Linde v. Arab Bank, PLC

Decision Date18 January 2013
Docket NumberDocket Nos. 10–4519–cv(L), 10–4524–cv(CON).
PartiesCourtney LINDE, et al., Plaintiffs–Appellees, v. ARAB BANK, PLC, Defendant–Appellant.
CourtU.S. Court of Appeals — Second Circuit

OPINION TEXT STARTS HERE

Stephen M. Shapiro, Mayer Brown LLP, Chicago, IL (Michele L. Odorizzi, Timothy S. Bishop, Jeffrey W. Sarles, Mayer Brown LLP, Chicago, IL; Philip Allen Lacovara, Mayer Brown LLP, New York, NY; Kevin Walsh, Douglas W. Mateyaschuk, II, DLA Piper LLP (U.S.), New York, NY, on the brief), for DefendantAppellant.

Peter Raven–Hansen, Osen LLC, Oradell, NJ (Gary M. Osen, Aaron Schlanger, Osen LLC, Oradell, NJ; Mark S. Werbner, Joel Israel, Sayles Werbner, Dallas, TX; Michael E. Elsner, John M. Eubanks, Vincent I. Parrett, Motley Rice LLC, Mount Pleasant, SC; Steven M. Steingard, Stephen H. Schwartz, Neil L. Glazer, Kohn, Swift & Graf, P.C., Philadelphia, PA; James P. Bonner, Stone Bonner & Rocco LLP, New York, NY; David S. Stone, Stone & Magnanini LLP, Short Hills, NJ, on the brief), for PlaintiffsAppellees.

Christopher M. Curran, White & Case LLP, New York, NY (Nicole E. Erb, White & Case LLP, New York, NY, on the brief), for The Hashemite Kingdom of Jordan as amicus curiae in support of DefendantAppellant.

Before: CHIN and CARNEY, Circuit Judges, and UNDERHILL, District Judge.**

SUSAN L. CARNEY, Circuit Judge:

This case concerns claims brought by victims and families of victims of terrorist attacks committed in Israel between 1995 and 2004. Proceeding under the Anti–Terrorism Act, 18 U.S.C. § 2333, and the Alien Tort Claims Act, 28 U.S.C. § 1350, plaintiffs seek monetary damages from Arab Bank, PLC (“Arab Bank” or the “Bank”), a large bank headquartered in Jordan, with branches in New York, throughout the Middle East, and around the world. According to plaintiffs, Arab Bank provided financial services and support to terrorists during this period, facilitating the attacks that caused them grave harm.

At stake in this litigation are interests both wide-ranging and weighty. They include plaintiffs' and the United States' interests in seeking redress for and deterring acts of international terrorism; the Bank's interests in avoiding substantial damages and the stigma of being labeled a supporter of terror; and foreign jurisdictions' interests in enforcing their bank privacy laws. Although the questions before us implicate some of these broader interests, our analysis turns on our own limited jurisdiction, either through interlocutory appeal or mandamus, to consider issues that have arisen during the course of litigation that is ongoing in the district court.

This appeal is brought by defendant Arab Bank from the District Court's orders imposing sanctions pursuant to Federal Rule of Civil Procedure 37(b) for the Bank's failure to comply with several of that court's discovery-related orders. In a separate action consolidated with the instant appeal, the Bank has also petitioned our Court under 28 U.S.C. § 1651 for a writ of mandamus directing vacatur of the District Court's sanctions order.

That order was entered following the Bank's repeated failures, over several years and despite multiple discovery orders, to produce certain documents relevant to plaintiffs' case. The Bank argues that the documents are covered by foreign bank secrecy laws such that their disclosure would subject the Bank to criminal prosecution and other penalties in several foreign jurisdictions. The sanctions order takes the form of a jury instruction that would permit—but not require—the jury to infer from the Bank's failure to produce these documents that the Bank provided financial services to designated foreign terrorist organizations, and did so knowingly. The order also precludes the Bank from introducing for the jury's consideration certain evidence related to the undisclosed materials.

On appeal, the Bank argues primarily that these sanctions are unduly harsh. It contends that the jury instructions will predetermine the outcome of the litigation, and that, in imposing the sanctions order, the District Court assigned inadequate weight to the interests of Lebanon, Jordan, and the Palestinian Monetary Authority in enforcing their banking privacy laws and to the hardship faced by the Bank in addressing competing legal dictates of the United States and foreign authorities. The Bank also submits that entry of the sanctions order constituted an abuse of the District Court's discretion in that the order is alleged to violate due process and to rest on erroneous factual findings.

