MEMORANDUM OPINION AND ORDER
Table of Contents
INTRODUCTION.. to to 00
EVIDENCE AT TRIAL. to to to
I. Plaintiffs’ Case.299
II. Defendant’s Case.305
STANDARD OF REVIEW.310
DISCUSSION.310
A. Bаckground.'. B. The Effect of the Permissive Inference. H 00 r-4 v — ( CO OO
C. The Effect of the Preclusion Order-U5 r-f CO
D. The Solicitor General’s Certiorari Brief OO ¶ — ( CO
II. “Act of International Terrorism” . OO to CO
III. Causation . CO to CO
A. Governing Law.'. OO to
B. Jury Charge. CO OO
C. Sufficiency of the Evidence. 00 to OO
IV. Attribution to Hamas. o CO CO
V. Scienter. CO CO
VI. Respondeat Superior. lO CO CO
VII. Evidentiary Rulings. CO CO
A. Authentication Generally. CCO CO
B. Declarations Against Interest. OO CO CO
C. Foreign Law . CO ^ CO
D. Israeli List of Unlawful Associations and Terrorist Organizations ^ ^ CO
E. FinCEN Assessment-lo ^ CO
F. Saudi Committee Experts <D ^ CO
VIII. Trial Structure. OO CO
IX. Defendant’s 1292(b) Motion ... CO cn ©
CONCLUSION .. © LO CO
INTRODUCTION
This case involves claims brought under the civil liability provisions of the Anti-Terrorism Act (“ATA”), 18 U.S.C. § 2383(a) et seq., against defendant Arab Bank, PLC. Plaintiffs are American citizens who were the victims, or relatives of victims, of 24 terrorist attacks in Israel and the Palestinian Territories. After a lengthy trial, a jury found that those attacks were perpetrated by the Palestinian terrorist group Harakat al-Muqawama al-Islamiya (“Hamas”) during the Second Intifada, a time of great violence between 2000 and 2005.
Before me is defendant’s timely motion for judgment as a matter of law under Federal Rule of Civil Procedure 50. In the alternative, defendant has moved for a new trial under Rule 59 and for certification of an interlocutory appeal pursuant to 28 U.S.C. § 1292(b).
EVIDENCE AT TRIAL
Much of the evidence that was introduced at trial had been previewed in detail in numerous pretrial rulings in this decade-old litigation. See, e.g., Linde v. Arab Bank, PLC,
I. Plaintiffs’ Case
Plaintiffs first called Evan Kohlmann, an international terrorism consultant, principally to determine whether' or not Ha-mas — “a terrorist organization that was founded in approximately December of 1987” — had ever issued claims of responsibility for the 24 terrorist attacks at issue in this ease. Mr. Kohlmann is an expert in international terrorism specializing in terrorist communications and previously has been so qualified in domestic and foreign cases. He has given similar testimony in criminal prosecutions. See United States v. Ali No. 10-cr-187,
As part of his testimony, Mr. Kohlmann authenticated two websites as sources of Hamas communications: Palestine-info. com and alqassam.ps. He explained that the first website represents the political wing of Hamas, and the second is the website for Hamas’ military wing. Mr. Kohlmann described the factors, which were “both extrinsic as well as intrinsic,” that led him to conclude that these were Hamas websites. He testified that those factors included: the reliance by the United States and other governments on the webpages as authentic sources of Hamas communications; the language and facts used in postings;. the posting of exclusive interviews with Hamas leaders and nonpublic details of their lives; and the fact that the websites contained official Hamas seals and watermarks.
Mr. Kohlmann identified Osama Ham-dan as a senior Hamas spokesman and an account holder at Arab Bank in Lebanon. The latter was based on an authentication of Hamdan’s passport, which was filed in connection with Hamdan’s obtaining an Arab Bank account, and which was received in evidence. In connection with this testimony, Mr. Kohlmann authenticated certain bank transfer (“SWIFT”) records processed through Arab Bank for Ham-dan’s account, and in which the beneficiary of the transfer was listed as “Harakat al Muqawamah al Islamiyah Hamas.” Through Mr. Kohlmann, plaintiffs introduced a CNN interview with Hamdan, in which Hamdan claimed responsibility for the March 27, 2002 Park Hotel bombing on behalf of Hamas.
During cross-examination, Mr. Kohl-mann conceded that with respect the January 29, 2004 suicide bombing on Bus No. 19 (discussed further below), another terrorist organization, the Al-Aqsa Martyrs Brigade (“AAMB”), along with Hamas, issued a claim of responsibility for the attack. In addition, defendant pointed out the lack of corroboration for some of Ha-mas’ claims of responsibility and Mr. Kohlmann acknowledged that Hamas has motives to lie about such claims for propaganda purposes. Ultimately, however, this did not change. Mr. Kohlmann’s conclusion that Hamas claimed responsibility for each of the attacks at issue in this case.
Plaintiffs next called Dr. Matthew Levitt, a director at the Washington Institute for Near East Policy, who has been qualified as an expert on Hamas in federal court on numerous other occasions. Prior to his current role, Dr. Levitt did counter-terrorism work for the United States Department of Treasury, the FBI, and the United States Department of State. Initially, Dr. Levitt provided “a little bit of Hamas 101,” describing the organization as an “extremist group” that was designated as a terrorist group by the United States. He explained that terrorist designations^ — which include the terms Foreign Terrorist Organization (“FTO”), Specially Designated Terrorist (“SDT”), and Specially Designated Global Terrorist (“SDGT”) — are labels used by the United States Departments of State and Treasury to “make it more difficult for-organizations that are involved in illicit activity, in this case terrorist activity, to be able to raise, launder, move and access money.” Dr. Levitt also introduced the jury to the role of designation lists, or “black list[s],” issued by the United States Office of Foreign Asset Control (“OFAC”).
In addition, Dr. Levitt testified about the relationship of certain charities to Ha-mas.
Through Dr. Levitt, plaintiffs put in evidence the terrorist designations of various charities, including the Al Salah Islamic Society and the Union of Good, an “umbrella organization” which encompasses many of the groups at issue in this case and which was created by the leadership of Hamas.
Dr. Levitt also offered testimony about the Saudi Committee, one of the charities included in the Union of Good. He stated, in concurrence with a German intelligence report, that the Saudi Committee passed donations through to the families of martyrs, which included suicide bombers. Dr. Levitt testified that, based on his investigation, he had concluded that defendant processed those payments on behalf of the Saudi Committee. Dr. Levitt also authenticated SWIFT transfers showing money being wired through Arab Bank to various charities that he identified as being associated with Hamas. As just one example, he authenticated a SWIFT transfer showing $7,800 being sent to the Islamic Society, Gaza, one of the charities at issue in this case; through Arab Bank. He also authenticated a wire transfer showing $12,000 going to the Ramallah Zakat Committee, another of the charities at issue.
Finally, through Dr. Levitt (and over defendant’s objection), plaintiffs entered certain videos in evidence, including one produced by Al-Manar television- — which is the television station of Hezbollah, a
Over the next three days of trial, plaintiffs presented the testimony of Mr. Ronni Shaked, a former paratrooper and intelligence analyst, now a researcher and journalist associated with Hebrew University in Jerusalem. Mr. Shaked testified that, in his assessment, the 24' attacks at issue in this case were, in fact, perpetrated by Hamas. His investigation relied on, among other things, Israeli Security Agency (“ISA”) reports, local police reports, and claims of responsibility. Effectively, only two attacks are at issue in the instant motion.
With respect to the January 29, 2004 suicide bombing on Bus No. 19, Mr. Shaked explained that the suicide bomber, AJi Ja’ara, approached two individuals, Nu-fal Adawin and Muhammad Nashash, and indicated that he wanted to carry out a suicide attack. They prepared an explosive device and planned an attack. Adaw-in. was later convicted of various terror-related crimes, including membership in Hamas. But the initial attack was never carried out, because Ja’ara encountered a checkpoint on the way to his target and was forced to turn back. Sometime later, Ja’ara approached operatives from the AAMB and reiterated his desire to carry out a suicide attack. Cross-examination revealed that Nashash was, in fact, convicted of membership in another Palestinian terrorist group, the AAMB.
Mr. Shaked also attributed the September 24, 2004 mortar attack on Neve Dekal-im, in Gaza, to Hamas. He based his determination on Hamas’ claim of responsibility, and on an assessment that Hamas was the only-Palestinian organization commonly using certain types of mortars at that time. On cross-examination, he conceded that other terrorist organizations were, in fact, using the same mortars during this time period.
Plaintiffs next called Arieh Spitzen. Mr. Spitzen was employed by the Israeli Defense Force between 2001 and 2009, and was the head of the Palestinian Affairs Department for the Coordinator of Government Activities in the Territories. Like Dr. Levitt, Mr. Spitzen offered corroborative testimony regarding the Hamas affiliations of many individuals discussed above, such as Sheik Yassin and Salah Shehadah.
Mr. Spitzen repeatedly qualified his opinions by reminding the jury that he had
Mr. Spitzen identified a transfer to El-Hayek from Osama Hamdan, who sent El-Hayek a check for $10,000 from his Arab Bank account. He also identified 223 individuals, either leaders of Hamas or their family members, who received transfers of funds (including many from El-Hayek) that were processed by Arab Bank.
Based on the records that he was able to obtain, Mr. Spitzen testified that the following individuals received transfers through Arab Bank:
1. Halima Hassan Yassin, Sheikh Yas-sin’s wife, received six Arab Bank transfers between November 2000 and May 2001 in the amount of $153,435.
2. Salah Shehadah received seven Arab Bank transfers between November 2000 and February 2001 in the amount of $109,500.
3. Ismail Haniyeh, the Bureau Chief of Sheikh Yassin’s Bureau, received 19 Arab Bank transfers between July 2000 and September 2001 in the amount of $420,100.
4. Ismail Abu Shanab, аnother Hamas founder, received nine Arab Bank transfers between August 2000 and August 2001 in the amount of $173,172.
5. Abbas Al-Sayyed, the individual who confessed responsibility for the Park Hotel bombing in 2002, received nine Arab Bank transfers between February 2001 and May 2001 in the amount of $123,000.
Mr. Spitzen also testified extensively about the charities at issue in this case, all of which had Arab Bank accounts, and all of which he testified were controlled by Hamas. He authenticated an Israeli list of Unlawful Associations and Terrorist Organizations, which he testified was published in the Official Gazette of Israel, the Israeli equivalent of the Federal Register. The list was received in evidence over defendant’s objection. Mr. Spitzen testified that various organizations on this list were controlled by Hamas, and that he was able to locate money transferred through Arab Bank for virtually all of the charities at issue in this case during the Second Intifada.
Using figures calculated by another of plaintiffs’ experts, forensic accountant Wayne Geisser, Mr. Spitzen testified that $32,312,170 was transferred to the Arab Bank accounts of these charities. In particular, Mr. Spitzen testified about the Saudi Committee, which is one of the 50 member organizations of the Union of Good. He stated that the Union of Good is an umbrella organization that “was established with the special purpose by Hamas leaders to transfer funds to Hamas.”
Mr. Spitzen also testified that many of the charities at issue handed out Hamas propaganda, and often gave funds to terrorists and their family members. Specifically, he testified that he was familiar with “lists showing martyr payments to families of suicide bombers and other terrorists” from his time working for the Israeli government.
He discussed the lists of payments to martyrs’ families produced by defendant, which were admitted in evidence. From these martyr lists, Mr. Spitzen concluded that the Saudi Committee made 24 payments to the families of suicide bombers from Hamas via Arab Bank from 2000 through 2002. He testified that these included payments to the immediate relatives of Hamas suicide attackers who perpetrated four of the terrorist attacks at issue: (1) the June 1, 2001 Dolphinarium bombing; (2) the August 9, 2001 Sbarro Pizzeria bombing; (3) the December 1, 2001 Ben Yehuda Street bombings; and (4) the December 12, 2001 shooting attack on Bus No. 189 in Emmanuel.
Plaintiffs also put into evidence two of defendant’s interrogatory answers. The first interrogatory asked defendant to “[s]tate the total number of fund transfers you processed for Palestinian Foreign Terror Organizations, Specially Designated Terrorist and Specially Designated Global Terrorists from the date of designation of those individuals or entities by the United States Government through December 31, 2007.” Defendant answered “Arab Bank processed 282 funds transfers in which parties identified on Exhibit A were either the originator or the beneficiary from the date of the designation of those individuals or entities by the United States Government through December 31, 2007.”
The second asked defendant to “[s]tate the total dollar amount” of all such funds transfers. Defendant answered that “Arab Bank processed $2,563,275 in funds transfers in which parties identified on Exhibit A were either the originator or the beneficiary from the date of designation of those individuals or entities by the United States Government through December 31, 2007.”
Plaintiffs supported their сase-in-chief, throughout, with the videotaped deposition testimony of numerous bank employees. For example, the jury watched the deposition testimony of Mohammad al-Tahan, one of defendant’s operations managers, who acknowledged a 2001 letter from Arab National Bank (the Bank’s correspondent bank in Saudi Arabia) titled “Outward Transfers As Per the Request of the Saudi Committee For Support of the Intifada Ai Quds.” This document appended lists of payments to the families of deceased indi
.The videotaped deposition testimony of certain of defendant’s employees also evidenced that some of its employees knew that Sheikh Yassin was a leader of Hamas. For instance, Mr. al-Tahan' admitted that he knew that Sheikh Yassin was “a terrorist leader of a terrorist group.” Defendant’s Chief Compliance Officer in the Palestinian Territories, Tayseer Sadeq, testified that Yassin “is known throughout the world” as “the head of the Hamas organization in the Palestinian Territories, and this is no secret.”
Plaintiffs also played the video deposition testimony of David Blackmore, a former compliance officer for defendant’s London branch. The significance of this testimony, in terms of undermining defendant’s central theory of the case — that its sole obligation was to make sure that it was not dealing with OFAC-designated entities or individuals — is hard to overstate. When Mr. Blackmore was asked to provide his view of the Saudi Committee wire transfer made payable to “[t]he family of the martyr Ibrahim Abdul Karim Bani Awdah,” and processed by defendant, he testified as follows:
Q. And the beneficiary name is not specific in the sense that it doesn’t say exactly who is to receive the wire transfer, it’s the family of that particular martyr. Were there policies and procedures in effect at Arab Bank in the United Kingdom that would have prevented executing a wire transfer where there is no specific account number listed and no specific 'beneficiary name provided?
