Bank Lawyer's Blog

A New York Jury Says: Arab Bank Liable For Funding Terrorists

2014-09-24T21:51:00-05:00

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."

The Law Is A Jealous Mistress

2013-09-17T21:48:00-05:00

Time for some recycling.

One thing about having a professional career that's not a complete bust: the profession is a time vampire. Doctors, lawyers, and accountants all understand that what they do for a living sucks minutes out of their lives that they can never recover. You'd better be doing it well and you'd better enjoy it, and there'd better be some overriding reason to do it other than for the money. There will never be enough money to justify the brain damage and the simple, irretrievable loss of time.

In the throes of another hectic week last week, I had to listen to a client moan about "those damn lawyers" again. He also told me the old joke about a half-full bus of lawyers going over a cliff as being "wasted space." The first 250,000 lawyer jokes I heard, I could tolerate. Once I hit 250,001, for some strange reason, I began to tune them out.

Lawyer bashing: It's rampant. It's reflexive. It's popular to honk that lawyers use "loopholes" in the law, or "courtroom tricks," to get the guilty off the hook. They twist words to help heartless businesses screw the common man. They're tools of greedy, selfish interests rather than paragons of virtue who fight for the rights of the "common man."

In other words, they represent clients. Even clients like those who complain about lawyers, yet hire them to their dirty work.

I suppose if my ultimate sense of self-worth depended upon the opinion of strangers, I'd be in deep dog do. Fortunately, I have enough self-love for any two people (another reason that I need all the help from God that "She" can spare), so I consider the disparagement of entire groups of professionals based upon prejudices (rather than knowledge) to be as noteworthy as many people consider my blog posts. In other words, of not much value.

Still, being a member of a despised profession becomes tiresome.

It's not just lawyers that people hate, however, it's the "system" in which they work. What kind of "justice" can be dispensed if it goes to the party with the best advocate that money can buy? Look at O.J. Look at Robert Blake. Look at Casey Anthony. Look at that Neighborhood Watch guy. Look at the myriad of "truly guilty" people who get off because of "clever lawyering." It stinks!

I had a professor in law school who told his students that if we came to law school seeking knowledge of the means to absolute justice, we were in the wrong place. Instead, we should be seeking a PhD in Philosophy or Theology. For most of us, "justice" is the proper functioning of a legal system that human beings have erected to keep most of us engaging in "self-help." If we don't like the system, then we should persuade enough voters to change the system, and "have at it." He'd been teaching at the law school for 50 years, and he hadn't been presented with a viable alternative. Eventually, he died waiting.

I agree that abuses by the malpractice bar and the class action bar enrage many people. I recognize that it "seems" unfair when an F. Lee Bailey outfoxes an underpaid, less experienced prosecution team. I'm open to any rational discussion of ways to curb these abuses (such as hiring F. Lee Bailey to proclaim "I come not to defend The Juice, but to bury him!"). However, at some point the ignorance of many people about the purpose of the legal system we've adopted in this country and its superiority in preserving the freedoms we take for granted over other systems of "justice" that mankind has heretofore concocted, becomes so overwhelming that I can no longer restrain the urge to hurl curses worthy of Monty Python:

Many Our Fathers and Hail Marys must then be said for my penance.

You want to live in Japan or Botswana, where there are fewer lawyers? Well, go live there. If you have a better system in mind to dispense civil and criminal justice, then propose it to the legislators of your choice and "let's have at it." 1,000+ years of common law tradition be damned, let's hear YOUR brilliant idea for resolving civil and criminal disputes without those evil lawyers being involved.

[sound of crickets chirping]

Yeah, lawyers are jerks.

Life's a bitch.

Get over it.

And as long as I'm on a roll: To all the folks I've chatted with over the years who think it's simply fine to trample on or ignore the law because they answer to a "higher power," did any of you who claim to be "righteous" ever take to heart the "render unto Caesar what is Caesar's" passage of the New Testament? If you did, did you even understand it? Oh, you did and now you want to argue with me about its meaning. How utterly lawyer-like.

As my response, I'll let a passage from a "lay text," the play and movie "A Man for All Seasons," speak for me. In it, Sir Thomas More responds to demands by his daughter Margaret, her fiance, Roper, and More's wife, Alice, that Moore arrest Richard Rich (who will later betray Moore and bear false witness against him, sealing his doom):

MARGARET Father, that man's bad.

