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Wednesday, June 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Hezbollah Victims Get a Boost in Suing AmEx

(CN) - A New York appeals court paved a jurisdictional path for victims of Hezbollah rocket attacks to revive claims that American Express Bank helped the group get money.

Dozens of American, Israeli and Canadian citizens sued American Express and Lebanese Canadian Bank (LCB) over injuries and fatalities that they and their families suffered during the Second Lebanon War in the summer of 2006.

The plaintiffs alleged that the Beirut-based LCB and American Express helped Hezbollah funnel money through its financial arm, the Shahid Foundation. A footnote to the decision translates "shahid" as "martyr."

Concluding that the Southern District of New York lacked of jurisdiction, and that the complaint failed to connect the bank's activities with those of Hizbollah, a federal judge dismissed the case.

The 2nd Circuit is considering the plaintiff's appeal, but it asked New York's highest court, the Court of Appeals, to determine whether the state's long-arm statute covers LCB.

According to an opinion written by Judge Susan Phillips Read, the answer is yes.

"Complaints alleging a foreign bank's repeated use of a correspondent account in New York on behalf of a client - in effect, a 'course of dealing' - show purposeful availment of New York's dependable and transparent banking system, the dollar as a stable and fungible currency, and the predictable jurisdictional and commercial law of New York and the United States," Read wrote.

"Repeated use of the correspondent account shows not only transaction of business, but an articulable nexus or substantial relationship between the transaction and the alleged breaches of statutory duties," she added.

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