A. There would have been a number of reasons why this would not have been applied, firstly, because as you rightly say ... the beneficiary name is not specific, there’s no account number, the payment for the original transaction I notice is in cash. We would never in a million years have dealt with a payment order such as this.
(Emphasis added).
II. Defendant’s Case
Defendant opened its case by calling Sabih Al-Masri, who has been the chairman of Arab Bank for two years and has sat on its board since 1998. He testified as to the history of Arab Bank and its operations, including its expansion in the Palestinian Territories during the period after the Oslo Accords were signed in the mid-1990s. Specifically, he testified that the Second Intifada had a substantial negative impact on defendant’s operations in Gaza and the West Bank during the time period of the attacks at issue in this case. Over plaintiffs’ objection, he testified as to the operation of defendant’s audit committee. On cross-examination, he conceded that he has limited day to day involvement with defendant’s operations, and that he had never heard of the Saudi Committee until the commencement of this suit.
Defendant next called Dr. Beverly Milton-Edwards, an author and scholar who has written extensively on Hamas. She testified that she had conducted extensive field work traveling with Hamas during the Second Intifada, inсluding with members of the al-Qassam Brigades. She was called for the purpose of giving her assessment of the 11 zakat (charitable) committees, specifically (1) to opine on whether
The effect of cross-examination on Dr. Milton-Edwards’ testimony, and its potential spillover effect on the credibility of defendant’s entire case, is again hard to overstate. First, asked on direct examination whether she had “observe[d] any evidence at all that Hamas was controlling ... any of these eleven Zakats and charitable organizations during the relevant time period,” she answered that she had seen none, nor had she seen Hamas “paraphernalia” during her visits to all but two of the charities in question during the relevant period.
On cross-examination, among other things, Dr. Milton-Edwards was shown a photograph (in fact, a still frame taken from a promotional video which had been released in connection with the launch of her book, Hamas: The Islamic Resistance Movement, in 2010). She identified several individuals appearing in the photo, including Sheikh Yassin, Abd al-Azis al-Ran-tisi, and Salah Shehadah. Other than a “symbol of Hamas” appearing on a billboard in the photo, she could not point to “anything else on it that tells you it’s a Hamas image.” On the billboard, however, were the words Muka Mahal Islamiah, which means “Islamic Resistance Movement,” followed by the word .“Hamas.” She was asked: “Can you tell us what it says right here on the bottom?” She replied: “No, I can’t. It’s in Arabic.”
In other respects, Dr. Milton-Edwards’ testimony was contradicted by her own book. For example, she testified about the whether the Islamic Society, Gaza, a charity for which defendant processed transactions, was controlled by Hamas:
Q: Did you apply your research criteria to determine whether or not ... the Islamic society was controlled or perceived to be controlled by Ha-mas during the 2000-2004 time period?
A: Yes, I did.
Q: And what conclusion did you reach? A: I reached the conclusion that they weren’t controlled by Hamas, nor did the Palestinians perceive them as being controlled by Hamas.
On cross-examination, she was confronted with a passage from her book, which stated:
But the work of the Islamic Society and the rest of Hamas’s network in the dee- . ades up to, during and after the second intifada, when families needed it most, represented not so much a donation as an investment by .Hamas, one that reached a lucrative political dividend in the 2006 election.
Dr. Milton-Edwards also testified that when she had met Musri Al-Masri, an “emerging leader” of Hamas, in 2005 or 2006, she was “never informed” of him having any connection with the Al Nur Prisoner Society. She was confronted with an excerpt from her book in which Al-Masri is identified as someone “involved as a Board member of the Gaza based charity Al-Nour.” She dismissed the inconsistency with the telling observation that “you know my book much, much better than I do,” and, when pressed, acknowledged that she had “forgotten I had written this in the book with my co-author.”
Defendant’s next witness was Shukry Bishara, who is the head of the Palestinian Monetary Authority and a former executive of the Bank. He explained the impact of the Second Intifada — including the Sbarro Pizzaria attack on September 21,
Because his knowledge of defendant’s policies extended beyond the Palestinian Territories, he was allowed to authenticate plaintiffs’ exhibits 1 and 41, which were examples of defendant’s internal guidance from the beginning of the Second Intifada concerning its anti-money-laundering policies. Despite an instruction limiting his testimony on these subjects to defendant’s policies outside of the Palestinian Territories, he testified that they were in force “across the institution.”
Bishara testified that, to his knowledge, during 2000-01, the Saudi Committee offered three categories of “programs and benefits,” specifically humanitarian aid; repair and construction; and unemployment benefits. He also testified that the account of Osama Hamdan had received five transfers after his OFAC designation, and had been closed as a result of his designation, in 2004; about $8,000 was returned to him out of escrow. In fact, as noted above, defendant had long since admitted in its interrogatory responses that it had returned over $2 million to account-holders whose accounts were frozen after their designation by OFAC. Bishara and others testified that defendant “had to” return frozen assets to known terrorists in such cases.
On cross-examination, Bishara acknowledged a 2001 letter titled “Payment of incoming transfers for the benefit of the families of the martyrs and the injured of the Al-Aqsa Intifada,” in which he wrote that defendant “strive[s] for the success” of this party’s [ie., the Saudi Committee’s] project.” He acknowledged defendant’s possession of the payment lists for surviv- or benefit payments from the Saudi Committee, on which the cause of death for certain beneficiaries was listed as amaliya istashidaya, which, as noted above, was translated as “martyrdom operations,” and which defendant’s regional compliance manager acknowledged means “suicide operation.”
Defendant also called Jamal Hurani, defendant’s CEO for the Palestinian Territories. He testified extensively, as the others before him, about the impact of the Second Intifada on his family and on bank operations. Over plaintiffs’ objections, Hurani also testified at length about defendant’s policies for compliance with Palestinian Monetary Authority regulations (although he was not allowed to testify as to defendant’s adherence to such policies in that area). Hurani, who rose to the executive ranks from being a programmer, also testified about the automated operation of defendant’s OFAC compliance software, and the manner in which transactions are flagged by the system for review.
Defendant then called Brian Billard, a New York-based Arab Bank executive who, from 1999 to 2004, was its comptroller and compliance officer. Billard testified that from the outset, he had been “very impressed” with defendant’s compliance policies because “everybody was involved” in that function. Because defendant’s department heads “had many years
Billard explained at length the role of defendant’s New York branch (since converted to an agency), specifically its role in “dollar clearing” for overseas transactions in U.S. dollars and service to U.S. companies generally. Again consistent with the central theory of defendant’s case, he explained the central role of the OFAC list in defendant’s U.S. compliance procedures, and opined that decisions about who should be on the list are properly the role of law enforcement, not the banks that must comply with the list.
Billard recounted his pre-trial review of several hundred individual transactions that had passed through the New York branch, and cleared the OFAC list, including some initiated by Yousef El-Hayek. He also acknowledged payments to and from nine charitable organizations, for example, from the Al-Aqsa foundation of Saudi Arabia (a charity designated by OFAC in 2003) to the Ramallah Zakat Committee. Billard noted only two missed transactions from designated entities, both from Interpal, which had been missed due to “human error.”
He emphasized the strength of defendant’s compliance efforts generally, calling those efforts “strict,” defendant’s record-keeping “very good,” and its approach “conservative.” He also testified to certain specifics, such as that defendant was “prompt” in filing mandatory Suspicious Activity Reports.
However, on cross-examination, Billard was confronted with certain findings issued in a 2004 assessment by the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). The assessment included findings that defendant had had not filed “the majority of its Suspicious Activity Reports referencing terrorist financing until after the [United States] Office of Controller of the Currency [“OCC”] commenced a review of its funds transfer activity in June of 2004,” which was also after the commencement of this lawsuit; that “names similar to those of originators and beneficiaries of funds transfers cleared by Arab Bank-New York appeared in credible and publicly available sources of information, including Congressional testimony, ’ indictments in the United States, and well publicized research and media reports linking the originators and beneficiaries to illicit activities”; and that “[o]nce a designation occurred, Arab Bank-New York failed to review recent activity occurring prior to the designation and associated with the designated entities to identify potentially suspicious activity.” He testified, however, that he had never read the FinCEN report in full, in part because “[tjhat was being handled by counsel.”
With respect to defendant’s reliance on the OFAC list to identify suspect transactions, Billard also conceded that a number of payments that had been “straight through processed” — ie., without human intervention — by the branch were made by or to designated individuals. These transactions included those made, for example, by Yousef El-Hayek to Sheik Yassin. Bil-lard also conceded that, beyond the OFAC list, there would be other ways to obtain personal knowledge that a particular bank customer was a terrorist.
Defendant then called Mohammed Dabbour, defendant’s senior vice president and director of compliance, based at defendant’s Amman headquarters. Over plaintiffs’ continued objections and requests for limiting instructions, he testified at length regarding international banking standards, including those established by the Basel Committee and Financial Action Task Force (“FATF”). He explained the “know your customer” rules, use of blacklists, training, and the “150, [or] 200 people” whose “primary responsibility was combat-
On cross-examination, Dabbour was asked whether he was aware that defendant had admitted (which it had) “that it maintained accounts for eleven United States designated terrorists on the OFAC list?” He answered that he was. When asked to name them, he refused to answer, invoking the right to privacy of defendant’s account holders. He also admitted knowing that defendant had transferred over $2.5 million to former customers whose accounts had been closed as a result of OFAC designation.
Like the testimony of David Blackmore, Dabbour’s cross-examination undercut the central theory of the Bank’s defense, that it could not be expected to do more than check transactions against the OFAC list. He was confronted by testimony at his deposition, at which he had stated: “[I]f upon discovering an unusual transaction by — by one of our customers as part of the investigation in the account of our customer, we might look to see if there is any information available in the public domain. And that would be part of the investigative process.”
Defendant called three other former employees of the Bank in the Palestinian Territories during the relevant time. They were Mazen Abu Hamdan, the regional head of compliance, Baker Mohammed Ahmad Al-Omari, a former manager of a branch in the West Bank, and George Kawwas, a retired Bank employee from Bethlehem, located close to the border between Israel and the West Bank, just south of Jerusalem. They testified as to the catastrophic impact of the Second Intifada on the Bank’s operations. In addition, among other things, these Bank employees testified to the widespread dissemination of posters bearing “pictures of martyrs” throughout the Palestinian Territories, including on the fronts of Arab Bank branches.
Defendant’s final fact witness was Man-ny Caravanos, the Bank’s vice president of operations for (ie., the head of) the New York branch. He testified that he was responsible for ensuring defendant’s compliance with OFAC. He explained the technical standard (SWIFT) by which international transfers are processed and, like Mr. Billard, opined that a person or entity’s presence on the OFAC list was a matter for law enforcement, not banks. Yet on cross-examination, Mr. Caravanos acknowledged that he was not aware of the 11 accounts held by the Bank in the Palestinian Territories for designated individuals, nor the $2.5 million that had been returned to these individuals when their accounts were closed.
Defendant closed its case with the expert testimony of Anne Vitale, a former prosecutor and consultant to the financial services industry with respect to money laundering and antiterrorism compliance. Her testimony was focused on explaining international standards, including the Basel Committee on Banking Supervision, the Financial Action Task Force, and the Wolfsberg Group. She explained in detail the mechanism by which banks can process wire transfers to non-account holders, and the know-your-customer protections that govern such transactions. She provided the jury with a detailed picture of the use of blacklists such as the OFAC list. Over plaintiffs’ objection, she testified that it was not common during the relevant period for foreign banks to use this country’s OFAC list, but that of the host coun
STANDARD OF REVIEW
Rule 50 provides for entry of judgment as a matter of law where “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party” on the issue or issues that are the subject of the motion. Fed.R.Civ.P. 50(a). A court reviewing a Rule 50 motion “must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.” Cross v. New York City Transit Auth.,
Rule 59 provides a court with discretion to grant a new trial if it is persuaded that there were, among other things, errors of law in charging the jury or improper admission or exclusion of evidence. See Song v. Ives Labs., Inc.,
Under § 1292(b), a court may certify an interlocutory order for appellate review if (1) it “involves a controlling question of law,” (2) “as to which there is substantial ground for differencе of opinion,” and (3) an immediate appeal-“may materially advance the ultimate termination of the litigation.” 28 U.S.C.' § 1292(b). Interlocutory appeal is not a “vehicle to provide early review of difficult rulings in hard cases.” German v. Fed. Home Loan Mortg. Corp.,
DISCUSSION
Defendant’s Rule 59 motion assigns error to a number of the Court’s charges to •the jury, ie., it argues that the verdict was reached under incorrect legal standards, including the ATA’s causation and scienter standards, and as a result of the improper application of a pretrial sanctions order. It also argues that the Court made certain evidentiary rulings in error and that it was prejudiced the structure of the trial.
Defendant’s Rule 50 motion, which of course challenges the sufficiency of the evidence presented in this case, is almost entirely focused on demonstrating that plaintiffs have failed to meet the legal standard that defendant argues is correct, as opposed to the one that Judge Gershon, to whom this case was previously assigned, and I have held applicable. I have therefore assessed the sufficiency of the evidence at trial under the correct legal standards.
Another problem with defendant’s Rule 50 motion is that it begins with, and heavily rests upon, the unsupported assertion that “[e]ach of the banking services that Plaintiffs placed at issue must be evaluated separately to determine if it provides an evidentiary basis for the elements of proof required by the ATA.” Defendant then proceeds to analyze separately the financial services it provided to senior Hamas leaders, the financial services it provided
For the following reasons, defendant’s Rule 50 motion is granted in part and denied in part, and defendant’s Rule 59 and § 1292(b) motions are denied.
I. Sanctions Order
A. Background
Before trial, Judge Gershon imposed sanctions on defendant for its failure to comply with a prior discovery order compelling production of key account records, despite the fact that its objections based on foreign bank secrecy laws had been considered and overruled. See generally Linde,
The Sanctions Order sets forth the history of discovery in this action in great detail, but as is most relevant here, defendant refused to produce full account records for its customers in Lebanon and the Palestinian Territories (Gaza and the West Bank). Defendant admitted that it maintained accounts for 11 individuals or entities that were designated as FTOs, SDTs, or SDGTs during the relevant time period, but refused to specify the identity of these account holders.
