Davis Polk Secures Complete Victory for AstraZeneca in Anti-Terrorism Act Case
7/24/2020

On July 17, 2020, Davis Polk secured a complete dismissal on behalf of its client, AstraZeneca, in an Anti-Terrorism Act (“ATA”) lawsuit asserted against several pharmaceutical and medical device companies for allegedly aiding terrorist attacks in Iraq. The case is captioned Joshua Atchley et al. v. AstraZeneca UK Ltd. et al., No. 17-2136 (RJL) (D.D.C.)

On October 24, 2017, a number of American service members and civilians who were killed or wounded in Iraq, as well as their family members, filed suit in the United States District Court for the District of Columbia against several pharmaceutical and medical device companies, including AstraZeneca UK Limited (“AstraZeneca UK”) and AstraZeneca Pharmaceuticals LP (“AstraZeneca US”). By the end of 2018, the number of plaintiffs swelled to more than 1,300. The plaintiffs alleged that, between 2005 and 2011, AstraZeneca UK and other mostly foreign defendants (the “supplier defendants”) corruptly provided medical goods and funds to the Iraqi Ministry of Health (the “Ministry”) knowing that the Ministry was controlled by a terrorist group, Jaysh al-Mahdi, and that the transactions were used to fund and support terrorist attacks against the plaintiffs in Iraq. The plaintiffs further alleged that the supplier defendants’ manufacturing affiliates, including AstraZeneca US, knowingly helped facilitate the alleged misconduct. Plaintiffs asserted claims of aiding and abetting terrorism, material support of terrorism and financing terrorism under the federal ATA, as well as various state law claims. Plaintiffs sought joint and several liability, unspecified compensatory and punitive damages and attorneys’ fees. The case was assigned to Judge Richard Leon.

On July 16, 2020, the district court granted defendants’ motion to dismiss in full. With respect to the foreign defendants, including AstraZeneca UK, the court held that it lacked personal jurisdiction because “all the relevant conduct that plaintiffs contend gives rise to liability occurred in Iraq, not the United States.” The court rejected plaintiffs’ arguments that personal jurisdiction existed because (1) defendants purportedly knew their alleged conduct resulted in attacks on U.S. citizens, (2) the medical goods sold to the Ministry were allegedly “sourced” from the United States and (3) the transactions in question relied on letters of credit that allegedly included payments through U.S. bank accounts. The court further held that it lacked personal jurisdiction over the state law claims against all defendants, foreign and domestic. In reaching its decision, the court closely tracked the arguments set forth in defendants’ personal jurisdiction briefing, on which Davis Polk took the lead, quoting the brief multiple times.

Additionally, the court held that the ATA claims failed on the merits. First, the court rejected plaintiffs’ claims that defendants were subject to primary liability under the ATA because the defendants’ alleged transactions with the Ministry did not proximately cause the alleged terrorist attacks. The court held that, because the transactions were “more than one step removed from a terrorist act or organization” and were with a sovereign entity that served many legitimate functions, plaintiffs had failed to plead a “substantial connection” between defendants’ alleged conduct and the attacks. Second, the court rejected plaintiffs’ claims that defendants were subject to aiding and abetting liability under the ATA because (1) as to the vast majority of the attacks, plaintiffs had failed to adequately plead that a group designated as a foreign terrorist organization by the State Department “committed, planned or authorized” the attacks, as required by the statute; and (2) as to all of the attacks, plaintiffs had failed to adequately plead that defendants’ transactions with the Ministry provided “substantial assistance” to the attacks.

The Davis Polk litigation team includes partners Neil H. MacBride, Kenneth L. Wainstein and Paul S. Mishkin (who argued the personal jurisdiction motion), counsel Adam Mehes and associates Alexander Bernstein and Lauren C. O’Leary. Members of the Davis Polk team are based in the New York and Washington DC offices.