Claim for Providing Material Support Under Antiterrorism Act Requires Knowing Support of Terrorist Organization, Not Terrorist Activities

On September 22, 2014, the Second Circuit issued a decision in Weiss v. National Westminster Bank PLC, No. 13-1618-CV, discussing the scienter required to state a claim for providing “material support and resources to a terrorist organization in violation of the Antiterrorism Act.”

In Weiss, the EDNY dismissed a an Antiterrorism Act claim, holding that such a claim requires knowing support of terrorist activities. The Second Circuit reversed, explaining:

While § 2333(a) does not include a mental state requirement on its face, it incorporates the knowledge requirement from § 2339B(a)(1), which prohibits the knowing provision of any material support to terrorist organizations without regard to the types of activities supported. . . .

Thus, to fulfill § 2339B(a)(1)’s scienter requirement, incorporated into § 2333(a), Plaintiffs must show that [the defendant] both knew that it was providing material support to Interpal and knew that Interpal engaged in terrorist activity. Section 2339B(a)(1) does not require a showing that NatWest knew it was providing material support for terrorist activity.

(Internal quotations and citations omitted) (emphasis added). The Second Circuit went on to explain that:

For the purposes of § 2339B(a)(1), a defendant has knowledge that an organization engages in terrorist activity if the defendant has actual knowledge of such activity or if the defendant exhibited deliberate indifference to whether the organization engages in such activity. . . . . Section 2339B(a)(1) explicitly incorporates the meaning of “engage in terrorist activity” from § 212(a)(3)(B) of the Immigration and Nationality Act, 8 U.S.C. § 1182(a)(3)(B)(iv)(IV), which defines “engage in terrorist activity” to include soliciting funds or other things of value for a terrorist organization described in clause (vi)(I). Clause (vi)(I) defines “terrorist organization” to mean an organization designated under section 1189 of this title, and § 1189 authorizes the Secretary of State to designate an organization as a foreign terrorist organization (“FTO”).

(Internal quotations and citations omitted) (emphasis added). Because Interpal was alleged to have “solicited funds for Hamas,” which has been designated as a terrorist organization, “Interpal engaged in terrorist activity within the meaning of Section 212(a)(3)(B) of the Immigration and Nationality Act.” To prevail, the plaintiff thus had to show that the defendant”provided material support to Interpal while having knowledge that, or exhibiting deliberate indifference to whether, Interpal solicited funds or other things of value for Hamas, regardless of whether those funds were used for terrorist or non-terrorist activities.”

Habeas Petitioner Entitled To Hearing On Whether Counsel Ignored Instruction To File Notice Of Appeal

On August 28, 2014, the Second Circuit issued a decision in Zazi v. United States, 13-2437-PR, holding that the EDNY erred in not holding a hearing on the question of whether a habeas corpus petitioner’s counsel ignored the petitioner’s instructions to file a notice of appeal.

In Zazi, the EDNY denied without hearing a petition for habeas corpus including a claim that the petitioner was “denied effective assistance of counsel by his lawyer’s failure to file a timely notice of appeal.” The Second Circuit reversed, explaining:

Our precedent holds that “a lawyer who disregards a defendant’s specific instruction to file a notice of appeal acts in a manner that is professionally unreasonable. Thus, even where, as here, a petitioner has waived his right to appeal, we have held that a claim that counsel failed to file a requested notice of appeal warrants a hearing before the district court to determine whether such a request was in fact made.

Because no such hearing was conducted here, on consent of the parties, we remand this case to the district court to conduct an evidentiary inquiry into [petitioner’s] claim that counsel was constitutionally ineffective in failing to file a requested notice of appeal, leaving the scope and nature of that hearing to the discretion of the district court.

(Internal citations omitted) (emphasis added).

Liens For Municipal Water And Sewer Charges Not Debts For the Purposes of the FDCPA

On August 27, 2014, the Second Circuit entered a decision in Boyd v. J.E. Robert Co., 12‐4422-CV, affirming a decision by the EDNY holding that water and sewer service liens were not debts for the purposes of the Fair Debt Collection Practices Act.

In Boyd, the EDNY dismissed the plaintiffs’ putative class action alleging “that defendants obtained unauthorized attorneys’ fees and costs in connection with actions to foreclose liens on plaintiffs’ properties arising out of unpaid municipal property taxes and water and sewer charges” in violation of the FDCPA, holding that the liens involved “did not involve a ‘debt’ as defined by the FDCPA.” The Second Circuit affirmed, explaining:

In order to maintain an FDCPA action, the allegedly unlawful behavior must occur in connection with collection of a “debt.” The FDCPA defines “debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5) (emphasis supplied).

We have not addressed the question of whether New York City’s mandatory water and sewer charges involve “debt” within the meaning of the FDCPA. In Beggs v. Rossi, we held that municipal taxes levied automatically in connection with ownership of personal property do not involve a “transaction” as that term is understood under the FDCPA and, accordingly, are not “debt” for purposes of the FDCPA. 145 F.3d 511, 512 (2d Cir. 1998). We now conclude that the New York City water and sewer charges also do not involve “debt” under the FDCPA. Rather, the relationship between plaintiffs and the City with respect to such charges is akin to “taxpayer and taxing authority,” and “does not encompass that type of pro tanto exchange which the statutory definition envisages.” Beggs, 145 F.3d at 512.

Like property taxes, New York City water and sewer charges are levied, in some amount, as an incident to property ownership in New York. In addition, the actions to foreclose the liens in question were instituted pursuant to New York law governing “tax liens.” Further, the city ordinance governing foreclosure of water and sewer liens requires that they be conducted “in the same manner as a lien for [] taxes.” N.Y. Pub. Auth. L. § 1045‐j(5). In light of the foregoing, the charges at issue are best treated as akin to the municipal property taxes discussed in Beggs and, accordingly, outside the scope of the FDCPA.