Before we may reach the merits of these arguments, however, we must determine whether our Court has jurisdiction to hear this appeal. Because 28 U.S.C. § 1291 vests us with jurisdiction to review “final decisions” of the district court, ordinarily a decision or order is appealable only after the district court has entered judgment. See Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 130 S.Ct. 599, 603, 175 L.Ed.2d 458 (2009). Since the questions raised here relate to pre-trial discovery, and the litigation is ongoing in the District Court, no one disputes that the District Court's sanctions ruling is not literally a “final decision.”

The Bank urges us to conclude, however, that the court's order falls within the “small category of decisions that, although they do not end the litigation, must nonetheless be considered ‘final.’ Swint v. Chambers County Comm'n, 514 U.S. 35, 42, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995). The order is of such gravity and of such a type, insists the Bank, that, independent of future proceedings in the District Court, it virtually dictates the outcome of the case. See generally Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Plaintiffs argue, in contrast, that the order is not appealable because it bears on questions inseparable from the merits of this case and because appellate review after final judgment will provide the Bank a sufficient avenue for relief.

In the alternative, the Bank urges by means of a petition for mandamus that we vacate the District Court's sanctions order. It contends that the order constitutes such a clear abuse of discretion that it cannot be allowed to stand. Plaintiffs, for their part, dispute that this is a suitable case for granting a writ of mandamus, maintaining principally that the Bank does not have a “clear and indisputable” right to the relief it seeks. See Cheney v. U.S. Dist. Court, 542 U.S. 367, 380–81, 124 S.Ct. 2576, 159 L.Ed.2d 459 (2004).

For the reasons set forth below, we conclude that the sanctions order is not a reviewable collateral order, and we therefore dismiss the Bank's appeal for want of jurisdiction. We conclude, further, that this is not an appropriate case for issuance of the extraordinary writ of mandamus, since we agree with plaintiffs that the Bank has not established (among other factors) that it has a “clear and indisputable right” to such drastic relief or that review after final judgment will not provide adequate relief. See id. at 381, 124 S.Ct. 2576. We therefore DISMISS the appeal and DENY the petition for mandamus.

BACKGROUND
1. Plaintiffs' Claims

Plaintiffs are thousands of individual victims and family members of victims injured or killed in terrorist attacks occurring in Israel and the Palestinian Territories between 1995 and 2004.1 Arab Bank is headquartered in Jordan and maintains a branch in New York City. Plaintiffs allege that during the relevant period (much of which is commonly referred to as the “Second Intifada”), the Bank knowingly, intentionally, and unlawfully “solicit [ed], collect[ed], transmitt[ed], disburs[ed], and provid[ed] the financial resources that allowed” foreign terrorist organizations operating within Israel and the Palestinian Territories “to flourish and to engage in a campaign of terror, genocide, and crimes against humanity in an attempt to eradicate the Israeli presence from the Middle East landscape.” 2 Providing such financial services to foreign terrorists violates U.S. law. See18 U.S.C. § 2339A(a) (proscribing the provision of “material support or resources, knowing or intending that they are to be used in preparation for, or in carrying out [any one of a number of expressly prohibited acts of terrorism]).

Plaintiffs' claims rest on two factual theories. First, plaintiffs allege that the Bank assisted in administering a “death and dismemberment benefit plan” pursuant to which the Saudi Committee for the Support of the Intifada Al Quds (Saudi Committee) made cash payments to terrorists and their families.3 The payments were allegedly designed to provide an incentive for suicide bombers and others who killed or injured plaintiffs and their kin. Plaintiffs allege that the families of terrorists would “claim this reward by obtaining an official certification of their deceased relative's status as a martyr, which include[d] an individualized martyr identification number.” 4 Plaintiffs further allege that the Saudi Committee and Arab Bank required that beneficiaries provide this “martyr certificate” or “death certificate” to Arab Bank to demonstrate their entitlement to benefits. 5

Second, plaintiffs allege that the Bank provided financial services to various entities and individuals acting on behalf of Hamas and other State Department-designated foreign terrorist organizations.6 These services included, for example, maintaining bank accounts, making wire transfers, and otherwise facilitating the movement of funds.

Plaintiffs are U.S. and foreign nationals. The U.S.-national plaintiffs assert claims arising under the Anti–Terrorism Act (“ATA”), 18 U.S.C. § 2333, and the foreign-national plaintiffs request relief under the Alien Tort Claims Act, 28 U.S.C. § 1350, also known as the Alien Tort Statute (“ATS”). Each group of plaintiffs seeks monetary damages.

2. The Discovery Disputes and Arab Bank's Limited Document Productions

Early in the litigation, in 20...

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