Ammon News - AMMONNEWS - Lawyers for Arab Bank and terrorism victims reached an agreement to settle the case after 11 years of vigorous litigation, just three days before the start of a damages trial in the Eastern District of New York.
"The parties have reached an agreement to settle the litigation," Michael Elsner, a member of Motley Rice in Mount Pleasant, South Carolina said Friday, adding that the agreement's framework would be finalized in the next few months. Elsner represents plaintiffs connected to one of the attacks at issue in the damages trial, a 2002 suicide bombing at a Jerusalem café.
A spokesman for the bank, Bob Chlopak, confirmed there was an agreement to resolve the case, but declined to comment further.
Eastern District Judge Brian Cogan was scheduled to begin questioning potential jurors on Monday in the damages phase of the trial.
With some 300 victims or estates going to trial last year, a jury said the Jordanian bank was civilly liable under the Anti-Terrorism Act for providing material support to Hamas for 24 terrorist attacks in Israel from 2001 to 2004.
The bank strongly rejected that it knowingly aided Hamas in any way and vowed to appeal to the U.S. Court of Appeals for the Second Circuit.
The liability trial in Linde v. Arab Bank, 04-cv-2799, was thought to be the first time any financial institution faced a jury for alleged violations of the Anti-Terrorism Act's civil provisions.
After the liability verdict, the bank moved to have the jury's determinations set aside, or at least get a new liability trial.
Cogan modified the verdict to make the bank liable for 22 of the 24 attacks but otherwise denied the bank's bid.
The bank, which is represented by DLA Piper partners Shand Stephens, Brett Ingerman and Anthony Coles, also unsuccessfully asked for certification to take the liability verdict to an immediate interlocutory appeal—a request that the Union of Arab Banks and the Hashemite Kingdom of Jordan backed in amicus briefs.
The damages portion was set to focus on the monetary damages for three incidents: a 2003 roadside shooting north of Jerusalem, a 2002 suicide bombing at a Jerusalem café and a 2003 suicide bombing on a public bus in Haifa.
The 17 plaintiffs in the damages proceedings consisted of one estate, three people sustaining physical harm and family members of the estate or the three survivors.
Damages had not been specified. The bank had $48.4 billion in assets as of the second quarter of 2015, according to its website.
Plaintiffs had been seeking compensation for wrongful death, loss of parental services due to death, lost earnings, pain and suffering and solatium damages, which are awarded for grief as opposed to physical injury.
They were planning to put on testimony from eyewitnesses, medical experts, experts in terrorism and explosives and some of the plaintiffs themselves.
Despite defense objections, the plaintiffs had also been permitted to bring in the stripped-down frame of the shot-up car and a replica AK-47 as demonstrative exhibits to reconstruct the shooting that killed the driver and injured the three passengers.
Gary Osen of Osen LLC, C. Tab Turner of Turner & Associates in North Little Rock, Arkansas, and Shawn Naunton, a partner at Zuckerman Spaeder, were set to represent the plaintiffs connected to the roadside shooting at trial.
Mark Werbner, co-founder of Sayles Werbner in Dallas, was lead counsel for the plaintiffs connected to the Haifa bus bombing.
Prior to Friday's announcement, DLA had filed motions to keep out evidence it viewed as prejudicial, inflammatory and cumulative.
As late as Thursday, plaintiffs were filing the opposition to the bank's preclusion motions.
In 2012, Eastern District Judge Jack Weinstein dismissed another terror financing suit against Arab Bank, Gill v. Arab Bank, 11-cv-3706, which was not appealed.
Nevertheless, there are now four civil Anti-Terrorism Act cases pending against banks in the trial level of New York's federal courts.
And months after the Arab Bank liability decision, a Southern District jury found the Palestine Liberation Organization and the Palestinian Authority civilly liable for six attacks under the Anti-Terrorism Act (NYLJ, Feb. 24).
The jury awarded $218.5 million in damages to the plaintiffs in the Palestinian Authority case—an amount that automatically tripled to $655.5 million under the statute's treble damages clause. The Palestinian Authority has said it would appeal.
Implications for Banks
In an interview days before news broke of the agreement to settle, David I. Miller, a partner at Morgan Lewis & Bockius who is not involved in the Arab Bank case, said "this is an area that banks are going to have to contend with in the coming months and years," speaking of civil Anti-Terrorism Act suits.
Miller, a former Southern District prosecutor, terrorism prosecutor with the Department of Justice and assistant general counsel with the CIA, said "for many years, terrorism enforcement actions were viewed by financial clients as something to watch, but not directly impacting them. Now I think for many clients, there has been more attention paid, because of, among other things, these recent lawsuits."
In the post-liability verdict litigation, the bank sought to use testimony from an expert who analyzed the plaintiffs' trial record and said the "upper limit of the bank's relative role in contributing to the three attacks" ranged from about 2 to 8 percent.
The bank argued for an apportionment of liability, citing a 2014 U.S. Supreme Court case, Paroline v. United States, 134 S. Ct. 1710, which discussed what amount of responsibility to assign to a convicted child pornography defendant for damages to the victim.
Arab Bank said plaintiffs invoked Paroline when they pushed back on defense arguments that liability had to be established with a "but for" standard. As a result, the plaintiffs also had to accept Paroline's discussion of apportionment, the bank argued.
In a motion to strike the expert report, the plaintiffs said the Anti-Terrorism Act allowed for joint and several liability and Paroline did not change the result.
Cogan granted the motion to strike, noting Paroline was a criminal restitution case.
After the bank filed preclusion motions in an attempt to exclude attack scene photos, autopsy reports, police records and other items, the plaintiffs responded the bank was trying to "sanitize" the trial and "sterilize" evidence.
During a court conference Tuesday—where there was no mention of settlement but rather a discussion on how trial would proceed—Cogan reserved decision on attack scene photos, videos and official reports, saying he would balance their relevance against cumulativeness and prejudice to the bank.
He overruled defense objections about the admission of family photos, but cautioned the plaintiffs against over-emphasis.
During the conference, Stephens of DLA told Cogan that instead of solely focusing on injuries sustained, the plaintiffs, in contravention to case law on damages for terrorism acts, were impermissibly "going to turn the courtroom into a stage to reterror attacks, and that is not what's at issue in this case."
"I kind of think that it is," Cogan said, later adding "The fact of the matter is the jury has the right ... to see what happened during the attacks."
*New York Law Journal
comment replay 