MORE There is no law against that.

ROPER There is! God's law!

MORE Then God can arrest him.

ROPER Sophistication upon sophistication!

MORE No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal.

ROPER Then you set man's law above God's!

MORE No, far below; but let me draw your attention to a fact-I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of the law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God . . . (He says this last to himself)

ALICE (Exasperated, pointing after RICH) While you talk, he's gone!

MORE And go he should, if he was the Devil himself, until he broke the law!

ROPER So now you'd give the Devil benefit of law!

MORE Yes. What would you do? Cut a great road through the law to get after the Devil?

ROPER I'd cut down every law in England to do that!

MORE (Roused and excited) Oh? (Advances on ROPER) And when the last law was down, and the Devil turned round on you-where would you hide, Roper, the laws all being flat? (He leaves him) This country's planted thick with laws from coast to coast-man's laws, not God's-and if you cut them down-and you're just the man to do it-d'you really think you could stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake.

ROPER I have long suspected this; this is the golden calf; the law's your god.

MORE (Wearily) Oh, Roper, you're a fool, God's my god . . . . (Rather bitterly) But I find him rather too (Very bitterly) subtle . . . I don't know where he is nor what he wants.

ROPER My god wants service, to the end and unremitting; nothing else!

MORE (Dryly) Are you sure that's God? He sounds like Moloch. But indeed it may be God- And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly!

Of course, More was put to death when the law (both man's AND God's) was ignored by the powerful. That possibility worries me far more than "clever lawyering."

The Pinochio Problem

2011-03-06T21:55:00-06:00

While I was gallivanting about the High Country last week, serving the Prince of Darkness, Housing Wire publisher Paul Jackson was deflating the Hindenburg of anti-bank gasbags, Yves Smith. Paul was writing about a decision in Arkansas in which a judge decided that as long as a loan servicer is a note "holder," it matters not who actually "owns" a note as far as the right to foreclose is concerned. If the borrower is in default, the "holder" of the note can foreclose. In addition, a borrower, not being a party to the pooling and servicing agreement among the parties to the loan securitization evidenced in part by that agreement, has no legal standing to contest the foreclosing party's right to foreclose under the terms of that agreement. Those rulings are directly contrary to positions taken by Ms. "Smith," and make her prior attacks on the credibility of Paul because he took positions contrary to hers, look like the blatherings of the ideological rant-bag I think she is.

I guess Paul resented Smith's prior unwarranted (and incorrect) attacks on him, and is issuing payback. My previous experience with Susan Webber (Smith's real name) leads me to the personal opinion that she's not worth the time it took Paul to write his opinion piece. In addition, her adoption of a French pseudonym in connection with her blog leads to me suspect that she's the type of American who would refuse to refer to "Freedom Fries" by their patriotic proper name.

Having said that, I confess to a personal bias against many of the loan servicers. I don't like what's been revealed about their slipshod servicing methods, and the noxious practice of "robo-signing" is particularly loathsome to me. My revulsion's cause is something that I haven't read much about, perhaps because I actually have a job that keeps me busy enough that I don't have time to scour the blogosphere for like-minded ranters, but perhaps it's because it's grounded in a moral objection, and "god knows," that morality stuff is all "relative and personal" these days. If you feel the same, then read no further and resume you're search for porn in cyberspace.

As most interested readers know by now, robo-signing involved employees of loan servicers and/or of law firms employed by the servicers, falsely swearing, mainly that they had personal knowledge of the truth of statements recited in documents filed with courts that were hearing foreclosure actions. There have also been allegations that notaries were falsely attesting that they witnessed the signatures of certain individuals, administered an oath to such individuals, and/or that those individuals swore under oath to the truth of the statements made in the documents filed with the court. Among other violations of law, such false swearing can constitute perjury.

Sure, if you're a presidential Pinochio, you might only get a three year suspension of a law license if you commit perjury. However, if you're a female rap artist like Lil Kim, you might get as much as a year and a day for perjury (although you'll likely serve less than that) and you'll also get a BET reality show out of the deal. If Kim had lied about sex with Bill Clinton, she'd likely have received only a suspended sentence.

