In Bodoff v. Islamic Republic of Iran (2012) the D.C District Court wrote: “Punitive damages are not meant to compensate the victim, but are instead meant to award the victim an amount of money that will punish outrageous behavior and deter such outrageous conduct in the future.”

In that case, Yonathan Barnea was killed in the Hamas bombing of the Number 18 Egged bus in Jerusalem on Feb. 25, 1996. Jeremy Bodoff, as administrator of Barnea’s estate, sued Iran on behalf of the estate.

The court wrote: “Hamas, the popular name for the Islamic Resistance Movement, is an organization supported by The Islamic Republic of Iran, dedicated to the waging of Jihad, or a holy war employing terrorism with the object of seizing the leadership of the Palestinian people and asserting sovereignty and the rule of the Muslim religion over all of Palestine, including all territory of the State of Israel.”

In that case, the Court awarded $300,000,000 in punitive damages to Bodoff against Iran.

Introduction

Last week we studied Warmbier v. Democratic People’s Republic of North Korea. That case involved North Korea’s kidnap, torture and killing of Otto Warmbier, a Jewish American college student. The Warmbier family sued North Korea in federal court and was awarded more than $500 million in damages.

The Foreign Sovereign Immunities Act (28 U.S.C. § 1605A) grants the United States jurisdiction over foreign governments that cause death by an act of torture, extrajudicial killing, or hostage taking. The statute writes, “In any such action, damages may include economic damages, solatium, pain and suffering, and punitive damages.”

From Bava Kamma to Federal Court: Four Types of Damages

Following the statute, the Court awarded the Warmbiers four types of damages: (1) Economic Loss (Lost Wages and Medical Expenses); (2) Pain and Suffering (of Warmbier, the decedent); (3) Solatium (payment for Warmbier’s parents’ emotional distress); (4) Punitive Damages.

Lost Wages: $6,038,308

Medical Expenses: $96,375.80

Pain and Suffering: $15,000,000

Solatium: (Emotional Damages): $30,000,000 ($15,000,000 per parent)

Punitive Damages: $450,000,000 ($150,000,000 per plaintiff).

Punitive Damages: To Punish, Not to Compensate

In ruling the Warmbiers were entitled to “Punitive Damages,” Howell explained that “punitive damages are awarded not to compensate the victims, but to punish outrageous behavior and deter such outrageous conduct in the future.

“Punitive damages are warranted where defendants supported, protected, harbored, aided, abetted, enabled, sponsored, conspired with, and subsidized a known terrorist organization whose modus operandi included the targeting, brutalization, and murder of American citizens and others.”

The Warmbier Court cited Hekmati v. Islamic Republic of Iran (2017), where a D.C. District Court awarded punitive damages against the Islamic Republic of Iran where Amir Hekmati was held in solitary confinement, beaten, threatened, and psychologically battered for years.

Similarly, the Court reasoned, North Korea’s conduct towards Warmbier justified significant punitive damages.

The Court cited Acosta v. Islamic Republic of Iran (2008). In that case, Rabbi Meir Kahane’s surviving spouse, children and family, together with Irving Franklin and Officer Carlos Acosta sued Iran, accusing Iran of providing material assistance to Al-Gam’aa Islamiyah, of which the assassin, El Sayyid Nosair, was a member.

The Acosta court provided a formula for determining the appropriate amount of punitive damages. The courts consider: “(1) the character of the defendants’ act, (2) the nature and extent of harm to the plaintiffs that the defendants caused or intended to cause, (3) the need for deterrence, and (4) the wealth of the defendants.”

Taking those factors into account, previous courts have developed three approaches in calculating damages against foreign governments that engage in terrorism.

Three Approaches

The first approach is to multiply the foreign state’s annual expenditures on terrorism by a factor between three and five. That approach often results in billion-dollar awards. Courts have utilized the “spending multiplier” approach to calculate punitive damages for exceptionally deadly attacks, such as the 1983 bombing of the Marine barracks in Beirut, which killed 241 American military servicemen. See Valore v. Islamic Republic of Iran (2010). The Court found that larger awards caused Iran to become more involved in the judicial process.

The second approach is a ratio of punitive to compensatory damages set forth in earlier cases.

The third approach awards a fixed amount of $150,000,000 per affected family. In Baker v. Socialist People’s Libyan Arab Jamahiriya (2011), families of American victims of the Nov. 23, 1985 hijacking of EgyptAir Flight 648 and other victims of terror sued the Libyan and Syrian governments on the basis that they supported the terrorists who took hostage and executed American citizens. The court awarded $150 million in punitive damages to each of the victims of the hijacking and their families.

The Warmbier Court applied the third approach, and awarded $150 million to each plaintiff for a total of $450 million.

Why Not the Multiple Approach?

The Warmbier Court provided two reasons why it did not award punitive damages as multiple of the amount North Korea spends on terrorism. First, using “the multiplier” method would result in an award in the billions of dollars. Although the Warmbiers requested billions, the Court refused to award billions.

The Court wrote: “In this case, although egregious, Otto’s detention in North Korea is not on the scale of an exceptionally deadly attack against many Americans, making the first method, which might result in an award in the billions of dollars, as the plaintiffs request, out-of-line with analogous circumstances.”

The Court added that awarding punitive damages as a multiple of the amount that North Korea spends on supporting terrorism, “requires knowing how much North Korea spends on terrorist activities, and that information is not available.”

Finally, the Court ruled that it was appropriate to award $450 million in punitive damages ($150 million per plaintiff). The Court noted: “The third approach, thus, is the most appropriate, but recognizing that North Korea has committed acts that are awful and worthy of the gravest condemnation and that North Korea is ‘keenly aware’ of the ‘political environment’ in the United States, including judgments issued by United States courts, a larger award is appropriate to punish and deter North Korea.”

The Court explained that in Kim v. Democratic People’s Republic of Korea (2015), a D.C. District Court awarded $300 million based on North Korea’s “presumed torture” of missionary Reverend Dong Shik Kim in North Korea. $300 million was insufficient to deter North Korea’s torture and killing of Warmbier. Accordingly, $450 million was an appropriate punishment.

In Sum

Federal courts have awarded billions of dollars to victims of terror. The overwhelming majority of these awards came in the form of “punitive damages.” As noted, punitive damages are intended to “deter and punish” the wrongdoer, not to compensate.

Several questions remain: Will a potential award for the victims of Oct. 7 be in the millions or billions? Will the court use the multiplier approach or the $150 million approach? Does a billion-dollar punitive damage award deter terrorism if it is difficult to collect? Would a smaller award be a more effective deterrent?

Eliyahu Asher Prero, Esq., is a practicing lawyer and certified mohel. He graduated magna cum laude from Seton Hall Law with a concentration in intellectual property law and served as a clerk for the Honorable Thomas A. Sarlo, Superior Court of New Jersey, Civil Division—Bergen County. He is currently an associate at the law firm Schenck, Price, Smith & King, where he focuses on constitutional law, commercial litigation, and insurance defense. Please address all correspondence to The Jewish Link.