U.S. Supreme Court Allows Retroactive Punitive Damages Against the Republic of the Sudan - The Supreme Court allows victims of terrorist attacks suing the Republic of the Sudan under § 1605A(c) of the Foreign Sovereign Immunities Act to pursue punitive damages for preenactment conduct.

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Jones Day

The Supreme Court in Opati v. Republic of Sudan, No. 17–1268, 590 U.S. ___ (2020), has held that the Foreign Sovereign Immunities Act ("FSIA") allows certain plaintiffs to recover punitive damages from state sponsors of terrorism for actions that occurred before the relevant provision of the FSIA—28 U.S.C. § 1605A(c)—was enacted.

In 1998, al-Qaeda detonated explosives outside U.S. embassies in Kenya and Tanzania. Victims and their families subsequently sued Sudan under the FSIA.

The FSIA generally holds foreign states immune from suit in U.S. courts, but excepts terrorism. The terrorism exception allows certain plaintiffs to sue countries that have supported certain acts of terrorism and have been designated "state sponsors of terror." Until 2008, this exception was subject to the FSIA's general bar on punitive damages. In 2008, Congress moved the terrorism exception to § 1605A of the FSIA, which is not subject to the bar on punitive damages. Additionally, § 1605A(c) created a federal cause of action for U.S. nationals, Armed Forces members, U.S. Government employees or contractors, and their legal representatives, and it expressly authorizes punitive damages. The 2008 amendments also specified that plaintiffs could file new actions for preenactment conduct under § 1605A.

The original plaintiffs then amended their complaint, and many additional victims and their relatives filed new actions, some invoking the § 1605A(c) federal cause of action to seek punitive damages from Sudan. Following a consolidated trial, the district court awarded $4.3 billion in punitive damages. On appeal, however, the D.C. Circuit held that the 2008 amendments included no statement clearly authorizing punitive damages for preenactment conduct.

The Supreme Court disagreed. The Court acknowledged the Landgraf principle that legislation usually applies only prospectively as well as the Altmann v. Austria decision, which declined to apply the presumption of prospectivity in the FSIA context. Ultimately, the Court refused to endorse an interpretive presumption in this case, holding instead that "Congress was as clear as it could have been" when it (i)"expressly authorized punitive damages under a new cause of action," and (ii) "explicitly made that new cause of action available to remedy certain past acts of terrorism."

As a result of the Court's ruling, Sudan once again owes punitive damages to victims of the 1998 embassy bombings who were able to invoke the § 1605A(c) federal cause of action. As for foreign nationals who had to rely on state law claims, the Court remanded the case to the D.C. Circuit for reconsideration of the availability of punitive damages in that context; a considerable portion of the punitive damages award therefore continues to hang in the balance. Meanwhile, the United States and Sudan continue to negotiate a bilateral claims agreement that would compensate the victims of the bombings, with Sudan seeking eventual removal from the "state sponsors of terrorism" list.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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