Court Opinion

ID: 4271628
Source: CourtListenerOpinion
Date Created: 2018-05-01 21:00:52.728747+00
Date Added: 2024-06-11T09:24:08.814264
License: Public Domain

UNITED STATES DISTRICT COURT
                      FOR THE DISTRICT OF COLUMBIA
_________________________________________
                                          )
FRIENDS OF MAYANOT INSTITUTE, INC., )
                                          )
      Plaintiff,                          )
                                          )
              v.                          ) Case No. 16-cv-01436 (APM)
                                          )
ISLAMIC REPUBLIC OF IRAN,                 )
                                          )
      Defendant.                          )
_________________________________________ )

                          MEMORANDUM OPINION AND ORDER

       From July 12, 2006, through August 14, 2006, the Hezbollah terrorist organization

perpetrated a prolonged attack (“2006 attack”) along the border between Israel and Lebanon, firing

thousands of rockets and missiles at civilian targets in northern Israel. Plaintiff Friends of Mayanot

Institute, Inc. (“Plaintiff” or “Mayanot”)—a New York non-profit corporation that operates

educational, experiential learning, and leadership training programs in Israel—claims that it

suffered economic losses as a result of the 2006 attack. It brings this action against the Islamic

Republic of Iran under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1602 et seq.,

asserting that Iran’s material support of Hezbollah in furtherance of the 2006 attack renders Iran

liable for the resulting economic losses it suffered.

       Iran has never entered an appearance in this action, and upon Plaintiff’s request, the Clerk

of Court entered default against Iran on May 17, 2017. Plaintiff subsequently moved for entry of

default judgment against Iran as to liability, additionally requesting that the court appoint a Special

Master to determine the amount of damages to be awarded to Plaintiff pursuant to 28 U.S.C.

§ 1605A(e). For the reasons stated below, the court denies without prejudice Plaintiff’s motion

for default judgment on liability.
I.       FINDINGS OF FACT

         The court begins by making factual findings regarding the 2006 attack—including Iran’s

involvement—as well as the financial status of Plaintiff Mayanot’s business in Israel before and

after the attack. To do so, the court draws upon the allegations contained in Plaintiff’s complaint

and motion for entry of default judgment, which rely extensively upon the findings of other judges

in this District Court in other related matters and on United States government official reports.

         Additionally, the court takes judicial notice of the underlying evidentiary record in Kaplan

v. Central Bank of the Islamic Republic of Iran, 55 F. Supp. 3d 189 (D.D.C. 2014), in making its

findings of fact in this case. 1 In Kaplan, a number of American nationals—injured survivors and

family members of victims of the 2006 attack—filed suit in this District Court under the state-

sponsored terrorism exception to the FSIA, 28 U.S.C. § 1605A, asserting that North Korea and

Iran were liable for injuries caused by the 2006 attack because they provided material support and

resources to Hezbollah. See Kaplan, 55 F. Supp. 3d at 197. Presiding over the case, Judge

Lamberth conducted a hearing to determine the liability of North Korea and Iran for the 2006

attack, receiving evidence and testimony from a number of expert witnesses. See id. at 192–98.

Based on that record, the court made extensive findings of fact and conclusions of law in finding

North Korea and Iran liable under 28 U.S.C. § 1605A(c). See generally Kaplan, 55 F. Supp. 3d

189. In taking judicial notice of the proceedings in Kaplan, this court is mindful that it must not

“simply adopt previous factual findings without scrutiny” and must “reach [its] own, independent

1
  The court grants Plaintiff’s Motion to Take Judicial Notice of the Findings and Record in Kaplan v. Central Bank of
the Islamic Republic of Iran, 55 F. Supp. 3d 189 (D.D.C. 2014). See ECF No. 18. A court may “take judicial notice
of, and give effect to, its own records in another but interrelated proceeding.” Opati v. Republic of Sudan, 60 F. Supp.
3d 68, 73 (D.D.C. 2014) (quoting Booth v. Fletcher, 101 F.2d 676, 679 n.2 (D.C. Cir. 1938)); see Fed. R. Evid. 201(b)
(allowing a court to “judicially notice a fact that is not subject to reasonable dispute because it . . . can be accurately
and readily determined from sources whose accuracy cannot reasonably be questioned”). Courts adjudicating FSIA
claims “frequently take[] judicial notice of earlier, related cases arising under the state sponsored terrorism exception
to foreign sovereign immunity.” Worley v. Islamic Republic of Iran, 75 F. Supp. 3d 311, 319 (D.D.C. 2014).

