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2nd Circuit revives terrorism lawsuit against Lebanese bank

4 minute read

The Lebanese Canadian Bank (LCB) headquarters in Beirut. REUTERS/ Cynthia karam

  • Lebanese Canadian Bank must face claims under Justice Against Sponsors of Terrorism Act
  • Plaintiffs allege bank indirectly aided Hezbollah by banking its affiliates

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(Reuters) - The 2nd U.S. Circuit Court of Appeals on Wednesday revived a lawsuit by 18 U.S. citizens against Lebanese Canadian Bank, saying it plausibly alleges the bank aided Hezbollah by providing financial services to its affiliates.

U.S. Circuit Court Judge Amalya Kearse wrote for a three-judge panel on Wednesday that a Manhattan federal judge applied standards higher than those laid out in the Justice Against Sponsors of Terrorism Act (JASTA) when he dismissed the case in 2019. The law provides civil claims against third parties for aiding and abetting terrorist acts through direct or indirect assistance.

Gary Osen of Osen, who represents the plaintiffs, called the decision "an important milestone in the efforts of American terror victims to vindicate their rights."

Jonathan Siegfried of DLA Piper, who represents the bank, did not immediately reply to a request for comment on Wednesday.

The lawsuit, first filed in 2008, seeks damages for injuries caused by rockets Hezbollah fired into Israel in 2006. The plaintiffs claim the bank assisted Hezbollah by providing banking services to entities that funnelled resources to the group.

Kearse, along with U.S. Circuit Court Judges Richard Wesley and Debra Livingston, said the complaint adequately alleged that the entities were so intertwined with Hezbollah that the bank was "generally aware" that its banking relationship played a role in "unlawful activities from which the rocket attacks were foreseeable."

The plaintiffs had also plausibly alleged the bank knowingly provided the assistance, the panel said, adding that JASTA covers indirect as well as direct assistance.

The case is one of several before the court involving JASTA claims against banks.

Kearse wrote an opinion for the court in April affirming summary judgment in favor of National Westminster Bank and Credit Lyonnais SA in two similar cases.

The case is Kaplan v. Lebanese Canadian Bank et al., No. 19-3522, in the 2nd U.S. Circuit Court of Appeals

For Lebanese Canadian Bank: Jonathan Siegfried of DLA Piper

For the plaintiffs: Gary Osen of Osen

Read More: 2nd Circuit questions dismissal of case over bank's Hezbollah ties 2nd Circuit won't revive Hamas victims' lawsuits against two banks

2nd Circuit to examine bank liability for terrorist acts

Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

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