Defendant produced full account records for only one account, the Beirut account of Osama Hamdan. Osama Hamdan is a spokesman for and leader of Hamas, designated as a SDGT by OFAC in 2003. Several transfers into his Arab Bank account in Beirut explicitly listed “Hamas” as the beneficiary party. See, e.g., Linde,
In imposing sanctions, Judge Gershon found that defendant had “intentionally failed to meet its production obligations.” Id. at 197. She also found, with respect to defendant’s claim that it would face criminal prosecution in Jordan if it complied with its discovery obligations, that “there is nothing in the record indicating that defendant faces a real risk of prosecution.” Id.
There can be no question that defendant’s violation of Judge Gershon’s production order was intentional. Defendant may or may not have had a good faith basis for arguing that it was not obligated to produce the records in the first instance (in reliance on local bank secrecy laws), but once Judge Gershon rejected that argument and ordered the records produced, defendant made the deliberate decision to disregard that Order.
I note also that, as demonstrated below, the circumstantial evidence at trial demonstrated that defendant’s reliance on local law was, in all likelihood, a convenient pretext for the non-production of doeu-
The Sanctions Order had two aspects. First, it provided for a permissive adverse inference instruction as follows:
[The jury] may, but is not required to, infer: (1) that defendant provided financial services to organizations designated by the United States as Foreign Terrorist Organizations, and to individuals affiliated with the FTOs; (2) that defendant processed and distributed payments on behalf of the Saudi Committee to terrorists, including those affiliated with named terrorist organizations and those who are unaffiliated, their relatives, or representatives; and (3) that defendant did these acts knowingly and purposefully.
Linde,
Second, the Sanctions Order restricted defendant’s ability to submit evidence of, or argue, certain facts that would likely have been illuminated by the withheld documents and testimony. It provided:
The Bank must be precluded from making any argument about its state of mind that would find proof or refutation in the withheld documents. Defendant is entitled to rely on the documents it did produce to make its case that it did not have the required state of mind. In addition, defendant can argue to the jury that it had no knowledge that certain accountholders, whose records have been produced, were terrorists. But it cannot argue that it had no knowledge a certain Bank customer was a terrorist if it did not produce that person’s complete account records.
Id. at 204. Thus, the Sanctions Order permitted defendant to make arguments about its intent as to the account for which it produced full records, the account of Osama Hamdan in Lebanon, but it precluded defendant from arguing that it did not know that other customers were terrorists. On the other hand, it did not direct the jury to find that defendant had such knowledge; it left plaintiffs with the burden of proving defendant’s knowledge.
It is clear from her decision why Judge Gershon chose these particular sanctions. This extensive circumstantial evidence strongly suggests that the withheld records would have shown what defendant knew about the Hamas connections of its customers, which means that defendant’s invocation of bank secrecy kept the most direct inculpatory evidence from the jury, as Judge Gershon predicted. For example, the evidence at trial demonstrated that defendant’s policies required customers to provide photo identification when opening an account or receiving cash over the counter and that defendant would retain a photocopy of that identification. Thus, the withheld records would likely have removed any need to speculate about whether “Ahmad Ismail Yasine” was, in fact, Sheikh Yassin — one or more people at the Bank were looking right at this person, and made a copy of his photograph identification. The same would be true of the account records for other alleged Ha-mas leaders who received transfers from Yousef El-Hayek. In all such cases, the withheld records would have shown the volume, amount, timing, and sender and
Moreover, as Judge Gershon noted, there were significant shortcomings in defendant’s production of records related to Saudi Committee payments. See Linde,
B. The Effect of the Permissive Inference
In light of the evidence that was adduced at trial even without the withheld documents, both by plaintiffs and defendant, it is now apparent that the permissive inference jury instruction had far less of a detrimental effect on defendant’s case than defendant contends. As a practical matter, it was effectively lost in the nearly seven weeks of trial proceedings. It took only a moment to mention in plaintiffs’ lengthy case and was buried in the lengthy final charge, although plaintiffs of course referred to it in their closing.
In any event, the verdict was based on volumes of damning circumstantial evidence that defendant knew its customers were terrorists.
Consider, for example, the compelling circumstantial evidence that plaintiffs were able to adduce — -despite the withheld documents — relating to an Arab Bank account held by Sheikh Ahmed Ismail Hasan Yas-sin, a founding member and senior leadér of Hamas. ' He was first designated as a SDT by the United States in 1995, and was described as the “[flounder and chief ideological figure of HAMAS.” He was designated as a SDGT in 2003. In issuing that designation, the United States government described Yassin as “the head of HAMAS in Gaza” and stated that “he maintained] a direct line of communication with other HAMAS leaders on coordination of HA-MAS’s military activities.” He was killed by Israel in 2004. The evidence showed that the wheelchair-bound Yassin, a man with a highly distinctive appearance, was well-known as a Hamas leader both internationally, and particularly in the Palestinian Territories, during the relevant time period; indeed, he could fairly be described as the face of Hamas. Sheikh Yassin was also, according to substantial circumstantial evidence, an Arab Bank customer.
That circumstantial evidence begins with the wire transfer from Yousef El-Hayek in Lebanon for $60,000 — which, because it was routed through defendant’s New York branch, was produced — to a beneficiary named “Ahmad Ismail Yasine.” The transfer went to an account numbered 36444 in Arab Bank’s branch in Gaza. As discussed in more detail above, El-Hayek also initiated and received wire transfers, routed through New York, to and from other accounts at Arab Bank held in names of (or similar to) Hamas leaders.
This evidence of transactions that seem to have involved known Hamas leaders certainly is relevant to defendant’s culpa
As if that were not enough evidence that Yassin was defendant’s customer, plaintiffs showed the jury an interview on a Bahrain web forum with Abd al-Azis al-Rantisi, another founding member of Hamas who was also killed by Israel in 2004, who expressly called for donations to an Arab Bank account matching that of Sheik Yas-sin. This is compelling evidence that Sheikh Yassin was among the 10 or more accounts of designated terrorists for which defendant refused to produce documents.
In addition to the circumstantial evidence discussed above, defendant’s decision to argue that its obligations began and ended by screening transactions against the OFAC list was completely undermined by the testimony of its own former employee. Defendant’s counsel emphasized this theory of the case both in his opening and in his closing. Defendant argued,'for example, that
[t]here is no international banking standard that requires banks to do more than clear the transactions through the OFAC list in the United States of America. There is no need to check the Internet or do. independent research by banks in order to figure this out. They úse the OFAC list. That’s the unrebut-ted testimony of the only banking expert that we had in this case.
This theory, the central tenet of the Bank’s defense, was myopic. It allowed the possibility that a well-known Hamas figure could enter the Bank, be recognized as such by every employee there, and yet, if his name did not yet show up on an OFAC list, the Bank not only could, but would be required to treat him like any other non-terrorist customer. This theory not only tolerated willful blindness — it mandated it.
It is therefore no wonder that in making its “OFAC list-only” argument to the jury, defense counsel made no mention- at all of the testimony at trial of its own employees, who utterly rejected it — like that then-head of U.K. compliance, Mr.- Blaekmore, who said that if the words “martyrdom operation” showed up as a payment designation, he “would never in a million years have dealt with a payment order such as” that, or that of their compliance director, Mr. Dabbour, who testified that: “[I]f upon discovering an unusual transaction by — by one of our customers as part of the investigation in the account of our customer, we might look to see if there is any information available in the public domain. And that would be part of the investigative process.”
It may be that defense counsel did not address this testimony in his lengthy closing argument because there was no way to explain it within his OFAC list-only argument. But it left an enormous gap in defendant’s central theory, and plaintiffs thoroughly exploited it. This failing in defendant’s case had nothing to do with the brief instruction to the jury under the Sanctions Order and, in my view, it east a much bigger shadow over defendant’s case than did the instruction.
Finally, any prejudice to defendant from the permissive inference instruction in the Sanctions Order was also greatly overshadowed by the testimony of defendant’s expert, Dr. Milton-Edwards, which backfired in spectacular fashion. I have to assume that the jury was as surprised as I was when, after testifying on direct exami
And the way it came out on cross-examination made it seem like she, and defendant as the party who had proffered her, had attempted to conceal the lack of basis for her opinion on direct testimony by not drawing the teeth on this point — such as when plaintiffs showed her a photograph bearing the words “Islamic Resistance Movement, Hamas” (taken from her own promotional video). By that point in the trial, I had seen the word “Hamas” in Arabic so many times that I immediately recognized it, and I suspect some of the jury may have as well. Yet the expert had to be prompted before she recognized it, and it only then came out that she could not read Arabic.
This was the most dramatic, but not the only, incident of friendly fire directed at the Bank by Dr. Milton-Edwards. As noted above, her testimony that the charities at issue were not Hamas affiliates was directly contradicted by what she had written in her book about Hamas. Her response to being confronted with that was flippant. She was similarly flippant when her knowledge of Hamas was tested by asking her to identify a picture of Salah Shehadah, the founder of the al-Qassam Brigades. She said she was unable to identify him because of the “whole big beard phenomenon,” suggesting that all terrorists look alike to her.
When a party calls an expert witness, it essentially vouches for her expertise. The jury knows that these witnesses are prepared by the lawyers and it evaluates a party’s case in conjunction with evaluating the expert’s testimony. A reasonable disagreement with a point that an expert expresses does not necessarily doom the proponent’s case. But when an expert is profoundly careless, there is a risk that the jury will attribute that' carelessness to the proponent, not just the expert.
In short, given the abundance of circumstantial evidence in plaintiffs’ case showing that defendant either had or deliberately ignored evidence that it was dealing with Hamas operatives, coupled with the miscues in defendant’s theory and evidence, I do not believe that thé modest permissive inference instruction played a very large, if any role, in the jury’s verdict.
C. The Effect of the Preclusion Order
With respect to the preclusion aspect of the Sanctions Order, it was applied in a way that allowed defendant to present ample evidence supporting its “OFAC-only” and “routine banking practice” defenses. In an effort .to avoid transforming it into that which Judge Gershon expressly did not intend — a dispositive sanction — the net effect was that defendant was, in fact, allowed to introduce extensive evidence and argument that it did not know that its customers were terrorists. Indeed, aside from an effort to raise doubts about the responsibility of Hamas for the 24 attacks (which comprised about one-third of the trial), virtually all of defendant’s evidence (and its cross-examinations of plaintiffs’ witnesses) was aimed at demonstrating its lack of knowledge that its customers were terrorists. As one commentator noted, “the jury heard evidence from both sides on Arab Bank’s knowledge or ignorance of its customers and their financial transactions.” David L. Hall and Claire Coleman, Outside Counsel, Banking and Bombs: What the ‘Linde’ Verdict Portends, New YoRK Law JouRnal (October 15, 2014).
It also proved difficult, in practice, to preclude much of defendant’s evidence relating to its compliance programs. The reason for this difficulty was that this evidence straddled the line drawn by the Sanctions Order. For example, although defendant was permitted to argue that it did not know that Osama Hamdan was a terrorist, defendant’s compliance evidence did not concern only his account. Instead, because defendant had adopted policies that applied broadly across its global operations, and had specific policies at branches in each country in which it operated, the Court allowed defendant to describe its programs generally, subject to a limiting instruction that the jury could only consider those programs with regard to the Osa-ma Hamdan account. In contrast, when it became clear that defendant intended to discuss its programs in the Palestinian Territories specifically — branches for which no account records were produced— the Court precluded such testimony.
These examples are only the beginning of the evidence that defendant was allowed to adduce regarding its knowledge of whether its customers were terrorists: defendant argued that Hamas operatives worked in secret;
Indeed, the Court permitted several of defendant’s employees to describe in some detail how they or their families had narrowly escaped physical injury or death or had in fact suffered financial loss as a result of the Hamas attacks at issue in this case. In one instance, the Court received testimony that a Bank officer’s children attended a school very near to one of the attacks at issue in the case — the obvious purpose being to ask the jury to draw the inference that Bank officers would not knowingly support an organization that threatened their own families. The same was true of the testimony of the Bank’s chairman that the Bank’s operations were negatively affected by the Second Intifada — the clear purpose of this testimony was to encourage the jury to infer that the Bank would not knowingly support terrorism. All of this evidence was offered to show circumstantially that defendant did not know its customers were terrorists. This evidence was all received, and emphasized in summation, despite the Sanctions Order.
What had a greater impact on the case than the Sanctions order was the scenario that defendant itself created — the very absence of key records that gave rise to the Sanctions Order in the first place. This enabled plaintiffs’ attorneys to ask most of defendant’s witnesses if they had produced records, and required the witnesses to say “no.” It enabled plaintiffs to have their own witnesses, principally their expert Mr. Spitzen, emphasize the point that they could not complete their analyses because defendant had failed to produce requested records. And it enabled plaintiffs’ counsel, during closing argument, to stress the fact that the issues at trial could, in all likelihood, have been answered if defendant had merely produced the account records — and to ask the jury to draw the obvious inference from that. The persuasiveness of that argument would not have been lessened by the absence of either the permissive adverse inference instruction or the preclusion order, and thus was not significantly enhanced by their presence.
In the same vein, it is worth noting that throughout defendant’s moving papers, it deems plaintiffs’ proof deficient due to gaps in the evidentiary record that it created. To give just one example, defendant stresses in its lengthy appendix that Abbas Al-Sayyed, the mastermind of the Park Hotel bombing, received only two transfers totaling $54,000 to his Tulkarem Arab Bank account a year before that attack was carried out. Maybe he did, and maybe he didn’t — defendant never produced Al-Sayyed’s account records, and thus to argue that the handful of transfers that happened to be routed through New York is the entire universe of funds defendant transferred to Al-Sayyed might have been regarded by the jury as disingenuous at best.
