372 F. Supp. 3d 33
E.D.N.Y2019Background
- Plaintiffs (mostly U.S. nationals or relatives of U.S. nationals) allege Arab Bank provided financial services that supported terrorist attacks during the Second Intifada (circa 2000–2004), including maintaining accounts, processing transfers, and administering a "terrorist insurance" scheme that paid families of "martyrs."
- Complaints allege millions of dollars moved through Arab Bank (including its New York branch) for Hamas-affiliated entities and the Saudi Committee; Arab Bank allegedly received beneficiary lists specifying violent causes of death (e.g., "Martyr Operation").
- FinCEN and regulators investigated and reported Arab Bank failed to implement adequate compliance and did not investigate transfers to entities later designated as terrorist organizations.
- Plaintiffs assert primary and secondary liability under the Anti-Terrorism Act (ATA), seeking damages; Arab Bank moved to dismiss for lack of personal jurisdiction and failure to state a claim.
- Court dismissed six non-U.S. plaintiffs whose claimed relationship to a surviving U.S. national did not fall within the ATA; otherwise it found standing for the U.S. plaintiffs.
- Court denied (or denied in large part) jurisdictional and 12(b)(6) challenges: exercised specific personal jurisdiction based on use of its New York branch and denied dismissal on the merits because plaintiffs plausibly alleged Arab Bank's conduct satisfied ATA elements (international terrorism, proximate causation, and aiding-and-abetting).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under ATA | U.S. plaintiffs and relatives suffered physical/emotional injury from attacks caused by terrorists supported by Arab Bank | Some plaintiffs are non-U.S. relatives of a surviving U.S. victim and thus lack an ATA cause of action | U.S. plaintiffs and qualifying relatives have standing; six non-U.S. relatives of a survivor dismissed |
| Personal jurisdiction | Arab Bank deliberately used its NY branch to clear dollar transactions tied to Hamas and the Insurance Scheme, creating substantial connection to NY | Arab Bank not "essentially at home" in NY; attacks and many transfers occurred abroad | Specific jurisdiction exists: NY branch use (processing/conversion/transfers) establishes prima facie jurisdiction over ATA claims |
| Primary liability under ATA (international terrorism) | Arab Bank's administration of the Insurance Scheme and account/transfers materially increased terrorist capacity and incentivized violence | Services were routine banking/automated and do not alone constitute international terrorism | Complaint plausibly alleges acts dangerous to human life and state of mind (knowledge or deliberate indifference); not resolved on 12(b)(6) motion |
| Secondary liability (aiding and abetting) | Arab Bank knowingly and substantially assisted Hamas and related entities over time (lists, payments, accounts) | Bank provided routine/humanitarian banking services; lacked specific knowledge of attacks | Allegations suffice to plausibly plead general awareness and substantial assistance under Halberstam factors; survives dismissal |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. 2016) (standing requires injury in fact fairly traceable to defendant and redressable)
- Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (U.S. 2018) (foreign sovereign/foreign corporate constraints on ATA remedial reach)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (fairly traceable standard and proximate-cause discussion in ATA context)
- Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013) (use of NY banking system can establish specific jurisdiction)
- Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir. 2018) (routine banking services vs. knowing support; standards for primary and secondary ATA liability)
- Boim v. Holy Land Foundation for Relief & Dev., 549 F.3d 685 (7th Cir. 2008) (financial support to terrorists can foreseeably enable violent acts; deliberate indifference doctrine)
- Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983) (factors for aiding-and-abetting liability)
- Paroline v. United States, 572 U.S. 434 (U.S. 2014) (causation principles when many wrongdoers contribute to harm)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard on motions to dismiss)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (Iqbal/Twombly pleading standard)
- Daimler AG v. Bauman, 571 U.S. 117 (U.S. 2014) (general jurisdiction requires defendant be "essentially at home" in forum)