Arab Bank Statement on the Court’s Exclusion of the Bank’s Damages Expert

New York, July 27, 2015 – Arab Bank released the following statement in reaction to the District Court’s decision to exclude the Bank’s expert, Dr. Marc Sageman, MD, PhD, from the damages trial in Linde v. Arab Bank. Dr. Sageman is a recognized authority on terror networks and a counterterrorism consultant to the United States government. His report assesses the relative role of the Bank in the chain of causation, involving hundreds of parties that plaintiffs allege contributed to their injuries. Under the Supreme Court’s Paroline decision, which the District Court relied on in eliminating the plaintiffs’ burden to prove that the Bank was a “but for” cause of their injuries, the damages imposed on one party in a case, where many parties contributed to an injury, must be proportionate to its relative role in causing the injuries. The damages trial is scheduled to begin on August 17 before the U.S. District Court for the Eastern District of New York.

“Rejecting controlling Supreme Court authority and contradicting its own past rulings, the District Court has ruled unfairly against the Bank by holding it to be solely responsible for the conduct of hundreds of other parties whom plaintiffs allege contributed to their injuries in this case, even though the Bank itself was not found to be the “but for” cause. Indeed, by refusing to apply the Supreme Court’s controlling holding on apportionment in Paroline, the District Court has created the very same unjust outcome for the Bank that the high court strongly warned other courts against in its decision.”

  • The plaintiffs and the District Court previously have argued or ordered, respectively, that Paroline applies to civil cases under the Anti-Terrorism Act. During the liability phase, plaintiffs argued against the Bank’s proposed jury instruction and its reliance on “but for” causation as required by two recent U.S. Supreme Court cases. Instead, citing Paroline, they claimed that “alternative standards for factual causation” were appropriate, and wrote that Paroline “appl[ies] with full force to civil ATA claims.” Similarly, the District court denied the Bank’s post trial motions which challenged the court’s ruling on causation, relying expressly on Paroline to hold that “tort law teaches that alternative and less demanding causal standards [than “but for” cause] are necessary in certain circumstances to vindicate the law’s purposes.” Apr. 8, 2015 Opinion (ECFNo. 1241) at 48 (quoting Paroline, 134 S. Ct. at 1724).
  • The causation and apportionment holdings in Paroline are interdependent and inseparable. In Paroline, a child pornography case, defendant Paroline was found liable under a lower standard than “but for” causation for being one of thousands who either possessed or distributed graphic images of the plaintiff and contributed to her injuries. The Supreme Court rejected the plaintiffs’ argument that Paroline should be fully responsible for her damages. The Court reasoned: the imposition of joint and several liability under these circumstances, “would amount to holding each possessor of her images liable for the conduct of thousands of other independently acting possessors and distributors, with no legal or practical avenue for seeking contribution.” 134 S. Ct. at 1725-26. The result would be to “stretch[ ] the fiction of aggregate causation to its breaking point.” The Supreme Court then reversed the 5th Circuit’s ruling and ordered the apportionment of damages.
  • The latest positions of the Plaintiffs and the Court imply a double standard – they claim that Paroline applies to causation in an ATA case, but does not apply to ATA damage assessments. Notwithstanding the inextricable connection between Paroline’s causation standard and apportionment holding, and their earlier argument that Paroline applies with “full force” to ATA cases, plaintiffs now self-servingly argue that Paroline applies with only half force – to the causation standard in Linde, but not to the apportionment of damages. There is simply no basis in Paroline or elsewhere to divorce the decision’s application of a lower causation standard to an injury caused by many parties from its apportionment holding. Similarly, after relying expressly on Paroline, a criminal restitution case, to justify its lower causation standard, the Court now claims that the apportionment holding in this same case does not apply – because it is a criminal restitution case. Moreover, the Court suggests apportionment does not apply in Linde because it is an intentional tort case, yet the Court expressly refused to instruct the jury of the need to find an intent to injure during the liability phase.
  • The exclusion of Dr. Sageman continues a pattern of unfairness in the Court’s rulings on expert witnesses. During the liability trial, the Linde court excluded all of the Bank’s proposed expert witnesses who had substantial personal knowledge of the charitable practices and anti-terrorist polices of the Saudi Committee, while permitting plaintiffs’ witnesses who never had the opportunity to visit Saudi Arabia or to talk to any Saudi official, thus not having any personal knowledge, to testify on such an important topic. The Court also excluded several experts on the banking laws applicable in the jurisdictions where the transactions at issue in the case occurred. Following a similar pattern, the Court excluded all of the Bank’s Israeli expert witnesses while permitting the plaintiffs’ experts whose qualifications were by far inferior to those proposed by the Bank.
  • In stark contrast, in a closely related case, Gill v Arab Bank, Senior District Court Judge Jack Weinstein, the author of leading treatises on the Federal Rules of Evidence, rejected motions by plaintiffs to exclude many of these same witnesses – Messrs. Lacey, Abed, Cortbaoui, Nsouli and Dagan. With regard to the Saudi expert Robert Lacey, Judge Weinstein wrote:

Mr. Lacey’s background and professional experience qualify as “specialized knowledge” gained through “experience, training, or education.” Mr. Lacey’s books about Saudi Arabia are the products of extensive study of modern Saudi Arabia through research of news and academic articles, the Saudi Committee website, bank documents produced in this litigation, and interviews. Mr. Lacey’s testimony bears directly on the Saudi Committee’s conduct.

The Bank remains confident that this damages ruling – as well as a liability verdict based on sanctions the U.S. government found were “erroneous” and flawed causation and evidentiary rulings – provide a very strong basis for appeal. As the District Court itself has recognized, this case will be resolved not by the initial damages trial, but by appellate review, a process that should begin later this year once the initial damages proceeding is completed.