I also cannot accept defendant’s contention that it would have been “futile” to proffer the in-court testimony of Mohammed Al-Tahan, Tayseer Sadeq, or Assad Saleh because of the Sanctions Order. The inculpatory deposition testimony from these Bank officers that plaintiffs showed to the jury concerned records that had been produced, and I have no reason to think that I would have excluded their live testimony to explain those statements. We can only speculate, of course, what would have happened, because defendant
Finally, although I agree with Judge Gershon’s exclusion of foreign law from this case, I do not believe that permitting defendant to argue its overruled bank secrecy objections to the jury would have appreciably changed matters either. Under Federal Rule of Evidence 403,1 determined not to permit the jury to be presented with a mini-trial on whether foreign bank secrecy law trumped defendant’s obligations under the Federal Rules of Civil Procedure. That was a question of law for the Court. Judge Gershon ruled on it, correctly in my view. It was then defendant’s choice to disregard her ruling. I was not going to have a mini-trial on the proper balancing of United States law against alleged foreign law.
In sum, the Sanctions Order did not play out to be a critical factor in the case. The strength of the plaintiffs’ evidence of defendant’s knowledge, the illogic of defendant’s OFAC-only theory, the miscues within defendant’s own case, and the gaping hole which defendant admittedly created by refusing to produce the key documents and testimony substantially overshadowed the Sanctions Order.
D. The Solicitor General’s Certiorari Brief
Defendant sought mandamus review of the Sanctions Order in the Second Circuit; when mandamus was denied, defendant petitioned the Supreme Court for certiorari. While defendant’s petition was pending, the Supreme Court invited the Solicitor General to file a brief offering the views of the United States. See Arab Bank, PLC v. Linde, — U.S. -,
The Solicitor General filed his brief, and argued that Judge Gershon’s comity analysis was erroneous in some respects, but that the Supreme Court should nevertheless deny certiorari. After the Court denied certiorari, at the pretrial conference, I declined to reconsider the Sanctions Order in light of the Solicitor General’s brief.
Defendant now argues that this was error because the Solicitor General’s views “pertained to issues of national interest and foreign policy that fall squarely within the province of the Executive Branch.” Defendant argues that “when the United States Government submits statements of interest to federal courts, there is a strong argument that federal courts should give serious weight to the Executive Branch’s view of the case’s impact on foreign policy,” citing Whiteman v. Dorotheum GmbH & Co. KG,
As an initial matter, Whiteman is inap-posite because it concerned a Statement of Interest invoking foreign policy to urge dismissal of the plaintiffs’ claims. See id. Judge Gershon long ago rejected defendant’s invocation of the political question doctrine, and defendant has not requested reconsideration of that decision. See Lev v. Arab Bank, PLC, No. 08-cv-3251,
At the outset, I have to note the very peculiar structure of the Solicitor General’s submission to the Supreme Court. It spends almost 13 pages arguing that the Sanctions Order was erroneous — and then urges the Supreme Court not to grant certiorari. It may be questioned why the Solicitor General would expend such an effort in persuading the Supreme Court that an error has been committed and then urge the Court not to correct the error. What is the point of asserting error that ope does not wish to see corrected? The answer may lie in the suggestion in at least one newspaper article that the Departments of State and Justice had opposing positions on this issue, and the Solicitor General’s submission reflects a political compromise of those positions. See Charlie Savage, Terror Suit Tests Diplomacy and Bank Secrecy Laws, N.Y. Times, at A3 (April 2, 2014) (describing the Solicitor General’s need to balance the interests of different executive agencies, in other words the “unusual trade-offs between ... diplomatic efforts to achieve Middle East peace, the rights of American victims of terrorism, and an American campaign to tear down Swiss banking secrecy laws thаt have long aided tax evasion”).
Any such disagreement is of no moment to this Court. It is axiomatic that dictum from a higher court is not controlling precedent; even less is dictum from one or more government agencies. It is enough for me to reject that one portion of the Solicitor General’s argument that urges error because the argument is flawed.
The brief, and defendant’s position, disregard a critical aspect of other interests purportedly overlooked by Judge Ger-shon — including undermining the United States’ close relationship with Jordan, and threats to stability in the Middle East-issues that would appear to be implicated not just by the Sanctions Order, but by any verdict against defendant. But again, the United States has not sought dismissal of this case. Cf. Rosenberg v. Pasha,
In any event, the brief also misunderstands certain facts, e.g., that Judge Ger-shon concluded that defendant did not act in good faith “simply because petitioner previously produced some of the documents to the Departments of the Treasury and Justice.” First, there were many other reasons for that finding, namely defendant’s mischaracterization of the lawsuit to foreign authorities, and the years of delay caused by defendant’s recalcitrance in discovery. See Linde,
Moreover, even as to that production, “selective disclosure” was only part of the story. Judge Gershon noted not only that defendant was not prosecuted for producing to the United States government, but also that defendant never sought permission before doing so. See Linde,
In this respect, the Solicitor General’s brief appears to go beyond merely explaining the foreign policy implications of the Sanctions Order, and offers its own analysis of how the various comity factors should have been weighed in light of the facts as he understood them. Cf. Von Saher v. Norton Simon Museum of Art at Pasadena,
I believe that Judge Gershon and Magistrate Judge Pohorelsky accurately described and balanced the core interests to be weighed in determining the appropriateness of sanctions: the interest of the United States (and of the foreign jurisdictions at issue here) in combating terrorism, against the interest of foreign states in enforcing their bank secrecy laws. See Linde,
Particularly in light of the extensive delays throughout discovery, I did and do not believe that the Solicitor General’s brief provided good reason to revisit, just before this decade-old case finally went to trial, the previous holdings that the foreign states’ asserted interests in their bank secrecy laws “must yield to the interests of combating terrorism and compensating its victims.” Linde,
Moreover, in my view, any interest in enforcing foreign bank secrecy laws only withstands scrutiny when described in the abstract, as in the Solicitor General’s statement that the laws at issue “reflect legitimate sovereign interests in protecting foreign citizens’ privacy and confidence in the nations’ financial institutions.” This sounds like an important interest until one considers exactly whose privacy defendant is seeking to protect. Specifically, plaintiffs are correct that the Solicitor General misunderstood the nature of the account information being withheld. These were not accounts that were “allegedly maintained ... for certain terrorist organizations,” they were accounts that defendant
For example, Abbas Al-Sayyed was convicted and sentenced to thirty-five life terms for his role in orchestrating Hamas terrorist attacks, including the Park Hotel bombing on March 27, 2002. According to Israeli court . documents, Al-Sayyed strapped a bomb to a young man, Abdal-Baset Odeh, who subsequently detonated it amidst a group of elderly Holocaust survivors enjoying Passover Seder at the Park Hotel. American citizens were among the thirty people killed and 160 injured. There is no need to rely on circumstantial evidence to determine whether Al-Sayyed had an Arab Bank account or used money sent to it to further Hamas’ “military activities,” because he admitted it himself.
Vindicating the right of a convicted mass-murderer like Al-Sayyed to the privacy of his financial records over the right of his victims to compensation is not in the interest of any nation. As defendant continually emphasizes, Jordan is staunchly opposed to terrorism and a strong ally in the United States’ counter-terrorism efforts. It thus seems unlikely that the Jordanian authorities would criminally prosecute defendant for disclosing the bank records of imprisoned terrorists like Al-Sayyed or those who were killed long ago, like Sheikh Yassin or Salah Shehadah. Yet defendant’s position is that even answering a question at a deposition as to whether these individuals ever had bank accounts would result in criminal prosecution.
Even at this late date, defendant has not pointed the Court to any cases where banks have faced criminal prosecution for violating the foreign bank secrecy laws at issue. In the absence of such evidence, and given the close relationship between defendant and the governments of Jordan and Palestine — the Kingdom of Jordan is a 16% shareholder, numerous Bank executives have served in government roles, and the current head of the Palestinian Monetary Authority, Shukry Bishara, is a former Bank employee — Judge Gershon had an adequate basis to conclude that defendant did not face a real risk of prosecution should it produce the documents at issue. Cf. Wuttz v. Bank of China Ltd.,
The Solicitor General was at best equivocal in asserting otherwise. The brief did not say outright that defendant would have been prosecuted for complying in discovery. Instead, it argued that a foreign state considering whether to prosecute “may view the matter differently based on whether the party requesting the information is a government entity or a private one.” As the Second Circuit pointed out, while this does not necessarily mean that a foreign government would not prosecute, “the converse is also not necessarily true: The foreign states would not necessarily
Most tellingly, amicus the Hashemite Kingdom of Jordan does not challenge this aspect of Judge Gershon’s ruling. Jordan argues for certification of the broader issue to the Court of Appeals, but carefully avoids any assertion that in fact, defendant (to whom its “economic wellbeing is tightly linked”) was likely to have been prosecuted for violations of the secrecy laws in question. If anyone were in a position to rebut Judge Gershon’s determination, it would be amicus, and it has declined to do so. While I give weight to Jordan’s interest in its sovereign prerogative to regulate its financial services industry, I cannot find that the balancing of interests that underlie the Sanctions Order warrant reconsideration.
II. “Act of International Terrorism”
Defendant assigns error to a number of legal principles on which the jury charges in this case were based; it makes sense to first address the threshold question of whether the provision of financial services can constitute an “act of international terrorism” under the ATA. Defendant requested that the jury be charged on each constituent element of an “act of international terrorism” under 18 U.S.C. § 2331. Specifically, defendant requested that the jury be charged that the Bank’s actions must (1) “involve violent acts or acts dangerous to human life”; (2) “qualify as ‘a violation of the criminal laws of the United States or of any State’ if it were committed within a United States jurisdiction”; (3) “ ‘appear to be intended’ to intimidate a civilian population, influence government policy, or affect the conduct 'of government by certain specified means”; and (4) “occur primarily outside the United States or transcend national boundaries.” See Licci v. Lebanese Canadian Bank, SAL,
I agree with those courts that have held that a violation of 18 U.S.C. § 2339B is itself an act of international terrorism. See Goldberg v. UBS AG,
Completing a wire transfer generally cannot be described as “violent” or “dangerous to human life” in the colloquial sense. But other courts have concluded, and I agree, that providing material support to a terrorist organization is an аct “dangerous to human life.” See, e.g., Boim v. Holy Land Found. for Relief & Dev.,
The civil liability provisions of the ATA are derived from a complicated series of incorporations by reference. But for a claim brought under 18 U.S.C. § 2333(a) and 18 U.S.C. § 2339B(a)(l), those incor-porations by reference distill to relatively simple questions: Did the defendant know that it was providing material support to Hamas, and did the defendant know that Hamas was a foreign terrorist organization (or “engaged in terrorist activity” or “terrorism”)? If those are the only questions that need be answered to determine whether a defendant committed an “act of international terrorism” with the requisite mental state — and they are — then they are the only questions a jury should be asked.
III. Causation
In denying defendant’s motion for summary judgment from the bench on April 24, 2013, Judge Gershon held that ATA plaintiffs are not required to show “but for” causation under either Rothstein v. UBS AG,
Over a year later, defendant’s proposed jury instructions requested that the Court charge the jury with the causation standard that Judge Gershon twice rejected. Defendant again argued that Judge Ger-shon’s previous ruling was erroneous, and added that the Supreme Court’s subsequent decisions in Univ. of Texas Southwestern Med. Ctr. v. Nassar, — U.S. -,
Proposed jury instructions, of course, are not the proper procedural vehicle for a motion for reconsideration. Defendant did not provide any reason why, if it viewed these decisions as an “intervening change of controlling law” justifying reconsideration, see Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd.,
For the reasons discussed below, I hold that Judge Gershon’s original ruling was correct. As the only cases to directly address the issue have held, requiring “but for” causation would effectively annul the civil liability provisions of the ATA. That cannot have been the intent of Congress in enacting them. Requiring but-for causation would render it practically impossible for an ATA plaintiff to recover from a defendant that has knowingly provided material support to a terrorist group over an extended period of time, as the jury found happened here. I further hold that
A. Governing Law
The ATA is different than other statutes that reference causation. The tort it condemns is оne of secondary action, not primary action. It assumes the existence of a tort by a third party, and then renders the defendant liable for providing support to that third party, not for supporting any particular conduct by that third party. That groups like Hamas are likely to continue to carry out terrorist attacks with or without specific sources of aid is inherent in their definition as foreign terrorist organizations. That is why, in passing 18 TJ.S.C. § 2339B, Congress “prohibited the provision of ‘material support or resources’ to certain foreign organizations that engage in terrorist activity. That prohibition is based on a finding that the specified organizations ‘are so tainted by their criminal conduct that any contribution to such an organization facilitates that conduct.’ ” Holder v. Humanitarian Law Project,
Thus, although there is no aiding and abetting liability under the ATA, see Rothstein,
But-for causation in that context is not simply absent from the facts of this case, it is nearly impossible to prove, because money is fungible. Even if an ATA plaintiff could show that a particular dollar was used in furtherance of a particular attack — a requirement rejected by this Court — that plaintiff still could never prove that absent the defendant’s providing that dollar, a group like Hamas would not have made up the shortfall from elsewhere. See Gill v. Arab Bank, PLC,
As an initial matter, I agree with Judge Gershon’s interpretation of Rothstein and Al Rajhi. To be perfectly clear, contrary to defendant’s repeated assertions, neither case holds that but-for cause is a requirement of the ATA. To understand why, it is important to understand that proximate and but-for causation are analytically distinct concepts, and neither one is simply a less demanding subset of the other. But-for causation is a factual inquiry, which requires a fact-finder to assess the likelihood of a counterfactual: Would X still have happened if Y had not. Proximate cause is a legal inquiry — focusing largely on foreseeability — that asks whether X and Y are sufficiently connected to justify holding one accountable for the other as a matter of legal policy.
Defendant’s assertion that those cases “expressly hold[] that the ‘by reason of language incorporated into the ATA requires a showing of both ‘but for’ and □proximate causation” would be wholly unsupportable, were it not for the Second Circuit’s passing reliance, without elaboration, on cases in which but-for cause was present, but not at issue. For example, examining the history of anti-trust legislation incorporating the same “by reason of’ requirement that is found in the ATA, the Court noted the Supreme Court’s holding
Despite such language, there is no valid argument that Rothstein or Al Rajhi preclude relief here because they are factually analogous, i.e., that they stand for the proposition that proximate cause was not shown here. The Rothstein Court held that “[w]e cannot agree that the Complaint sufficiently alleges proximate cause,” and went on to note that there was no allegation that the defendant “was a participant in the terrorist attacks,” that it “provided money to Hizbollah or Hamas,” that the currency it transferred to Iran “was given to Hizbollah or Hamas,” and that if it had not transferred currency to Iran, then that country, “with its billions of dollars in reserve, would not have funded the attacks .... ”
More importantly, neither Nassar nor Burrage require a conclusion to the contrary, most significantly because both cases were interpreting statutes that differed significantly from the ATA. I therefore consider these cases in light of the background principle, stated in Burrage, that “[wjhere there is no textual or contextual indication to the contrary, courts regularly read phrases like ‘results from’ to require but-for causality.”
