In a widely watched terrorism lawsuit that drew the attention of the Obama administration, a federal judge in Manhattan ruled on Monday that the Palestinian Authority would have to post $10 million and an additional $1 million monthly to appeal a huge damages award for its role in six terrorist attacks in Israel that had killed and injured Americans.
The bond amount was much lower than lawyers for the victims had sought and matched the amount that lawyers for the Palestinian Authority said in court on Monday that the defendants could pay.
Just two weeks ago, the Obama administration weighed in on the case, expressing concern in a submission to the judge that requiring too high a bond could cause economic and political harm to the Palestinian Authority and the broader peace process.
The Palestinian Authority and the Palestine Liberation Organization in February were found liable in the attacks, which occurred between 2002 and 2004, after a lengthy civil trial brought under an antiterrorism law that provided for a tripling of the jury’s damages award of $218.5 million, for a total of $655.5 million.
Defense lawyers said their clients would appeal, but argued that the Palestinian Authority could not afford to post the required bond, which they said was typically 111 percent of the judgment. Earlier they had asked the judge, George B. Daniels of United States District Court, to waive the bond requirement altogether, which the plaintiffs strongly opposed.
After the court hearing on Monday, Kent A. Yalowitz, a lawyer for the families that brought the case, said he was disappointed in the size of the bond, calling it a “token amount” for the defendants.
On Aug. 10, the Justice Department filed an unusual “Statement of Interest of the United States of America,” asking that Judge Daniels “carefully consider” the size of the bond that he would require for an appeal.
The filing said that the government “strongly supports the rights of victims of terrorism to vindicate their interests in federal court and to receive just compensation for their injuries.”
But it also included a declaration by Antony J. Blinken, the deputy secretary of state, which said that the United States had “significant concerns about the harms that could arise if the court were to impose a bond that severely compromised the Palestinian Authority’s ability to operate as a government authority.” The declaration did not take a position on the merits of the case, only the bond’s impact.
“A P.A. insolvency and collapse would harm current and future U.S.-led efforts to achieve a two-state solution to the Israeli-Palestinian conflict,” Mr. Blinken asserted.
The New York Times reported this month that the government’s filing followed an intense debate between officials in the State Department and the Justice Department over the proper strategy to take in the case.
Gassan Baloul, a defense lawyer in the case, said in a statement after the hearing that the Palestinian Authority appreciated the court’s “careful consideration” of the issues and was “taking measures to comply on a timely basis with the court’s directives.”
At a hearing last month, Judge Daniels indicated that he wanted some sort of “minimum bond” as a “significant demonstration” that the defendants were “willing and able to pay a judgment, if a judgment is entered and is affirmed on appeal.” He asked that the defendants return with a proposal that was “reasonable.”
In court on Monday, another defense lawyer, Mitchell R. Berger, said the Palestinian Authority could deposit $10 million and also pay $1 million a month over the course of the appeal.
The money would be paid into a court registry and held pending the end of the appeal.
Mr. Berger argued that there were “human consequences” to such payments. Every $1 million that the authority had to pay, he said, could result in the loss of more than 900 Palestinian Authority jobs, or ending the reconstruction of a destroyed school in Gaza.
The lawyer for the victims’ families, Mr. Yalowitz, originally asked that the Palestinian Authority be required to make payments of $30 million a month while pursuing an appeal, and on Monday he suggested that $20 million in monthly payments would be appropriate.
Mr. Yalowitz said that the amount proposed by the defendants should “outrage” the court, given that the Palestinian Authority was still paying millions of dollars to convicted terrorists imprisoned in Israel.
Another of the families’ lawyers, Nitsana Darshan-Leitner, in a statement issued after the hearing from her office in Ramat Gan, Israel, said, “This is a very serious blow to the terror victims who spent 11 years litigating” the case.
Under the terms of the judge’s ruling, the defendants must continue to make their monthly payments pending the duration of an appeal. If the verdict is upheld on appeal, the defendants would owe the entire amount of the judgment.
Judge Daniels said that as long as the defendants adhered to the schedule of payments, he would issue a stay on the plaintiffs’ ability to execute the judgment.
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(via NY Times)