Clifford Chance

Second Circuit Vacates Jury Verdict in ATA Case

12 February 2018

On February 9, 2018, in Linde v. Arab Bank, the United States Court of Appeals for the Second Circuit issued an important decision making it more difficult for plaintiffs to hold financial institutions primarily liable under the Anti-Terrorism Act ("ATA") for injuries they sustain in terror attacks. The court held that the mere provision of routine banking services to a terrorist organization (in this case, Hamas) does not by itself constitute "material support" to terrorists, but rather that plaintiffs also must show that the provision of those services met the definition of an "act of international terrorism," including the "inten[t]" to intimidate or coerce a civilian population, or to influence government policy or conduct through intimidation, coercion, or certain violent acts. As a result of this decision, ATA lawsuits against financial institutions and other commercial defendants will be less likely to succeed based on primary liability theories, but rather will focus on secondary liability theories of aiding and abetting and conspiracy, which Congress created through the 2016 Justice Against Sponsors of Terrorism Act.

Download PDF