On September 8, 2023, the Second Circuit Court of Appeals dismissed claims brought by U.S. nationals against the Palestinian Liberation Organization (PLO) under the Anti-Terrorism Act (ATA) and the Promoting Security and Justice for Victims of Terrorism Act [3] (PSJVTA). As reported by Maggie Gardner in Transnational Litigation Blog [4], the Second Circuit’s decisions in Fuld v. Palestine Liberation Organization [5] and Waldman v. Palestine Liberation Organization [6], declared the PSJVTA unconstitutional “because it asserts personal jurisdiction based on activity that cannot be understood as consent to jurisdiction.” The PSJVTA attempted to create consent to personal jurisdiction for anyone sending money to any “individual… imprisoned for committing an act of terrorism that injured or killed a U.S. national or to the family of an individual who died while committing” such an act.

Waldman had followed a long path before the Second Circuit’s final decision this month. As relayed by Gardner, the suit initially arose in 2004 under the ATA and went to trial in 2015, where the Plaintiffs were successful. On appeal, the Court of Appeals decided for the defendants finding a lack of general and specific personal jurisdiction. The Court found no general jurisdiction because “the PLO and the Palestinian National Authority (PA) are not ‘at home’ in the United States, but ‘in Palestine, where these entities are headquartered and from where they are directed’” (Waldman II quoting Waldman I). Specific jurisdiction was lacking “given the absence of any ‘substantial connection’ between their ‘suit-related conduct – their role in the six terror attacks at issue – [and]… the forum.’” (Waldman II citing Walden v. Fiore). The Plaintiffs filed a petition for certiorari with the Supreme Court which it granted before remanding the case to the Second Circuit, which in turn remanded back to the District Court (S.D.N.Y.). The District Court denied the Plaintiff’s claims and declared that the PSJVTA “does not establish constitutionally valid personal jurisdiction over the defendants.”

Fuld commenced in April of 2020 following the passage of the PSJVTA and the Supreme Court’s remanding of Waldman II. Fuld’s only basis for jurisdiction was the PSJVTA, and the PLO and PA moved to dismiss for lack of personal jurisdiction and failure to state a claim. The District Court of the S.D.N.Y agreed, writing that “the predicate activities under the PSJVTA do not ‘even remotely signal approval or acceptance of,’ or an ‘intent to submit to,’ jurisdiction in the United States…,’ and the consent jurisdiction allegedly allowed by the PSJVT “is not ‘consistent with the requirements of due process….’”

The decisions of the District Court in Waldman II and Fuld were upheld by the Second Circuit, with the Appeals Court deciding Fuld first as a basis for its decision in Waldman II. Discussing the Second Circuit’s reasoning, Gardner noted that the Court had “[drawn] heavily from Insurance Corp. of Ireland v. Compagnie des Bauxites (1982)” to describe “ways that consent to suit can be established.” Consent can be established via contracts, stipulations entered into by a defendant, arbitration agreements, voluntary use of certain state procedures, and through other avenues. According to the Second Circuit in Fuld, consent can only be established when the defendant has “accepted some in-forum benefit in return for an agreement to be amenable to suit in the United States.” The PLO and PA never could have consented to personal jurisdiction under the PSJVTA because “the statute does not offer any in-forum benefit, right, or privilege….” Moreover, “Congress cannot, by legislative fiat, simply ‘deem’ activities to be ‘consent’ when the activities themselves cannot plausibly be construed as such.” Despite the PSJVTA’s attempts to create consent to personal jurisdiction through the sending of money to a certain class of individuals, that activity “cannot reasonably be understood as signifying the defendants’ consent [and] the statute does not effect a valid waiver of the defendants’ due process protection against the ‘coercive power’ of a foreign forum’s courts.”