Judge dismisses $1B UNRWA lawsuit, rejecting Trump DOJ's immunity reversal

In April 2025, the Trump administration reversed the Biden-era position. AG Pam Bondi's Justice Department filed a new brief arguing UNRWA "is not immune from this litigation" and that the agency bore responsibility for "heinous offenses" on October 7. The DOJ also argued that UNRWA may not legally qualify as a UN subsidiary organ because it was established by a General Assembly resolution, not a Security Council action, and the General Assembly may have lacked authority to create it. Judge Torres ultimately rejected that framing.

The reversal was the first time the U.S. government formally argued in federal court that a UN subsidiary organ lacked IOIA immunity. The Trump DOJ's position reflected broader pressure on UNRWA, building on Congress's March 2024 decision to ban U.S. contributions to the agency.

U.S. District Judge Analisa Torres, appointed by President Barack Obama, ruled on October 3, 2025, that UNRWA retains immunity under IOIA. Torres's order found that "UNRWA is a subsidiary organ of the United Nations and has not waived its immunity" and dismissed the case for lack of subject matter jurisdiction. She did not evaluate whether UNRWA actually diverted funds to Hamas or helped plan the attack.

Plaintiffs' attorney Gavriel Mairone said Torres "totally misinterpreted the most important argument that we made" and announced plans to appeal to the Second Circuit Court of Appeals. AG Bondi's DOJ had filed the April 2025 brief arguing against immunity. Torres's ruling rejected that interpretation and sided effectively with the Biden-era legal position.

When a court dismisses a case on jurisdictional grounds, it decides only whether it has legal authority to hear the case, not whether the underlying allegations are true. Torres's ruling meant the plaintiffs received no verdict on whether UNRWA actually diverted funds to Hamas.

Federal courts interpret IOIA independently. They give executive branch legal arguments serious weight but aren't bound by them. The Second Circuit will decide whether UNRWA's status as a UN subsidiary organ triggers immunity under a statute Congress passed in 1945.

In January 2024, the Israeli government accused 12 UNRWA staff members of involvement in the October 7 attack. Commissioner-General Philippe Lazzarini immediately terminated 10 of those employees; 2 others were confirmed dead. The accusations triggered an immediate funding crisis: the United States, European Union member states, and Canada paused contributions to UNRWA within days of the allegations becoming public.

Congress enacted a formal UNRWA funding prohibition in March 2024, under Division G, Section 301 of P.L. 118-47, barring any U.S. funds from reaching UNRWA through March 25, 2025. The United States had historically been UNRWA's largest single donor, providing nearly 30% of the agency's donor contributions in 2023 and more than $7.3 billion in total since 1950.

The UN Office of Internal Oversight Services investigated all 19 UNRWA employees alleged by Israel to have participated in October 7. In August 2024, OIOS published its findings: nine staff members "may have been involved" in the attacks, and Commissioner-General Lazzarini terminated all nine. In nine other cases the evidence was insufficient to support the allegations, and in one case there was no evidence of involvement.

OIOS noted it couldn't independently authenticate most of the Israeli evidence because Israel retained custody of the underlying materials. Israel argued that far more than 19 of UNRWA's more than 30,000 employees had ties to Hamas. UNRWA said more than 200 of its staff members died during the conflict in Gaza after October 7.

Sen. Ted Cruz (R-TX) and Sen. Rick Scott (R-FL) introduced the Limiting Immunity for Assisting Backers of Lethal Extremism (LIABLE) Act in March 2024 and reintroduced it in April 2025. The bill would amend the IOIA to remove immunity from international organizations that provide material support to designated terrorist groups. If passed, it would let courts hear suits like Estate of Tamar Kedem Simon Tov v. UNRWA on the merits.

Judge Torres applied the IOIA as written. Only Congress can change the statute. The LIABLE Act is the only pending legislation that would alter the immunity framework Torres applied. It hadn't advanced out of committee as of May 2026.