Nassar addressed the issue of causation in the context of a Title VII retaliation case. See Nassar,
Burrage is, admittedly, more closely analogous, as it concerned the causality requirement of a sentencing enhancement for certain drug offenses when death or bodily injury “results from the use” of the substance that the defendant provided.
Even more importantly, in Burrage, the Court’s review of the proof supporting convictions in past cases revealed that “but-for causation is not nearly the insuperable barrier the Government makes it out to be.”
The ATA presents a different context than Nassar or Burrage, the impossibility of proving “but for” causation, and strong textual and contextual reasons for declining to impose a “but for” requirement. Those textual and contextual reasons lie in Congress’ intent to impede terrorism by “the imposition of liability at any pоint along the causal chain of. terrorism.” S.Rep. No. 102-342, at 22 (1992). There is no question that “the ‘by reason of language of the statute restricts the imposition of such liability to situations where •plaintiffs plausibly allege that defendants [sic] actions proximately caused their injuries.” Al Rajhi,
And although it should go without saying, nothing in Nassar or Burrage changes what the Second Circuit did or did not say in Rothstein or Al Rajhi. The Rothstein Court’s discussion of the construction of “by reason of’ causation in anti-trust and RICO statutes,
In short, nothing in these later cases, in my view, disturbs the reasoning that Judge Posner applied to this question in Boim III, upon which this Court relied in its extant ruling on this issue. The principle is that when a tortfeasor acts with the knowledge that its conduct will, in concert with that of others, result in harm that would not otherwise occur, it is appropriate to hold each tortfeasor accountable. For example, in an environmental nuisance case,
[e]ven if the amount of pollution caused by each party would be too slight to warrant a finding that any one of them had created a nuisance [ie., caused injury,] pollution of a stream to even a slight extent becomes unreasonable [and therefore a nuisance] when similar pollution by others makes the condition of the stream approach the danger point. The single act itself becomes wrongful because it is done in the context of what others are doing.
Boim III,
In short, Boim Ill’s reasoning is precisely on point with this case, and remains the only decision by a Court of Appeals to address this particular question under this particular statute. As Judge Posner made clear, a but-for causation requirement would eviscerate the civil remedy available under § 2333. I cannot conclude that Congress enacted a meaningless provision here.
In light of these considerations, although defendant strenuously urges that Roth-stein, Al Rajhi, Burrage, and Nassar command a result different than the one that has been reached here, it is clear to me that none of them do. The Second Circuit’s cases, as Judge Gershon has already held, are not addressing the question presented here. The Supreme Court’s eases have nothing to do with the ATA, and are distinguishable on their facts. The fact remains that no court has expressly held that the ATA’s civil remedy requires a showing of but-for causation. And in the only Court of Appeals decision to actually
B. Jury Charge
The jury charge given in this case conformed to the legal principles set forth above. Plaintiffs requested that the jury be charged that plaintiffs must prove that defendant’s alleged support “by augmenting Hamas’s resources, would enable Ha-mas to kill or wound, or try to kill, or conspire to kill more people in Israel and the Palestinian Territories at the time of the 24 attacks at issue in this trial,” and that it was reasonably foreseeable that the alleged support would do so. This charge was rejected as too argumentative and fact-specific. Instead, the Court proposed what it viewed as a generic proximate cause charge. See Rothstein,
Plaintiffs rightly pointed out, however, that some of the Court’s proposed language concerning the “directness” of the relation between plaintiffs’ injury and defendant’s acts was inappropriate in the ATA context. No one has ever “directly” been injured by a wire transfer, and further, the language was too suggestive of a requirement to trace specific dollars to specific terrorist attacks, a requirement that had been rejected by this Court and others. See Gill,
C. Sufficiency of the Evidence
Plaintiffs provided evidence that from 2000-2001, defendant processed approximately $3.2 million in transfers from Yousef El-Hayek to accounts that plaintiffs identify as belonging to Hamas leaders and their wives. From 1999-2004, the 11 Hamas-controlled charities received approximately $32 million into their Arab Bank accounts, approximately $15 million of which was originated by the Saudi Committee. The. originating parties for much of the remaining funds were organizations that plaintiffs identified as part of the Hamas worldwide fundraising network, including Interpal, a British charity designated by OF AC in 2003; Comité de Bienfaisance et de Secours aux Palestinians (“CBSP”); Association de Secours Palestinian (“ASP”); the Al-Aqsa foundation, all designated in 2003; and the Holy Land Foundation, a United States charity designated in 2001.
Hamas carried out the terrorist attacks in which plaintiffs were injured between 2001 and 2004, the time period during which tens of millions of dollars were flowing to the Arab Bank accounts of Hamas leaders and charities. Just as the Strauss court concluded in denying summary judgment in similar litigation involving the Ha-mas fundraiser CBSP,
[o]n this record, a reasonable juror could conclude that the sizable amount of money sent from Defendant to Hamas front organizations was a substantial reason that Hamas was able to perpetrate the terrorist attacks at issue, and that Ha-mas’ increased ability to carry out deadly attacks was a foreseeable consequence of sending millions of dollars to groups controlled by Hamas.
Defendant does little to contest this evidеnce, focusing its argument on plaintiffs’ failure to prove but-for causation. But defendant is even incorrect that plaintiffs have failed to trace specific funds transfers to any of the terrorist attacks at issue, although they were not required to do so. Plaintiffs identified Saudi Committee “martyr” payments to the immediate relatives of the Hamas suicide attackers who perpetrated four of the terrorist attacks at issue: (1) the June 1, 2001 Dolphinarium bombing; (2) the August 9, 2001 Sbarro Pizzeria bombing; (3) the December i, 2001 Ben Yehuda Street bombings; and (4) the December 12, 2001 shooting attack on Bus No. 189 in Emmanuel. Defendant’s emphasis on the fact that these payments were made after the attacks occurred misses the point; the jury was entitled to find that the prospect that the families of dead Hamas terrorists would be financially rewarded was a substantial factor in increasing Hamas’ ability to carry out attacks such as these. See Boim III,
Plaintiffs were similarly able to trace some of the transfers for Hamas leaders to specific attacks, despite defendant’s failure to produce account documents. On December 18, 2000, Osama Hamdan sent a check for $10,000 to Yousef El-Hayek in Lebanon. From February 2001 to May 2001, El-Hayek sent $123,000 to Abbas Al-Sayyed in Palestine, routed through Arab Bank New York. Al-Sayyed planned and supervised the Park Hotel bombing that occurred less than a year later, on March 27, 2002. In his interrogation by the Israeli police, Al-Sayyed stated that he used funds sent to his Arab Bank account from abroad to buy weapons.
Defendant argues that even this evidence is insufficient, because Al-Sayyed stated only that he used the funds he received through Arab Bank to purchase rifles and pistols, and not the bomb that was detonated during the Park Hotel Passover Seder. As an initial matter, I disagree; even if plaintiffs were required to trace specific dollars to specific attacks — and again, they were not — a jury could reasonably infer that because Al-Sayyed confessed to using money sent through Arab Bank for some terrorist purposes, he also used it for others, including the Park Hotel bombing for which he was convicted.
Defendant’s argument on this point does not persuade me that the evidence is insufficient, but it does reinforce my view that the causation standard that has been applied in this case is the correct one.
This underscores why the ATA is not a statute that requires tracing dollars to bombs. Congress has found that “foreign organizations that engage in terrorist activity are so tainted by their criminal conduct that any contribution to such an organization facilitates that conduct.” Antiterrorism and Effective Death Penalty Act of 1996, Pub.L. 104-32, § 301(a)(7), 110 Stat. 1214, 1247 (1996). Defendant’s position is precisely to the contrary: Only specific, identifiable contributions dirеctly connected to terrorist activities facilitate an FTO’s criminal conduct, and such contributions can facilitate only the specific crimes to which they are connected and no others. In order to cut terrorist groups off from their sources of financing, the ATA takes the more commonsense view that putting money in the hands of terrorist groups increases their ability to carry out attacks. See Boim III,
IV. Attribution to Hamas
Although defendant states in passing that- it believes that plaintiffs “have failed to prove Hamas’ responsibility for perpetrating all 24 attacks,” an assertion not remotely supported by the record, defendant moves for judgment as a matter of law only as to two: the January 29, 2004 suicide bombing on Bus No. 19, and the mortar attack on Neve Dekalim on September 24, 2004. As to these two attacks, defendant is correct.
The facts surrounding the Bus No. 19 attack, although somewhat complicated, are not substantially in dispute. Plaintiffs do not contest the evidence of the Al-Aqsa Martyrs Brigade’s role in the attack. Rather, they rely on Mr. Shaked’s testimony that Hamas and the AAMB shared responsibility for the attack, essentially because Hamas’ role in preparing the suicide bomber for the initial, aborted attack made it easier for the AAMB to recruit him for the one that was actually carried out.
Hamas certainly bears some moral responsibility for the bombing of Bus No. 19. But that is not enough, in light of the uncontroverted evidence that the AAMB built and supplied the bomb, that the bomber himself wrote in his will that he was working on behalf of the AAMB, and that several AAMB operatives were convicted for planning the attack. Ultimately, attribution of the attack to Hamas is not a question hf moral responsibility, but one of whether Hamas’s involvement in bringing about the attack was sufficient for a reasonable jury to find by a preponderance of the evidence that Hamas committed the attack. The evidence demonstrated that the AAMB used its resources to carry out the Bus No. 19 attack, including building the actual bomb used. If Hamas did not use its resources to carry out the attack in which plaintiffs were injured, then defendant’s support in augmenting those resources could not have been a substantial factor in causing that attack.
As for the mortar attack on Neve Dekal-im, plaintiffs’ only evidence was Hamas’ claim of responsibility. That claim of responsibility did not identify the perpetrators, who were never arrested or captured. Although this does not, as discussed below, render the claim inadmissible, it does lessen its probative value. Further, unlike for
With respect to both of these attacks, I find as a matter of law that there was insufficient evidence to support the jury’s finding that plaintiffs had proven that Ha-mas committed these attacks by a preponderance of the evidence. Defendant’s Rule 50 motion is therefore granted as to these two attacks only.
V. Scienter
At trial, defendant requested a jury charge that the improper intent required for an ATA claim brought pursuant to 18 U.S.C. § 2339B(a)(l) could be demonstrated by a finding that defendant “engaged in deliberate wrongdoing with malice or an evil motive or in such conscious or deliberate disregard of the interests of others and of the potential for harm to American nationals that the conduct may be called willful or wanton.” Only now, in its post-trial motions, does defendant argue that plaintiffs could only satisfy the scienter element by proving that defendant acted with “an evil motive” or an “intent to harm someone.” This argument is incorrect.
The cases agree-that 18 U.S.C. § 2333(a), because it provides for treble damages, requires proof of intentional mis.conduct. See, e.g., Boim III,
Therefore, the Court instructed the jury that it could find defendant acted with the requisite intent if it found, for example, that defendant “knew that it was providing material support to Hamas, and also knew that Hamas engaged in terrorist activity.” The jury was also charged that it could find that defendant acted knowingly if it found that defendant “deliberately closed its eyes” to the fact that it was providing material support to Hamas. In order to make such an inference, the jury had to find that (1) “defendant was aware of a high probability of the fact in question,” and (2) “defendant consciously and deliberately avoided learning of that fact.” Days later, the Second Circuit described the scienter requirement in nearly identical terms. See Weiss,
Weiss is fatal to defendant’s arguments concerning the scienter required for an ATA claim brought pursuant to § 2339B(a)(l). Weiss involved neither evidence nor an allegation that the defendant had a subjective intent to “harm someone” by its provision of financial services to the
Defendant’s argument that Weiss only addressed the intent requirements imposed by § 2339B, and not the issue of whether § 2333(a) imposes a separate and additional intent requirement, is expressly contradicted by the Second Circuit’s opinion. Weiss held that “[w]hile § 2333(a) does not include a mental state requirement on its face, it incorporates the knowledge requirement from § 2339B(a)(l), which prohibits the knowing provision of any material support to terrorist organizations without regard to the types of activities supported.” Id. at 207. Therefore, in this context, the scienter standards for § 2339B(a)(l) and § 2333(a) are one and the same.
Undaunted by the express holding of Weiss, defendant argues that plaintiffs have failed to show that it acted with an “evil motive” or an “intent to harm someone,” which is defendant’s preferred liability standard, not the correct one. Notwithstanding this fact, plaintiffs satisfied their burden of proving defendant’s intent under the proper legal framework. Plaintiffs needed to prove that defendant knew that it was providing financial services to Ha-mas, and that defendant knew Hamas was a foreign terrorist organization (or engaged in terrorism or terrorist activity). See Weiss,
Plaintiffs introduced ample evidence at trial demonstrating that defendant provided financial services directly to senior Ha-mas leaders and operatives (and other U.S.-designated terrorists), and from which a reasonable jury could infer that defendant did so knowingly. First and foremost, defendant processed several transactions into the account of Osama Hamdan, a well-known spokesman for Ha-mas who regularly appeared on television to claim responsibility for terrorist attacks, on which the transferor listed the beneficiary party as “Hamas.” Some of these transactions were apparently initialed and approved by one of defendant’s senior executives.
Defendant argues that the transfers “misidentified the accountholder as Ha-mas,” and that the Bank “confirmed that the proper accountholder was Osama Hamdan (and not Hamas).” Therefore, defendant seemingly draws a distinction between funds transferred to Hamas and funds transferred in Hamas’ name to the account of Osama Hamdan, who is undis-putedly a member of Hamas.
