Phila. law firm’s 9/11 suit dealt setback

A federal appeals court today rejected lawsuits by victims of the Sept. 11, 2001, attacks against Saudi Arabia and senior members of the Saudi royal family, alleging that they helped foster al-Qaeda and other Islamist terrorist groups.

The U.S. Court of Appeals for the Second Circuit, ruling in Manhattan, said Saudi Arabia and members of its royal family were protected from being sued because the State Department had not officially designated the desert kingdom as a supporter of terrorism.

Under the Foreign Sovereign Immunities Act, foreign governments are immune from such lawsuits unless the State Department finds in advance that they had actively supported terrorist groups.

Lawyers for the kingdom argued that there was no credible evidence that senior Saudi officials had any knowledge of terrorism activities by the charities or that they intended for the charities as vehicles for funding al-Qaeda.

The ruling came in an appeal filed by the Philadelphia law firm of Cozen O'Connor on behalf of several dozen insurers that paid out billions in claims to businesses at ground zero. They were joined in the legal action by law firms representing victims and survivors and various other commercial interests that suffered losses in the attacks.

The appeals challenged a lower court ruling that Saudi Arabia and members of the royal family could not be sued. The decision by the second circuit essentially upheld that decision.

In their lawsuits, the victims alleged that over a period of a decade or more, officials of the government of Saudi Arabia had financed Islamic charities that, in turn, had become the sources of funding for Islamic terrorists, first in Afghanistan and then later in Bosnia Herzegovina and, ultimately, in the Sept. 11 attacks.

The victims offered as evidence testimony by senior U.S. Treasury and State Department officials and other U.S. government findings that the charities had become conduits for terrorist financing, beginning in the mid-1990s. U.S. officials have said that although the Saudis have taken some steps to crack down on the charities, they remained concerned that some charities continue to be sources of funding for al-Qaeda.