IED Injury Lawsuit | 2026 Latest Updates

U.S. service members and civilian contractors were killed or wounded by improvised explosive devices and explosively formed penetrators in Iraq. Some attacks are alleged to have been financed through foreign banks tied to Iranian-backed militant groups.

Surviving service members, contractors, and relatives of those killed pursued an Antiterrorism Act lawsuit against the banks. A default judgment was entered against one bank, while the original theory against the other banks was dismissed and later affirmed on appeal.

A renewed motion to dismiss a further amended complaint is now pending. A separate federal fund keeps paying eligible terrorism victims each year. Anyone hurt or bereaved this way should get an individual legal review of which path fits.

Latest IED Injury Lawsuit Updates

January 7, 2026: USVSST Fund Announces Its Largest Distribution

The Justice Department announced that the USVSST Fund‘s Special Master authorized a sixth-round distribution of $2.825 billion to nearly 22,000 eligible claimants of state-sponsored terrorism [1]. It was the largest single distribution in the Fund’s history.

The distribution brought total USVSST Fund payments since the program began to more than $10 billion for thousands of victims and families. A denied claimant can request a hearing within 30 days and gets a decision within 90 days.

July 16, 2025: Banks File Renewed Motion to Dismiss

Defendants in Freeman v. HSBC Holdings PLC filed a renewed motion to dismiss the third amended complaint in the Eastern District of New York, fully briefed as of this date (docket details in the box above).

The case remains open only for claims the court had not already dismissed. The original bank-conspiracy theory did not survive a related appeal at the Second Circuit, and Bank Saderat’s 2021 default judgment is separate from this motion.

March 25, 2025: DOJ Announces Sixth-Round Distribution Plans

The Fund’s Special Master announced the Justice Department would authorize sixth-round USVSST Fund payments of at least $2 billion by January 1, 2026 [2]. The funds come partly from the terminated Beirut barracks and Khobar Towers reserve fund.

New claimants had until June 1, 2025 to apply, while claimants already approved in the Fund’s first five distribution rounds remained eligible without filing again. The Fund had paid more than $7 billion in those five rounds combined.

February 26, 2025: Court Orders a Third Amended Complaint

The same court granted the banks’ motion to quash and denied plaintiffs’ request to file an unredacted second amended complaint. It instead ordered a third amended complaint that omits allegations based on the discovery materials at issue.

It set deadlines. The amended complaint was due March 28, 2025, a motion to dismiss by April 28, opposition by May 28, and any reply by June 11. It did not decide the surviving claims’ merits.

January 7, 2021: Default Judgment Granted Against Bank Saderat

The court granted default judgment against Bank Saderat PLC on JASTA aiding-and-abetting claims. The bank never appeared or defended itself in the case, unlike the other bank defendants, which had filed motions to dismiss.

The court set a damages inquest for April 7, 2021, but the public docket does not report a figure from that inquest. Saderat has not since taken part in the litigation.

June 5, 2020: Court Dismisses Most Claims Against the Banks

The court granted the banks’ motion to dismiss ten of the twelve claims in Freeman II and Bowman for failing to state a claim. It dismissed the Commerzbank claim separately for lack of personal jurisdiction.

It also directed plaintiffs to seek a certificate of default against Bank Saderat PLC within seven days, since Saderat had never appeared in the case, setting up its later default judgment.

December 26, 2018: Veterans and Families File Freeman V. HSBC

Twenty named veterans, contractors, and families of those killed filed Freeman v. HSBC Holdings PLC before that same federal court in Brooklyn, naming HSBC and several other foreign banks as defendants.

The complaint alleged that the banks helped finance the militant groups behind the IED and EFP attacks that killed or wounded the plaintiffs in Iraq. Additional plaintiffs joined through later amendments.

What Is an IED?

An improvised explosive device, or IED, is a homemade bomb built to destroy, incapacitate, harass, or distract, the Department of Homeland Security says [3]. The term became common during the Iraq War that began in 2003.

This page covers the litigation and compensation options tied to IED and EFP attacks on U.S. service members and contractors in Iraq. It does not explain how such devices are engineered.

Who May Be Affected?

Two different paths may apply, and they are not the same claim. A person may have a role in the ATA lawsuit if a service member, veteran, or contractor was hurt by an IED or EFP attack in Iraq.

Family members or an estate can step in as plaintiffs when the person died. A different path runs through the federal USVSST Fund instead of any lawsuit.

Under its statute, an eligible claimant is a U.S. person, or that person’s estate or survivors, who already holds a final judgment against a state sponsor of terrorism arising from an act of international terrorism [4].

