BOSTON (CN) — The First Circuit dug into privilege claims Friday by a Saudi spymaster who says he would inadvertently disclose sensitive intelligence information, putting the lives of Americans at stake, if forced to explain where he got the $3.5 billion that a holding company accuses him of misappropriating.
Saad Al Jabri insists that the money came to him legitimately for counterterrorism work, such as foiling a 2010 plot to attack synagogues in Chicago, and serving as an adviser to the former the Saudi Crown Prince Muhammad bin Nayef. Once bin Nayef was deposed in 2017, however, Al Jabri took refuge in Canada where he says the successor to the throne, Crown Prince Mohammed bin Salman, tried to assassinate him. This happened in 2018, according a lawsuit Al Jabri filed in Washington, shortly after the assassination and dismemberment of Washington Post columnist Jamal Khashoggi.
It was in Canada then that Sakab Saudi Holding Company accused Al Jabri of the $3.5 billion fraud. With an injunction against the spymaster in Ontario, Sakab filed another suit in the U.S., purporting that Al Jabri had purchased eight condominiums in Boston with the misappropriated funds.
Sakab seeks a reversal from the First Circuit now after a federal judge agreed to dismiss the case last year, crediting input from the U.S. government that Al Jabri's defense was likely to implicate state secrets.
At oral arguments Monday in Boston, one of Sakab's attorneys at Willkie Farr recalled that Al Jabri included more than 100 pages of "excruciating details" related to the allegations against him, including information about the payments, when he filed his answer to the complaint in Ontario.
Calling the dismissal of Sakab's case "draconian and drastic," attorney Mike Gottlieb said Al Jabri's response went to the merits of the issues and illustrates Al Jabri can mount a defense to the suit filed in the United States.
Sakab insists that "thousands of pages of evidence" support its claims of fraud against Al Jabri, and that the lower court used "an unsupported legal standard" to dismiss the case.
"The district court's sua sponte dismissal on state secrets grounds should be reversed because it is unprecedented, illogical, and unsupported by the record," Gottlieb's brief to the court argues. "Where the government successfully invokes the state secrets privilege, courts at a minimum must attempt to fashion appropriate procedures by which litigation may proceed without endangering national security, and dismissal must always be the last, not first, resort."
Ian Gershengorn with the firm Jenner & Block argued on behalf of Al Jabri, disputing Sakab's characterization of the filings in Canada.
Indeed, Al Jabri claimed in 13 separate instances in that filing he was prevented from giving details about payments he received while acting as an intelligence operative because of concerns about confidential information, Gershengorn said.
"The core of this case is clandestine activity," Gershengorn said. "This isn't some tangential thing we brought in at the last moment."
Gershengorn insisted that the duty to protect state secrets means he cannot call witnesses on behalf of Al Jabri, exchange documents with his opposing counsel, or submit any evidence of why his client received various payments.
The defense asserted in a brief to the First Circuit that "further litigation of a case between a key U.S. intelligence partner and the former spy who led that partnership would [create] an unacceptable risk of disclosing privileged information [and cause] 'exceptionally grave' danger to national security."
That filing calls the version of facts represented by Sakab "unrecognizable" and refers to the Saudi government's lawsuit as "but one piece of Mohammed Bin Salman's broader campaign to discredit and terrorize Dr. Saad and his family."
The judges of the panel asked whether Al Jabri should be forced to defend himself if his best defense is unavailable because of sensitive material, and what Sakab would have the panel do on remand to the district court.
Gottlieb said that, because the content of the case is not sensitive intelligence information but rather the payments made to Al Jabri, he is required to defend himself even if some avenues of defense are unavailable.
As for a remedy, the attorney said the panel could simply issue a stay to allow the Canadian action to play out.
Department of Justice attorney Lewis Yelin urged the First Circuit to affirm dismissal.
While the U.S. government is "keenly aware state secrets privilege is a cudgel" and should be narrowly tailored, Yelin noted, he reminded the panel that all parties agreed to the scope of the privilege in the case at hand.
Gottlieb argued on rebuttal for an order that would allow the district court to examine Sakab's lawsuit on a claim-by-claim basis, rather than a total dismissal of the case.
While the attorney admitted information about some of the payments received by Al Jabri could require the disclosure of sensitive intelligence, Gottlieb said a refusal to conduct a more thorough examination would prejudice his client.
U.S. Circuit Judges Gustavo Gelpi, Jeffrey Howard and O. Rogeriee Thompson heard Sakab's appeal. They offered no timetable for a decision.Follow @@kkoeninger44
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