By: Aaron D. Simowitz*
Abstract
When we think of the law of terrorism, we think of the state and the terrorists. We think of the many steps that states take to detect, deter, and destroy terrorist groups. But that frame captures only a small piece of the overall picture of terrorism regulation. Regulation directed at and shaped by terrorism policy has inserted itself into many facets of private life. These interventions distort private law in predictable ways. These interventions are always presented as exceptions: terrorism is different, so they say. But these exceptions are generative. Terrorism has become the testing ground for new and different ideas about how to regulate private conduct—ideas that have a tendency to spread beyond the borders of terror policy.
This Article examines disparate areas of U.S. law, each of which has been shaped by terror regulation. In tort, civil procedure, and banking, terror regulation has distorted the background principles guiding the intervention of law in private conduct. In tort law, terror regulation has led to a profound loosening of causation requirements, based on import of concepts from criminal law into civil liability. In civil procedure, federal statutes have expanded the power of courts to hear private terror suits and curbed the discretion of courts to stay or dismiss them. In banking law, terror regulation has led to a dramatic expansion of know-your-customer laws, as well as a persistent private litigation against multi-national banks.
Terror regulation shapes each of these bodies of law in similar and predictable ways. The state feels justified in inserting itself into private relationships more forcefully than in any other area of regulation. Protections owed to defendants are loosened, as are limitations on the power of courts. These innovations do not remain comfortably at home in the law of terrorism. They spread into other areas of private law once they have been broached in the private law of terrorism.
The private law of terror is likely to follow a different path than the public law of terror, however. In public law, terrorism legislation has displayed a “one-way ratchet” effect, making areas like criminal, immigration, and sanctions law consistently more punitive. In private law, powerful and well-organized interests, like banks and other financial intermediaries, are able to push back. Their intervention creates a different problem in private law—the rise of legislation that targets a single defendant or even a single lawsuit, like the Iran Threat Reduction Act or the recently passed Promoting Security and Justice For Victims of Terrorism Act. These laws undermine rule of law values, even if they target legitimate policy goals.
*Assistant Professor, Willamette University College of Law; Director, The Business Lawyering Institute at Willamette University; Affiliated Scholar, The Classical Liberal Institute at NYU School of Law. I owe great thanks to Pamela Bookman, John Coyle, Jeff Dobbins, Bill Dodge, Maggie Gardner, Andrew Gilden, Maryam Jamshidi, Chimène Keitner, Alyssa King, Karen Sandrik, Linda Silberman, Shirin Sinnar, Symeon Symeonides, and to all the participants in the Pacific Northwest Junior Scholars’ Workshop, the Brooklyn Law School Business Law Scholar’s Roundtable, the Rocky Mountain Junior Scholars’ Conference, the Northwestern Pritzker School of Law Civil Procedure Workshop, the annual Conference for Northern California International Law Scholars, and the American Association of Law Schools Annual Conference’s panel on “Changing Concepts of International Economic Security & the Law.” I am deeply grateful to Mary Rumsey and Andie Harrison-Doherty for outstanding research assistance.