- - Sunday, October 13, 2013


Syria has been reduced to a small blip in the corner of the radar screen, if only for a moment, but the screen of the neighborhood is as busy as always. Bashar Assad still clings to power in the Syrian civil war, with the Russians standing by to “help,” as usual. Iraq continues to be a tinderbox. Egypt, an old ally, is fighting the Muslim Brotherhood without U.S. political support or military aid. Now Jordan, a steadfast American ally, faces a threat to economic stability in the form of an unusual lawsuit our own Supreme Court has been asked to consider.

The survivors, relatives and heirs of terrorist attacks in Israel have sued the largest financial institution in the Middle East, the Jordan-based Arab Bank, for financing these terrorist attacks by virtue of members of Hamas and Hezbollah using their banking services. The lawyers and their client have their eyes on millions of dollars of damages if they prevail. The trial commences in January. The bank wants the U.S. Supreme Court to intervene before the trial because, it says, American trial lawyers shouldn’t be allowed to require the bank to violate the bank secrecy laws of the countries where it does business.

To comply with a discovery order in the U.S. suit, Arab Bank turned over 200,000 documents after the Saudi Arabian government agreed to it. Jordan, Lebanon and the Palestinian Authority declined to waive their laws for the American suit. The countries further warned the bank that any unauthorized disclosure would result in criminal prosecution of the bank officer who discloses such documents. In Jordan, that’s $70,000 per violation, with the possibility of a six-month jail sentence for the bank officer and revocation of the bank’s license. No matter what the bank does, there’s trouble.

From her Brooklyn courtroom, U.S. District Court Judge Nina Gershon, a Clinton appointee, has sanctioned Arab Bank for $1.3 million in attorneys’ fees and says she will instruct jurors that failure to produce documents will be evidence that the bank “knowingly and purposefully” violated the law, even if there isn’t any other any actual evidence of a crime.

Other banks face a similar plight. The Bank of China, National Westminster Bank, UBS, American Express and Credit Lyonnais have all had to choose which laws to break as trial lawyers deploy sweeping U.S. discovery requests they know create a conflict with privacy laws.

Jordanian Prime Minister Samir al-Rifai protested to then-Secretary of State Hillary Clinton, and Jordanian lawyers filed a friend of the court brief with the U.S. Supreme Court in support of Arab Bank, calling the Brooklyn court’s order a “grave affront to [Jordanian] sovereignty and grave threat to its stability and prosperity.” The lawyers will eventually sort out this curious lawsuit, but it seems to us that if Americans wouldn’t like it if a foreign court ordered an American bank to turn over records in violation of U.S. law, the courts here ought to think twice about the implications of the lawsuit. Lawyers are always clever, but sometimes they’re too clever by half.

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