The US Court of Appeals for the District of Columbia Circuit on Tuesday renewed a lawsuit against twenty-one medical equipment and pharmaceutical companies over allegations that their contracts with Iraq’s health ministry aided in funding terrorism that ultimately led to the death of American soldiers during the Iraq War.
AstraZeneca, GE Healthcare USA Holding, Johnson & Johnson, Pfizer, Hoffmann-La Roche, and other companies are accused by plaintiffs, family members of victims of the attack in Iraq by the Mahdi group, of providing illegal support to terrorist acts in two ways. First, plaintiffs claim that defendants used local agents to deliver cash kickbacks to the terrorists who gave them business. Second, plaintiffs argue that defendants delivered extra, off-the-books batches of valuable medical goods to Jaysh al-Mahdi to sell on the black market to fund their operation and pay terrorist fighters. Jaysh al-Mahdi is a militia group funded by Hezbollah, who had power over Iraq’s health ministry during the time of the war in Iraq.
On July 17, 2020, a District of Columbia District Court granted defendant’s motion to dismiss for failure to state a claim for either direct or secondary liability. Along with multiple other findings, the District Court found proximate causation was defeated by defendant’s insistence that they provided “life-saving medical goods” to the Iraqi Ministry of Health, not Jaysh al-Mahdi. The Appeals Court on Tuesday disagreed, stating, “aid directed to beneficial or legitimate-seeming operations conducted by a terrorist organization does not alone attenuate the role of the aid in using terrorist acts.”
In total, the Appeals Court reversed on three issues and remanded the balance of the issues to be addressed by the district court consistent with the court’s opinion. First, the court concluded that plaintiffs plead facts that suffice to support their aiding-and-abetting claim at the motion-to-dismiss stage. Second, with respect to the direct liability claim, the court concluded that plaintiffs have adequately pleaded that defendants’ payments to Jaysh al Mahdi proximately caused plaintiffs’ injuries. Third, the court concluded that the district court’s personal jurisdiction analysis was unduly restrictive.
