May 18, 2020

Supreme Court authorizes recovery of punitive damages against Sudan for 1998 embassy bombings (Opati v. Republic of Sudan)

The Supreme Court issued a unanimous 11-page opinion today, reversing the D.C. Circuit and allowing punitive damages against the government of Sudan for its role in the 1998 bombings of the U.S. embassies in Kenya and Tanzania.

As described in our prior post about this case, the plaintiffs obtained a judgment for $6 billion in compensatory damages and $4.3 billion in punitive damages.  The D.C. Circuit vacated the punitive damages award, ruling that when Congress amended the Foreign Sovereign Immunities Act (FSIA) in 2008 to create a federal cause of action against foreign governments for acts of terror, Congress did not expressly authorize recovery of punitive damages for acts committed before 2008.

The Supreme Court disagreed.  Justice Gorsuch, writing for the court, explained that the National Defense Authorization Act for Fiscal Year 2008 (NDAA) created a federal cause of action for acts of terror, and expressly provided that remedies "may include economic damages . . . . and punitive damages."  Moreover, two other provisions of the act specifically authorized new claims for pre-2008 acts of terrorism.  Although the latter provisions did not expressly mention punitive damages, the Supreme Court found it implausible that Congress would have authorized retroactive application of all the other features of the new cause of action except for punitive damages.

The Supreme Court also rejected Sudan's argument that the 2008 act is equivocal because it says only that awards "may" include punitive damages.  Justice Gorsuch noted that all categories of damages authorized by act are provided on equal terms, i.e., damages "may" include economic, non-economic, and punitive damages.  Thus, the use of the word "may" simply indicates that district courts are given discretion to determine whether each category of damages is appropriate under the facts of the particular case.

However, the Supreme Court stopped short of reinstating the entire $4.3 billion punitive damages award.  That's because the case involved two categories of plaintiffs: (1) U. S. nationals, members of the U.S. Armed Forces, and U. S. government employees or contractors, and (2) foreign nationals who are family members of U.S government employees and contractors.  The NDAA created a direct cause of action for the first category of plaintiffs, but not for the second, who were left to pursue claims under pre-existing state laws.  The D.C. Circuit, after concluding that U.S. nationals could not recover punitive damages, concluded that it would be "puzzling" to allow such a remedy to foreign nationals.  The Supreme Court, having concluded that U.S. nationals can recover punitive damages, asked the D.C. Circuit to revisit the availability of punitive damages for foreign nationals.