BNP Paribas Must Face Revived Lawsuit Over Sudanese Genocide

Victims of the Sudanese genocide accusing BNP Paribas SA of knowingly facilitating the atrocities by evading U.S. sanctions had their claims revived May 22 by a federal appeals court.

The French banking giant was fined $9 billion, the largest penalty ever imposed in a criminal case, after pleading guilty to state and federal crimes for doing business with the Sudanese regime from 2002 to 2007. But BNP convinced a federal judge to dismiss the civil suit last year based on the “act of state” doctrine, which bars U.S. courts from questioning the official acts of foreign governments.

That decision misapplied the doctrine, the U.S. Court of Appeals for the Second Circuit ruled.

Judge Barrington D. Parker, writing for the court, said the judge who dismissed the case “painted with too broad a brush,” making the exact interpretive errors the U.S. Supreme Court has warned against.

“The Supreme Court has made clear that the act of state doctrine has important boundaries,” Parker wrote. “It is not a categorical rule of abstention that prohibits courts from deciding cases or controversies whenever issues of foreign relations arise.”

The doctrine applies when the validity of a foreign official action is the actual issue being litigated, not when “the inquiry is simply whether the conduct in question occurred,” the Second Circuit said. It only bars relief that would require a U.S. court “to declare invalid the official act of a foreign sovereign performed within its own territory,” Parker wrote, quoting Kirkpatrick & Co. v. Environmental Tectonics Corp.

Kirkpatrick “is directly applicable” to the BNP case, the appeals court said.

“The issue is simply whether the atrocities occurred,” Parker wrote. “The act of state doctrine cannot shield this genocide from scrutiny.”

To invoke the act of state doctrine, the bank would have to prove that the atrocities reflected the “officially sanctioned policies of Sudan,” the appeals court said. But it didn’t make that showing because the genocide “unquestionably violated Sudanese law,” the court found.

Judges Denny Chin and Robert D. Sack joined the ruling.

The plaintiffs are represented by McKool Smith PC and Tobias B. Wolff of the University of Pennsylvania Law School. BNP is represented by Cleary Gottlieb Steen & Hamilton.

The case is Kashef v. BNP Paribas SA, 2d Cir., No. 18-1304, 5/22/19.