I find this distinction unpersuasive, to say the least. Defendant’s argument implies that unless a terrorist formally opens up an account in the name of Hamas, that terrorist should be presumed to be acting
The notoriety of the Hamas terrorists for whom defendant maintained accounts also provided circumstantial evidence of defendant’s knowledge. As discussed above, Sheikh Yassin, an Arab Bank customer, was the most famous founding member and leader of Hamas. Several of defendant’s employees confirmed that they knew this. Yassin was designated a SDT by the United States in 1995, but remained an Arab Bank customer until 2001. Defendant offered no evidence to refute plaintiffs’ contention that Yassin was a customer of the Bank, and it was defendant’s policy to require photo identification of its customers.
Plaintiffs also provided evidence that Ismail Haniyeh, Yassin’s chief of staff and a Hamas leader who was acknowledged as such by .defendant’s employee Mohammad al-Tahan, was an account holder who received payments via the Bank totaling more than $420,000. In addition, as discussed above, the Bank completed trans-fere for 11 accountholders, each of whom the Bank admitted were United States designated terrorists at the time. Finally, defendant transferred funds to numerous designated terrorists after they were designated as such, in amounts totaling over $2.5 million.
Based on this evidence that defendant maintained accounts for well-known senior leaders of Hamas (and other designated terrorists), and processed transactions explicitly for the benefit of Hamas (and other designated terrorists), the jury could reasonably infer that defendant did so knowingly.
Defendant’s principal response is that most of the Hamas operatives who held accounts with the Bank were not designated as terrorists by OFAC, the United Nations, or the European Union. For those that were designated on the OFAC list, defendant points out that their names were spelled differently on the transfer forms than they were on the OFAC list. These were arguments for the jury, and the jury rejected them.
Plaintiffs also submitted evidence that defendant provided financial services to the 11 Hamas-controlled charities. Defendant first contends that plaintiffs failed to prove that the charities at issue were controlled by Hamas. It claims that plaintiffs were required to satisfy all of the traditional corporate veil-piercing factors in order to establish that the charities were controlled by Hamas.
I share the skepticism later expressed by the court in Strauss as to whether “legitimate corporations are sufficiently analogous to terrorist groups such that every corporate veil piercing factor applies.” Strauss,
Indeed, on similar evidence, the defendants in the Holy Land Foundation trial were convicted for providing material support to Hamas in violation of 18 U.S.C. § 2339B for providing funds to many of the very same charities at issue in this case. See generally United States v. El-Mezain,
The testimony of plaintiffs’ experts, Dr. Levitt and Mr. Spitzen, supplied a substantial record on which the jury could reasonably conclude that these charities were controlled by Hamas. For example, the evidence included that many of the charities were founded by senior Hamas leaders or had Hamas operatives on then-boards; findings by the governments of the United States, Germany, and Israel that the charities were controlled by Ha-mas; funds routed to these charities from United States designated Hamas fundraisers like Interpal; and the charities’ promotion of Hamas’ ideology and political goals. See Strauss,
The record also contained sufficient evidence to support a jury finding that defendant was aware of, or at least willfully blind to, the charities’ Hamas connectiоns. Again, plaintiffs’ expert Mr. Spitzen identified numerous well-known Hamas leaders who occupied leadership roles in the charities, and it was defendant’s policy to collect information about the boards of its customers who were entities, whether or not those entities had charitable purposes. For instance, there was testimony that the Islamic Center, Gaza was founded by Sheikh Yassin, who, along with other founding members of Hamas, participated in the charity’s activities. Yassin was also featured in the charity’s promotional materials and was listed as its founder and
Lastly, the testimony of David Black-more and evidence of “martyrdom” payments, discussed above, provided ample basis on which the jury could reasonably have found defendant knew or was deliberately indifferent to its clients’ association with terrorism. In particular, as to the latter, when asked about these lists at his deposition, Mohammed Al-Tahan, one of defendant’s senior employees, stated that he now found the lists suspicious, but only “for one reason: the Bank does not pay persons who are deceased.” In other words, he found the lists suspicious only because they did not list the names of the beneficiaries’ family members and were therefore “incomplete,” not because the Bank was facilitating payments to the families of suicide bombers. Defendant was free to argue to the jury, as it did, that there was nothing wrong with facilitating these transactions, and that distributing such “charity” provided neither support to Hamas nor incentive for suicide attackers. The jury was equally free to reject that argument, as it did.
Similarly, the evidence indicated that defendant was aware that Hamas-controlled charities like the Al-Salah Society and Islamic Society of Hebron selected Saudi Committee beneficiaries, and defendant relayed instructions from these charities to the Saudi Committee. Combined with the circumstantial evidence of defendant’s knowledge of these charities’ Hamas control, there was sufficient evidence for the jury to infer defendant’s knowledge.
VI. Respondeat Superior
In what can be viewed as another procedurally infirm motion for reconsideration, defendant’s proposed jury charges renewed its contention, also previously rejected by Judge Gershon, that it could only be held liable if one of its high-ranking officers or directors committed the unlawful acts of which plaintiffs complained. In the alternative, defendant requested a charge adapted from the criminal context, which included the instruction that the Bank could not be held liable if its agent “performs an act which the Bank has, in good faith, forbidden its officers, directors, employees, or agents to perform.”
Finally, defendant ignores the collective weight of the evidence. Plaintiffs provided evidence that defendant ‘ maintained accounts for senior Hamas leaders, and Ha-mas-controlled charities, and facilitated Saudi Committee payments to Hamas charities, Hamas prisoners, and the families of Hamas suicide bombers, all during the extreme violence of the Second Intifada. It was reasonable for the jury to consider the totality of this evidence and to conclude that defendant acted knowingly.
Judge Gershon rejected defendant’s effort to impose a standard higher than traditional respondeat superior. She
Defendant analogizes to the civil RICO statute, pointing to the fact that both it and the ATA are quasi-criminal in nature and impose treble damages. But a treble damages provision alone is not sufficient to overcome the presumptive application of general respondeat superior principles. See id. More fundamentally, the cases that defendant cites that hold respondeat superior liability unavailable in RICO actions make clear that this conclusion is based in the unique language and purpose of that statute. See Banque Worms v. Luis A. Duque Pena E Hijos, Ltda.,
As for defendant’s alternative charge, traditional principles of respondeat superi- or provide that the principal is liable for his agents’ unlawful acts committed in the course of the agent’s employment, even if those acts were contrary to the principal’s instructions:
The rule of “respondeat superior,” or that the master shall be civilly liable for the tortious acts of, his servant, is of universal application, whether the act be one of omission or commission, whether negligent, fraudulent, or deceitful. If it be done in the course of his employment, the master is liable; and it makes no difference that the master did not authorize, or even know of the servant’s act or neglect, or even if he disapproved or forbade it, he is equally liable, if the act be done in the course of his servant’s employment.
There may be found, in some of the numerous cases reported on this subject, dicta which, when severed from the context, might seem to countenance the doctrine that the master is not liable if the act of his servant was in disobedience of his orders. But a more careful examination will show that they depended on the question, whether the servant, at the time he did the act complained of, was acting in the course of his employment, or in other words, whether he was or was not at the time in the relation of servant to the defendant.
Philadelphia & Reading R.R. Co. v. Derby,
Here, the unlawful acts of which plaintiffs complain were wire transfers and other financial services. It is difficult to see how opening an account, initiating or receiving a wire transfer, or paying a customer would be outside the scope of any bank employee’s employment.
What defendant really wanted was for the Court to suggest to the jury that, because defendant had a general policy against providing financial services to terrorists, whatever employee processed the transactions or opened the accounts at issue surely must have been acting outside the scope of his or her employment. This not only would have represented an incorrect legal standard; it would have been fundamentally unfair, because defendant itself blocked the necessary discovery to meet that standard.
No one but defendant knows who the employee was who opened an account for Sheikh Yassin, the founder and leader of Hamas — if indeed it was his account. Defendant requested a “rogue agent” charge, but blocked all evidence that would identify who those rogue agents might be, what acts they committed, and whether those acts were within the scope of those agents’ employment. The Court therefore gave a general respondeat superior charge, stating in relevant part that a corporation is liable for its agents’ unlawful acts, “provided the unlawful acts are done within the scope of their authority, as would usually be the case if done in the ordinary course of their employment, or in the ordinary course of the corporation’s business.”
VII. Evidentiary Rulings
A. Authentication Generally
Federal Rule of Evidence 901 “does not erect a particularly high hurdle” for authenticating evidence. United States v. Dhinsa,
Most relevant here is Rule 901(b)(4), which permits authentication by “[t]he appearance, contents, substance, internal patterns, or other distinctive characteristics of the item, taken together with all the circumstances.” The Advisory Notes to Rule 901(b)(4) state that “[t]he characteristics of the offered item itself, considered in the light of circumstances, afford authentication techniques in great variety.”
1. Authentication of Website Postings
A proponent seeking to authenticate a website posting must show a reasonable likelihood that the information was posted by the individual or organization to which the postings were attributed. See, e.g., Boim III,
In this case, plaintiffs’ expert Evan Kohlmann authenticated two websites, Palestine-info.com and alqassam.ps, as authentic mouthpieces for Hamas. Mr. Kohlmann has given similar testimony in criminal prosecutions, see United States v. Ali,
At trial, Mr. Kohlmann testified in detail as to the factors, both extrinsic and intrinsic, that led him to conclude that these two websites were authentic. Those factors included: the reliance of the United States and other governments on the webpages as authentic sources of Hamas communications; the language and facts used in postings; the posting of exclusive interviews with Hamas leaders and nonpublic details of their lives; and the fact that the websites contained official Hamas seals and watermarks. Cf. United States v. Vayner,
2. Authentication of Videos
The Court also admitted certain video recordings at trial. Videos may be authenticated “on the same principles as still photographs,” Mikus v. United States,
B. Declarations Against Interest 1. Website Postings
All the web ppstings that the Court admitted, save one, were claims of responsibility by Hamas for terrorist attacks. The Court has noted its disagreement with decisions by other district courts that have held that a claim of responsibility by a terrorist group categorically cannot qualify as a declaration against interest. See Gilmore v. Palestinian Interim Self-Gov’t Auth., 53
Defendant’s Rule 59 motion, which again objects to the admission of these claims of responsibility, raises no new arguments. It merely reiterates defendant’s reliance on these cases, without addressing the Court’s previous decision expressing its disagreement with them and the authorities cited therein. Nevertheless, I will explain my rationale once more.
First, claiming responsibility for a terrorist attack is plainly against Hamas’ penal interest. For a statement to be admissible under Rule 804(b)(3), a court must determine that “a reasonable person in the declarant’s shoes would perceive the statement as detrimental to his or her own penal interest.” United States v. Saget,
This part of the analysis is relatively straightforward. It is beyond reasonable dispute that Hamas’ claim of responsibility for a violent terrorist attack on Israeli civilians could subject the organization and its members to penal consequences, including crackdowns, arrests and even assassination by Isrаel. For example, on August 19, 2003, a suicide bomber blew himself up on a bus in Jerusalem, and Hamas claimed responsibility that night. According to Mr. Spitzen’s expert report, Ismail Abu Shanab, a senior Hamas leader, was killed by the IDF two days later, on August 21, 2003. This is not to say that Shanab’s killing was solely in response to Hamas’ claim of responsibility. However, it cannot be disputed that Israel takes punitive action against Hamas when it perceives that Hamas has committed a terrorist attack. Hamas claiming responsibility for a terrorist attack tends to increase that perception, and Hamas is aware of these facts.
In its Rule 59 motion, defendant does not seriously contest that claiming responsibility for a terrorist attack could subject Hamas to the criminal consequences described above. Rather, it relies on select quotations from plaintiffs’ experts to argue that Hamas had an ulterior motive to lie, negating the assumption underlying Rule 804(b)(3) that people “do not make statements which are damaging to themselves unless satisfied for good reason that they are true.” This effort is not persuasive.
As I have previously held, the fact that Hamas may have other motivations for claiming responsibility for a terrorist attack does not automatically render such claims inadmissible. After all, it is rare for anyone to say anything purely for the sake of getting himself in trouble. Courts regularly admit statements under Rule 804(b)(3) despite the argument that the declarant had another motive for making the statement. See United States v. Gupta,
Thus, the question is not whether Ha-mas’ claims of responsibility were undiluted by other motives, but whether Hamas, or rather, its members, were aware that they faced severe penal consequences for making these claims. The fact that Ha-mas claimed responsibility for these attacks signals only that it thought the risk of penal consequences was outweighed by its collateral goals, not that there were no penal consequences attached to the statements. Plaintiffs were entitled to argue to the jury that Hamas would not have made these statements unless they had a least a kernel of truth. With the potential penal consequences as severe as they are in this case, Hamas’ propaganda motives are insufficient to render its statements inadmissible.
It bears mentioning that this is not a criminal case. Thus, Rule 804(b)(3)(B)’s requirement that a statement against interest “supported by corroborating circumstances that clearly indicate its trustworthiness” does not apply, because the statement is not “offered in a criminal case as one that tends to expose the declarant to criminal liability.” Nevertheless, many of the claims of responsibility in this case were corroborated by Israeli government reports assigning blame to Hamas, and by court records showing convictions of Ha-mas operatives for the attacks.
Defendant rightly pointed out the lack of such corroboration for some of the statements on cross-examination. It also pointed to claims of responsibility by other groups,
These competing contentions were presented where they should have been presented: to the jury. See Gupta,
Ironically, had defendant been successful in excluding all reference to Hamas’ claims of responsibility for terrorist attacks, I may have been forced to grant a directed verdict to plaintiffs on the issue of attribution of many of the attacks. That is because with few exceptions, the only evidence that defendant offered to show that the attacks were not carried out by Hamas were claims of responsibility by other terrorist groups. Without those competing claims, plaintiffs’ evidence and expert testimony would have gone uncontradicted. See Boim III,
Finally, the Court admitted one website posting that was not a claim of responsibility, but was instead a statement on the website Palestine-info.com, which called for donations to Hamas at a particular Arab Bank account. In hindsight, it is not clear what statements on this webpage were being offered for their truth, and thus they may not have been hearsay at all; certainly, plaintiffs were not contending the truth of the statement that supporters of Hamas should donate to a particular account. The document’s primary relevance lies in the fact that an Arab Bank account number was listed on an authenticated Hamas website, not in the veracity of the statements featured on the website.
