Anti-Terrorism Act Liability for Financial Institutions: Jury Verdict Against Arab Bank PLC Under Anti-Terrorism Act; Second Circuit Analyzes Requisite Scienter for Pleading ATA Violation

Sullivan & Cromwell LLP - September 24, 2014

The past decade has witnessed a surge in the number of cases brought under the federal Anti-Terrorism Act, 18 U.S.C. § 2331 et seq. (“ATA”), against financial institutions, oil companies, food distribution companies, and other major corporations.  September 22, 2014 marked two more notable events in this rapidly developing area of the law.  First, in what has been one of the most high-profile ATA actions to date, a jury in the Eastern District of New York found Arab Bank PLC liable for ATA violations in Linde v. Arab Bank, PLC, No. 04-CV-2799.  On the same day, the U.S. Court of Appeals for the Second Circuit reinstated ATA claims against National Westminster Bank (“NatWest”), holding that to violate the ATA, a defendant need only have knowledge that, or be deliberately indifferent to whether, it provided material support to a terrorist organization, and need not have knowledge of whether that support actually aided terrorist activities.  See Weiss v. National Westminster Bank PLC, No. 13-1618-cv.