(CN) — A handful of Americans held captive by Iran fought to revive a lawsuit against Chase Bank on Monday, telling the Second Circuit that the financial institution not only prolonged the 1979 crisis but concealed its involvement for decades.
Though the suit was dismissed for being untimely, attorney Walter Kelley Jr. argued before a three-judge panel this morning that the hostages are being punished for Chase Bank's coverup of the true narrative.
It was only after the death of former Chase Bank chairman David Rockefeller in 2017, however, that Yale University was permitted to unseal explosive records about the bank's secret efforts to secure U.S. refuge for the former Iranian shah Mohammed Reza Pahlavi after an uprising ended his iron-fisted rule.
Less than two weeks after Chase secured passage into the United States for the shah, who was one of the bank's most profitable clients, revolutionary Iranian students seized the U.S. Embassy in Tehran on Nov. 4, 1979, and held several dozen American diplomats captive for 444 days until the inauguration of President Ronald Reagan on Jan. 20, 1981.
Kelley represents a group of former hostages seeking to hold Chase liable now after The New York Times reported on Yale's long-sealed records detailing the bank's “Project Eagle." He pointed at Chase in oral arguments Monday as critical to delaying the release of the hostages, a conspiracy fomented to ensure then-President Jimmy Carter's loss in the 1980 presidential election and bring President Ronald Reagan into office.
U.S. Judges Susan Carney, Steven Menashi and Myrna Perez drilled the attorney with questions in quick succession at the hearing, which was held via teleconference, asking what steps the hostages and their families took to learn about the circumstances of their captivity all those years ago and whether the hostages were suing the bank because it engaged in speech intended to petition the government.
The hostages have argued in briefing that three things were made apparent with the unsealing of the Project Eagle records: that Chase duped the Carter administration into believing the shah was in need of urgent medical care only obtained in New York; that it threw a wrench into the hostage negotiation works because the bank thought Reagan “more pliant;” and that it then concealed the whole operation.
While U.S. District Judge Lewis Liman ruled last year that the deadline for the hostages to launch such a lawsuit passed sometime in the 1980s, Kelley insisted Monday that there is evidence Chase spread rumors about a payout to thwart the release of the hostages in an “October surprise” ahead of the 1980 presidential election.
The panel asked Kelley about the news reports at the time that talked about Chase’s involvement in the hostage crisis, to which Kelley noted that those reports offered no detail about the bank’s delay tactics.
“We didn’t know someone was acting to prolong their captivity,” Kelley said.
Kelley said the bank’s acts involved not only its petitioning of the government but its lying to public — conduct that had a “direct or foreseeable consequence” of the hostage’s continued captivity.
Roman Martinez, attorney for the bank, meanwhile called it as “implausible as it sounds" to argue that the bank and its executives are responsible for the Iran hostages because of speech otherwise protected by the First Amendment.
Martinez, with the firm Latham & Watkins, disputed the hostages' timeline of when they could have learned of the alleged injury. Even accepting their theory, Martinez argued, 2020 was still too late to bring a suit against the bank.
The attorney noted that two books about the Iran hostage crisis came out in 2004 and 2007 that suggested the bank worked to undermine negotiations to free the captives.
Furthermore, some of the hostages had sought legal advice back in the mid-1980s, according to Martinez.
“We believe this meritless case was filed far too late and we ask that you affirm,” Martinez said.
Meanwhile, the panel wondered how much the hostages had to push to learn the truth against a “sophisticated misrepresentation campaign” that included alleged false statements made in response to a congressional subpoena.
Using up the two minutes he reserved for rebuttal, Kelley said the hostages’ case is about bringing a new claim to address an injury that could not have been discovered sooner, and more factual inquiry must be done to address the statute of limitations.
Before the panel moved on to the next case, saying they would take the arguments into consideration, it asked if the statute of limitations was a problem with the hostages’ case on the face of the complaint.
“Yes,” Kelley admitted, “40 years is a very long time.”
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