                                                            2
findings of fact” in the case at hand. Worley v. Islamic Republic of Iran, 75 F. Supp. 3d 311, 319–

20 (D.D.C. 2014) (quoting Opati v. Republic of Sudan, 60 F. Supp. 3d 68, 73–74 (D.D.C. 2014)).

        A.      Hezbollah and the July-August 2006 Attack

        Hezbollah—Arabic for “Party of God”—is a radical Shi’ite Islamic group founded in

Lebanon “under the auspices of the government of Iran.” Peterson v. Republic of Iran, 264

F. Supp. 2d 46, 51 (D.D.C. 2003); see Pl.’s Mot. to Take Judicial Notice & for Entry of Default J.,

ECF No. 18 [hereinafter Pl.’s Mot.], Ex. C, ECF No. 18-3 [hereinafter Podoler Decl.] ¶¶ 26–27.

Hezbollah is opposed to the United States and the state of Israel, and has been designated a

“Foreign Terrorist Organization” by the U.S. Department of State since 1997. See Designation of

Foreign Terrorist Organizations, 62 Fed. Reg. 52,650 (Oct. 8, 1997); Kaplan, 55 F. Supp. 3d at

193. Hezbollah historically has engaged in acts of terror against Israeli and U.S. targets, and

carried out the July-August 2006 attack at issue in this case. See Kaplan, 55 F. Supp. 3d at 193;

Pl.’s Mot., Ex. A, ECF No. 18-1 [hereinafter Rubin Decl.], at 8–11; Suppl. Decl., ECF No. 21, Ex.

B, ECF No. 21-2 [hereinafter Kaplan Hr’g Tr.], at 10–11 (testimony of Dr. Podoler explaining that

he “can’t point to any other group, militant or other” other than Hezbollah “that could have

launched such a prolonged and heavy attack”); Kaplan Hr’g Tr. at 30–31 (testimony of Dr. Bechtol

explaining that “[Hezbollah] told the world that they were responsible for attacking . . . Israeli

civilians and military facilities in 2006”).

        Beginning on July 12, 2006 and continuing until August 14, 2006, Hezbollah engaged in a

prolonged attack across the Lebanese border into northern Israel, firing thousands of missiles and

rockets on Israel’s northern civilian communities.         Rubin Decl. ¶¶ 27–28.        Hezbollah

simultaneously engaged in a ground infiltration of Israel’s northern border. Podoler Decl. ¶ 7.

                                                3
Forty-three civilians were killed as a result of Hezbollah rocket fire during the attack, and 4,262

civilians were injured. Rubin Decl. ¶ 29.

       B.      Iran’s Support of Hezbollah

       Judges of this District Court have held that Iran supports Hezbollah. See, e.g., Stern v.

Islamic Republic of Iran, 271 F. Supp. 2d 286, 292 (D.D.C. 2003) (“[Hezbollah] is an Iranian

proxy organization, controlled, funded and operated by Iran.”); Peterson, 264 F. Supp. 2d at 53

(“It is clear that the formation and emergence of Hezbollah as a major terrorist organization is due

to the government of Iran. Hezbollah presently receives extensive financial and military technical

support from Iran, which funds and supports terrorist activities.”). Dr. Podoler characterized Iran

as Hezbollah’s “closest ally, providing it with political, economic[], and military assistance” since

its founding, Podoler Decl. ¶ 27, and Dr. Bechtol testified at the Kaplan hearing that there is “[no]

other way to describe” the relationship between Iran and Hezbollah other than that “Hezbollah is

a project of Iran,” Kaplan Hr’g Tr. at 29.

       The court finds that Iran’s historical support of Hezbollah and its terrorist acts includes

material support and the provision of resources to Hezbollah in support of its commission of the

2006 attack. See Kaplan, 55 F. Supp. 3d at 197. Specifically, Iran provided financial support and

weapons, as well as weapons training, to Hezbollah prior to the attack. During the Kaplan hearing,

Dr. Bechtol explained that “[t]his whole thing”—the 2006 attack—“was financed by Iran.” Kaplan

