2nd Cir. Refuses to Re-Open Arab Bank Terrorism Suit

Controversy aside, jurists will have to live with the fact that precedent does not allow a re-hearing of the Arab Bank suit which ruled against victims of suicide bombers late last year.

This was the final say of the Second Circuit, which finally put to rest the suits brought by families of Israeli victims killed by Palestinian suicide bombers during the Second Intifada.

In the Wake of Kiobel

The suit arises out of allegations that the Arab Bank, a foreign corporate entity, had helped funnel monies that were ultimately used by Palestinian terrorist groups for repeated attacks on Israel during the five year conflict between the two countries.

Citing two recent cases, one of which was heard by the Supreme Court, the Second Circuit declared that prior precedent had foreclosed any legal avenue for the case to be reopened against Arab Bank. Under Kiobel's precedent, the circuit said, the Alien Tort Statute would not apply because corporate liability had not yet been recognized as a "specific, universal, and obligatory" norm. This has since been a view affirmed by none other than SCOTUS itself (thought finer points are still debated). Since such a norm was not customary, the Alien Tort Statute ("ATS") could not be applied.

Dissent and Outcry -- Within the Court

The 4-3 decision left the court bitter split apart. The case now has four opinions which alternately concur, dissent and partly do both.

Botched Opportunity

Judge Rosemary Pooler lamented a lost opportunity by the majority and court to right a precedent that was, in her words, "almost certainly incorrect." When the original Kiobel case was decided, it opened the gates to a firestorm of controversy as the decision appeared to insulate corporate institutions from liability for funding overseas crimes. Kiobel II also has left many civil rights watchers left reeling.

Twist the Knife

Other judges Raggi, Livingston, and Jacobs joined in a concurrence penned by judge Cabranes that included a quote attributed to late Second Circuit judge Frank Altimari: "If attorneys want to know what the law is now, then they should read the dissent."

In fact, the dissenting opinions (or opinions that dissent with the dissent and polish fine points) all take up approximately three quarters of the total opinion body. Clearly the proper application of the law and its reach to corporations has touched a sore nerve.

Although the exact settlement terms are a secret, rumor has it that Arab Bank has denied reports that it had agreed to pay the victims' families $1 billion.

Related Resources:

• Tom Brady Must Be Punished for Deflategate, Says 2nd Circuit (FindLaw's U.S. Second Circuit Blog)
• New York Can Require In-State Offices for Nonresident Attorneys (FindLaw's U.S. Second Circuit Blog)
• Companies Won't Be Held Liable in U.S. for Bad Acts Abroad (FindLaw's U.S. In-House Blog)