US Supreme Court Rules for Pharmaceutical Companies in Terrorism-Funding Case

The U.S. Supreme Court in Washington on June 20, 2024. Madalina Vasiliu/The Epoch Times

The U.S. Supreme Court on June 24 ruled in favor of AstraZeneca and other pharmaceutical companies that were sued over allegedly funding terrorism.

The nation’s top court granted the companies’ bid to throw out a lower court ruling that found plaintiffs who sued the companies supported “an inference that defendants aided and abetted acts of international terrorism.”

The lawsuit, filed in 2017, sought damages under the Anti-Terrorism Act. It was brought by U.S. troops and civilians injured in Iraq between 2005 and 2009, and family members of troops and civilians killed in the Middle Eastern country during that period of time.

Twenty-one companies, including AstraZeneca and subsidiaries of Pfizer, corruptly funded terrorist operations led by an army known as Jaysh al-Mahdi, which controlled Iraq’s Ministry of Health starting in 2004, according to the suit. The funding mechanisms included the firms paying a 20 percent religious tax to score contracts from the ministry, plaintiffs said.

U.S. District Judge Richard Leon in 2020 ruled against the plaintiffs. He said he sympathized with the plaintiffs but that the Anti-Terrorism Act, which enables suits against people who knowingly provide “substantial assistance” to attacks carried out or authorized by designated foreign terrorist organizations.

“To establish that defendants’ conduct was a ’substantial factor,‘ plaintiffs must show ’some direct relation between the injury asserted and the injurious conduct alleged,’” Judge Leon wrote, citing a ruling in a separate case. He said that they had not, and that Jaysh al-Mahdi was never designated a foreign terrorist organization by the U.S. secretary of state.

While plaintiffs said Hezbollah, a designated foreign terrorist organization, authorized the attacks, the plaintiffs provided “threadbare” evidence to support the claim, according to the judge.

Appeals

The U.S. Court of Appeals for the District of Columbia Circuit in 2022 reversed the ruling. A panel of three circuit judges said that the suit “plausibly alleges that Hezbollah ... planned or authorized the relevant attacks. The judges also said that the allegations regarding payments to Jaysh al-Mahdi ”support an inference that defendants aided and abetted acts of international terrorism“ and that plaintiffs ”have adequately pleaded that defendants’ payments to Jaysh al-Mahdi proximately caused plaintiffs’ injuries.”

The Supreme Court later ruled in a case called Twitter Inc. v. Taamneh that Twitter and several other companies were not responsible for terrorism if the group responsible used their platforms. Justice Clarence Thomas, writing for the majority, found that to violate the Anti-Terrorism Act (ATA), people must have “consciously and culpably participated in” the act of terrorism that injured the plaintiffs.

AstraZeneca and the other companies asked the Supreme Court to intervene, arguing the appeals court ruling should be revisited in light of the top court’s decision in the Taamneh case.

“As this court recently confirmed in Twitter, Inc. v. Taamneh, the ATA does not make global companies indemnitors for every attack whenever those companies have some alleged connection to the perpetrators,” lawyers for the firms said.

They asserted that the appeals court ruling, if left intact, would “send a chilling message to businesses and nonprofits: Avoid troubled countries where help is needed most, or risk treble-damages liability in U.S. courts.”

Plaintiffs in the case countered by saying the Taamneh ruling merely “confirmed that centuries-old common law principles govern aiding-abetting claims under the ATA” and that the ruling did not warrant overturning the lower court decision.

The justices sided with the companies. They threw out the earlier ruling from the U.S. Court of Appeals for the District of Columbia Circuit and directed the case back to the court “for further consideration in light of Twitter, Inc. v. Taamneh.”

Justice Samuel Alito did not participate in the decision on the appeal, according to the court. It did not list a reason.

Lawyers for the companies and the plaintiffs did not return requests for comment.