing new ones under this new federal cause of action (as well as some state causes of action), all of which were consolidated. Sudan refused to participate, leading to a default judgment being entered against it. The District Court appointed a special master to make individual damage assessments for each of the plaintiffs, which ultimately amounted to more than $10.2 billion in damages, $4.3 billion of which were punitives. Sudan then appeared and appealed, arguing that Congress’s 2008 elimination of the FSIA’s punitive damages bar for suits against state sponsors of terror could not be applied retroactively to suits over pre-2008 conduct. The D.C. Circuit agreed, vacating the punitive damages award and holding that Congress did not clearly express the intent to apply the NDAA’s punitive provision retroactively. The Supreme Court granted cert and reversed.
Justice Gorsuch, writing for a unanimous Court (with Justice Kavanaugh recused), began with the Court’s decision in Landgraf v. USI Film Products (1995). As Landgraf explained, the general rule, grounded in the due process clause, is that statutes should be interpreted to only apply prospectively unless Congress “clearly” indicates a different intent. Before the Court, the parties spent most of their time arguing about whether and how Landgraf’s presumption applies in the context of the FSIA, in light of another FSIA case about retroactivity, Republic of Austria v. Altmann (2004). But Justice Gorsuch saw no reason to delve into that complicated question, because Congress’s intent in the 2008 NDAA was pretty clear: It made punitive damages available for suits brought under the new federal state sponsor of terrorism cause of action, and it explicitly made that cause of action applicable retroactively. Nothing in Landgraf or the Court’s other retroactivity cases required Congress to explicitly say that the removal of the prohibition on punitive damages specifically was retroactive when it was clear that Congress intended the new cause of action as a whole to be so.
The Court thus vacated the D.C. Circuit’s decision as to punitive damages. But in a long passage at the end of Justice Gorsuch’s opinion, he declined to address several other thorny questions the parties tried to raise before the Supreme Court because they fell outside the scope of the question presented. Instead, the Court left those issues to be decided in the first instance on remand.
We’ll be back next week as the Court continues its march toward crunch time of OT2019.