Second Circuit Revives ATA Judgment Against PLO and PA Following Supreme Court Guidance

In Waldman v. Palestine Liberation Organization, the Second Circuit issued a significant decision addressing personal jurisdiction, retroactive legislation, and the power of appellate courts to reopen final judgments.

The Issue

The case arises from claims under the Anti-Terrorism Act (“ATA”) brought by U.S. nationals injured in terrorist attacks abroad. After a jury awarded substantial damages, the Second Circuit previously vacated the judgment for lack of personal jurisdiction over the Palestine Liberation Organization (“PLO”) and Palestinian Authority (“PA”).

Congress responded with legislation, culminating in the Promoting Security and Justice for Victims of Terrorism Act (“PSJVTA”), which deems certain foreign entities to have consented to U.S. jurisdiction based on specified conduct. The central questions became: (1) whether the PSJVTA could constitutionally confer jurisdiction, and (2) whether courts could revive a previously vacated judgment based on that statute.

The Decision

Following the Supreme Court’s intervening decision in Fuld, the Second Circuit held that the PSJVTA is consistent with the Fifth Amendment and provides a valid basis for personal jurisdiction.

Critically, the court went further and recalled its prior mandate, reinstating the original district court judgment in favor of plaintiffs. It reasoned that:

• The PSJVTA represents a “supervening change in governing law,” reflecting the considered judgment of both Congress and the Executive on issues of national security and foreign policy.
• The statute expressly applies to pending cases, including this one, and ties jurisdiction to post-enactment conduct by the defendants.
• Concerns about finality were outweighed by fairness and efficiency, particularly where dismissal had been based on a procedural defect rather than the merits.

The court also rejected the argument that the original judgment was void due to lack of jurisdiction at the time it was entered. Instead, it held that post-judgment developments, including congressional action, can cure jurisdictional defects in appropriate circumstances.

Practical Takeaways

1. Congressional action can reshape jurisdictional landscapes midstream.
   The decision underscores that statutes like the PSJVTA can retroactively affect pending cases, particularly where tied to national security and foreign policy interests.
2. Finality is not absolute.
   Although recalling a mandate is an extraordinary remedy, courts may do so where there is a significant change in law and strong equitable considerations.
3. Jurisdictional defects may be curable.
   The court’s willingness to allow post-enactment conduct and legislation to cure earlier jurisdictional deficiencies is notable and may have broader implications beyond ATA litigation.
4. Deference to political branches matters.
   The opinion reflects substantial judicial deference where Congress and the Executive act in tandem on issues implicating foreign affairs.

Read our previous post regarding the ATA here: Corruption, Contracts, and Terrorism Financing: The D.C. Circuit Clarifies ATA Risk – Ward & Berry