Linde v. Arab Bank, PLC
97 F. Supp. 3d 287
E.D.N.Y2015Background
- Plaintiffs (American victims and relatives) sued Arab Bank under the Anti-Terrorism Act (18 U.S.C. § 2333/§ 2339B) alleging the Bank knowingly provided financial services to Hamas leaders, Hamas-controlled charities, and the Saudi Committee, facilitating 24 terrorist attacks during the Second Intifada (2000–2005).
- After prolonged discovery disputes, Judge Gershon imposed sanctions for Arab Bank’s failure to produce account records in Lebanon and the Palestinian Territories: (1) a permissive adverse-inference instruction and (2) preclusion of arguments about state of mind that the withheld records would have proved or refuted.
- Six-week jury trial produced a verdict for plaintiffs; Arab Bank moved under Rule 50 (JMOL), Rule 59 (new trial), and sought 1292(b) certification. The court grants Rule 50 in part (as to two specific attacks) and denies the remainder of post-trial relief.
- Key factual proofs: SWIFT records and other transfers routed through Arab Bank New York; witness testimony (experts on Hamas, former Israeli intelligence, forensic accounting); documentary and video evidence (Hamas website claims of responsibility, video wills, Israeli lists, FinCEN assessment for impeachment); testimony from former Arab Bank employees that undermined an “OFAC-only” defense.
- Core legal disputes: whether providing financial services can be an “act of international terrorism”; causation standard under the ATA (whether but‑for causation is required); the scienter required for liability; scope and effect of the sanctions/preclusion orders; admissibility/authentication of Hamas claims, websites, and videos.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether providing financial services can be an “act of international terrorism” under the ATA | Financial support (including banking services) constitutes material support and is an act dangerous to human life; §2339B violations qualify as terrorism | Wire transfers are non-violent and cannot qualify absent an additional violent act; material support is different from direct violence | Court: Providing material support (including banking services) can be an act of international terrorism under the ATA; §2339B knowledge elements control |
| Causation standard under §2333 (proximate vs. but‑for) | Plaintiffs: proximate causation/substantial-factor standard fits ATA; but‑for tracing of specific dollars to attacks is impossible and would nullify the statute | Defendant: ATA requires both proximate and but‑for causation (trace specific dollars); recent Supreme Court decisions (Nassar, Burrage) support stricter causation | Court: Rejects a but‑for requirement; applies proximate/substantial-factor causation (but excludes two attacks for insufficient attribution) |
| Scienter required for liability under §2339B/§2333 | Plaintiffs: liability requires knowing provision of material support or deliberate indifference (aware of substantial probability) | Defendant: requires an ‘‘evil motive’’ or intent to harm; or higher mens rea tied to senior officers only | Court: Adopts knowledge/deliberate-indifference standard (knowledge that support went to terrorist organization is sufficient); Weiss supports incorporation of §2339B mens rea into §2333 |
| Effect and fairness of sanctions and preclusion (failure to produce records) | Sanctions remedied prejudice from withheld records (permissive inference + limited preclusion), but plaintiffs still bore burden of proof | Sanctions were overbroad and prejudicial; Solicitor General brief and foreign-comity concerns require reconsideration | Court: Sanctions valid and appropriately applied; permissive inference had limited effect given trial evidence; Solicitor General’s views not dispositive; no reconsideration warranted |
Key Cases Cited
- Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685 (7th Cir. 2008) (material support to terrorists is an act “dangerous to human life”; reasoning on secondary liability and causation)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (discussion of proximate causation in ATA-related context; court distinguishes but‑for requirement)
- In re Terrorist Attacks on Sept. 11, 2001 (Al Rajhi Bank), 714 F.3d 118 (2d Cir. 2013) (causation analysis under ATA incorporations; addressed proximate cause)
- Weiss v. Nat’l Westminster Bank PLC, 768 F.3d 202 (2d Cir. 2014) (incorporation of §2339B scienter into §2333; plaintiffs must show defendant knew it was providing material support to an entity engaged in terrorism)
- Holder v. Humanitarian Law Project, 561 U.S. 1 (2010) (Congress’s rationale that contributions to terrorist organizations facilitate criminal conduct; funds fungibility)
- Burrage v. United States, 134 S. Ct. 881 (2014) (Supreme Court on but‑for causation in criminal sentencing context — distinguished here)
- Univ. of Texas Southwestern Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2013) (Supreme Court on causation in employment retaliation context — distinguished here)
- Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258 (1992) (discussion of proximate vs. but‑for causation in statutory tort contexts; cited for causal analysis framework)