Arab Bank Gets U.S. Supreme Court Query in Terrorism Case

The U.S. Supreme Court asked the Obama administration for advice on sanctions imposed against Arab Bank Plc in a lawsuit by victims of overseas terrorist attacks.

A judge imposed the penalty after Arab Bank disobeyed court orders to turn over account records. In its Supreme Court appeal, the bank argues that it can’t supply the information without violating the criminal laws of Jordan, Lebanon and the Palestinian territories.

The sanctions would potentially make it easier for the victims to prove their case at trial. Jurors would be told they could infer from the Amman, Jordan-based bank’s failure to produce the documents that it intentionally provided financial services to terrorist groups.

A trial has been scheduled to start in April in federal court in Brooklyn, New York. The case would be the first U.S. trial in a terrorism-financing suit against a bank.

The dispute centers on allegations that Arab Bank backed 24 attacks from 1995 to 2004 in Israel and the Palestinian territories perpetrated by Hamas, the militant Islamic group considered a terrorist organization by the U.S. and European Union. The bank allegedly helped provide payments to the families of suicide bombers.

Arab Bank faces hundreds of claims under the U.S. Anti-Terrorism Act. The lead lawsuit is being pressed by six American families, including Courtney Linde, whose husband, John Linde Jr., was killed in 2003 while working as a private security guard in the Gaza Strip.

Limited Defense

Under the sanctions, imposed by U.S. District Judge Nina Gershon and left intact by a federal appeals court, Arab Bank would be limited in the defenses it could mount. The lender would be barred from using any of the withheld evidence at trial and from making any argument that might have been disproven using the account information.

In August, a judge threw out thousands of claims pressed by non-Americans under a different law, the Alien Tort Statute. That ruling followed a Supreme Court decision limiting the law’s reach.

The high court directed its request today to U.S. Solicitor General Donald Verrilli, the administration’s top courtroom lawyer.

The Supreme Court case is Arab Bank v. Linde, 12-1485. The district court case is Linde v. Arab Bank Plc, 04-cv-02799, U.S. District Court, Eastern District of New York (Brooklyn).

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