NEW YORK - After years of legal maneuvering, a huge lawsuit against the government of Saudi Arabia and key members of its royal family was put to a crucial test today as lawyers for victims of the 9/11 attacks urged a federal appeals court to reinstate the government of Saudi Arabia as a defendant.
The Cozen O'Connor law firm of Philadelphia was the first to file suit against the government of Saudi Arabia in 2003, charging that the desert kingdom bears responsibility for the attacks because it permitted Islamic charities under its control to bankroll Osama bin Laden and his global terror movement.
Cozen represents scores of U.S. and European based insurers in the case who have paid out billions in claims. Other lawyers have since filed suit against Saudi Arabia on behalf of individual victims and other insurers. Yet others have not named Saudi Arabia, choosing instead to go after individual members of the royal family, the charities, alleged terrorism financiers and others.
In essence, the Cozen lawsuit charges that a network of government sponsored charities, shell corporations, terrorists and others were used to launder money into bin Laden's terror group, and that government officials had been warned repeatedly of the problem before the 9/11 attacks.
The lawsuits by Cozen and others suffered a setback in 2005 when New York federal district court judge Richard Conway Casey ruled that the federal foreign sovereign immunity act barred lawsuits against Saudi Arabia and members of the royal family.
The act generally bars lawsuits against foreign governments unless the U.S. State Department has determined that they are sponsors of terrorism, the offending act was not a normal function of government or the dispute arose in the context of normal commercial activity.
The act is intended to restrict lawsuits against foreign governments on the grounds that unfettered litigation would interfere with American foreign policy.
Steve Cozen, chairman of the firm and the lead attorney in today's arguments, contended today that none of those conditions had been met.
"It is the misconduct of the charities and of government officials which forms the basis of our complaints," Cozen said. "Let's not be so fast to bar our citizens from the court room."
Cozen has long represented big insurers trying to recover losses from third parties after big payouts.
Lawyers for the kingdom and various Islamic charities named as defendants said that Cozen and other lawyers have brought forth no reliable evidence showing that the kingdom or the charities knowingly funded terrorists groups.
"Anytime he (Judge Casey) looked for a basis (for expanding the lawsuit), he found nothing," said William Jeffress, a lawyer for Prince Naif bin Abdulaziz, the Saudi interior minister, and other members of the Saudi royal family.
A three-member panel for the second circuit heard the arguments today. The judges gave little indication of how they might rule, lobbing tough questions at both sides.
At one point, second circuit chief judge Dennis Jacobs appeared skeptical of claims that individual members of the royal family could be sued without breaching the protections established sovereign immunities act.
Yet Jacobs also appeared to be skeptical of an assertion a lawyer for the Saudi High Commission, a government charity named as a defendant, that the commission had been involved only in charitable works. He cited reports that a NATO raid on the commission offices in Sarajevo in October 2001 turned up before and after pictures of the World Trade Center, the bombed U.S. embassies in east Africa, materials for forging U.S. State Department badges and maps of government buildings in Washington.