June 28, 2019

Supreme Court grants cert. to decide whether $4.3 billion punitive damages award should be reinstated (Opati v. Republic of Sudan)

We have reported several times about huge punitive damages awards against foreign governments based on acts of state-sponsored terrorism.  (See here, here, and here.)  These awards are typically entered by default, because the defendant countries usually do not appear to defend themselves.  And to my knowledge the plaintiffs have not had any success on collecting on these judgments.

Once such award occurred in this case: a federal district court awarded $6 billion in compensatory damages and $4.3 billion in punitive damages against the government of Sudan for its complicity in the 1998 attacks on the U.S. embassies in Kenya and Tanzania that killed 224 people.  Sudan eventually appeared in the case and appealed the judgment.

In 2017 the D.C. Circuit upheld Sudan's liability but vacated the punitive damages.  The court ruled that the plaintiffs could not recover punitive damages under the 1976 Foreign Sovereign Immunities Act (FSIA), because when Congress amended the statute to permit claims against state sponsors of terrorism, it did not expressly authorize recovery of punitive damages in lawsuits over conduct that predated the amendment.

The plaintiffs filed a cert. petition, which the Supreme Court granted today.  The Court's order limits review to the second issue raised in the petition: whether the FSIA applies retroactively, permitting punitive damages against foreign states for terrorist activities occurring prior to the passage of the current version of the act.

The decision in this case will obviously have an impact on the various other punitive damages cases involving state-sponsored terrorism, but it may not have much application outside that context.