Justia Banking Opinion Summaries

Plaintiffs, victims of terrorist attacks in Israel by Hamas, filed suit against NatWest, claiming that NatWest provided material support and resources to a terrorist organization in violation of the Antiterrorism Act (ATA), 18 U.S.C. 2331(1)(A), 2333(a), and 2339B(a)(1), and collected and provided funds for the financing of terrorism in violation of 18 U.S.C. 2331(1)(A), 2333(a), and 2339C. Plaintiffs alleged that NatWest provided material support and resources to a foreign terrorist organization by maintaining bank accounts and transferring funds for Interpal. The district court granted NatWest's motion for summary judgment. The court vacated and remanded, concluding that there is a triable issue of fact as to whether NatWest possessed the requisite scienter. The statute's requirement is less exacting, and requires only a showing that NatWest had knowledge that, or exhibited deliberate indifference to whether, Interpal provided material support to a terrorist organization, irrespective of whether Interpal's support aided terrorist activities of the terrorist organization. Because Hamas is an organization designated as a Foreign Terrorist Organization (FTO), plaintiffs can fulfill their burden by demonstrating either that NatWest had actual knowledge that Interpal provided material support to Hamas, or that NatWest exhibited deliberate indifference to whether Interpal provided material support. View "Weiss v. Nat'l Westminster Bank" on Justia Law

This appeal concerns Ex-Im Bank's efforts to execute on a $21 million judgment in its favor against Grenada. Grenada had waived its sovereign immunity from suit in federal court but, nonetheless, Ex-Im Bank has encountered obstacles in attempting to enforce the judgment in the United States under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1602-1611. The court concluded that: the question whether the Grynberg Funds may be attached is moot because those funds have already been disbursed; the district court properly vacated the restraining notices against the Restrained Entities because, with one possible exception, the Restrained Funds are not "used for commercial activity in the United States"; and because the record does not provide an adequate basis to determine whether the IATA Funds are used for commercial activity in the United States and whether they belong to Grenada, the court vacated the denial of post-judgment discovery to these funds, and remanded for the district court to reassess whether to permit further discovery. Accordingly, the court dismissed in part, affirmed in part, vacated in part, and remanded. View "Export-Import Bank of the Republic of China v. Grenada" on Justia Law

After the Republic of Argentina defaulted on its external debt, NML, one of its bondholders, prevailed in 11 debt-collection actions filed against Argentina in New York. To execute its judgments, NML sought discovery of Argentina’s property, serving subpoenas on nonparty banks for records relating to global financial transactions. The district court granted motions to compel compliance. The Second Circuit affirmed, rejecting Argentina’s argument that the order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. 1330, 1602. The Supreme Court affirmed; the FSIA does not immunize a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets. The FSIA replaced factor-intensive loosely-common-law-based immunity with “a comprehensive framework for resolving any claim of sovereign immunity” so that any sort of immunity defense made by a foreign sovereign in a U.S. court must stand or fall on its text. The FSIA established jurisdictional immunity, section 1604, which was waived here. FSIA execution immunity under sections 1609, 1610, 1611, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. Nothing forbids or limits discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Even if Argentina is correct that section 1609 execution immunity implies coextensive discovery-¬in-aid-of-execution immunity, there would be no protection from discovery a foreign sovereign’s extraterritorial assets. Section 1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Argentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue its discovery. View "Republic of Argentina v. NML Capital, Ltd." on Justia Law

The Bank filed this interpleader action to determine ownership of funds held on deposit in an account in the name of the Federal Directorate of Supply and Procurement (FDSP), an entity organized under the former Socialist Federal Republic of Yugoslavia (SFRY). The account was frozen pursuant to an executive order during the Bosnian War. Yugoimport, a Serbian entity, claimed full ownership of the funds as successor-in-interest to the FDSP. The Republics of Croatia and Slovenia contend that the funds should be divided among the states succeeding the SFRY under a multilateral treaty, the Succession Agreement. The court held that interpretation of the Succession Agreement was governed by the Vienna Convention and that the FSPA was an agency of the SFRY. Therefore, the court affirmed the district court's grant of summary judgment to the Republics. View "Yugoimport v. Republic of Croatia, Republic of Slovenia" on Justia Law

Plaintiffs, victims and victims' families and estates, filed suit against Iran and others alleging their liability for the attack on the Khobar Towers apartment complex in Dhahran, Saudi Arabia. Plaintiffs obtained a default judgment and attempted to collect. Plaintiffs had writs of attachment issued to Bank of America and Wells Fargo, seeking any asset held by the banks in which Iran had interest. The banks conceded that some accounts were potentially subject to attachment and these "uncontested accounts" were the subject of an interpleader action in the district court. The remaining "contested accounts" are the subject of this appeal. The court affirmed the order of the district court denying plaintiffs' motion for a turnover of the funds because plaintiffs could not attach the contested accounts under either section 201 of the Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, 116 Stat. 2322, 2337, or 28 U.S.C. 1610(g) without an Iranian ownership interest in the accounts and because Iran lacked an ownership interest in the accounts. View "Heiser, et al. v. Islamic Republic of Iran, et al." on Justia Law

