Terror victims to 2nd Circuit: Let case vs PLO go to trial next month

December 18, 2014

The Palestinian Authority and the Palestinian Liberation Organization are scheduled to go to trial in federal district court in Manhattan next month to defend against claims by more than 40 U.S. citizens (or their survivors) who were injured or killed in attacks in Israel between 2000 and 2004. U.S. District Judge George Daniels has set jury selection to begin on Jan. 7 and opening statements to be presented on Jan. 13.

Defense lawyers at Miller & Chevalier have said that as much as $3 billion is at stake in the case, which was brought under the 1992 Anti-Terrorism Act. The Palestinian Authority and the PLO also said in a brief filed earlier this month that they are worried about press coverage of the trial because plaintiffs will portray them as financial enablers of Hamas attacks that killed or wounded dozens of civilians. On Wednesday, the defendants asked the 2nd U.S. Circuit Court of Appeals for an emergency stay, arguing that the case shouldn’t go before a jury until the 2nd Circuit has decided whether Judge Daniels even has authority to hear it.

According to the PLO and the Palestinian Authority, Daniels abused his discretion when he held that he has personal jurisdiction over them, despite the U.S. Supreme Court’s restrictive interpretation of jurisdiction in its 2014 decision in Daimler AG v. Bauman and the 2nd Circuit’s subsequent application of Daimler in Gucci America v. Bank of China. The defendants petitioned the 2nd Circuit for a writ of mandamus overturning Daniels’ findings on jurisdiction.

“As an important partner in the United States’ efforts to foster peace and security in the Middle East, the Palestinian Government should not be subjected to a lengthy, high-profile terrorism trial in the United States without appellate review of the district court’s patently erroneous decision,” the PLO and Palestinian Authority said in Wednesday’s stay motion.

The 2nd Circuit was at least interested enough in the jurisdiction question to ask last week for a response to the defendants’ mandamus petition from the plaintiffs. Their lawyers at Arnold & Porter filed that response Wednesday. It’s a doozy of a brief, asserting at least half a dozen arguments why the 2nd Circuit should not grant the writ of mandamus.

For one thing, according to the new brief, the defendants waived their right to challenge the personal jurisdiction of U.S. courts to hear this case by failing to make that argument after the Supreme Court issued its 2011 decision in Goodyear v. Brown, a precursor of the justices’ Daimler opinion three years later. And for another, the brief said, the Daimler opinion – which held that corporations may only be sued in the states in which they are incorporated or headquartered – addressed only 14th Amendment limitations on a state’s right to assert jurisdiction, not the 5th Amendment, which controls in cases arising under federal laws such as the ATA. Moreover, according to the plaintiffs, the PLO and the Palestinian Authority won’t suffer irreparable harm from waiting until after a final judgment to appeal Judge Daniels’ repeated rulings that he has jurisdiction to hear the case.

“In short, petitioners would have this court extend Daimler to the 5th Amendment, decide an issue not decided in Daimler, and then apply Daimler to a case in which the defendants are not headquartered or incorporated in any state, foreign or domestic – and make those novel decisions on an expedited mandamus petition filed on the eve of trial,” the plaintiffs’ brief said. “Such extraordinary steps are … unwarranted here.”

I’ve been tracking the foreign-policy implications of private litigation against accused terrorism financiers. The defendants in this case, like Jordan in the Arab Bank case that went to a jury verdict on liability this summer, claim that private Anti-Terrorism Act litigation punishes U.S. allies in the global fight against extremist violence. Specifically, the PLO and Palestinian Authority said in their Dec. 3 mandamus petition that the PA, as the governing authority in the Palestinian Territories, “plays an essential role in the United States’ efforts to achieve a two-state solution as part of a comprehensive regional peace in the Middle East.”

In their response brief Wednesday, the plaintiffs pointed out that the U.S. State Department, contrary to the defendants’ implications, has consistently refused to intervene to help defendants in ATA suits. The U.S government has twice rebuffed specific requests for help from the PLO and the Palestinian Authority, despite claims that big judgments would destabilize the Palestinian economy and impede peace negotiations.

“Prosecuting this case to judgment will not undermine any U.S. foreign policy goals,” the brief said. “To the contrary, this court can and should follow the foreign policy decisions of the political branches of our government in this case by enforcing the statute as written.”

Fundamentally, the plaintiffs argue, the Anti-Terrorism Act is working just as Congress intended in this case, in which U.S. citizens seek accountability in U.S. courts from non-sovereign entities that allegedly sponsored lethal attacks. The 2nd Circuit, they said, should let their case move ahead.

“This court should not countenance petitioners’ last-ditch efforts to avoid their day of reckoning,” the brief concluded.

I reached out to defense lawyer Laura Ferguson of Miller & Chevalier but she didn’t respond.

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