The Second Circuit agreed with NatWest, finding that the extensive record of due diligence efforts by the bank, documented by ten years of pre-trial discovery, showed that plaintiffs did not meet the knowledge element of liability as set out in JASTA.
The court also found that Interpal did not say the transfers were for terrorism and that plaintiffs had no evidence that the 13 charities supported terrorist acts or recruitment.
Issues Before the Supreme Court
The plaintiffs’ petition for review framed the question before the court as “Whether a person who knowingly transfers substantial funds to a designated FTO aids and abets that organization’s terrorist acts for purposes of civil liability under JASTA, §2333(d)(2).” It cited both JASTA and the Supreme Court’s ruling on the criminal prohibition on material support of terrorism (Holder v Humanitarian Law Project) as support for its argument that civil liability should be triggered by the same threshold as the criminal statutes.
NatWest’s brief, filed in Nov. 8, 2021, makes two basic arguments: 1) that JASTA establishes a different threshold for liability than the criminal statute, requiring support to be both knowing and substantial, 2) there is no split between federal Circuit Courts of Appeals rulings on JASTA, since the Seventh Circuit case was decided before JASTA was enacted, and 3) that:
“Notwithstanding petitioner’s efforts to engineer a purely legal question from the decision below, their real quarrel is with the lower courts’ fact-bound application of the multi-factor test for aiding and abetting liability set out in Halberstam v Welch, 705 F.2d472(D.C. Cir. 1983, which Congress explicitly instructed provides the governing legal standard for JASTA claims in the Findings and Purposes section of the statute.” (p.2)
The plaintiffs’ reply, filed Nov. 22, 2021, argued that the dispute in the case is over legal, not factual issues, and that the Second and Seventh Circuits are split on the issue, which is ripe for Supreme Court review.
Briefs from amici supporting the plaintiffs can be accessed on the Supreme Court’s docket page for the case.
On Dec. 13, 2021, the court invited the Solicitor General to “to file a brief in this case expressing the views of the United States.” As of May 3, 2022, the brief has not yet been posted.
On June 27, 2022, the Supreme Court denied the plaintiffs’ petition for certiorari without explanation. As a result, the Second Circuit’s ruling that the banks in question cannot be held liable for funds transfers to organizations with alleged ties to Hamas remains in place.