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Judge Drops 2 Terror Attacks From Arab Bank Case Judge Drops 2 Terror Attacks From Arab Bank Case
(about 7 hours later)
A federal judge on Wednesday dropped two of the 24 terrorist attacks that a jury found Jordan-based Arab Bank liable for in September. A federal judge in Brooklyn on Wednesday largely upheld a jury verdict that found a Middle Eastern bank liable for 24 terrorist attacks, but agreed to drop two of those attacks from the verdict.
The judge granted a motion by Arab Bank that argued that the plaintiffs had not sufficiently demonstrated that the terrorist group Hamas had committed two of the 24 attacks — a September 2004 mortar attack in the Gaza Strip, and a January 2004 bus bombing in Jerusalem. In addition to challenging the verdict, the bank, Arab Bank, had sought a new trial and an expedited appeal. But the judge, Brian M. Cogan, denied both motions and said the bank could not appeal the jury’s decision until after the damages portion of the trial.
In a first-of-its-kind trial, a jury in Federal District Court in Brooklyn found Arab Bank liable in September for knowingly supporting terrorism by allowing Hamas-linked money to be sent through its banks. That financial support, the jury found, made Arab Bank liable for two dozen Hamas attacks during the second Palestinian intifada of the early 2000s. In September, the jury in Federal District Court found Arab Bank liable for knowingly supporting terrorism by allowing money linked to the terrorist group Hamas to be sent through its banks. That financial support, the jury found, made Arab Bank, which is based in Jordan, liable for two dozen Hamas attacks during the second Palestinian intifada of the early 2000s.
Dropping the two acts from the case was a small victory for Arab Bank in Judge Brian M. Cogan’s otherwise unfavorable decision. Judge Cogan denied its motion for a new trial, and said it could not appeal the jury’s decision until after the damages portion of the trial occurred. The verdict was the first to find a bank liable in a civil suit under a United States antiterrorism statute. Several similar cases in which other banks are accused of being liable for supporting terrorism are proceeding.
The first trial was only about liability; a damages trial is scheduled for July. The verdict, closely watched in the banking industry, potentially opens banks to broad liability, suggesting that even if they follow established compliance standards, they can still be held responsible for acts of terrorism committed or financed by their clients. The damages portion of the trial is to start in July.
Arab Bank argued at trial that it properly followed banking regulations and screening procedures. In the ruling issued on Wednesday, Judge Cogan granted the bank’s motion that the plaintiffs had not sufficiently shown that Hamas had committed two of the 24 attacks — a September 2004 mortar attack in the Gaza Strip, and a January 2004 bus bombing in Jerusalem. The plaintiffs are roughly 300 Americans who were injured or killed in the attacks; in the case of those who were killed, relatives or the estates of the deceased serve as the plaintiffs.
The case was brought by about 300 American plaintiffs who were injured, or the estates or relatives of people killed, in the 24 attacks. Arab Bank argued at trial that it had followed compliance standards, and that the accounts and payments linked to individual terrorists passed through because of errors.
The September verdict was the first time a bank has ever been held liable in a civil suit under a United States antiterrorism statute. Several similar cases that accuse other banks of being liable of supporting terrorism are going forward. The bank also processed thousands of payments on behalf of a group called the Saudi Committee. The plaintiffs claimed the committee offered financial incentives to suicide bombers, paid via Arab Bank. The bank said it was a legitimate charity that did not appear on relevant terror watch lists and sent money to families affected by the intifada.
Judge Cogan, in his opinion, made clear where he stood.
“The verdict was based on volumes of damning circumstantial evidence that defendant knew its customers were terrorists,” he wrote. “Plaintiffs provided evidence that defendant maintained accounts for senior Hamas leaders, and Hamas-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 Cogan also undercut Arab Bank’s central argument: that it had screened customer accounts using the appropriate watch lists, including the Treasury Department’s Office of Foreign Assets Control list, but was not required to do more.
Arab Bank’s lawyer, Shand S. Stephens, said in closing arguments that it should be governments, not private companies like banks or retailers who decline to do business with individuals out of concern, that designate terrorists.
Judge Cogan said that argument was flawed. “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,” he wrote. “This theory not only tolerated willful blindness — it mandated it.”
Arab Bank has made aggressive legal arguments since the suit was filed more than 10 years ago. Even before the trial started, the case went to the Supreme Court, which declined to hear it, and drew intervention from the Jordanian and United States governments.
On Wednesday, Arab Bank said in a statement that the ruling was expected. “The district court’s predictable decision to adhere to its prior rulings comes as no surprise,” the statement said, adding that the bank planned to appeal various decisions in the case.