On June 18, 2010, Daniels outlined the contours of the in pari delicto doctrine in New York, holding in SEC v. Lee, 720 F. Supp.
Furthermore, under New York law, the doctrine of in pari delicto may be subject to the "adverse interest" exception, which applies when an agent is defrauding the principal exclusively for the agent's own benefit and to the detriment of the corporation.... Another exception to the in pari delicto defense is the "innocent insider" exception, which provides that if there is another agent within the corporation who had no knowledge of the fraud, and who had the will and the ability to stop the fraud had it come to his or her attention, the in pari delicto defense will fail...[7]On March 9, 2016, Daniels issued a default judgment against Iran, ordering it to pay $7.5 billion in damages to families of victims who died in the September 11, 2001 attacks, as well as $3 billion to insurers such as Chubb Limited that paid out claims resulting from the event.
The plaintiffs in the case argued that Iran "provided material support" and training to al Qaeda members, including 9/11 hijackers, through Hezbollah prior to the attacks and was therefore liable.
Earlier in 2015, Daniels had ruled that Saudi Arabia had sovereign immunity and dismissed all charges against the kingdom for its alleged role in the attacks.
On September 13, 2019, the United States Court of Appeals for the Second Circuit vacated and remanded Judge Daniels's decision.