Federal District Court Opinions

et al., Plaintiffs, v. THE DE DIETRICH GROUP, et al.,
Defendants. 03-CV-4058 (ILG). United States District
Court, E.D. New York. June 30, 2006

Kenneth F. McCallion, McCallion & Associates LLP, for

Jamison A. Diehl, Lance T. Lackey, Steven M. Zager, Akin
Gump Strauss Hauer & Feld LLP Houston, TX, for Defendants


LEO GLASSER, Senior District Judge

Plaintiffs are a proposed class of military servicemen or
civilian employees of United States Department of Defense
contractors who were deployed in the Persian Gulf region
during the 1991 Gulf War (“Gulf War”).[fn1] They seek
relief for damages sustained as a result of exposure to
toxic agents contained in chemical weapons developed or
otherwise obtained by the Iraq government and ultimately
detonated by the United States and its allies (“Coalition
forces”) during the Gulf War conflict. Plaintiffs assert
causes of action against two classes of defendants: the
“Supplier Defendants,” foreign corporations that allegedly
sold chemical precursors and manufacturing equipment to
Iraq that was used to develop the chemical weapons to which
plaintiffs were exposed, Page 2 and the “Bank Defendants,”
foreign corporations that acted as correspondent banks
under letters of credit issued in favor of the Supplier
Defendants to support the sale of goods and services by the
Supplier Defendants to Iraq. The Bank Defendants[fn2] have
moved to dismiss plaintiffs’ complaint pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure for failure
to state a claim upon which relief can be granted. For the
reasons that follow, the Court grants the Bank Defendants’
motion in its entirety.


This case arises out of the plaintiffs’ alleged exposure
to sarin nerve gas, mustard gas and other chemical weapons
when they were deployed in the Middle East during the Gulf
War between January 16, 1991 and April 30, 1991. Compl.
§ 2. Plaintiffs were exposed to those chemical
agents when Coalition forces blew up weapons storage
facilities in Iraq and chemical weapons were detonated.
Plaintiffs allege that Saddam Hussein used chemical weapons
against civilians in Iraq and other neighboring countries
and that, despite the widespread knowledge of Hussein’s
illegal actions, the Supplier Defendants provided him with
goods and services that enabled his regime to use chemical

Plaintiffs’ allegations against the Bank Defendants are
based on their issuance of letters of credit to the
Supplier Defendants in the 1980s. The complaint alleges
that the Page 3 Bank Defendants were aware or reasonably
should have been aware of Iraq’s use of chemical weapons
against Kurdish and other Iraqi citizens prior to the 1991
Gulf War and during Iraq’s war with Iran. Compl.
§§ 80, 87. Notwithstanding this knowledge, the
Bank Defendants allegedly issued letters of credit as
correspondent banks to the Iraq government “for the benefit
of the Supplier Defendants in connection with the sale of
goods and services used by Saddam Hussein’s regime to
produce and/or obtain chemical weapons of mass
destruction.” Compl. §§ 40-75, 87. The
complaint describes the process of issuing letters of
credit as follows: a “correspondent bank” takes steps to
ensure that the sales transaction meets the requirements of
the buyer and then pays the seller the amount due under a
letter of credit. Id. § 88. In the process of acting
as correspondent banks, the Bank Defendants would have had
to review documents pertinent to the transaction and knew
or should have known, therefore, about the parties and
goods — namely, manufacturers of chemical agents or
production equipment — involved in the transactions.
Id. Plaintiffs allege that by providing these services, the
Bank Defendants themselves violated international laws
involving restrictions on chemical weapons and enabled
Hussein’s regime to carry out extreme acts of violence.

In the complaint, plaintiffs seek compensatory and
punitive damages against the Bank Defendants under the
Anti-Terrorism Act, 18 U.S.C. § 1331 et seq., the
Geneva Convention of 1925, United Nations Security Council
Resolutions 582, 588, 596, 612 and 620,[fn3] customary
international law, and the common law torts of aiding and
abetting Page 4 tortious conduct, civil conspiracy,
negligence, and negligence per se.