## Facts

- The Society for Worldwide Interbank Financial Telecommunications (SWIFT) was an international cooperative consortium that provided secure financial-messaging services and related software to thousands of financial institutions worldwide, including many major U.S. banks and market participants.
- In the aftermath of the September 11, 2001 attacks, U.S. counterterrorism officials sought access to SWIFT’s financial-message data as part of a government effort later publicly associated with tracking terrorist financing.
- In June 2006, press reports disclosed that U.S. officials had obtained access to SWIFT’s database of financial records, including records involving many U.S. nationals and other U.S. persons.
- Ian Walker and other affected U.S. persons, including later-added co-plaintiff Stephen Kruse (collectively, plaintiffs), filed a putative class action against SWIFT in the Northern District of Illinois.
- Plaintiffs alleged that SWIFT provided U.S. authorities access to financial-transaction information without customer consent and without warrants, and that the disclosures were not properly authorized.
- Plaintiffs advanced alternative theories of SWIFT’s legal status: that SWIFT acted as an agent/instrument of the U.S. government (supporting constitutional claims) or, alternatively, functioned as part of financial-institution recordkeeping (supporting statutory claims).
- The Second Amended Complaint asserted four counts: (I) First Amendment, (II) Fourth Amendment, (III) Right to Financial Privacy Act (RFPA), and (IV) Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA).
- SWIFT moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing plaintiffs failed to plead standing (injury in fact) and failed to state claims under the First Amendment, Fourth Amendment, and RFPA.
- SWIFT also asserted an affirmative defense of immunity under the International Emergency Economic Powers Act (IEEPA), contending it acted in good faith in responding to government subpoenas.
- Plaintiffs’ complaint did not detail concrete injury beyond the alleged unlawful acquisition/disclosure of their financial transaction information, and it did not expressly plead lack of good faith, but it alleged SWIFT acted without valid legal authorization.

## Issues

1. Whether the complaint alleged enough injury and personal connection to the alleged disclosures to proceed at the pleading stage.
2. Whether plaintiffs stated a First Amendment claim based on SWIFT’s alleged disclosure of their financial-transaction information to the U.S. government.
3. Whether plaintiffs stated a Fourth Amendment claim premised on an asserted privacy interest in their financial records and SWIFT’s alleged role as a government agent.
4. Whether plaintiffs stated an RFPA claim and whether SWIFT’s asserted IEEPA good-faith immunity could be resolved on a motion to dismiss.
5. Whether plaintiffs stated an ICFA claim, including whether the alleged conduct occurred “primarily and substantially” in Illinois.

## Decision

- SWIFT’s Rule 12(b)(6) motion was granted in part and denied in part.
- Count I (First Amendment) was dismissed with prejudice for failure to state a legally cognizable First Amendment theory on the alleged disclosure of financial records.
- Count II (Fourth Amendment) survived the motion to dismiss and could proceed as pleaded.
- Count III (RFPA) survived the motion to dismiss and could proceed as pleaded.
- Count IV (ICFA) was dismissed without prejudice because the alleged conduct did not have a sufficient Illinois connection; plaintiffs were granted leave to file a Third Amended Complaint to attempt to cure the pleading defects and to refile the remaining counts in a renumbered format.
- The court did not resolve SWIFT’s asserted IEEPA good-faith immunity defense at the pleading stage for the surviving counts.

## Legal Principles

- On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and draws reasonable inferences in the plaintiff’s favor; dismissal is appropriate when the complaint fails to state a claim on which relief can be granted.
- At the pleading stage, a plaintiff must allege enough facts to support standing, including an injury in fact fairly traceable to the defendant’s conduct, but detailed proof is not required in the complaint.
- A First Amendment claim requires a recognized First Amendment interest and a plausible burden on protected speech or association; the court rejected plaintiffs’ attempt to base a First Amendment claim on disclosure of routine financial transaction information.
- A Fourth Amendment claim may proceed past the pleading stage where plaintiffs plausibly allege the government obtained their information through a private party acting as a government instrument or agent, and the pleadings do not foreclose a reasonable expectation-of-privacy theory as a matter of law.
- Under the RFPA, government access to a customer’s financial records is restricted and is generally subject to statutory procedures; whether a defendant’s conduct falls within RFPA coverage and whether a statutory immunity applies can require factual development.
- Statutory good-faith immunity (including asserted IEEPA immunity) is commonly treated as an affirmative defense and is not typically resolved on a motion to dismiss unless established on the face of the complaint.
- An ICFA claim requires, among other elements, that the challenged conduct occur primarily and substantially in Illinois; an Illinois resident plaintiff, without more Illinois-based conduct, may be insufficient.

## Conclusion

In *Walker v. S.W.I.F.T. SCRL*, the Northern District of Illinois partially granted SWIFT’s motion to dismiss a Second Amended Complaint challenging SWIFT’s alleged cooperation with U.S. counterterrorism access to financial messaging data: the court dismissed the First Amendment claim with prejudice, allowed the Fourth Amendment and RFPA claims to proceed beyond the pleadings, and dismissed the Illinois consumer-fraud claim without prejudice for lack of a sufficient Illinois connection while granting leave to amend.


Walker v. S.W.I.F.T. SCRL, 491 F. Supp. 2d 781 (2007)