Linde v. Arab Bank, PLC and Related Cases

On September 22, 2014, following a trial infected by scores of errors, the Linde jury reached a verdict, finding Arab Bank liable for the plaintiffs’ injuries. On August 14, 2015, the Bank and the plaintiffs agreed to settle the litigation; the terms of the agreement are confidential.

More about the Case

The liability verdict against the Bank was the result of a trial infected by scores of errors.

The District Court made many serious errors in legal and evidentiary rulings that prejudiced the outcome of the liability trial. As the United States government has stated, rulings by the District Court will warrant close scrutiny on appeal. The District Court’s errors include, but are not limited to:

      • Sanctions. The Linde Court aggressively applied sanctions against the Bank for its compliance with foreign privacy laws and effectively denied the Bank an opportunity to defend itself. The Court disregarded the U.S. government’s conclusions that the sanctions order was significantly flawed and could be modified by the District Court prior to trial. The Court did not modify the sanctions, and as a result, the Bank was precluded from mounting an effective defense, as well as explaining to the jury that it did not produce certain banking records due to foreign laws and government directives during trial. Meanwhile, the Court permitted the plaintiffs’ experts and counsel to tell the jury repeatedly that the Bank simply “refused” to provide the requested documents in an attempt to conceal evidence of liability.
      • Legal Standard. The Court eliminated the plaintiffs’ burden to prove that the Bank’s services were a “but for” and “direct” proximate cause of the plaintiffs’ injuries, in conflict with both U.S. Supreme Court and Second Circuit precedents. By eliminating the plaintiffs’ need to prove factual causation, the Court turned tort law on its head in an unprecedented manner in order to accommodate the plaintiffs, who conceded that they would never be able to prove such a factual connection between the Bank’s conduct and their injuries.
      • Elements of Proof. The Court mistakenly instructed the jury that the provision of a banking service by itself is an act of international terrorism when it involves individuals or organizations affiliated with a designated terrorist organization.  Under this ruling, providing any good or service that falls within the broad definition of “material support,” including non-violent conflict resolution counseling, would itself be an act of international terrorism. This plain error requires the Linde verdict to be vacated.
      • Foreign Law. Even though the distribution of funds that the plaintiffs have placed in issue took place exclusively in countries other than the United States, through non-U.S. accounts, the Court excluded all evidence of the Bank’s compliance with foreign law, which the Bank sought to introduce as evidence of its innocent state of mind. The court permitted plaintiffs, however, to introduce evidence of Israeli law—in particular, an Israeli designation list of prohibited entities, even though Arab Bank had no operations in Israel.  The ruling prohibiting the Bank from introducing evidence of its compliance with foreign law stands in direct conflict with Judge Weinstein’s decision in Gill v. Arab Bank plc, a case in which summary judgment was granted to the Bank, and every other court that has considered ATA claims against a foreign bank defendant.
      • Inflammatory Evidence. In direct conflict with all prior decisions in analogous cases, the Linde Court admitted numerous, prejudicial and inflammatory hearsay statements, pictures and video claims of responsibility by alleged terrorists downloaded from the Internet. In a first of its kind ruling, the Court found that this material qualified as an exception to the normal hearsay rule as an admission by terrorists against their own interests, despite considerable expert testimony that such Internet propaganda served the terrorists own interests and was unreliable.