After years of litigation in which Arab Bank has denied any wrongdoing, the Second Circuit ruled unanimously on February 9, 2018 to overturn the District Court’s liability verdict in Linde v. Arab Bank. The Second Circuit found that the Court erred in failing to provide the jury with adequate instructions, an outcome that brings finality to this case. The decision means the Bank has not been found liable for the alleged injuries in these cases.
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 in September 2014. 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.