In 2006, Hezbollah, a political party and terrorist organization in Lebanon, fired a series of rockets at civilians in Israel during a 34-day conflict that resulted in significant destruction and civilian casualties.

In the five years prior to the attack, the Central Bank of Iran (CBI), Bank Saderat Iran (BSI) and Bank Saderat, PLC (BSPLC) of Iran and North Korea provided financial support of over $50 million to the Hezbollah to promote terrorist attacks against American and Israeli citizens. CBI is the central bank of Iran and is wholly owned by the Iranian government. The funds were provided with knowledge of the impending attacks and were intended to facilitate further terrorist activities in the region.

In February 2010, American, Israeli, and Canadian victims of the attacks and their family members filed suit against the Central Bank of Iran (CBI) in the D.C. Federal Court under the Antiterrorism Act, the Foreign Sovereign Immunities Act (FSIA), and the Alien Tort Claims Act for the banks’ participation in and contributions to the terrorist attacks.

The Court held that the lawsuit did not present a non-justiciable political question and found that it could make a determination based on the merits of the case. However, on the merits, the Court found that the Plaintiffs were unable to recover.

Plaintiffs’ claims against BSI under FSIA failed because the bank is not majority-owned by Iran and is therefore not an “agency or instrumentality” within the definition of the FSIA.  The claims under the ATA fail because rocket attacks were considered an “act of war” and therefore qualified for the statute’s exemption under § 2336.

The claims under ATS failed for non-American plaintiffs because the attack in Israel did not sufficiently “touch and concern” the territory of the United States.

However, in July 2014, the Federal Court found Iran and North Korea liable for plaintiffs’ injuries based on its provision of material support and assistance to the Hezbollah terrorists who fired the rockets at Israel in 2006. The Court entered a final default judgment against Iran.