The last time we took a look at the civil proceedings in a US District Court in ew York against Jordan's Arab Bank by victims of Hamas terrorist violence, the plaintiffs had survived a motion to dismiss in a "strongly worded" decision by judge Nina Gershon that was a bad omen for the defendant. A mere seven and one-half years later, a jury found against the defendant on liability. A separate trial will be held to determine damages. As The New York Times noted, the decision marks "the first time a bank has ever been held liable in a civil suit under a broad anti-terrorism statute."
The burden of proof in the trial, held at Federal District Court in Brooklyn, was high: The plaintiffs had to prove that the terrorist attacks were indeed conducted by Hamas, and that the bank’s support of Hamas was the “proximate cause” of the events. In addition, the plaintiffs had to demonstrate that their injuries were “reasonably foreseeable” as a consequence of the bank’s acts.
Several similar lawsuits are pending; one case, filed by victims of terrorist attacks against the National Westminster Bank, was reinstated on Monday by a federal appeals court.
“What this has done is it’s made the effects of American law felt in far-off places, and that is significant,” said Jonathan Schanzer, vice president for research at the Foundation for Defense of Democracies and a former terrorism finance analyst for the Treasury Department. “I don’t think any country, any bank, would want to be cut off from the U.S. financial sector, and they’re going to start thinking very carefully about whether they accept financial transactions” even from people or groups who are not on designated terrorist lists.
That last point is an important one, because some of the organizations that were the bank's "problematic" customers were not on the official terrorist blacklists, and one of the bank's attorneys argued that this is an ominous decision for banks everywhere.
“The proposition that’s being floated here,” he told the jury, is “that private businesses, including banks, are supposed to make up their own lists of terrorists. Imagine, actually, what that would do, if a bank did that.”
The plaintiffs' attorneys countered that the organizations with which the banks did business were so obviously linked to terrorist organizations that denying the connection didn't pass the "straight face" test. Not that anything about the suffering of the plaintiffs is amusing.
The same defendant's lawyer confidently stated that the decision would be overturned on appeal. At the rate this matter has been winding its way through our judicial system, I assume that we'll know whether this prediction is prescient or fallacious sometime right before the turn of the next century.
The comments I made when discussing these types of lawsuits in January 2006 are still pertinent, I think, perhaps even more pertinent because of the recent jury verdict.
- They present huge reputational risk for the defendants.
- "Is the Israeli government financing all or any portion of the litigation, or is this merely another example of a tough, hardcore group of civilians seeking justice and simultaneously taking the fight to the enemy wherever they find them? I don't know; however, if I were a bank, the last thing I'd want to do is get between Israelis and their enemies anymore than I'd want to stand between a speeding eighteen-wheeler and a brick wall. That's just another fact of life, told from the perspective of an Irish-American Catholic kid with no axe to grind."
- "Litigation of this type is long, emotional, and expensive, win or lose. Inasmuch as it's personal, not business, to your foes, the banks involved can pin their ears back and, as they say in Las Vegas, 'get ready to rumble.' If you love protracted litigation, you'll enjoy yourself immensely."