On July 12, 2010, the Eastern District Court imposed sanctions on Arab Bank in the Linde case for not providing certain banking records in the course of the discovery process that reside outside the U.S. Arab Bank maintains that it did not have permission to disclose these records and that it would have been subject to criminal prosecution under bank privacy laws in countries where the Bank operates if it did. Moreover, through the Bank’s efforts to obtain waivers of foreign bank privacy laws, it has turned over some 200,000 documents that it would have otherwise been prohibited from producing by laws applicable in the jurisdictions in which the documents resided.
In response to the sanctions, Arab Bank filed a petition for writ of mandamus in the United States Court of Appeals for the Second Circuit on November 4, 2010, taking the position that the ruling violates international comity, is not supported by the factual record and otherwise compromises the Bank’s due process rights. On January 18, 2013, the Second Circuit rejected the Bank’s motion on procedural grounds but stated that, “our conclusion today should not be read, however, to preclude a future court from holding that the district court erred in imposing sanctions.” On February 1, 2013, the Bank filed a petition for rehearing en banc, asking all of the active judges on the Court of Appeals for the Second Circuit to reconsider the Bank’s petition for a writ of mandamus. On March 26. 2013, the Second Circuit denied Arab Bank’s petition for rehearing en banc.
On February 14, 2013, the Bank filed a letter with the Second Circuit submitting as supplemental authority the Second Circuit’s decision in Rothstein v. UBS. In that decision, the Second Circuit affirmed the Southern District Court of New York’s decision to dismiss an ATA complaint filed against UBS after concluding that the ATA is not a strict liability statue but rather requires plaintiffs to prove that their injuries were proximately caused by the defendant’s conduct, and the ATA does permit civil aiding and abetting claims. Rulings by the Linde court on proximate cauation and aiding and abetting are in direct conflict with both Rothstein and Gill.
Click here to read Arab Bank’s brief.
Click here to read the Second Circuit Court of Appeals’ decision.
Click here to read the Bank’s petition for rehearing en banc.