Hr’g Tr. at 28. According to Dr. Podoler, “[o]n the eve of the [rocket attacks] in 2006, Iran’s status

in Lebanon was particularly strong”: at that time, Iran provided training to Hezbollah fighters;

delivered Iranian missiles, firing systems, and launching equipment to Hezbollah; and assisted in

the identification of targets and firing the weapons provided. Podoler Decl. ¶ 28. Evidence

introduced during the Kaplan hearing also establishes that Iran worked in concert with North

                                                  4
Korea and Syria to provide the rocket and missile components that Hezbollah used in the 2006

attack. See generally Kaplan Hr’g Tr. Specifically, North Korea, as Iran’s “key supplier of arms,”

sent rocket and missile components to Iran to be assembled and then shipped to Hezbollah through

Syria. Id. at 29–30. Iran also secured the assistance of North Korean instructors who cooperated

with Iranian engineers to construct a sophisticated underground tunnel network in southern

Lebanon to move Hezbollah fighters during the 2006 attack. Podoler Decl. ¶¶ 30–31. The

underground tunnel network enabled Hezbollah to “hide the troops from being hit by Israeli

retaliations” during the 2006 attack and also likely served as a hiding place for Hezbollah’s

stockpile of missiles and rockets. Kaplan Hr’g Tr. at 18, 27.

       In light of this evidence, the court finds that Iran provided material support and resources

to Hezbollah in carrying out the 2006 attack at issue here.

       C.      Plaintiff Mayanot

       For nearly twenty years Mayanot has operated educational, experiential learning, and

leadership training programs in Israel. Pl.’s Mot., Ex. D, ECF No. 18-4 [hereinafter Shemtov

Decl.], ¶ 3. Specifically, Mayanot operates a religious academy, or yeshiva, for men; a women’s

study program; a summer study program; and heritage travel programs in conjunction with

Birthright Israel, an American organization that sponsors trips to Israel for young Jewish men and

women. Id. ¶ 4. After the 2006 Hezbollah attack, enrollment and participation in Mayanot’s

programs declined. Id. ¶¶ 7–8. For example, prior to the 2006 attack, the Mayanot yeshiva had

80 full-time students enrolled; by the end of the attack, enrollment in the yeshiva declined to fewer

than 20 students. Id. ¶¶ 9–12. Mayanot was forced to cancel its 2006 summer study program due

to withdrawals and cancellations by enrolled participants. Id. ¶¶ 20–21. Additionally, although in

a typical year Mayanot conducts Birthright Israel heritage trips in Israel for approximately 3,200

                                                 5
individuals, participation in Mayanot’s Birthright travel programs in 2006 declined 50%, to

approximately 1,600 individuals. Id. ¶¶ 14–19.

II.    PROCEDURAL HISTORY

       Plaintiff brought this lawsuit against the Islamic Republic of Iran on July 12, 2016. See

Compl., ECF No. 1. Plaintiff filed its Amended Complaint on October 19, 2016, and requested a

summons to issue. See Am. Compl., ECF No. 4; Req. for Summons to Issue, ECF No. 5. After

concluding that service could not be accomplished, Plaintiff asked the Clerk of Court to mail by

DHL Express one copy of the summons, complaint, and notice of suit, together with a translation

of each, to the Foreign Minister of the Islamic Republic of Iran. See Aff. Requesting Foreign

Mailing, ECF No. 9; Certificate of Mailing, ECF No. 10.

       On March 29, 2017, Plaintiff filed proof of service, reflecting that an individual in the

Ministry of Foreign Affairs in Tehran signed for the package sent by the Clerk of Court.

See Notice of Filing of Proof of Service, ECF No. 12, Ex. A, ECF No. 12-1. When Iran failed to

file an Answer to the Amended Complaint within 60 days, the Clerk of Court entered default. See

Clerk’s Entry of Default as to the Islamic Republic of Iran, ECF. No. 15 (dated May 17, 2017);

28 U.S.C. § 1608(d); Fed. R. Civ. P. 55(a). Plaintiff then filed the Motion for Entry of Default

Judgment presently before the court. See Pl.’s Mot.

