Causation Standards under Anti-Terrorism Act Are the Same as RICO Causation Standards — Same “By Reason Of” Language

Fields v. Twitter, Inc., 2018 U.S. App. LEXIS 2445 (9th Cir. Jan. 31, 2018):

After Lloyd "Carl" Fields, Jr., and James Damon Creach were killed while working as government contractors in Jordan in an attack for which ISIS claimed credit, Plaintiffs-Appellants sued Defendant-Appellee Twitter, Inc. (Twitter) pursuant to 18 U.S.C. § 2333(a), the civil remedies provision of the Anti-Terrorism Act (ATA), alleging that they were injured "by [*3]  reason of" Twitter's knowing provision of material support to ISIS. Twitter moved to dismiss the case, and its motion was granted. The district court held that Plaintiffs-Appellants had failed to plead that they were injured "by reason of" Twitter's conduct. The district court also ruled that Twitter's liability was precluded by § 230 of the Communications Decency Act (CDA), 47 U.S.C. § 230(b), because Plaintiffs-Appellants' claims sought to treat Twitter as the publisher of ISIS's content. Plaintiffs-Appellants have appealed both holdings. We affirm on the ground that Plaintiffs-Appellants have failed to adequately plead proximate causation.

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ANALYSIS

I. The ATA's Proximate Causation Requirement

The civil remedies section of the ATA allows any United States national "injured in his or her person, property, or business by reason of an act of international terrorism, or his or her estate, survivors, or heirs," to sue in federal court and recover treble damages and attorney's fees. 18 U.S.C. § 2333(a).3

The ATA also contains criminal provisions, the violation of which can provide the basis for a cause of action under § 2333(a). As relevant here, § 2339A prohibits the provision of "material support or resources" by anyone "knowing or intending that they are to be used in preparation for, or in carrying out" any of several enumerated crimes. 18 U.S.C. § 2339A. Section 2339B prohibits the knowing provision of "material support or resources to a foreign terrorist organization." Id. § 2339B(a)(1).

Plaintiffs-Appellants allege that Twitter violated both § 2339A and § 2339B when it knowingly provided Twitter accounts and its Direct Messaging services to ISIS, and is therefore liable under § 2333(a). Twitter argues that Plaintiffs-Appellants have failed to show that they were injured "by reason of" its alleged acts, as is required for liability under that section.

The gravamen of the parties' disagreement is the scope of the ATA's [*10]  "by reason of" requirement. Appropriately, the parties do not dispute that the ATA's "by reason of" language requires a showing of proximate causation. Rather, they disagree concerning what such a showing entails.4 Plaintiffs-Appellants contend that proximate causation is established under the ATA when a defendant's "acts were a substantial factor in the sequence of responsible causation," and the injury at issue "was reasonably foreseeable or anticipated as a natural consequence." See Rothstein v. UBS AG, 708 F.3d 82, 91 (2d Cir. 2013)). Twitter argues that the standard is higher, requiring Plaintiffs-Appellants to show that Twitter's conduct "led directly" to their injuries. The district court declined to decide the question because it concluded that Plaintiffs-Appellants' pleading was insufficient under either standard. We conclude that Twitter has the better of the argument, and hold that to satisfy the ATA's "by reason of" requirement, a plaintiff must show at least some direct relationship between the injuries that he or she suffered and the defendant's acts.

A. The ATA's "By Reason Of" Language

We undertake our construction of the ATA's "by reason of" provision against the backdrop of two key assumptions mandated by the [*11]  Supreme Court: First, we assume that Congress is familiar with the "'well established principle of the common law that in all cases of loss, we are to attribute it to the proximate cause, and not to any remote cause . . . and does not mean to displace it sub silentio' in federal causes of action." Bank of Am. Corp. v. City of Miami, 137 S. Ct. 1296, 1305 (2017) (alteration omitted) (quoting Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1390 (2014)); see also Rothstein, 708 F.3d at 95 ("[I]f, in creating civil liability through § 2333, Congress had intended to allow recovery upon a showing lower than proximate cause, we think it either would have so stated expressly or would at least have chosen language that had not commonly been interpreted to require proximate cause for the prior 100 years."). Second, we assume that because Congress has used "the same words" — "by reason of" — in the ATA as it used previously in the Sherman, Clayton, and Racketeer Influenced and Corrupt Organizations (RICO) Acts, Congress intended these words to "have the same meaning that courts had already given them" in those contexts. Holmes v. Sec. Inv'r Prot. Corp., 503 U.S. 258, 268 (1992).5

In light of these assumptions, we understand that the phrase "by reason of" connotes some degree of directness. We begin our construction of the statutory language with the Court's decision in Holmes v. Securities Investor Protection Corporation, 503 U.S. 258 (1992). In that case, the [*12]  Court was charged with interpreting the "by reason of" language that Congress had included in the civil RICO statute. Id. at 265-70. To do so, the Court looked first to the history of the language as used in the Sherman and Clayton Acts, and determined that a longstanding, central element of proximate causation in the Clayton Act context was "some direct relation between the injury asserted and the injurious conduct alleged." Id. at 268. The Court reasoned that courts coalesced around this directness requirement because not requiring "some direct relation" (1) would make it more difficult to determine the amount of damages "attributable to the violation, as distinct from other, independent factors"; (2) would force courts to develop complicated damages-apportionment rules to avoid multiple recoveries; and (3) would create these difficulties needlessly, because requiring some direct relation would never prevent directly injured victims from utilizing the law. Id. at 268-70. The Court then held that "these reasons appl[ied] with equal force to suits" brought under the civil RICO provision, id. at 270, and convinced the Court to hold that civil RICO liability required a showing of "some direct relation between the injury asserted [*13]  and the injurious conduct alleged," id. at 268.

