By Alex L. Sarria, Alejandra Montenegro Almonte and Laura Ferguson of Miller & Chevalier Chartered
A lawsuit recently filed in District of Columbia federal court suggests stability operations contractors may soon face a new wave of litigation under the Anti-Terrorism Act (ATA) — a sweeping federal statute that imposes civil liability for knowingly supporting acts of international terrorism. The lawsuit, captioned Cabrera v. Black & Veatch Special Projects et al., 1:19-cv-03833 (D.D.C) (“Cabrera”), was filed in late 2019 by or on behalf of United States military veterans who were injured or killed in terrorist attacks while serving in Afghanistan between 2009 and 2017. The plaintiffs allege that the defendants, all current or former U.S. government contractors, helped fund such attacks by making “protection payments” to terrorist organizations in violation of the ATA. According to the complaint, the purpose of the protection payments was to prevent attacks on the contractor-defendants’ U.S.-funded projects in Afghanistan. The plaintiffs claim that payments were made to entities such as the Taliban and Haqqani Network in the form of cash transfers or wages paid to local security guards. They also rely extensively on public reports and news articles, which highlight alleged financial ties between terrorist organizations and both the U.S. government and some of its contractors.
What Is the Anti-Terrorism Act?
The ATA allows U.S. nationals injured in an act of international terrorism to bring a civil lawsuit in U.S. federal court. A broad class of family members may also file suit under the ATA in the event of death. “International terrorism” includes violent or dangerous acts that constitute a violation of U.S. criminal laws (or various material support statutes) and which appear intended to intimidate or coerce a civilian population or to influence the policy of a government through intimidation or coercion. An entity may be liable under the ATA if it provides material support (e.g., financial support) to a terrorist organization alleged to have carried out an act of international terrorism. The statute also imposes liability for aiding and abetting an act of international terrorism by a designated foreign terrorist organization (e.g., Al Qaeda). Damages awarded in ATA litigation are automatically tripled.
Until now, plaintiffs’ attorneys have pursued few, if any, ATA lawsuits against government contractors. They initially attempted to sue foreign governments, organizations or individuals directly linked to specific terror attacks. Plaintiffs then began suing U.S. and foreign corporations, alleging they provided material support or aided and abetted terror attacks. The initial wave of suits against corporate defendants involved banking institutions but later expanded to include technology companies, pharmaceutical companies and now government contractors. Government contractors are appealing ATA defendants because they often are subject to suit in the U.S. and are perceived as having “deep pockets.”
How Can Contractors Defend ATA Lawsuits?
ATA defendants commonly focus their defense on areas where plaintiffs confront significant hurdles of proof. For example, plaintiffs must establish that the defendant caused their alleged injuries — i.e., that the defendant’s conduct was a substantial factor in causing the injury and that the injury was reasonably foreseeable. This can be challenging, particularly in cases like Cabrera where the complaint itself alleges only a general connection between supposed protection payments and the particular attacks that led to plaintiffs’ injuries. Similarly, under § 2339A of the statute, plaintiffs must show that a defendant knowingly provided material support in furtherance of an act of international terrorism. ATA defendants often challenge this knowledge element by arguing that there are other plausible, benign explanations for their alleged conduct (e.g., hiring local guards, at the direction of the U.S. military, to provide legitimate security services).
Apart from traditional ATA defenses, government contractors may also look to assert federal defenses that are rooted in separation-of-powers and preemption principles. These defenses include the political question doctrine, state secrets privilege and derivative sovereign immunity. Though largely untested in ATA litigation, such defenses could prove viable in the Cabrera case — where the U.S. military’s own connections to individuals with alleged terrorism ties undoubtedly will loom large.
Investing in an ATA Compliance Program
Given the threat posed by lawsuits like Cabrera, every government contractor operating in a high-risk environment should strongly consider building an internal ATA compliance program. Thankfully, to get started, many contractors can leverage their existing compliance tools and business functions as a baseline. Building an ATA compliance program involves several steps. First, contractors must conduct a documented, bottoms-up assessment of their ATA risk and any moderating factors. Second, contractors must evaluate if their internal and operational controls mitigate the company’s identified ATA risks effectively and, if not, adopt additional or modified controls. Third, contractors must operationalize their ATA compliance by training employees, monitoring third parties, conducting periodic audits and communicating with authorized government officials about emerging ATA risks. Though completing these steps requires investment, when compared to the threat of high-stakes ATA litigation, an ounce of prevention undoubtedly is worth a pound of cure.
Alex L. Sarria
Alex L. Sarria is Member at Miller & Chevalier Chartered, where he specializes in government contracts litigation and counseling. For more than a decade, Alex has represented government contractors in complex civil litigation arising from the wars in Afghanistan and Iraq, including in mass tort lawsuits and multi-million dollar contract disputes involving the federal government.
Alejandra Montenegro Almonte
Alejandra Montenegro Almonte is a Member and the Vice-Chair of the top-ranked International Department at Miller & Chevalier Chartered. Alejandra’s practice focuses on regulatory compliance, internal investigations, and government enforcement actions across a variety of business-critical areas, including anti-corruption and internal controls, ethics, and code of conduct violations.
Laura Ferguson is a Member at Miller & Chevalier Chartered, where she has developed a proven track record of winning challenging Anti-Terrorism Act (ATA) cases on dispositive motions and securing affirmance on appeal. Laura has litigated eleven ATA cases, obtaining dismissals in seven of the cases, with the remainder favorably resolved on appeal following trial or through settlement.