III.   LEGAL STANDARD

       Under Federal Rule of Civil Procedure 55(b)(2), the court may enter default judgment upon

application by a party seeking that relief. Although there are “strong policies favoring the

resolution of genuine disputes on their merits,” default judgments are appropriate “when the

adversary process has been halted because of an essentially unresponsive party.” Jackson v. Beech,

636 F.2d 831, 835–36 (D.C. Cir. 1980) (citation omitted). “[E]ntry of a default judgment is not

                                                 6
automatic,” however. Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005). The court has an

“affirmative obligation to determine whether it has subject-matter jurisdiction over the action,”

Friends Christian High School v. Geneva Fin. Consultants, 321 F.R.D. 20, 22 (D.D.C. 2017)

(internal quotation marks omitted), and also should “satisfy itself that it has personal jurisdiction

before entering judgment against an absent defendant,” Mwani, 417 F.3d at 6. “The party seeking

default judgment has the burden of establishing both subject matter jurisdiction over the claim[]

and personal jurisdiction over the defendant[].” Thuneibat v. Syrian Arab Republic, 167 F. Supp.

3d 22, 33 (D.D.C. 2016).

       In order to secure a default judgment under the FSIA, Plaintiff must “establish[] [its] claim

or right to relief by evidence satisfactory to the court,” 28 U.S.C. § 1608(e), a standard that

“mirrors a provision in Federal Rule of Civil Procedure 55(d) governing default judgments against

the U.S. Government,” Owens v. Republic of Sudan, 864 F.3d 751, 785 (D.C. Cir. 2017). Section

1608(e)’s standard thereby “provides foreign sovereigns a special protection akin to that assured

the federal government” in Rule 55. See Thuneibat, 167 F. Supp. 3d at 33 (citing Jerez v. Republic

of Cuba, 775 F.3d 419, 423 (D.C. Cir. 2014)). “Precisely what that standard entails—that is, how

much and what kind of evidence the default provision requires—is unclear,” and thus the FSIA

“leaves it to the court to determine precisely how much and what kinds of evidence the plaintiff

must provide.” Han Kim v. Democratic People’s Republic of Korea, 774 F.3d 1044, 1046–47

(D.C. Cir. 2014).

       In making that determination, the court “may not unquestioningly accept a complaint’s

unsupported allegations as true,” Reed v. Islamic Republic of Iran, 845 F. Supp. 2d 204, 211

(D.D.C. 2012), but “[u]ncontroverted factual allegations that are supported by admissible evidence

are taken as true,” Thuneibat, 167 F. Supp. 3d at 33. Critically, in assessing whether a plaintiff

                                                 7
has established a claim under the FSIA, the court “must be mindful that Congress enacted Section

1605A, FSIA’s terrorism exception, and Section 1608(e) with the ‘aim[] to prevent state sponsors

of terrorism—entities particularly unlikely to submit to this country’s laws—from escaping

liability for their sins.’” Id. (quoting Han Kim, 774 F.3d at 1047–48).

IV.    CONCLUSIONS OF LAW

       In the FSIA context, default judgment may be entered if: (1) the court has subject matter

jurisdiction over the claims; (2) personal jurisdiction is properly exercised over Defendant; and

(3) Plaintiff has presented satisfactory evidence to establish its claim against Defendant. See id.

The court addresses each of these requirements in turn.

       A.       Subject Matter Jurisdiction

       This court has original jurisdiction over suits against a foreign state “without regard to

amount in controversy” if the case is a nonjury civil action for in personam relief and the foreign

state is not entitled to immunity under 28 U.S.C. §§ 1605–1607. 28 U.S.C. § 1330(a). Although

the FSIA generally insulates foreign states from suit in American courts, as relevant here, the FSIA

provides an exception to a foreign state’s sovereign immunity in 28 U.S.C. § 1605A, known

colloquially as the “state-sponsored terrorism exception.”       In pertinent part, the exception

abrogates a foreign state’s sovereign immunity in any case:

               in which money damages are sought against a foreign state for
               personal injury or death that was caused by an act of torture,
               extrajudicial killing, aircraft sabotage, hostage taking, or the
               provision of material support or resources for such an act if such
               act or provision of material support or resources is engaged in by an
               official, employee, or agent of such foreign state while acting within
               the scope of his or her office, employment, or agency.

28 U.S.C. § 1605A(a)(1) (emphasis added). It is the “material support or resources” provision that

Plaintiff relies upon here.

                                                 8
       In order to have his or her claim heard, a plaintiff relying upon the state-sponsored terrorism

exception must prove that: (1) the foreign state was designated a “state sponsor of terrorism” by

the U.S. Department of State at the time the alleged action took place; (2) the claimant or victim

was a national of the United States at the time the act took place; and (3) if the act “occurred in the

foreign state against which the claim has been brought, the claimant has afforded the foreign state

a reasonable opportunity to arbitrate the claim.” 28 U.S.C. § 1605A(a)(2)(A)(i)–(iii); see also

Thuneibat, 167 F. Supp. 3d at 34.