Once upon a time, in a land far, far away, a land we like to call "The United States of America," people actually believed that the fear of eternal damnation for the false swearing of an oath was necessary for the survival of a free society. George Washington, in his Farewell Address, asked an essential question:

Let it simply be asked: Where is the security for property, for reputation, for life, if the sense of religious obligation desert the oaths which are the instruments of investigation in courts of justice?

Washington was echoing the position taken by one of the philosophical God Fathers of the Revolution, John Locke, who, a hundred years earlier in his "Epistola de Tolerentia" ("A Letter Concerning Toleration") asserted:

Lastly, those are not at all to be tolerated who deny the being of a God. Nor do I. Promises, covenants, and oaths, which are the bonds of human society, can have no hold upon an atheist. The taking away of God, though but even in thought, dissolves all; besides also, those that by their atheism undermine and destroy all religion, can have no pretence of religion whereupon to challenge the privilege of a toleration. As for other practical opinions, though not absolutely free from all error, if they do not tend to establish domination over others, or civil impunity to the Church in which they are taught, there can be no reason why they should not be tolerated.

In the current "enlightened" age, it's hard for many to believe that such sentiments were representative of an era called "The Enlightenment." Dead, white, European males: What did those guys know? Nothing that's of interest to Lady Gaga or Charlie Sheen, I'm sure.

Well, George, to answer your question, I'd have to observe that the "denial of the being of a God" is so prevalent, and the fear of eternal damnation so weak, that "the sense of religious obligation" has long deserted oaths. Gone AWOL and is not returning in my lifetime. The only fear left to us with which to inspire men and women to honor their oaths is the fear of imprisonment for the crime of perjury. The only robe-wearers that inspire fear in our current civilization are not priests but their successors, judges. You can mourn or cheer this development, but it's difficult to deny it.

Wild Bill and Diminutive Kimberly are representative of how well the current system has been working for us. On the other hand, it's never too late to send a message. If robo-signers and their enablers (because it's important to cast a wide net in order to catch the big fish) get some serious time in the cooler for having perjured themselves or abetted the practice of perjury by others, then maybe we'll have stuck a small trowel of mortar into the cracks of the crumbling wall of Western civilization. After all: this isn't 'Nam. There are rules.

Stop, Look, Listen

2010-12-23T21:30:00-06:00

I'm taking a break for the holidays. Blogging will be sporadic until after New Year's day.

I suppose it would be politically correct to wish everyone a Joyful Festivus, but I'd like to wish you all a Merry Christmas and a Happy New Year. As we used to say in my DJ days, "Catch you on the flip side."

As a parting gift, allow Thomas Merton and Andrea Bocelli to give us all a little clue about "divine inspiration."

*********************************************************************************************

What is serious to men is often very trivial in the sight of God. What in God might appear to us as "play" is perhaps what God takes the most seriously. At any rate the Lord plays in the garden of creation, and if we could let go of our own obsession with what we think is the meaning of it all, we might be able to hear God's call and follow in the mysterious, cosmic dance. We do not have to go very far to catch echoes of that game, and of that dancing. When we are alone on a starlit night; when by chance we see the migrating birds in autumn descending on a grove of junipers to rest and eat; when we see children in a moment when they are really children; when we know love in our own hearts; or when, like the Japanese poet Basho we hear an old frog land in a quiet pond with a solitary splash -- at such times the awakening, the turning inside out of all values, the "newness," the emptiness and the purity of vision that make themselves evident, provide a glimpse of the cosmic dance.

For the world and time are the dance of the Lord in emptiness. The silence of the spheres is the music of a wedding feast. The more we persist in misunderstanding the phenomena of life, the more we analyze them out into strange finalities and complex purposes of our own, the more we involve ourselves in sadness, absurdity, and despair. But it does not matter much, because no despair of ours can alter the reality of things, or stain the joy of the cosmic dance which is always there. Indeed, we are in the midst of it, and it is in the midst of us, for it beats in our very blood, whether we want it or not.

Yet the fact remains that we are invited to forget ourselves on purpose, cast our awful solemnity to the winds and join in the general dance.
---Thomas Merton