Subsequent civil RICO cases affirmed this requirement. In Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006), the Court reiterated that "[w]hen a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff's injuries." Id. at 461. And in Hemi Group, LLC v. City of New York, 559 U.S. 1 (2010), the Court emphasized that a claim would not meet RICO's direct relationship requirement if it required the Court to move beyond the first step in the causal chain. Id. at 8-12; see also Holmes, 503 U.S. at 271 ("The general tendency of the law, in regard to damages at least, is not to go beyond the first step." (quoting Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 534 (1983)).

More recently, outside the RICO context, the Court has explored the necessity and scope of the "first step" limitation. Echoing Holmes's three concerns, the Court explained in Lexmark International that the first-step limitation was crucial in most cases because "there ordinarily is a 'discontinuity' between the injury to the direct victim and the injury to the indirect victim, so that the latter is not surely attributable to the former (and thus also to the defendant's conduct), but might instead have resulted from 'any number of [other] reasons.'" 134 S. Ct. at 1394 (alteration in original) (quoting Anza, 547 U.S. at 458-59). The Court [*14]  observed that the general purpose of requiring proximate causation is to "bar[] suits for alleged harm that is 'too remote' from the defendant's unlawful conduct," and limit recovery to those cases where "the harm alleged has a sufficiently close connection to the conduct the statute prohibits." Id. at 1390.

The ATA presents precisely the risks with which the Court was concerned in Holmes and Lexmark. On its face, the ATA does not limit recovery to those directly injured. Rather, it allows "[a]ny national of the United States injured . . . by reason of an act of international terrorism, or his or her estate, survivors, or heirs" to sue in federal court. 18 U.S.C. § 2333(a) (emphasis added). Thus, where an act of international terrorism causes an injury indirectly, there is inevitably a "discontinuity" between the injury and the defendant's conduct. See Lexmark Int'l, 134 S. Ct. at 1390 (explaining injuries that are "too remote" from a defendant's unlawful conduct "ordinarily" arise where the harm for which recovery is permitted is "purely derivative of 'misfortunes visited upon a third person by the defendant's acts'" (quoting Holmes, 503 U.S. at 268)); see also Linde v. Arab Bank, PLC, 97 F. Supp. 3d 287, 324 (E.D.N.Y. 2015) ("The tort [that the ATA] condemns is one of secondary action, not primary action. It assumes the existence [*15]  of a tort by a third party, and then renders the defendant liable for providing support to that third party.").

Accordingly, the same three reasons that compelled the Holmes Court to adopt the Clayton Act's "some direct relation" requirement in the RICO context now motivate us to adopt that requirement in the context of the ATA. As relevant here, the conduct the ATA prohibits is the provision of material support to international terrorists. See 18 U.S.C. §§ 2333(a), 2339A, 2339B; see also Bank of Am. Corp., 137 S. Ct. at 1305 (2017) (identifying what alleged conduct the FHA prohibited in order to analyze proximate cause). Not requiring that this provision of support have some direct relation to a plaintiff's injuries (1) would make it extremely difficult to attribute damages to the provision of material support as distinct from other intervening factors, (2) would force courts to develop complicated damages-apportionment rules to avoid multiple recoveries, and (3) would create these difficulties needlessly, because victims injured more directly by the provision of material support would not be prevented from recovery by a "direct relation" requirement. See Holmes, 503 U.S. at 268-70.

 


The term "international terrorism" is statutorily defined to include activities occurring abroad that "(A) involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State" and "(B) appear to be intended — (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping . . . ." 18 U.S.C. § 2331(1). Twitter does not argue that its acts do not qualify as "international terrorism" under this definition — indeed, Twitter mentions this issue only in a footnote of its brief. Therefore, we do not address it. For purposes of this appeal, we assume, arguendo, that the SAC pleads properly the ATA's "international terrorism" element.

In footnotes in their briefing, the parties suggest that there might be a second dispute regarding the issue of but-for causation. However, because this dispute was not "argued specifically and distinctly" in either party's brief, we do not address it. Greenwood v. F.A.A., 28 F.3d 971, 977 (9th Cir. 1994); see also Rodriguez v. Airborne Express, 265 F.3d 890, 894 n.2 (9th Cir. 2001).

All four statutes use near identical language to create a private right of action. Compare Sherman Act, ch. 647, § 7, 26 Stat. 209, 210 (1890) (permitting "[a]ny person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act" to sue in federal court and recover treble damages and attorney's fees), with 15 U.S.C. § 15(a) (the Clayton Act) (permitting "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws" to sue in federal court and recover treble damages and attorney's fees), and 18 U.S.C. § 1964(c) (the RICO Act) (permitting "[a]ny person injured in his business or property by reason of a violation of section 1962" to sue in federal court and recover treble damages and attorney's fees).

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