Nevertheless, there is a readily identifiable penal interest implicated by the statements on the website: soliciting donations for Hamas is a crime under the laws of the United States, Israel, and other countries. The purportedly “ulterior” motivation for making these statements is equally obvious: the desire to raise money. But again, a statement is admissible as a declaration against penal interest if it is sufficiently self-inculpatory, even though the statement might also serve the declarant’s other interests. See Saget,
Moreover, to the extent that any statements on the website were offered for their truth, they were reliable and well-corroborated. The desire to raise money does not provide a motive to fabricate. Soliciting donations for a fake bank account would have the undesired effect of ensuring that the intended recipient never received those donations. In addition, the statements were corroborated by SWIFT transfers to the account number listed on the website — the account of Osama Ham-dan. Some of those transfers bore the notation “Palestine Information Center,” the name of the website that posted the statements.
2. Hamas Website Videos
Most of the videos at issue originated from the Hamas websites that Mr. Kohlmann authenticated. That each video was found on a Hamas website supports the finding that it is reasonably likely that the videos were what plaintiffs professed them to be. Another factor in favor of authenticity is that plaintiffs’ expert witnesses, Messrs. Kohlmann and Shaked, who were both familiar with the likenesses of these terrorists from their extensive review of other Hamas materials, identified the individuals depicted in the “video wills” as the same individuals who carried out the attacks in question.
The video wills of suicide bombers are declarations against interest — they expose a declarant to significant criminal liability. For example, if the video fell into Israel’s hands before the declarant was able to carry out his attack, Israel would make great efforts to capture or kill the declarant before he could do so.
Defendant’s argument that the video wills were not against the declarants’ penal interests because the statements contained therein “cannot conceivably imply any fear of post-suicide prosecution” is without merit. First, as explained above, at the
For the remaining Hamas website video-a video of the funeral of a Hamas bombmaker-plaintiffs' expert Mr. Spitzen testified that he recognized and personally met some of the individuals depicted in the video, and he recognized the area portrayed in the video as the town square of Nablus. The video was not introduced for the truth of any statements made by the individuals appearing in it, but rather to depict those individuals appearing together, which tended to connect them to Ha-mas.
3. Videos From Other Sources
The Court also admitted several video clips from other sources. All but one of these was adequately authenticated by testimony from plaintiffs’ experts, who were familiar with the individuals depicted in the video clips. The lone exception was plaintiffs’ exhibit 1132, a video' depicting children dressed up as terrorists at an event for one of the charities at issue, which was authenticated by testimony from Dr. Levitt based on the fact that he recognized the logo of the television station on which it was broadcast, and that he was personally familiar with this video and its use by law enforcement in several countries.
Osama Hamdan’s statements on CNN,
The remaining video clip — one showing Sheikh Bitawi, an individual connected to some of the charities at issue, speaking at the funeral of Jamal Mansur and Jamal Salim, two- alleged Hamas leaders- — -was not admitted for the truth of any statements contained in it, but to depict the connection between the individuals portrayed therein, Hamas, and the charities at issue in this case.
Finally, with respect to Rule 403, the subject matter of each of these videos was provocative to varying degrees. But for each one, the probative value of the video — whether proving Hamas’ responsibility for a given attack or showing the connection between certain individuals and charities to Hamas — outweighed the risk of undue prejudice.
C. Foreign Law
Judge Gershon denied defendant’s motion to put foreign law before the jury. See Linde v. Arab Bank, PLC,
Evidence of foreign law is irrelevant to whether certain bank transactions violated the ATA. The sagacity of Judge Gershon’s holding to that effect was confirmed at trial when one of defendant’s former senior executives, Shukry Bishara, testified that (to his knowledge) Osama Hamdan had not been blacklisted by the government of Lebanon to that day. In other words, Mr. Bishara testified that over one decade after the United States designated Hamdan as a terrorist based on his public association with Hamas, he still believed that it remained legal to do business with Hamdan under the laws of Lebanon.
Indeed, Hezbollah, a foreign terrorist organization designated by the United States long ago, operates openly in Lebanon. Knowingly providing financial services to Hezbollah would be a violation of the ATA regardless of whether doing so would be illegal under Lebanese law. Therefore, whether or not it was legal for defendant to do business with terrorists under foreign law is plainly irrelevant to whether defendant knowingly violated the ATA, which applies extraterritorially. See Weiss v. Nat’l Westminster Bank PLC,
The jury's question in Court Exhibit 3-"What is the law regarding the return of money when the SIC [Lebanon's Special Investigation Commission] doesn't respond to an inquiry?"-does not indicate otherwise. It was obvious from the context that the jury's question was directed at what the SIC's failure to respond would mean under United States law, and not at whether Lebanese law was relevant to defendant's state of mind. Furthermore, Judge Gershon had already ruled that this meant nothing. The jury was specifically instructed that it was not to consider the legality or illegality of defendant's conduct under any foreign law. Defendant would have the Court infer that the jury disregarded this instruction based on its reference to the SIC. The law almost invariably presumes otherwise. See, e.g., Zafiro v. United States,
Nor do I believe that Judge Ger-shon erred in prohibiting defendant from rearguing to the jury its discovery objection regarding foreign bank secrecy laws. Judge Gershon and Magistrate Judge Po-horelsky held that defendant's bank secrecy objections were not a valid excuse for refusing to participate in discovery. Despite these rulings, defendant proposed to argue to the jury that its reasons for not producing certain documents were valid. They were not; permitting this argument would have allowed defendant to "defeat the court's analysis, mislead and confuse the jurors, and improperly invite them to decide legal issues." Linde,
D. Israeli List of Unlawful Associations and Terrorist Organizations
Defendant also argues that I erred in admitting an Israeli list of Unlawful Associations and Terrorist Organizations, because it concerns foreign law, which is irrelevant (and was therefore excluded), and because the document was not properly authenticated and was prejudicial. These arguments are unpersuasive.
First, the Court's previous rulings on the applicability of foreign law do not control whether this list was properly admitted. The question was not whether the listed entities were deemed to be controlled by Hamas as a matter of Israeli law, but rather that the Israeli government found as a matter of fact that these organizations were controlled by Hamas. This distinction is critical. Therefore, the jury was able to consider the list in determining whether certain organizations were in fact controlled by Hamas.
In addition, plaintiffs' expert Mr. Spit-zen stated that the list was published in the Israeli equivalent of the Federal Register-a fact that cannot be disputed-and thus was publicly available during the relevant time period. Defendant's expert witness Dr. Milton-Edwards rebutted that testimony with her own opinion. She stated that while visiting some of the charities at issue during the relevant time period, she did not see any evidence of the Israeli list being enforced. Weighing this evidence was for the jury.
Finally, I reject defendant’s Rule 403 argument. That certain charities were declared illegal by the Israeli government due to their Hamas affiliations is highly probative evidence that these charities were affiliated with Hamas. This list was one piece of evidence that tended to establish that fact. Also, as described above, defendant suffered no unfair prejudice by its admission.
E. FinCEN Assessment
Before trial, the Court ruled that plaintiffs could admit a certain portion of the 2004 assessment against defendant by FinCEN. However, plaintiffs failed to lay the proper foundation to introduce this evidence during their case-in-chief. Therefore, the Court refused to allow plaintiffs to read the document into the record.
That might have been the end of it. But then, defendant called Brian Billard, the head of compliance for defendant’s New York branch, who described the Bank’s compliance program in New York in glowing terms. For example, Mr. Billard repeatedly testified that defendant “strictly adheres” to the applicable U.S. laws and regulations, and always followed them to the “strictest degree.” He also testified that in order to apply for a license at OFAC, the Bank needed to have, and in fact did have “very good records.”
FinCEN’s investigation, however, found the Bank’s compliance programs lacking in several.critical respects. FinCEN’s factual findings included that “Arab Bank— New York did not file the majority of its suspicious activity reports regarding terrorist financing until after the Office of the Comptroller of the Currency commenced a review of its funds transfer activity jn July 2004,” and “Arab Bank — New York failed to review information in its possession that would have shown it was clearing funds transfers for individuals and entities dealing with subsequently designated terrorists and terrorists organizations, failed to analyze this information, and failed to file Suspicious Activity Reports.”
Consequently, the Court permitted plaintiffs to use portions of the assessment for cross-examination because FinCEN’s findings directly impeached Mr. Billard’s characterization of defendant as an eminently compliant financial institution, but did not admit it into evidence. The portions of the assessment plaintiffs used to impeach the witness were the factual findings that FinCEN made in the process of • discharging its legal duty to investigate. Those portions were detailed in a section headed “determinations.” They contained no statements by defendant, no offers of compromise, no evidence of the amount defendant paid, no evidence of defendant’s conduct during compromise negotiations, nor any reference to the fact that defen
Courts have disagreed on Rule 408’s effect on the admissibility of the factual findings of a government investigation, where the investigation ends in a settlement. Compare Option Res. Grp. v. Chambers Dev. Co., Inc.,
Defendant points out that the latter two cases are inapposite because they permitted the use of settlement fact-finding to defend an action. But that is not the full story as to the Pentagon Capital case. There, the factual findings of the SEC in previous, settled enforcement actions were offered against the SEC, as tending to refute the SEC’s allegations against the defendant. See Pentagon Capital,
Moreover, Rule 408 could not be used to preclude all mention of the investigation. Whether plaintiffs .should have been permitted to ask defendant’s witnesses whether FinCEN investigated the Bank implicates only Rule 403.
At the end of the day, defendant’s position is essentially that because it settled the FinCEN investigation, its witnesses were free to testify as if that investigation had never occurred and the factual findings made by FinCEN did not exist. I do not believe that either Rule 408 or Rule 403 permitted defendant to mislead the jury this way, and the proper balance was to allow the agency findings to be used for impeachment only.
F. Saudi Committee Experts
Defendant argues that Judge Ger-shon erred in excluding the testimony of two of defendant’s experts, Robert Lacey and David Rundell, who would have testified as to the Saudi Committee’s purportedly legitimate, humanitarian motives.
Judge Gershon explained in detail the reasons for her finding that Mr. Lacey was “wholly unqualified” to offer opinions about the Saudi Committee. See Linde v. Arab Bank, PLC,
In addition, both the testimony of Mr. Lacey and of Mr. Rundell fell within Judge
Defendant next claims that this Court improperly applied a double standard by permitting plaintiffs’ expert Mr. Spitzen to opine on the intent of the Saudi Committee to support Hamas. This argument distorts the record. Mr. Spitzen testified that the Saudi Committee was part of the Union of Good, an umbrella organization that was designated in 2008 as a Hamas fundraiser. The portion of the transcript that defendant quotes — a reference to the Union of Good having the “primary purpose” of “diverting] charitable donations to support Hamas members and the families of terrorist operatives” — is not even Mr. Spitzeris own words. Rather, it is a quote from the United States government’s designation of the Union of Good as a SDGT. Mr. Spitzen simply agreed with the United States government. He also testified that the Saudi Committee made’ payments to Hamas, including its operatives and suicide bombers, which bolstered his conclusion regarding the relationship between the two organizations. Finally, Mr. Spitzen commented briefly on the stated purpose of the Saudi Committee, embodied in its full name, the “Saudi Committee for the Support of the Intifada Al~ Quds,” and noted that the death benefits distributed by the Saudi Committee were relatively high when compared to the per capita income of Palestine. None of this references the subjective intent of the Saudi Committee.
This testimony is fundamentally different in kind than the proposed testimony of defendant’s experts that, for example, the Saudi Prince appointed to head the Saudi Committee “would be the last person to want the [Saudi Committee] money to fall into terrorist hands” or that Saudi Arabia is “inherently opposed to terrorism.” Indeed, neither of defendant’s experts even mentioned the Union of Good in their reports, much less disputed that the Saudi Committee was part of it.
Finally, to the extent defendant objects that Mr. Spitzen’s brief reference to the stated purpose of the Saudi Committee was improper testimony concerning the Saudi Committee’s intent, that objection is without merit. Testimony that an organization called the “Saudi Committee for the Support of the Intifada” was founded to support the Intifada is not an expert opinion about intent; it is reading the organization’s name out loud.
Moreover, expert testimony about the Saudi Committee’s humanitarian efforts would be largely irrelevant. As most recently reiterated in Weiss, there is no such thing under United States law as “legitimate” charity distributed through Hamas. See Weiss,
In sum, I adhere to Judge Gershon’s holding that defendant’s proffered Saudi Committee experts were unqualified, offered no relevant expert testimony, or both.
VIII. Trial Structure
Defendant argues that it was prejudiced by the trial structure, which grouped together the liability trials for the 24 attacks that plaintiffs allege were carried out by Hamas. Defendant raised this argument in the parties’ Proposed Joint Pretrial Order. I rejected it as untimely and without merit in July 2013, and stick to that holding now.
Judge Gershon adopted plaintiffs’ proposed trial structure over defendant’s proposals at a pretrial conference held on July 22, 2010. Defendant filed a letter objecting to the trial structure on evidentiary and due process grounds on May 22, 2013. Although framed as an “evidentiary” objection, based on the purported irrelevance of certain evidence with regard to certain attacks, defendant’s letter was clearly a vastly untimely motion to reconsider the trial structure. The letter did not seek the exclusion of any particular items of evidence, but rather that the entire trial structure be reconsidered.
Initially, it is at least surprising, if not entirely disingenuous, that defendant now complains about prejudice from aggregating 24 Hamas attacks under only the ATA when defendant at one time recommended a three-phase trial structure to “resolve all of the 6,580 plaintiffs’ claims — arising from 389 separate alleged incidents.” Defendant’s position is in any event without merit. It is primarily based on the mistaken premise that evidence relating to one attack is necessarily irrelevant to all other attacks. That is true only if one accepts that the evidence must be viewed piecemeal, without consideration of the whole.
