By Jessica Dye
NEW YORK, Jan 18 (Reuters) - A U.S. appeals court on Friday
let stand a sanction against Arab Bank Plc for failing to turn
over documents in a lawsuit accusing it of providing banking
services to Hamas and other U.S.-designated terrorist groups.
The ruling applies to a group of pending cases in U.S.
District Court in Brooklyn. The lawsuits were filed on behalf of
U.S. citizens and foreign nationals who were the victims, or
family members of victims, of militant attacks in Israel and the
Palestinian territories between 1994 and 2005.
Currently, more than 100 families and 700 individuals are
seeking more than $1 billion in damages from Arab Bank in the
lawsuits, according to the plaintiffs' lawyers.
Friday's decision, handed down by the 2nd U.S. Circuit Court
of Appeals, stems from the original case, Linde v. Arab Bank,
which has been consolidated with similar lawsuits and is
expected to go to trial later this year.
The 2nd Circuit, in a unanimous ruling, said it had no
standing to hear Arab Bank's appeal until the case was resolved.
The sanction, ordered by U.S. District Judge Nina Gershon in
2010, means the jury in the Linde case and the other lawsuits
can consider the missing documents in their verdicts.
The decision was issued by U.S. Circuit Judges Denny Chin
and Susan Carney and U.S. District Judge Stefan Underhill from
the U.S. District Court in Connecticut.
Arab Bank said in a statement that it is considering its
appeals options and "continues to believe that the district
court's sanctions order raises serious issues of international
A lawyer for the plaintiffs, Gary Osen, said he was pleased
with the appeals court's decision in the long-running case.
Gershon ordered the sanction after the plaintiffs asked the
bank to turn over account information relating to groups known
to be, or suspected of being, linked to the designated terrorist
groups. Arab Bank withheld some of the requested documents,
saying that foreign bank secrecy laws prohibited their
Gershon's sanction would allow jurors to infer, if they
wished, that the bank's failure to produce the requested
documents meant that it had knowingly provided financial
services to designated terrorist organizations.
In its appeal to the 2nd Circuit, Arab Bank said that
Gershon's punishment was overly harsh and that the bank was
being forced to choose between running afoul of the U.S. court
or violating bank secrecy laws in Lebanon, Jordan and other
countries where it operated.
The 2nd Circuit panel said its decision would not preclude a
future appeal of the sanctions order.
The case is Linde v. Arab Bank, 2nd U.S. Circuit Court of
Appeals, Nos. 10-4519 and 10-4524.
For the plaintiffs: Peter Raven-Hansen, Gary Osen and Aaron
Schlanger of Osen; Mark Werbner and Joel Israel of Sayles
Werbner; Michael Elsner, John Eubanks and Vincent Parrett of
Motlet Rice; Steven Steingard, Stephen Schwartz and Neil Glazer
of Kohn Swift & Graf; James Bonner of Stone Bonner & Rocco;
David Stone of Stone & Magnanini.
For Arab Bank: Stephen Shapiro, Michele Odorizzi, Timothy
Bishop, Philip Lacovara and Jeffrey Sarles of Mayer Brown; Kevin
Walsh, Douglas Mateyaschuk of DLA Piper.
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