       The court concludes that subject matter jurisdiction exists under the FSIA’s state-sponsored

terrorism exception and that the court may hear Plaintiff’s claim. First, as established above,

satisfactory evidence has been presented that Iran provided “material support and resources” to

Hezbollah within the meaning of § 1605A for the 2006 attack. “Material support or resources”

includes the provision of “any property, tangible or intangible, or service, including currency or

monetary instruments or financial securities, financial services, lodging, training, expert advice or

assistance, safehouses, false documentation or identification, communications equipment,

facilities, weapons, lethal substances, explosives, personnel . . ., and transportation, except

medicine or religious materials.” 28 U.S.C. § 1605A(h)(3); 18 U.S.C. § 2339A. Plaintiff has

supplied satisfactory proof that Iran provided material support and resources to Hezbollah in the

form of financial services and support, weapons, and training, thereby enabling Hezbollah to

perpetrate the 2006 attack. Second, Iran was designated a “state sponsor of terrorism” within the

meaning of 28 U.S.C. § 1605A(h)(6) at the time of the 2006 attack, and has been so designated by

the Secretary of State since January 19, 1984. See U.S. Dep’t of State, State Sponsors of Terrorism,

https://www.state.gov/j/ct/list/c14151.htm (last visited May 1, 2018). Third, Plaintiff has satisfied

Section 1605A(a)(2)(A)(ii) by virtue of the Kaplan plaintiffs’ claim against Iran. Cf. La Reunion

                                                  9
Aerienne v. Socialist People’s Libyan Arab Jamahiriya, 533 F.3d 837, 843–44 (D.C. Cir. 2008)

(rejecting argument that third-party corporate claimants could not bring suit under the FSIA’s

earlier version of the terrorism exception, 28 U.S.C. § 1605(a)(7), where the statutory text was

clear that “if either the claimant or the victim is a national of the United States, then immunity is

waived” (emphasis added)). And, finally, Plaintiff’s suit satisfies Section 1605A(a)(2)(A)(iii), as

the acts of terrorism at issue did not occur in Iran, rendering an opportunity to arbitrate

unnecessary. Accordingly, Iran does not enjoy foreign sovereign immunity from Plaintiff’s suit

pursuant to 28 U.S.C. § 1605A, and this court possesses original jurisdiction over this matter

pursuant to 28 U.S.C. § 1330(a).

       B.      Personal Jurisdiction

       The court next assesses whether effective service has been made, as required by 28 U.S.C.

§ 1330(b), which governs personal jurisdiction over a foreign state and requires that service be

made pursuant to 28 U.S.C. § 1608. Section 1608 provides four alternative means of effecting

service on a foreign state: (1) by “special arrangement for service between the plaintiff and the

foreign state or political subdivision”; (2) “if no special arrangement exists . . . in accordance with

an applicable international convention on service of judicial documents”; (3) if service cannot be

made under the first two options, then “by sending a copy of the summons and complaint and a

notice of suit, together with a translation of each into the official language of the foreign state, by

any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the

court to the head of the ministry of foreign affairs of the foreign state concerned”; or (4) if service

cannot be made within 30 days under the third option, then by requesting that the clerk of the court

send two copies of the aforementioned materials to “the Secretary of State in Washington, District

of Columbia, to the attention of the Director of Special Consular Services,” whereupon the

                                                  10
Secretary transmits “one copy of the papers through diplomatic channels to the foreign state and

shall send to the clerk of the court a certified copy of the diplomatic notice indicating when the

papers were transmitted.” 28 U.S.C. § 1608(a).

       Plaintiff properly effected service in accordance with Section 1608(a)(3). On March 29,

2017, Plaintiff filed with the court proof that the Complaint, Summons, and Notice of Suit, together

with translations of each in Farsi, were served on the Minister of Foreign Affairs and signed for in

Tehran, Iran. See Notice of Filing of Proof of Service. Service in accordance with Section

1608(a)(3) was appropriate because Iran is subject to extensive U.S. sanctions and, at the time

Plaintiff commenced its suit, service of court papers to Iran could not be accomplished under

subsections 1608(a)(1) or (2). See Pl.’s Second Status Report Regarding Service of Process, ECF

No. 11. Accordingly, Plaintiff has established that service was properly effected against Iran and

the court is satisfied that it may exercise personal jurisdiction over Iran.