Matching the ATA-lawsuit or USVSST Fund criteria above does not decide the outcome by itself. An individual legal review can help sort out which path, if any, applies.

Reported Injuries or Damages

The complaints describe service members and contractors killed or wounded in IED and EFP attacks in Iraq between roughly 2003 and 2011. The people bringing claims include those hurt directly, and survivors and estates acting for those killed.

The Department of Homeland Security describes IEDs generally as capable of causing massive damage and loss of life, and the complaints allege that pattern played out in each attack at issue.

An allegation in a complaint is not proof that a named bank financed the specific attack that caused a plaintiff’s injury or death. That link is what the litigation is meant to test.

Evidence to Preserve

Both the ATA lawsuit and a USVSST Fund application depend on documented proof, so it helps to gather and keep the following:

• Military service and deployment records showing where and when the person served
• After-action, incident, or casualty reports naming the specific IED or EFP attack
• Medical records, VA disability findings, or a death certificate tied to the attack
• Any prior correspondence with the USVSST Fund, including an award letter or application receipt
• Records of any other compensation already received for the same attack

Keeping these organized before contacting a lawyer or applying to the Fund can shorten the review. It also lowers the chance a real claim is turned down for missing paperwork.

Filing Deadlines

Two separate clocks apply here, and missing either one can end that path even with strong facts. A civil claim under the Antiterrorism Act (18 U.S.C. 2335) [5] runs on its own separate schedule.

It generally must be filed within 10 years of when it accrued, though the clock pauses while a defendant hides abroad.

A USVSST Fund application instead starts from a final judgment, generally due within 90 days after it, though specific rounds set other windows. Check with a lawyer promptly rather than assume a deadline has passed.

Potential Compensation

An Antiterrorism Act claim (18 U.S.C. 2333) lets a U.S. national hurt by international terrorism, or their estate, survivors, or heirs, seek treble damages, the suit’s cost, and attorney’s fees [6].

The USVSST Fund pays a share set by its own formula, separate from any lawsuit, through the sixth-round distribution described above.

Bank Saderat PLC was found liable by default on some claims after never appearing, though the docket lists no damages figure.

Compensation amounts vary by case. Past results do not guarantee future outcomes. The ATA claim and USVSST Fund remain separate potential compensation paths.

Frequently Asked Questions

What Is an EFP?

An EFP, or explosively formed penetrator, is a powerful roadside bomb that U.S. military officials have said Iran supplied to Iraqi militia groups. It can pierce an M1 Abrams tank, the U.S. military’s most heavily armored land vehicle.

Did the IED Injury Lawsuit’s Appeal Reach the Supreme Court?

Yes, the IED injury lawsuit’s appeal did reach the Supreme Court. Freeman I, docket 19-3970 in the Second Circuit, challenged the scope of JASTA conspiracy liability and ended when the Supreme Court denied certiorari, leaving that ruling in place. Freeman v. HSBC Holdings PLC proceeds on its own docket.

Can Family Members File a Claim If a Service Member Died?

Yes, family members can file if a service member or contractor died in one of these attacks. The Antiterrorism Act lets an estate, survivors, or heirs sue on the victim’s behalf, and several children already appear as named plaintiffs through a guardian.

Do I Need a Lawyer to Apply to the USVSST Fund?

No, a lawyer is not required to apply to the USVSST Fund. Its procedures let an eligible person apply directly or through an attorney, and the law caps an attorney’s fee at 15 to 25 percent of any payment made.

Does Other Compensation Affect a USVSST Fund Payment?

Yes, other compensation can affect a USVSST Fund payment. Under the Fund’s own law, an applicant who already received 30% or more of their judgment from another source must wait. Other eligible claimants reach that same 30% share first before this applicant receives more.

Has This Litigation Been Consolidated into an MDL?

No, this litigation has not been consolidated into a multidistrict litigation. The federal judicial panel’s most recent pending-cases list shows only one terrorism-related MDL, covering the September 11, 2001 attacks, unrelated to the bank case here.

References

1. https://www.justice.gov/opa/pr/justice-department-announces-largest-distribution-over-28-billion-compensate-victims-state
2. https://www.justice.gov/opa/pr/justice-department-announces-anticipated-distribution-least-2b-victims-state-sponsored
3. https://www.dhs.gov/xlibrary/assets/prep_ied_fact_sheet.pdf
4. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title34-section20144&num=0&edition=prelim
5. https://www.govinfo.gov/content/pkg/USCODE-2021-title18/html/USCODE-2021-title18-partI-chap113B-sec2335.htm
6. https://www.govinfo.gov/content/pkg/USCODE-2021-title18/html/USCODE-2021-title18-partI-chap113B-sec2333.htm