The Palestinian Authority Jury Award: Implications on Liability of Non-States and Damages for Psychological Harm

The recent jury verdict in the U.S. federal court finding that the Palestinian Authority should pay $655.5 million in damages to American victims of terrorism during the second Intifada has important legal and political ramifications. This post will focus on two questions raised by the verdict. First, on what basis can non-states be obligated to compensate civilians for casualties inflicted by another non-state actor? Second, might we begin to see more courts willing to award damages for psychological harm caused by terrorism?

Regarding the first issue, the verdict leaves open the question whether holding the Palestinian Authority accountable for the deeds of non-state actors implies that the Palestinian Authority should be viewed as a state. Until now, in a number of judgments, U.S. courts have found only that states, and not non-state entities such as freedom movements that possess some characteristics of a state, may bear accountability for material support to non-state actors. However, the verdict could be interpreted as an extension of this jurisprudential line.

Such an interpretation counters arguments by some scholars that the Palestinian Authority might be treated like other non-state actors such as multinational companies. Some legal academics have argued that courts hearing the case on appeal might consider such an analogy. On this view, the Supreme Court’s Daimler AG judgment could serve as a guiding torch. In the Daimler AG case, the US Supreme Court ruled that Daimler AG, a company in Germany, could not be sued in California based on the continuous and substantial business activities in California of Daimler’s US subsidiary, Mercedes-Benz USA.

Following this line of argumentation, lawyers for the defendants argued that US courts should not have jurisdiction just because the PLO maintains a 12-person office in the United States. Yet, the Anti-Terrorism Act, under which the lawsuit was brought, looks to the bond of the victims with the United States to establish jurisdiction. In this case, the victims had not only U.S. citizenship but also substantial links with the country.

Any pronouncement implying that the Palestinian Authority is already a state would be bold coming from a U.S. court, considering the United States’ opposite stance on the issue. Nonetheless, some might point to the decision as an implicit recognition by a domestic legal body that the Palestinian statehood criteria have already been met, as the U.N. General Assembly held in November 2012.

But even if the Court’s judgment does not imply anything about the Palestinian Authority’s statehood bid, still the verdict would be important as the first judgment holding a non-state entity with state-like characteristics accountable for the actions of other non-state actors. The verdict held the Palestinian Authority liable for attacks by Hamas. This could lead  in the future to more Palestinian Authority-targeted lawsuits before US or other domestic or even international courts for terrorist acts carried out by Hamas, missile attacks from Gaza against Israel being the most characteristic example.

Echoing the ECtHR’s Catan judgment in which Moldova was held accountable for human rights breaches taking place in part of its territory which Moldova did not control de facto (para. 110), the Palestinian Authority could be held liable for Hamas missile attacks because it [the Palestinian Authority] remains the only internationally recognized sovereign over the Strip.  Alternatively, if such attacks take place in the realm of a joint Hamas-Palestinian Authority government, such a partnership can be construed as expanding the Palestinian Authority’s de facto control over the Gaza Strip. Thus any liability arising from the continuation of missile attacks could extend to the Palestinian Authority.

Regarding damages, the U.S. Anti-Terrorism Act permits damages to be awarded for pain and suffering caused by U.S.-designated terrorist organizations. The verdict rests on this statutory basis and awards damages based on the claims of 10 families, comprising around three dozen members, eight of whom were physically injured, and the rest of whom attested that they were left with deep psychological scars. This implies that damages could have been awarded not only for the victims’ physical injuries but also for psychological and emotional harm.

International and domestic courts have generally been reluctant to award damages for psychological repercussions of armed attacks. Thus for example, in a case arising from the Kunduz strike by German forces under the auspices of NATO in Afghanistan, the German administrative court appeared reluctant to acknowledge any such repercussions and spoke in paragraph 36 of its judgment only about the damage to the ‘physical integrity’ of the victims. That was despite the Court’s acknowledgment in the previous paragraph that the victims claimed psychological effects just one paragraph up (in paragraph 35). Similarly, although they have been raised in other instances (see here and here), any arguments put forth on the psychological toll of drone strikes in Pakistan were ignored by the UK High Court.

The New York jury verdict and the documentation of civilian posttraumatic stress disorder after terrorist or missile attacks, together with the latest interest in the subject in the academic literature, raise the possibility that future courts—domestic and international alike—will be more likely to consider psychological harm, awarding damages even in the absence of  death or physical injury.