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 settlement have not been disclosed, but both parties agreed as part of the resolution to an appeal on the merits, which was argued before the United States Court of Appeals for the Second Circuit on May 16, 2017.

In its argument before the Second Circuit, Arab Bank outlined many serious errors in legal and evidentiary rulings made by the District Court that prejudiced the outcome of the liability trial and warrant reversal. The District Court’s errors include, but are not limited to:

      • 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.
      • 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.
      • 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.