2nd Circuit Overturns $100 Million Arab Bank Terror Verdict

The Second Circuit on Friday overturned a $100 million jury verdict against Arab Bank PLC, finding jury instructions in the case alleging that it provided material support to Hamas and other militant groups were prejudicial against the bank, in a case the bank already settled.

A three-judge panel ruled that the jury in a case brought by the victims and families of deceased victims of Hamas attacks inside Israel was improperly instructed that a finding that Arab Bank provided any banking services to Hamas and other groups necessarily meant that they were guilty of aiding and abetting a terror attack.

Under the law at the time of the trial, the jury should have been instructed that they needed to determine that the financial services the Jordanian bank provided directly led to the terror attacks at issue in order for it to be found guilty under the Anti-Terror Act, the panel said.

“We conclude only that providing routine financial services to members and associates of terrorist organizations is not so akin to providing a loaded gun to a child as to excuse the charging error here and compel a finding that as a matter of law, the services were violent or life‐endangering acts that appeared intended to intimidate or coerce civilians or to influence or affect governments,” U.S. Circuit Judge Reena Raggi wrote on behalf of the panel.

U.S. Circuit Judge Susan L. Carney and U.S. District Judge Lewis A. Kaplan, who was sitting on the panel by designation, also signed on Judge Raggi’s opinion.

While the Second Circuit dismissed the $100 million verdict against Arab Bank on technical grounds, the panel did not rule on any of the merits issues raised by the bank. Instead, the panel ruled that the plaintiffs in the case would be able to argue their theories under the Justice Against Sponsors of Terrorism Act, which was passed in 2016.

And despite the Second Circuit’s remand of the case back to the district court, Friday’s verdict marks the end of the litigation. Arab Bank in 2014 agreed to a confidential “high-low” settlement with the bellwether plaintiffs in the litigation, with the result of the Second Circuit appeal meant to determine how much each plaintiff received in the settlement.

“We would have liked a sweeping victory, but we’re still very satisfied with the result. The plaintiffs will receive meaningful and very substantial compensation for their injuries, and today’s decision doesn’t diminish the fact a jury found Arab Bank liable for knowingly supporting Hamas,” said Gary M. Osen, the managing partner at Osen LLC, the firm representing the plaintiffs.

Since that settlement was given district court approval, the litigation is over.

“Arab Bank is pleased with the court’s decision, and continues to believe that the district court’s errors at trial all but dictated an adverse outcome. The bank is pleased to put this case behind it and focus on its business, its commitment to safe and sound banking and its dedication to the service of its customers across the globe,” the bank said in a statement.

The high-profile lawsuit was brought by about 300 U.S. victims and families of victims of the attacks who say that Arab Bank facilitated terrorism by allowing tens of millions of dollars to flow through its accounts to the families of Hamas members who were killed, injured or imprisoned during the unrest.

The plaintiffs claimed that a Saudi charity known as the Saudi Committee for the Support of the Intifada al Quds sent money to Arab Bank accounts via Arab National Bank, in which Arab Bank has a 40 percent stake, and encouraged families of suicide bombers and other combatants to visit Arab Bank's branches in Palestinian territory to pick up compensation for their losses.

Sarri Singer, a plaintiff in the litigation who was injured in a 2003 Hamas suicide bombing on a Jerusalem bus, said that the technical reasons for vacating the jury verdict were not important to her.

“The bottom line remains that we got our day in court, a jury held Arab Bank accountable for knowingly supporting terrorism, and the families hurt by them are going to get the help they need,” she said.

Arab Bank has a case pending before the U.S. Supreme Court where it is trying to keep in place a 2015 Second Circuit ruling that blocked plaintiffs from using the Alien Tort Statute to sue over allegations that it provided support to terror groups.

The victim-plaintiffs are represented by Peter Raven-Hansen, Ari Ungar and Aaron Schlanger of Osen LLC, Shawn Naunton of Zuckerman Spaeder LLP, and Michael E. Elsner and John M. Eubanks of Motley Rice LLC.

Arab Bank is represented by Paul D. Clement of Kirkland & Ellis LLP and Jonathan D. Siegfried, Kevin Walsh and Douglas W. Mateyaschuk of DLA Piper LLP.

The appeal is Linde et al. v. Arab Bank PLC, case number 16-2119, in the U.S. Court of Appeals for the Second Circuit.