The ruling is a significant setback for the 10 American families who sued over terrorist attacks in Israel in the early 2000s that left 33 dead and more than 400 injured. After a trial in Manhattan federal court last year, jurors found the PLO and Palestinian Authority liable for the attacks and ordered the groups to pay the families $218.5 million, which was automatically tripled to $655.5 million under a U.S. antiterrorism law.

On Wednesday, three judges for the Second U.S. Circuit Court of Appeals dismissed the case, saying there wasn’t enough of a connection between the U.S. and the Israel attacks. There is no U.S. jurisdiction in this case, “no matter how horrendous the underlying attacks or morally compelling the plaintiffs’ claims,” wrote Judge John Koetl.

One test of jurisdiction was whether the Palestinian Authority and the PLO could be considered “at home” in the U.S. Despite the groups’ office and lobbying efforts in Washington, the appeals panel said that was insufficient to establish a substantial presence in the U.S. The groups are clearly “at home” in Palestine, the opinion said.

The victims who brought the lawsuit were U.S. citizens, but the judges said that during the Israel attacks, the shooters “fired indiscriminately” at large groups of people, meaning they weren’t expressly targeting Americans. Lawyers for the plaintiffs had argued that the attacks were aimed at the U.S. and intended to influence U.S. foreign policy.

Gassan Baloul, a Squire Patton Boggs partner representing the Palestinian groups, said in a statement: “We are very gratified that the court fully accepted our clients’ consistent position that the PA and the PLO are not subject to the jurisdiction of the United States courts in these matters.”

Nitsana Darshan-Leitner, the Israel-based lawyer for the plaintiffs, said Congress and the State Department should intervene to “ensure that these families are compensated by the PA and PLO for these crimes.”

“This decision must be corrected so that these families may receive justice,” she said.

The case has been winding its way through U.S. courts for over a decade. The families filed the original lawsuit in 2004, and lawyers for the Palestinian groups have made nine separate attempts since then to dismiss the case on jurisdictional grounds. U.S. District Judge George Daniels consistently sided with the victims on the jurisdiction issue, which the appeals judges on Wednesday overturned.

The U.S. government has only intervened once in the case. Last year, when Judge Daniels was deciding how much money the Palestinian Authority needed to put up for the appeal, Justice Department and State Department officials filed a letter saying a high bond could hurt the group’s ability to operate and destabilize the region further.

The appeals judges noted that similar lawsuits pending against the Palestinian Authority and PLO in Washington had also been dismissed for lack of jurisdiction.

The families brought the lawsuit under the Antiterrorism Act, which allows American citizens who are victims of terrorist attacks overseas to sue in U.S. federal court. But the appeals judges said the victims still have the burden of establishing a “substantial connection” between the U.S. and the misconduct alleged in the lawsuit.

Legal experts say the ruling is unlikely to have a widespread impact. Other lawsuits brought by terrorism victims seeking compensation typically target foreign countries or banks and accuse them of supporting terrorists. The lawsuit against the Palestinian Authority and the PLO is unusual because the groups aren’t recognized by the U.S. as a sovereign nation, but they also aren’t companies or individuals, which makes the jurisdictional issue particularly challenging.

The Palestinian Authority is the government of Palestinians in the West Bank and Gaza Strip, and the PLO is the Palestinians’ political representative. The groups said at trial last year that they had no involvement in the Israel attacks and shouldn’t be held responsible for the actions of extremist individuals.


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