       C.      Iran’s Liability to Plaintiff under 28 U.S.C. § 1605A(d)

       Plaintiff Mayanot brings its claim against Iran under 28 U.S.C. § 1605A(d), alleging that

Iran is liable for the “reasonably foreseeable property loss” it sustained, purportedly “by reason

of” Iran’s material support and provision of resources to Hezbollah for the 2006 attack. 28 U.S.C.

§ 1605A(d). “After an action has been brought under [Section 1605A(c)],” Section 1605A(d)

provides that “actions may also be brought” for recovery of “reasonably foreseeable property loss,

whether insured or uninsured, third party liability, and loss claims under life and property

insurance policies, by reason of the same acts on which the action under [Section 1605A(c)] is

based.” Id. In other words, under the language of Section 1605A, “once a party with valid

[statutory] standing has brought an action under [Section] 1605A(c), it is unnecessary for a party

filing suit under [Section] 1605A(d) to establish standing separately; [statutory] standing under

                                                  11
[Section] 1605A(d) is derivative of that under [Section] 1605A(c).” Certain Underwriters at

Lloyd’s London v. Great Socialist People’s Libyan Arab Jamahiriya, 811 F. Supp. 2d 53, 71

(D.D.C. 2011). The plaintiffs in Kaplan had proper statutory standing to bring their suit against

Iran under Section 1605A(c), 55 F. Supp. 3d at 198, and therefore, Mayanot may bring a suit

seeking recovery for “reasonably foreseeable property loss . . . by reason of the same acts,” i.e.,

the 2006 attack. See Certain Underwriters, 811 F. Supp. 2d at 71–72; see also In re: Terrorist

Attacks on September 11, 2001, No. 03-MDL-1570, 2015 WL 9468813, at *1–2 (S.D.N.Y. Dec.

28, 2015) (allowing federal insurance carriers that made payments in response to property damage

and business interruption caused by the September 11, 2001 terrorist attacks to bring suit against

Iran under Section 1605A(d) to recover compensatory damages, after an action was brought under

Section 1605A(c) by the estates of persons who either were on the planes that crashed or were

present at the World Trade Center and the Pentagon during the attacks).

                1.      Quantum of Evidence Required by 28 U.S.C. § 1608(e)

        Although Plaintiff has established its standing to bring this action and seek recovery of its

property losses from Iran, the court concludes that Plaintiff has failed to “establish [its] . . . right

to relief by evidence that is satisfactory to the court” in accordance with Section 1608(e). Mayanot

offers insufficient admissible evidence to support its claim that it sustained “reasonably

foreseeable property loss” “by reason of” Iran’s material support and provision of resources to

Hezbollah.

        Plaintiff’s action for recovery of property loss hinges on its contention that the 2006

Hezbollah attack “directly caused” the financial losses Mayanot incurred following the attack.

E.g., Am. Compl. ¶ 26. In support of this central contention, Plaintiff offers only a five-page

declaration from Rabbi Kasriel Shemtov, one of the Directors of Mayanot. See Shemtov Decl.

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Shemtov’s Declaration details the financial losses to Mayanot’s yeshiva, summer study program,

and Birthright travel programs in 2006, asserting that “as a direct result of the Hezbollah Attack,

enrollment and participation in Mayanot Israel programs declined precipitously.” Shemtov Decl.

¶ 7. Shemtov states that “American and other students withdrew from the Yeshiva and the summer

program, and cancelled future plans to attend. Most of these students explicitly told Mayanot that

they were withdrawing or cancelling their plans because of the ongoing Hezbollah Attack.” Id.

¶ 8. Shemtov additionally explains that “[a]s a direct result of the Hezbollah Attack, Mayanot

suffered cancellations [of] approximately 1,600 Birthright participants. . . . Many of these

participants informed Mayanot explicitly that they were cancelling their trips due to the ongoing

Hezbollah Attack.” Id. ¶ 15. In Shemtov’s view, “[a]s with the Yeshiva withdrawals and

cancellations, no reason other than the Hezbollah Attack would explain the extraordinarily high

rate of cancellations by Birthright participants.” Id. In sum, Shemtov estimates that the property

loss incurred by Mayanot “resulting directly from the Hezbollah Attack” is “in excess of

$1,000,000.00.” Id. ¶ 24.

