Tamam v. Fransabank Sal
| Decision Date | 05 January 2010 |
| Docket Number | No. 08 Civ. 6156(JFK).,08 Civ. 6156(JFK). |
| Citation | 677 F. Supp.2d 720 |
| Parties | Zivie TAMAM et al., Plaintiffs, v. FRANSABANK SAL, Banque Libanaise Pour Le Commerce, Bank of Beirut SAL, Banque Libano-Française Sal, Middle East Africa Bank, and John Does 1-100, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Gary M. Osen, Esq., Joshua D. Glatter, Esq., Cindy T. Schlanger, Esq., Aaron Schlanger, Esq., Ari Ungar, Esq., OSEN LLC, for Plaintiffs.
Jonathan D. Siegfried, Esq., Lawrence S. Hirsh, Esq., Dewey & Leboeuf LLP, for Defendants Fransabank SAL and Bank Libanaise Pour le Commerce.
Brian H. Polovoy, Esq., Daniel M. Segal, Esq., Shearman & Sterling LLP, Tai H. Park, Esq., Park & Jensen LLP, for Defendant Bank of Beirut SAL.
Mark Hanchet, Esq., Christopher J. Houpt, Esq., Mayer Brown LLP, for Defendant Bank Libano-Française SAL.
Edward B. MacMahon, Jr., Esq., Law Office of Edward B. MacMahon, Jr., Joshua L. Dratel, Esq., Law Offices of Joshua L. Dratel, P.C., for Defendant Middle East and Africa Bank.
Plaintiffs are fifty-seven Israeli citizens who were injured in or survive family members killed in missile attacks launched by Hizbullah, a Lebanese terrorist organization, in July and August of 2006. Plaintiffs brought suit under the Alien Tort Claims Act ("ATCA") against five foreign banks, Fransabank SAL, Bank Libanaise Pour le Commerce, Bank of Beirut SAL, Bank Libano-Française SAL, and Middle East and Africa Bank ("Defendants"), claiming that their provision of certain financial services to parties associated with Hizbullah constituted terrorism financing as well as conspiracy and aiding and abetting Hizbullah to commit genocide, crimes against humanity, war crimes, and terrorism. Before the Court are Defendants' motions to dismiss the Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). For the reasons set forth below, the motions are granted.
The following facts as alleged in the Amended Complaint are taken as true for the purposes of this motion. Hizbullah is an extremist organization that originated in Lebanon in the early 1980s. Funded, trained, and armed by Iran, Hizbullah has committed numerous acts of violence and terrorism in its attempt to destroy the state of Israel. Most relevant to the Plaintiffs' claims, on July 12, 2006, Hizbullah operatives crossed from Lebanon into Israel and ambushed an Israeli military patrol. This assault sparked a thirty-four day conflict between Israel and Hizbullah during which Hizbullah launched approximately 3,900 missiles at civilian areas in Israel. Missile attacks during this period resulted in serious injuries to several Plaintiffs and the deaths of many more Israelis, whose survivors join the present lawsuit.
Since its inception, Hizbullah has evolved into a highly structured organization operating through a network of departments which handle everything from terrorist and paramilitary activities to the administration of social services, financial services, and media services. The Amended Complaint highlights several groups associated with Hizbullah which allegedly further the terrorist mission, including: (1) the Islamic Resistance Support Organization ("IRSO"), a Hizbullah-controlled fundraising operation that solicits and collects donations primarily used to purchase weapons; (2) the Wounded Association, also known as the Charitable Society for the Help of the Wounded and Crippled of the War in Lebanon (the "Wounded Association"), a social services organization that provides financial and medical assistance to injured Hizbullah fighters; (3) the Martyrs Foundation Charitable Social Society (the "Martyrs Foundation"), a group that pays stipends to the families of Hizbullah fighters killed in battle; (4) Jihad Al-Bina, a construction company operated by Hizbullah for its own as well as Lebanese civilian construction projects; (5) Yousser Company for Finance and Investment, the unofficial treasury that holds and invests Hizbullah's assets; and (6) Al-Manar, a Lebanese satellite television network, and Al-Nour, a Lebanese radio station, both of which are operated by Hizbullah in order to broadcast propaganda, raise money, and recruit volunteers.
The Amended Complaint devotes numerous pages to describing the worldwide recognition of Hizbullah and related front groups as terrorist organizations. For instance, in 1995, President Clinton signed an Executive Order naming Hizbullah and several of its leaders Specially Designated Terrorists. In 1997, the United States designated Hizbullah as a Foreign Terrorist Organization. Several other countries, including Canada, the Netherlands, and Israel, followed suit. In 2001, President Bush signed an Executive Order naming Hizbullah a Specially Designated Global Terrorist ("SDGT"); on March 23, 2006, Al-Manar and Al-Nour became SDGTs; on August 29, 2006, the IRSO was designated an SDGT; and from late 2006 to early 2007, Yousser Company for Finance and Investment, Jihad Al-Bina, and the Martyrs Foundation were named SDGTs.
