Linde v. Arab Bank, PLC
882 F.3d 314
| 2d Cir. | 2018Background
- Sixteen named plaintiffs (U.S. nationals or relatives) sued Arab Bank for injuries from three Hamas attacks in Israel (2002–2003), alleging the bank’s financial services to Hamas and affiliated charities constituted liability under the Antiterrorism Act (ATA), 18 U.S.C. § 2333.
- Plaintiffs pursued a theory that Arab Bank’s provision of financial services itself was an "act of international terrorism" under the ATA; aiding-and-abetting theories were not available at trial because JASTA had not yet been enacted.
- Pretrial discovery sanctions prohibited Arab Bank from using or offering documents it withheld based on foreign bank-secrecy laws and allowed a permissive inference that the bank knowingly provided services to terrorists.
- After a six-week trial, the jury found Arab Bank liable for multiple attacks; parties stipulated to a $100,000,000 Rule 54(b) judgment and a settlement that waived retrial if the judgment were vacated on appeal.
- On appeal, Arab Bank challenged (1) the court’s jury instruction equating a § 2339B material-support violation with an "act of international terrorism," (2) the discovery sanctions, and (3) sufficiency of causation proof; the Second Circuit found instructional error requiring vacatur and remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether proof of a § 2339B material-support violation is, as a matter of law, an "act of international terrorism" under § 2331(1) | Linde: § 2339B violation can satisfy ATA's terrorism definition and the jury properly could treat it as such | Arab Bank: § 2331(1) has separate elements (violence/endangering life; apparent intent to intimidate/coerce or influence government; transnational character) that § 2339B alone does not necessarily satisfy | Reversed: charging error — jury must be instructed to find all § 2331(1) requirements; equating § 2339B violation alone to an act of international terrorism was prejudicial error requiring vacatur and remand |
| Whether discovery sanctions deprived Arab Bank of a fair trial | Linde: sanctions were within court's discretion and supported by discovery refusals | Arab Bank: sanctions (permissive inference; exclusion of withheld documents) were unjustified and prejudicial | Not decided: circuit remanded on instructional error; settlement obviated need to resolve sanctions question on appeal |
| Whether causation standard (proximate vs. but-for) required reversal for insufficient evidence | Linde: proximate causation was properly charged and supported by evidence | Arab Bank: ATA requires but-for causation; evidence insufficient under either standard | Not reversed on sufficiency grounds: court declined to resolve causation standard because JASTA permits aiding-and-abetting theory and the Hamas perpetrators indisputably caused the injuries |
| Effect of JASTA (post-trial) expanding ATA to aiders and abettors | Linde: JASTA supports plaintiffs’ alternative claim and could render error harmless | Arab Bank: JASTA cannot cure the principal-liability instructional error on this record; aiding-and-abetting requires separate Halberstam factors and jury findings | Court: Plaintiffs may invoke JASTA on remand, but aiding-and-abetting liability is not established as a matter of law; remand required for proper instruction/factfinding |
Key Cases Cited
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (statutory silence bars secondary ATA liability pre-JASTA)
- In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 118 (2d Cir. 2013) (routine banking services do not necessarily establish causation)
- Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685 (7th Cir. 2008) (jury may find donations enabled violence and satisfy § 2331(1) in some circumstances)
- Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983) (civil aiding-and-abetting framework and substantial-assistance factors)
- Holder v. Humanitarian Law Project, 561 U.S. 1 (2010) (mens rea for material-support statutes requires knowledge of organization’s terrorist connection)
- Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50 (2d Cir. 2012) (discussion of § 2331(1) definitional requirements)