       But standing alone, Shemtov’s Declaration does not provide sufficient, admissible proof to

establish that Mayanot suffered financial loss “by reason of” Iran’s material support and provision

of resources to Hezbollah. “In order to issue a default judgment under § 1608(e), a court must

base its findings of fact and conclusions of law upon evidence admissible under the Federal Rules

of Evidence.” Owens, 864 F.3d at 786 (citing Han Kim, 774 F.3d at 1049). Here, the only

admissible proof of causation that Mayanot offers are Shemtov’s representations about the

approximate number of students that left the yeshiva and the number of cancellations of Birthright

program trips that occurred around the time of the 2006 attack. That evidence on its own

establishes a correlation between the reduced yeshiva enrollment and the increase in trip

                                                13
cancellations and the 2006 attack, but not necessarily causation. Cf. Whole Woman’s Health v.

Hellerstedt, 136 S. Ct. 2292, 2346 (2016) (observing that “plaintiffs[] [who] b[ear] the burden of

proof” “cannot simply point to temporal correlation and call it causation”); Norfolk & W. Ry. Co.

v. Ayers, 538 U.S. 135, 173 (2003) (“Correlation is not causation.”).

       The only other evidence of causation presented in Shemtov’s Declarations—statements

from yeshiva and summer program students and Birthright participants informing Mayanot that

their cancellations and withdrawals were due to the Hezbollah attack, see Shemtov Decl. ¶¶ 11,

15—constitute inadmissible hearsay. These are statements made out of court that Mayanot offers

“to prove the truth of the matter asserted”—namely, that the Hezbollah attack was in fact why

these students and trip participants withdrew from Mayanot’s programs. See Fed. R. Evid. 801.

Indeed, the unreliability of these statements is underscored by the fact that Shemtov does not state

whether he heard these statements himself or received these explanations from some other

interlocutor. In sum, Mayanot offers insufficient admissible evidence to support its claim that

Iran’s provision of material support and resources to Hezbollah in the 2006 attack caused Mayanot

to incur financial losses. This shortfall of admissible evidence is fatal to Mayanot’s claim on the

present motion.

       The court acknowledges that the D.C. Circuit has encouraged application of a “lenient

standard” when assessing the quantum of proof required to establish liability in a FSIA case against

a defaulting state sponsor of terrorism. See Owens, 864 F.3d at 785. But such leniency is most

appropriate when, as is often the case in FSIA terrorism actions, “firsthand evidence and

eyewitness testimony is difficult or impossible to obtain from an absent and likely hostile

sovereign.” Id.; see also Han Kim, 774 F.3d at 1048–51 (permitting plaintiff estate to establish

the Democratic People’s Republic of Korea’s liability under Section 1605A(c) for the deceased’s

                                                14
torture and extrajudicial killing by indirect evidence because, given DPRK’s “repressive

practices,” intimidation of defectors and witnesses, and the nature of cases of forced

disappearance, “direct evidence of subsequent torture and execution will, by definition, almost

always be unavailable”). Those circumstances are not present here. Unlike evidence made

unavailable by reason of repression, intimidation, or extrajudicial killings, evidence demonstrating

that students and participants withdrew from Mayanot’s programs because of the 2006 attack can

be readily secured, for example, by affidavit or deposition of some number of those individuals.

Absent such admissible evidence, the court cannot conclude that Plaintiff’s case has been

established “by evidence satisfactory to the court.” 28 U.S.C. § 1608(e). The court therefore

denies Plaintiff’s motion to enter default judgment against Iran. The denial is without prejudice,

so as to afford Mayanot an opportunity to re-file its motion for entry of default judgment supported

with additional, admissible evidence. 2

                 2.       Theory of Recovery under 28 U.S.C. § 1605A(d)

        In concluding that Plaintiff has not submitted “satisfactory” admissible evidence to the

court to establish its claim, the court does not address whether, even if Plaintiff had provided

admissible evidence of causation, Plaintiff can establish that its business losses are “reasonably

foreseeable” and recoverable “by reason of the [2006 attack]” under 28 U.S.C. § 1605A(d).