The Amended Complaint also cites to several public sources to establish the notoriety of various groups' (for example, the IRSO and Al-Manar) association with Hizbullah. These include news articles, U.S. Congressional testimony and Treasury Department statements, and an MSNBC report in which a journalist posed as a prospective donor responding to an advertisement on Al-Manar and was directed to send contributions to the "Lebanese-French Bank." (Am. Compl. ¶ 82).
Defendants are several Lebanese banks operating in Lebanon that allegedly provided financial services to organizations affiliated with Hizbullah.
Fransabank SAL ("Fransabank") is a Lebanese bank established in Beirut in 1921. It provides a range of retail, commercial, corporate, and international banking services, including U.S. dollar wire transfers effectuated through correspondent banks including the Bank of New York and JPMorgan Chase Bank, which are located in New York. From January 2003 to August 2006, Fransabank maintained an account for and provided financial services to the Wounded Association as well as the IRSO at its Cheiah Branch in Lebanon.
Banque Libanaise Pour le Commerce ("BLC Bank") is a Lebanese bank established in 1950. It operates thirty-four branches in Lebanon, and in August 2007, Fransabank acquired a majority of BLC Bank's capital. BLC Bank also sends U.S. dollar wire transfers through correspondent banks including Wachovia Bank, the Bank of New York, and JPMorgan Chase Bank. From January 2003 to August 2006, BLC Bank maintained an account and provided financial services to the IRSO in Al-Shiyah, Lebanon and to Al-Manar and/or its parent company.
Bank of Beirut SAL ("Bank of Beirut") is one of the largest banks operating in Lebanon. It provides various retail banking services, and it sends U.S. dollar wire transfers through correspondent banks including American Express Bank, Ltd., JPMorgan Chase Bank, and the Bank of New York. From January 2003 to August 2006, Bank of Beirut maintained an account and provided financial services to the IRSO in its Al-Ghabiri branch in Lebanon and to Al-Manar and/or its parent company.
Banque Libano-Française SAL ("Banque Libano-Française") is a leading private bank in Lebanon. It offers a wide variety of banking services, such as retail, commercial, corporate, investment, and private banking. It submits its U.S. dollar wire transfers through correspondent banks including the Bank of New York and Citibank. From January 2003 to August 2006, Banque Libano-Française maintained an account and provided financial services to the IRSO in the Hreik Neighborhood of Beirut.
Middle East and Africa Bank ("MEAB") has five locations in Lebanon. It effects U.S. dollar wire transfers through correspondent banks including Wachovia Bank, which is located in New York. From January 2003 to August 2006, MEAB maintained an account and provided financial services to the IRSO.
Plaintiffs also name 100 John Doe defendants, who allegedly maintained accounts and provided financial services to the Martyrs Foundation, Jihad Al-Bina, and Yousser Company for Finance and Investment.
The Lebanese pound is pegged to the U.S. dollar, and U.S. dollars are widely used and accepted in Lebanon. The Amended Complaint alleges that three-quarters of deposits in Lebanese banks are denominated in U.S. dollars. Lebanese banks generally acquire U.S. currency either through the Central Bank of Lebanon clearinghouse or through correspondent banking relationships in other countries. As discussed above, Defendant banks maintained several correspondent bank accounts in New York.
In relation to those accounts, Defendant banks, as well as their U.S. correspondent banks, were obligated to implement Know Your Customer and Anti Money Laundering procedures. Know Your Customer practices include verifying a customer's identity and confirming that the customer is not involved in illegal activities or included on sanctions lists in connection with suspected terrorist activities, money laundering, fraud, or other crimes. The Amended Complaint cites public statements on BLC Bank's website and in Fransabank's 2006 Annual Report in which the banks discuss their customer identification and anti money laundering policies in support of the overriding allegation that Defendants "intentionally, knowingly, recklessly, and/or with willful blindness" provided Hizbullah with "regular, systematic, and unfettered access to U.S. currency, thus enabling Hizbullah to rapidly access funds to purchase missiles and other weapons." (Am. Compl. ¶¶ 22, 24).
Thus, Plaintiffs' theory of the case is a long causal chain linking Hizbullah missile attacks to banks in Lebanon to New York through a series of money transfers. Plaintiffs allege that named Defendants maintained bank accounts and provided financial services...
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