Legal analysis of duty of care for material support to terrorist organizations

In re: TERRORIST ATTACKS ON SEPTEMBER 11, 2001., 2012 WL 257568 (2012) York, courts determine the “threshold question” of whether a duty of care exists “by balancing factors, including [1] the *141 reasonable expectations of parties and society generally, [2] the proliferation of claims, [3] the likelihood of unlimited or insurer-like liability, [4] disproportionate risk and reparation allocation, and [5] public policies affecting the expansion or limitation of new channels of liability.” Hamilton v. Beretta U.S_A. Corp., 96 N.Y.2d 222, 232 (2001), opinion after certified question answered, 264 F.3d 21 (2d Cir. 2001) (internal quotation marks and citation omitted). A defendant may have a duty of care with respect to a third-party’s actions “where there is a relationship either between defendant and a third-person tortfeasor that encompasses defendant’s actual control of the third person’s actions, or between defendant and plaintiff that requires defendant to protect plaintiff from the conduct of others.” Jd. at 233. For example, New York recognizes the doctrine of negligent entrustment, whereby One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them. Restatement (Second) of Torts (1965), § 390. See Splawnik v. DiCaprio, 540 N.Y.S.2d 615, 616-17 (N.Y. App. Div. 1989) (citing the negligent *142 entrustment doctrine and holding defendant liable for leaving gun with suicide victim because “the supplier owes a duty to foreseeable parties to withhold the chattel from the entrustee’). Here, where defendants are alleged to have known -- or at least been on notice of facts supporting a conclusion regarding -- the terrorist nature of the al-Qaeda network they supported, the factors weigh overwhelmingly in support of a duty of care. As the Seventh Circuit has concluded, lending material support to a terrorist organization, even without knowledge of its activities, satisfies the elements of negligence. Boim IT, 549 F.3d at 693. A fortiori, providing support while knowing the character of the terrorist organization is like giving “a gun you know is loaded to a child .... [D]oing so is reckless and if the child shoots someone” the defendant “will be liable to the victim” even under the higher standard for recklessness. Id. Analogously, in Sickles v. Montgomery Ward & Co., a department store was held liable for negligence when an employee sold an air rifle to a father, knowing that it was intended as a gift to his son, and the son later shot the eye of another child. 167 N.Y.S.2d 977 (N.Y. Sup. Ct. 1957). The court found that the store clerk “should have known” it to be irresponsible *143 to sell the rifle, not only because of the “known propensities of young children in whose possession firearms are placed,” but also because the sale “was specifically proscribed by the Penal Law” and violated the “legislative policy of the State.” Jd. at 979. Nor did the fact that the defendant sold the rifle to the father, rather than the boy directly, changes the analysis. Jd. (“The naked legality of the sale to the parent, also in pari delicto, does not operate to relieve the defendant from liability.”) (emphasis added). Here, plaintiffs allege that defendants gave material support to persons and organizations they had every reason to suspect were terrorists, and did so either directly or through front institutions -- in clear violation of the United States’ policies against such actions. See Companion Brief at Point LA. The “reasonable expectations of parties and society generally” and “oublic policies affecting the expansion” of liability therefore weigh heavily in favor of recognizing a duty of care. Hamilton, 96 N.Y.2d at 232. Moreover, recognizing a duty would not give rise to a “likelihood of unlimited or insurer-like liability” or a “proliferation of claims” because the class of potential claimants is restricted to those injured by terrorist attacks and “does not extend beyond that limited class of plaintiffs to members of *144 the community at large.” Jd. at 232-33. Finally, imposing a duty of care on those who provide material support to terrorists makes sense as a matter of “risk and reparation allocation,” id. at 232, because “[d]amages are a less effective remedy against terrorists and their organizations than against their financial angels.” Boim IT, 549 F.3d at 690. As for plaintiffs’ NIED claims, the district court itself recognized that under New York law, NIED may be established under the “bystander theory,” whereby a defendant is negligent for conduct that is “a substantial factor in bringing about injuries to the plaintiff in consequence of shock or fright resulting from his or her contemporaneous observation of serious physical injury or death inflicted by the defendant’s conduct on a member of the plaintiff’s immediate family in his or her presence.” Bovsun v. Sanperi, 61 N.Y .2d 219, 223-24 (1984); see SPA54 (Terrorist Attacks I). A plaintiff need not have been physically WESTLAW HOUSE_OVERSIGHT_023405