Plaintiffs’ theory of the case, accepted by the jury, is that defendant engaged in a lengthy course of conduct that provided material support to Hamas. For examplе, the evidence included that defendant processed transactions for senior Hamas leaders in 2001, received lists of beneficiaries containing the names of suicide bombers in 2002, and returned a bank account balance to the known terrorist Osama Hamdan in 2005. Defendant’s position is that each of these actions must be viewed in isolation, but a jury could reasonably infer from defendant’s course of conduct subsequent to 2001 that it was deliberately indifferent to or even supportive of its customers’ Hamas affiliations in 2001. The fact that defendant had no qualms about paying the families of suicide bombers in 2002 might suggest that defendant was equally indifferent to providing financial sérvices to Hamas leaders in 2001. In other words, although defendant may have had an answer for everything, the jury could reason
Defendant, moreover, vastly overstates the complexity of the evidence before the jury. The evidence relating to attribution of each of the 24 attacks was relatively simple, consisting largely (although not entirely) of Hamas claims of responsibility, criminal convictions of Hamas operatives in Israeli courts, and the factual findings of the Israeli government as to responsibility for the attacks. Some attacks had evidence from all of these categories. Some did not. But this fact did not necessarily disadvantage defendant. Indeed, defendant could have compared the amount of evidence available for the different attacks to highlight the attacks for which plaintiffs’ proof was thinner. Defendant attempted to do so, to a certain extent, but the credibility of this argument was likely undermined by defendant’s somewhat quixotic attempt to persuade the jury that plaintiffs could not prove that Hamas had carried out any of the 24 attacks. It was of course defendant’s right to hold plaintiffs to their proof, but the wisdom of doing so was questionable in the case of attacks like the Park Hotel bombing, where Hamas said they carried it out, the ISA said Ha-mas carried it out, and the Israeli courts convicted the perpetrators for both the bombing and their membership in Hamas.
The evidence as to the material support defendant provided was similarly straightforward, consisting solely of financial transactions it processed on behalf of Ha-mas leaders, charities, and the Saudi Committee. Defendant is correct that plaintiffs did not link certain attacks to specific transactions, but Judge Gershon held that they did not have to do so. Instead, the jury could — and did — consider the overall support that defendant provided to Hamas during the relevant time period.
In short, this case was nothing like the mass proceedings described in the authorities that defendant cites. Malcom v. National Gypsum Co.,
Defendant appears to suggest that the only option was to hold 24 liability trials. The inefficiency and wasted resources that would have resulted from proceeding that way are obvious. Witnesses would have had to testify multiple times to multiple juries, for example, as to the background of Hamas as an organization and the relationship, or lack thereof, between the charities at issue and Hamas. Witnesses based abroad — which is most of them— would have had to fly to the United States repeatedly. The overwhelming expense of doing that might well sound the death knell to plaintiffs’ ability to finance this case, and since I am cognizant of that, I have to assume that defendant is as well.
Malcom instructs that in considering whether to consolidate, courts must consider
whether the specific risks of prejudice and possible confusion [are] overborne by the risk of inconsistent adjudications of common factual and legal issues, the burden on parties, witnesses, and available judicial resources posed by multiplelawsuits, the length of time required to conclude multiple suits as against a single one, and the relative expense to all concerned of the single-trial, multiple-trial alternatives.
IX. Defendant’s 1292(b) Motion
“Section 1292(b)’s legislative history reveals that although that law was designed as a means to make an interlocutory appeal available, it is a rare exception to the final judgment rule that generally prohibits piecemeál appeals.... [Section 1292(b) ] is reserved for those cases where an intermediate appeal may- avoid protracted litigation.” Koehler v. Bank of Bermuda Ltd.,
[i]t does not normally advance the interests of sound judicial administration or efficiency to have piecemeal appeals that require two (or more) three-judge panels to familiarize themselves with a given case, instead of having the trial judge, who sits alone and is intimately familiar with the whole case, revisit a portion of the case if he or she has erred in part and that portion is overturned following the adjudication of the whole case.
Harriscom Svenska AB v. Harris Corp.,
The upcoming damages trial in this case will allow a judgment under Rule 54(b) which will bring all of the issues defendant raises in its § 1292(b) motion before the Circuit. That by itself is sufficient reason to deny certification. In any event, defendant has not shown that the substantive standards of § 1292(b) are met for any of the issues on which it seeks certification. With respect to the ATA’s causation standard and whether terror financing is an “act of international terrorism” under the ATA, I do not believe that there is “substantial ground for difference of opinion,” as required by the statute. Moreover, even if there were substantial grounds for difference of opinion as to whether the Sanctions Order improperly balanced the relevant interests on its face, defendant clearly seeks to challenge it as applied. (Even defendant’s amicus the Hashemite Kingdom of Jordan appears to concede the same, arguing that “[t]he sanctions order, as applied at trial,” poses a controlling question of law.) There is therefore no pure question of law that could be resolved by the Court of Appeals without resort' to the record, making certification inappropriate. See Morris v. Flaig,
CONCLUSION
For the foregoing reasons, defendant’s Rule 50 motion is granted in part and denied in part, and its Rule 59 and § 1292(b) motions are denied.
SO ORDERED.
Notes
. The 24 attacks are: the March 28, 2001 bombing at Neve Yamin; the June 1, 2001 bombing at the Dolphinarium in Tel Aviv; the August 9, 2001 bombing at Sbarro in Jerusalem; the December 1, 2001 bombings on Ben Yehuda Street; the December 12, 2001 attack on Bus No. 189 at Emmanuel; the March 7, 2002 attack at Atzmona; the March 10, 2002 bombing at Café Moment; the March 27, 2002 bombing at the Park Hotel, Netanya; the May 7, 2002 bombing at the Sheffield Club, Rishon Le-Zion; the September 19, 2002 bombing on Bus No. 4, Allenby Street; the June 18, 2002 bombing on Bus No. 32-A, Pratt Junction, Jerusalem; the July 31, 2002 bombing of the Frank Sinatra Cafeteria at Hebrew University; the January 29, 2003 shooting attack on Road 60; the March 5, 2003 bombing on Bus No. 37, Haifa; the March 7, 2003 shooting attack in Kiryat Arba; the April 30, 2003 bombing at Mike's Place, Tel Aviv; the May 18, 2003 bombing on Bus No. 6, French Hill, Jerusalem; the June 11, 2003 bombing on Bus No. 14A, Jaffa Road, Jerusalem; the June 20, 2003 shooting attack on Road 60; the August 19, 2003 bombing on Bus No. 2, Jerusalem; the September 9, 2003 bombing at Café Hillel, Jerusalem; the October 22, 2003 shooting attack in Tel Rumeida; the January 29, 2004 bombing on Bus No. 19,
. In August 2003, Misk blew himself up on Bus No. 2 in Jerusalem, killing approximately 23 people and wounding as many as 125 others.
. As discussed below, a central element of
. The 11 charities at issue are: the Islamic Charitable Society of Hebron; the Jenin Za-kat Committee; the Al Tadamun Islamic Charitable Society; the Nablus Zakat Committee; the Tulkarem Zakat Committee; the Ramallah Al Bireh Zakat Committee; the Al Islah Charitable Society; Mujama Al Islamiya (Islamic Center, Gaza); Al Jamiya Al Islamiya (Islamic Society, Gaza); Al Salah Islamic Society; and the Al Nur Prisoner Society.
. Due to an apparent translation error, the copy of Nashash’s conviction that plaintiffs originally submitted stated that Nashash was convicted of membership in Hamas. Mr. Shaked conceded, upon reviewing the document from the stand, that Nashash was actually convicted of membership in the AAMB.
. Mr. Spitzen also added that Yassin was killed by the IDF in 2004, while Shehadah was killed by the IDF in 2002.
. Mr. Spitzen also read from the U.S. Department of Treasury’s press release designating the Union of Good as a SDGT which said that
. For example, he recalled some "martyr files” that were seized by the Israeli government from one of the charities, the al-Tada-mun Society in Nablus.
. The jury was not permitted to consider the names of the parties identified in Exhibit A as evidence in the case.
. As discussed below, defendant was precluded from offering evidence of its policies in Lebanon and the Palestinian Territories, where account records that could show defendant’s adherence to such policies had not been produced.
. Defendant attempted to justify these returns by pointing to Lebanese law requiring it, but such reliance on foreign law to explain otherwise knowing conduct had been precluded by Judge Gershon in a pre-trial ruling. As discussed in greater detail below, this ruling also prohibited defendant from explaining the non-production of account records, which gave rise to the discovery sanctions that are at issue in the instant motions, by resort to its foreign bank secrecy obligations.
. As discussed below, defendant sought to enter evidence that it closed the accounts of all OFAC-designated individuals and entities, but produced neither supporting documentation for such account closures nor any indication of what it did with the funds in those accounts. Linde, 269 F.R.D. at 201 & n. 13. Defendant was precluded from making this argument, because it would have found proof or refutation in the withheld documents.
.This limited preclusion makes sense in light of the circumstantial evidence relating to Sheikh Yassin's alleged account,’ discussed above. Testimony and evidence that defendant's policies and procedures in the Palestinian Territories were in line with industry standards could have been rebutted by plaintiffs if those programs failed to detect documented donations to Sheikh Yassin. Further, defendant's non-production left plaintiffs with no way of testing on cross-examination how defendant's on-paper policies were applied in practice. Because no emails or internal reports were produced, whether any of defendant’s employees raised suspicions about any accounts will never be known. Testimony concerning the strength of defendant’s compliance programs in the Palestinian Territories would thus have invited the jury to take defendant at its word — an unfair proposition, when on cross-examination those witnesses would have refused to answer even the question “Did Sheikh Yassin have an account at Arab Bank?”
. Cf. Linde.,
. Cf. id. at 202 ("Defendant maintains that 'there is no basis to infer that [the withheld] records would establish’ that the Bank knew the Saudi Committee sponsored terrorism and that the Bank supported the Saudi Committee's efforts. But the content of the Saudi Committee records that have been produced suggests otherwise.”).
. Shortly before trial, defendant stipulated that the attacks in which plaintiffs were injured were “acts of international terrorism” within the meaning of the ATA. Previously, defendant maintained for over a decade of litigation that plaintiffs could not prove that suicide bombings fit the definition of "acts of international terrorism.”
. Defendant cites Paroline for the proposition that if but-for cause is not required in this case, damages should be apportioned to that amount of plaintiffs' losses that can be ascribed to defendant. Although this argument is premature, because we have yet to try damages in this case, I note that Paroline so held in the context of criminal restitution, where there is a "bedrock principle that restitution should reflect the consequences of the defendant's own conduct,” id. at 1725, a principle that is not unbending in the law of torts, where joint and several liability is commonplace. Moreover, neither the facts nor the jury instruction given in this case suggests that there was a finding of liability based on “very minor” contributions to plaintiffs' losses, as was the case in Paroline.
. Even if the statute in Holmes were properly viewed as analogous to the ATA in every
. As discussed above, defendant’s motion suffers from a failure to address the sufficiency of the evidence under the correct causation standard. Judge Gershon held over a year ’ ago that plaintiffs had to prove neither but-for nor ''direct” causation. Defendant addresses the causation standard she held applicable in a single conclusory footnote, stating that "[p]laintiffs have also failed to prove that the Bank’s financial services were a substantial factor in causing each of the 24 attacks and that their injuries were the foreseeable result of those financial services.”
. Although defendant maintains that these transactions were small both in number and in amount, which is true, defendant did not produce full account records for any accounts other than Hamdan’s. Therefore, it is unknown whether defendant processed other transfers for the benefit of Hamas.
. We cannot know whether these payments were made only to Hamas, or whether they included other terrorist groups, because the Bank refused to turn over its records. However, again, defendant cannot profit from such withholding.
. Those factors are: "(1) disregard of corporate formalities; (2) inadequate capitalization; (3) intermingling of funds; (4) overlap in ownership, officers, directors, and personnel; (5) common office space, address and telephone numbers of corporate entities; (6) the degree of discretion shown by the allegedly dominated corporation; (7) whether the dealings between the entities are at arms length; (8) whether the corporations are treated as independent profit centers; (9) payment or guarantee of the corporation's debts by the dominating entity, and (10) intermingling of property between the entities.” MAG Portfolio Consultant, GMBH v. Merlin Biomed Grp. LLC,
. Defendant's expert Dr. Milton-Edwards disagreed that there was any public affiliation between these charities and Hamas, but it was up to the jury to decide whom to credit.
. Claiming responsibility for terrorist attacks can also contribute to other sanctions. The United States’ August 22, 2003 designation of several Hamas fundraising charities and leaders as SDGTs specifically cited Hamas' claim of “responsibility for the despicable act of terror on August 19.’’
. The fact that certain, of those claims were presented in newspaper articles, however, added an extra level of hearsay and rendered them inadmissible.
. Defendant argued that this video may have been "staged.” But this objection missed the relevance of the video. Obviously, the kindergarten video was staged: Children do not dress up as terrorists unless they are prompted to do so. However, the very fact that this event was "staged” at one of the charities at issue in this case is where the video’s relevance is found.
. In terms of authentication, Mr. Kohlmann testified that the individual in the video was Osama Hamdan, the spokesman for Hamas. The record also contained Mr. Hamdan’s passport. The picture on that passport demonstrated that the Osama Hamdan in the CNN video was the same individual who held an account at Arab Bank. • In addition, the video itself was effectively self-authenticating. It bore CNN logos and showed no signs of being edited. Before beginning the interview, the anchor identified Osama Hamdan, both by name and as a spokesman for Hamas. Simply put, there is no doubt that the CNN video was authentic. Indeed, forging such a video would be extremely difficult. Cf. Advisory Committee Notes to Fed.R.Evid. 902(6) ("The likelihood of forgery of newspapers or periodicals is slight indeed. Hence no danger is apparent in receiving them.”).
.The video was also independently relevant for the not-for-truth purpose of rebutting defendant's argument that Hamas operatives like Hamdan hid their Hamas affiliations and conducted their affairs in a secretive manner.
. As discussed above, Mr. Bishara was also permitted to testify that the Bank believed it had "no choice” but to return to Hamdan the funds in his account in order to close it despite knowing that Hamdan was a SDGT and senior Hamas leader because the Bank provided discovery concerning that account.
. Defendant's related argument that during a sidebar I saidthe jury could draw an inference based on the list that the Bank knew or was reckless in not knowing about this list is moot. Plaintiffs never offered testimony or argued about defendant's knowledge of the Israeli list, and still do not do so.
. Defendant does not dispute Mr. Spitzen’s opinion that the Saudi Committee was a part of the Union of Good; this opinion was based in part on the Union of Good website, which explicitly lists the Saudi Committee as a member organization.