Second Circuit Wipes Away $665M PLO Fine

     MANHATTAN (CN) — Explaining why it must void a $655 million fine against the Palestinian government for a spate of suicide bombings in Israel, the Second Circuit emphasized Wednesday that U.S. courts are the wrong venue for such justice.
     The complaint had been filed over a decade ago in the immediate wake of the Second Intifada.
     Taking its name from the Arabic word for “uprising” or “shaking off,” the intifada raged in Israel from late 2000 to early 2005, toward the end of Yasser Arafat’s rule. The Jerusalem-based human rights group B’Tselem says the cycle of violence left 1,083 Israelis and 6,371 Palestinians dead.
     Mark Sokolow, a lawyer who had also been in the World Trade Center on 9/11, led 11 families touched by the slaughter in a lawsuit against the Palestinian Authority and Palestine Liberation Organization.
     When the case finally went to trial last year in New York, a federal jury found Arafat’s government to blame for five attacks on Hebrew University, a bus and public streets.
     The court automatically tripled the jury’s $218.5 million verdict against the government bodies under the Anti-Terrorism Act.
     State Department officials predicted, however, that the hefty fine would ruin the Palestinian Authority, breeding regional instability.
     Though Daniels kept the penalty largely at bay, he did allow a small payment of $1 million a month pending appeal.
     The Second Circuit waived the penalty entirely today, however, emphasizing that sympathy for the plaintiffs cannot translate to relief.
     “The terror machine gun attacks and suicide bombings that triggered this suit and victimized these plaintiffs were unquestionably horrific,” its 61-page ruling states. “But the federal courts cannot exercise jurisdiction in a civil case beyond the limits prescribed by the due process clause of the Constitution, no matter how horrendous the underlying attacks or morally compelling the plaintiffs’ claims.”
     U.S. District Judge John Koeltl wrote today’s ruling on behalf of a three-person panel. Koeltl normally presides in the Southern District of New York but sat on this case by designation.
     The ruling denies that jurisdiction for the case is possible since Sokolow and the other families are U.S. citizens, and the Palestinian Authority has an office in Washington, D.C.
     In the case Daimler AG v. Bauman, the Supreme Court said such ties are not enough.
     Daimler, which let a German auto giant off the hook for Argentina’s Dirty War, requires that a plaintiff demonstrate a defendant sued for conduct abroad is “essentially at home” in the United States.
     This is not the case for the Israeli-Palestinian conflict, the judges noted.
     “The district court held that the record before it was ‘insufficient to conclude that either defendant is ‘at home’ in a particular jurisdiction other than the United States,'” Koeltl wrote. “That conclusion is not supported by the record. The evidence demonstrates that the defendants are ‘at home’ in Palestine, where these entities are headquartered and from where they are directed.” (Emphasis in original)
     Sokolow and the other families are U.S. citizens, but their “own evidence establishes the random and fortuitous nature” of the attacks, the court found.
     Their attorney, Kent Yalowitz of Arnold & Porter, indicated that an appeal is in the works.
     “This cruel decision must be corrected so that these families may receive justice,” Yalowitz said in a statement. “No one denies, as the federal jury has found, that the Palestinians carried out these attacks and killed and injured these American citizens, who will not give up seeking justice from the courts. The time has come for the U.S. Congress and the State Department to intervene on the side of American victims of terror to ensure that these families are compensated by the PA and PLO for these crimes.”
     Gassan Baloul, an attorney who represented the Palestinian bodies for the Washington-based firm Squire Patton Boggs, applauded the ruling.
     “We are very gratified that the court fully accepted our clients’ consistent position that the PA and the PLO are not subject to the jurisdiction of the United States courts in these matters,” Baloul said in a statement.

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