2nd Circuit Vacates Verdict in ATA Case against Arab Bank Due to Improper Jury Instructions

The U.S. Court of Appeals for the Second Circuit Friday reversed a 2014 verdict that found the Jordan-based Arab Bank liable under the Anti-Terrorism Act for three separate Hamas-associated attacks in Israel between 2002 and 2003.  The court, in Linde v. Arab Bank, PLC, found that the jury instructions had incorrectly allowed for a guilty verdict simply because the Arab Bank handled financial transactions for Hamas and its supporters.   At the trial, the Arab Bank was found to have been used by Hamas to send payments to families of suicide bombers.

In reversing the verdict, the Second Circuit panel found that “the provision of material support to a terrorist organization does not invariably equate to an act of international terrorism,” and that in order to be found liable under the ATA, the person or entity providing the support must also be found to be involved in an act that constitutes international terrorism.

Although the Second Circuit remanded the case for a retrial, the parties had reached a settlement agreement before the decision was handed down.  According to the settlement agreement, the amount of the payout turned on whether the Second Circuit affirmed or reversed the verdict.  Thus, even with the reversal, the 597 plaintiffs are still set to receive payment from the Arab Bank.  While the specific terms of the agreement remain secret, media accounts relate that the Arab Bank has set aside at least $1 billion to cover its obligations under the settlement.