        In order to satisfy the statutory elements of causation and injury, plaintiffs in actions arising

under companion Section 1605A(c) “must articulate the justification for such recovery, generally

through the lens of civil tort liability.” Rimkus v. Islamic Republic of Iran, 750 F. Supp. 2d 163,

2
  In finding the present record lacking to prove causation, the court does not mean to intimate that Mayanot must
obtain a sworn statement from every student that withdrew from the yeshiva or summer program or decided against
traveling to Israel as a Birthright participant. Mayanot, however, must come forward with some quantum of first-hand
proof to satisfy the court that the 2006 attack was the actual cause of those decisions, as opposed to just merely
temporally related to the attack.

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176 (D.D.C. 2010). In other words, “to properly raise a claim under [Section] 1605A(c),” a

claimant “must identify a particular theory of tort liability—e.g., intentional infliction of emotional

distress, wrongful death, [or] battery.” Stansell v. Republic of Cuba, 217 F. Supp. 3d 320, 341

(D.D.C. 2016). In assessing liability under Section 1605A(c), federal courts are not authorized “to

fashion a complete body of federal law,” but must instead “find the relevant law.” Bettis v. Islamic

Republic of Iran, 315 F.3d 325, 333 (D.C. Cir. 2003). Federal courts therefore “‘rely on well-

established principles of law, such as those found in the Restatement (Second) of Torts and other

leading treatises, as well as those principles that have been adopted by the majority of state

jurisdictions’ to define the elements and scope of . . . theories of recovery” under 28 U.S.C.

§ 1605A(c). Roth v. Islamic Republic of Iran, 78 F. Supp. 3d 379, 399 (D.D.C. 2015) (quoting

Oveissi v. Islamic Republic of Iran, 879 F. Supp. 2d 44, 54 (D.D.C. 2012)).

         Whether plaintiffs in Section 1605A(d) actions likewise must articulate the justification for

their recovery “through the lens of civil tort liability” is unclear. Although the statutory text of

Section 1605A(d) similarly requires a showing of causation (“by reason of”) and injury

(“reasonably foreseeable property loss”), the conclusion that a Section 1605A(d) plaintiff must

“identify a particular theory of tort liability” to recover is not an obvious one. 3 No case, to this

court’s knowledge, has addressed the issue.

         Assuming without deciding that a plaintiff must proffer a specific theory of tort liability to

sustain a Section 1605A(d) action, the court notes that the most analogous torts to the case at hand

are intentional interference with performance of contract, Restatement (Second) of Torts § 766,

3
  Alternatively, a court assessing a Section 1605A(d) claim for “reasonably foreseeable” property loss recoverable “by
reason of” an act of terrorism could simply apply well-established principles of tort law regarding causation and
reasonable foreseeability to determine liability, rather than assessing the elements of a particular common law cause
of action. Cf. Oveissi, 879 F. Supp. 2d at 57 (explaining that Section 1605A(d) “contains two causation elements: (1)
the property loss must come ‘by reason of’ the [terrorist acts], and (2) the property loss must be a ‘reasonably
foreseeable’ result of the [terrorist acts]”).

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and intentional interference with prospective contractual relation, id. § 766B. Both of those torts

require as an element of proof knowledge on the part of the tortfeasor of the existence of a business

contract or prospective contractual relation. See id. § 766 cmt. i (“To be subject to liability under

[international interference with performance of contract by third person], the actor must have

knowledge of the contract with which he is interfering and of the fact that he is interfering with

the performance of the contract.”); see also Yong Ki Hong v. KBS Am., Inc., 951 F. Supp. 2d 402,

423 (E.D.N.Y. 2013) (claim of tortious interference with prospective business relationships

requires proof of “defendant’s knowledge of a business relationship between the plaintiff and a

third party” (citing Restatement (Second) of Torts § 766B)). If such knowledge must be shown to

recover in this case under Section 1605A, the present pleadings and record are inadequate because

they are silent as to that element. Plaintiff has not asserted or shown that Iran had knowledge of

Mayanot, let alone its contractual relationships and business opportunities. Should Plaintiff decide

to re-file its motion, the court invites Plaintiff to address whether it must come forward with proof

of such knowledge to recover under Section 1605A(d).

V.     CONCLUSION AND ORDER

       For the reasons explained above, the court denies Plaintiff’s Motion for Default Judgment

without prejudice. Plaintiff’s motion for appointment of a Special Master is accordingly denied

as moot.

       If Plaintiff seeks to re-file its motion and supplement the record with admissible evidence

as to the damages purportedly incurred by Mayanot “by reason of” the 2006 attack, it must do so

no later than July 2, 2018.

Dated: May 1, 2018                            Amit P. Mehta
                                              United States District Judge

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