Weiss v. National Westminster Bank PLC
2014 U.S. App. LEXIS 18061
| 2d Cir. | 2014Background
- ~200 U.S. nationals (and estates) sued NatWest alleging liability under the Antiterrorism Act (ATA) for providing material support to Interpal, which OFAC designated an SDGT and which plaintiffs allege funneled funds to Hamas.
- NatWest maintained Interpal accounts (1994–2007), conducted biannual reviews, reported suspicious activity to U.K. authorities, and closed accounts in 2007. U.K. authorities (Charity Commission, Bank of England, Special Branch) investigated and did not treat Interpal as a terrorist organization under U.K. standards.
- OFAC designated Interpal an SDGT in 2003 and publicly stated Interpal was a principal conduit for funds to Hamas; the U.S. Treasury and later U.S. indictments alleged links between Interpal payees and Hamas-related committees.
- Plaintiffs sued under 18 U.S.C. § 2333(a) predicated on § 2339B(a)(1) (and § 2339C, though not argued here), asserting NatWest had the requisite scienter (knowledge or deliberate indifference) that Interpal provided material support to a designated FTO.
- The district court granted summary judgment for NatWest, finding plaintiffs failed to show NatWest had the scienter required (it focused on knowledge of terror financing rather than knowledge that Interpal supported a terrorist organization).
- The Second Circuit vacated and remanded, holding the district court applied too stringent a scienter standard and that triable issues exist whether NatWest knew or was deliberately indifferent to Interpal’s provision of material support to Hamas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper scienter standard for §2333(a) predicated on §2339B(a)(1) | Weiss: Plaintiffs argue district court required proof NatWest knew Interpal funded terrorist activities; statute requires only knowledge or deliberate indifference that Interpal provided material support to an FTO | NatWest: Requires awareness of terror financing or actual use of funds for violent acts to trigger liability | Held: Statute requires knowledge or deliberate indifference that the organization provided material support to a designated FTO, irrespective of whether funds funded violent acts |
| Relevance of OFAC/UK designations and foreign authorities’ conclusions | Plaintiffs: OFAC designation and related evidence create triable issue about NatWest’s scienter | NatWest: U.K. authorities cleared Interpal and their guidance justified NatWest’s conduct; foreign views undermine plaintiffs’ claims | Held: U.K. authorities’ different inquiry does not negate U.S. statutory standard; their views may be relevant but cannot defeat summary judgment when contrary U.S. evidence exists |
| Sufficiency of evidence to create a triable issue on scienter | Plaintiffs: OFAC SDGT designation, internal NatWest emails, account reviews showing payments to organizations linked to Hamas, and NatWest officials’ testimony show knowledge or deliberate indifference | NatWest: Pointed to investigations clearing Interpal and compliance steps taken; argued lack of proof of funds used for terrorism | Held: Sufficient evidence exists to create a triable issue of fact whether NatWest had requisite knowledge or demonstrated deliberate indifference |
| Extraterritorial application of ATA to conduct in the U.K. | Plaintiffs: ATA applies extraterritorially to international terrorism harming U.S. nationals | NatWest: Extraterritorial application creates conflicts with foreign law and U.K. approvals | Held: Congress intended extraterritorial reach of §2333; potential foreign-law tension does not preclude application when statutory tests are met |
Key Cases Cited
- Holder v. Humanitarian Law Project, 561 U.S. 1 (2010) (Congress required knowledge of an organization’s connection to terrorism, not specific intent to further terrorist activities)
- Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685 (7th Cir. 2008) (deliberate indifference standard: defendant who knows of a substantial probability of terrorism but does not care satisfies knowledge requirement)
- In re DDAVP Direct Purchaser Antitrust Litig., 585 F.3d 677 (2d Cir. 2009) (courts should be lenient in allowing scienter issues to survive summary judgment)
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (presumption against extraterritoriality but Congress may clearly express extraterritorial intent)
- El-Mezain, 664 F.3d 467 (5th Cir. 2011) (affirming convictions for conspiracy to provide material support to FTOs; substantial evidence of organizational control over committees cited)