Plaintiffs appealed from the district court's dismissal of their action brought under the Anti-Terrorism Act (ATA), 18 U.S.C. 2331 et seq., against UBS, alleging that plaintiffs were direct or indirect victims of terrorist attacks in Israel facilitated by UBS's furnishing of United States currency to Iran, which the U.S. Department of State had listed as a state sponsor of terrorism. The district court dismissed plaintiffs' First Amended Complaint (FAC) for lack of standing and failure to state a claim. On appeal, plaintiffs contended principally that the FAC alleged a chain of causation between transfers of funds to Iran by UBS and plaintiffs' injuries at the hands of various terrorist groups sponsored by Iran, sufficient to establish traceability for purposes both of standing and of stating a claim under the ATA. The court concluded that the FAC was sufficient to show Article III standing but insufficient to state a claim on which relief could be granted. Accordingly, the court affirmed the judgment. View "Rothstein v. UBS AG" on Justia Law

Plaintiffs, American citizens, had bank accounts in UBS, Switzerland’s largest bank, in 2008 when the UBS tax-evasion scandal broke. The accounts were large and the plaintiffs had not disclosed the existence of the accounts or the interest earned on the accounts on their federal income tax returns, as required. Pursuant to an IRS amnesty program, they disclosed the interest and paid a penalty. They brought a class action to recover from UBS the penalties, interest, and other costs, plus profits they claim UBS made from the class as a result of the fraud and other wrongful acts. The Seventh Circuit affirmed dismissal, noting that the “plaintiffs are tax cheats,” and rejecting an argument that UBS was obligated to give them accurate tax advice and failed to do so. Plaintiffs did not argue that they asked UBS to advise them on U.S. tax law or that the bank volunteered advice. The court stated that: “This is like suing one’s parents to recover tax penalties one has paid, on the ground that the parents had failed to bring one up to be an honest person who would not evade taxes.” The court noted, but did not decide, choice of law issues. View "Thomas v. UBS AG" on Justia Law

In these three consolidated appeals, the court must decide issues about the enforceability of German bonds issued during the period between World War I and World War II. The court concluded that the district court had jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330, 1302-1311, over the complaint against Germany filed by Sovereign Bonds regarding its Agra bonds issued in the territory that later became East Germany; all the bonds were subject to the 1953 Validation Treaty and must be validated before they could be enforced in American courts; the complaint filed by World Holdings to enforce its validated bonds was untimely; and the district court did not abuse its discretion when it denied discovery to Sovereign Bonds on the issue of validation. View "World Holdings, LLC v. Federal Republic of Germany" on Justia Law

Argentina appealed from permanent injunctions entered by the district court designed to remedy Argentina's failure to pay bondholders after a default in 2001 on its sovereign debt. The district court granted plaintiffs summary judgment and enjoined Argentina from making payments on debt issued pursuant to its 2005 and 2010 restructurings without making comparable payments on the defaulted debt. The court held that an equal treatment provision in the bonds barred Argentina from discriminating against plaintiffs' bonds in favor of bonds issued in connection with the restructurings and that Argentina violated that provision by ranking its payment obligations on the defaulted debt below its obligations to the holders of its restructured debt. Accordingly, the court affirmed the judgment of the district court; found no abuse of discretion in the injunctive relief; and concluded that the injunction did not violate the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1602-1611. However, given the need for clarity as to how the injunctions were to function, the court remanded for further proceedings. View "NML Capital, Ltd. v. The Republic of Argentina" on Justia Law

Holocaust survivors and heirs of other Holocaust victims sued, alleging that the Hungarian National Bank and Hungarian National Railway participated in expropriating property from Hungarian Jews during the Holocaust. Railway plaintiffs claimed subject matter jurisdiction under the expropriation exception to the Foreign Sovereign Immunities Act, 28 U.S.C. 1605(a)(3), and assert: takings in violation of international law, aiding and abetting genocide, complicity in genocide, violations of customary international law, unlawful conversion, unjust enrichment, fraudulent misrepresentation, and accounting. Bank plaintiffs claimed subject matter jurisdiction under the FSIA expropriation and waiver exceptions, 28 U.S.C. 1605(a)(1) and assert: genocide, aiding and abetting genocide, bailment, conversion, constructive trust, and accounting. They sought certifications as class actions, seeking to have the railway held responsible for approximately $1.25 billion, and the bank held jointly and severally responsible with private banks for approximately $75 billion. The district court declined to dismiss. The Seventh Circuit held that it had appellate jurisdiction under the collateral order doctrine and remanded with instructions that plaintiffs either exhaust available Hungarian remedies identified by defendants or present a legally compelling reason for failure to do so. The court should allow jurisdictional discovery with respect to whether the railway is engaged in “commercial activity” in the U.S. View "Abelsz v. Magyar Nemzeti Bank" on Justia Law