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Family of American killed in plane's downing sued bank

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Sberbank claimed sovereign immunity in case

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State-owned lender allegedly linked to separatist group

By Jonathan Stempel

Oct 6 (Reuters) - The U.S. Supreme Court declined on

Monday to hear a bid by Sberbank, Russia's largest bank, to

avoid a lawsuit brought under an American anti-terrorism law

alleging that it did business with a group blamed for downing a

Malaysia Airlines jetliner over Ukraine in 2014.

The justices turned away Sberbank's appeal of a lower

court's ruling letting the family of Quinn Schansman, an

18-year-old American passenger who was killed in the crash, sue

the state-controlled lender.

Schansman's family sued under the Anti-Terrorism Act, which

lets U.S. nationals injured by an "act of international

terrorism" seek damages in private civil lawsuits.

In February, the New York-based 2nd U.S. Circuit Court of

Appeals decided that Sberbank was not entitled to sovereign

immunity against claims it used the U.S. banking system to

funnel donor money to Donetsk People's Republic, or DPR, a

Russia-backed separatist group.

Malaysia Airlines Flight MH17 to Kuala Lumpur from Amsterdam

was shot down by a surface-to-air missile on July 17, 2014, over

DPR-controlled territory in eastern Ukraine.

All 298 people on board were killed including Schansman, who

was traveling for a planned family vacation.

The Russian government has denied involvement. Ukraine had

previously declared the DPR a terrorist organization, and the

United States had imposed sanctions on the group.

Russia's Ministry of Finance acquired a majority stake in

Sberbank in 2020.

Sberbank said it deserved a presumption of immunity as a

"foreign state" under the Foreign Sovereign Immunities Act.

It said the 2nd Circuit erred by finding it engaged in

commercial activity, triggering an exception to immunity.

The bank called that outcome "especially problematic in an

increasingly fraught diplomatic environment" in which the United

States and other countries that are "not commonly considered to

be the proverbial 'black hats' nevertheless support non-state

actors."

Sberbank said allowing lawsuits such as the one by the

Schansman family could provoke retaliation by other countries,

and even expose the United States to liability under the

Anti-Terrorism Act for activities by "militant groups" it

supports.

In asking the Supreme Court to reject the appeal, lawyers

for the Schansmans said there was no confusion among lower

courts about the scope of the commercial activity exception.

They also said Sberbank was not a "foreign state" under the

Anti-Terrorism Act to begin with.