Averbach et al v. Cairo Amman Bank

Filing 174

MEMO ENDORSEMENT granting 170 Joint Motion approve the proposed changes to the December 13, 2022 transcript . ENDORSEMENT: The parties' proposed revisions to the transcript from the December 13, 2022 Conference are APPROVED. SO ORDERED. (Signed by Magistrate Judge Katharine H. Parker on 1/17/2023) (vfr)

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01/17/2023

January 12, 2023
VIA ECF

The parties' proposed revisions to the transcript
from the December 13, 2022 Conference are
APPROVED.

Hon. Katharine H. Parker
United States Magistrate Judge
United States District Court, Southern District of New York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007
Re:

01/17/2023

Averbach et al. v. Cairo Amman Bank, 19-cv-00004-GHW-KHP
Letter Motion Requesting Approval of December 13, 2022, Transcript
Errata

Dear Magistrate Judge Parker:
At the request of the transcription service that prepared the transcript for the December 13,
2022, case management conference, we write jointly on behalf of the parties to request that the
Court approve the proposed changes to the transcript attached hereto as a clean document in
Exhibit A and a redline in Exhibit B.
Respectfully submitted,
/s/ Dina Gielchinsky
cc:

All Counsel

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EXHIBIT A

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
In re:

:

Docket #19cv0004
: 19-cv-00004-GHW-KHP

AVERBACH, et al.,
Plaintiffs,
- against -

:
:

CAIRO AMMAN BANK,
Defendant.

: New York, New York
December 13, 2022
:

------------------------------------- :
PROCEEDINGS BEFORE
THE HONORABLE KATHARINE H. PARKER,
UNITED STATES MAGISTRATE JUDGE
APPEARANCES:
For Plaintiffs:

OSEN LLC
BY: GARY OSEN, ESQ.
DINA GIELCHINSKY, ESQ.
190 Moore Street, Suite 272
Hackensack, New Jersey 07601

For Defendant:

DLA PIPER US LLP
BY: JONATHAN SIEGFRIED, ESQ.
ANDREW PECK, ESQ.
1251 Avenue of the Americas
New York, New York 10020

For Third Party
Defendants:

WHITMAN BREED ABBOTT & MORGAN LLC
BY: RICHARD LAWLER, ESQ.
MICHAEL THOMASON, ESQ.
500 West Putnam Avenue
Greenwich, Connecticut 06930

Transcription Service:

Carole Ludwig, Transcription Services
155 East Fourth Street #3C
New York, New York 10009
Phone: [phone]
Email: [e-mail]

Proceedings recorded by electronic sound recording;
Transcript produced by transcription service.

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INDEX
E X A M I N A T I O N S
Witness

Direct

Cross

ReDirect

ReCross

None
E X H I B I T S
Exhibit
Number
None

Description

ID

In

Voir
Dire

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1
2

3
THE CLERK:

Calling case 19cv004, Averbach

3

versus Cairo Amman Bank.

4

for the plaintiffs, please make your appearance for

5

the record.

6

MR. GARY OSEN:

Beginning with the counsel

Good morning, Your Honor, this

7

is Gary Osen from Osen LLC, together with my

8

colleague, Dina Gielchinsky, on behalf of the

9

plaintiffs.

10

THE COURT:

Okay, nice to see you.

11

THE CLERK:

And counsel for the defendants,

12
13

please make your appearance for the record.
MR. JONATHAN SIEGFRIED:

Good morning, Your

14

Honor, Jonathan Siegfried for DLA, along with my

15

colleague, Andrew Peck.

16

THE COURT:

Hello.

17

THE CLERK:

And counsel for the third party

18
19

defendants, please make your appearance.
MR. RICHARD LAWLER:

Good morning, Your Honor,

20

Richard Lawler, Whitman Breed Abbott & Morgan, for

21

Arab Bank New York, and Michael Thomason, good

22

morning, Your Honor.

23

THE COURT:

Good morning.

Okay, welcome,

24

everyone. The principal purpose of today’s proceeding

25

I think is to address the subpoena and the motion to

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4

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compel that plaintiffs have filed seeking certain

3

information from Arab Bank.

4

was talk about that motion, hear from plaintiffs on

5

that and then I’ll hear from Arab Bank’s counsel who

6

are here today. I did read the Spetner case which was

7

cited in the, in the briefs, but the principal thing

8

that I want plaintiffs to address is why what you are

9

seeking is proportional to the needs of the case and,

And what I wanted to do

10

of course, any other points that you want to raise.

11

So I’ll hear first from plaintiffs’ counsel.

12

MR. OSEN:

Thank you, Your Honor.

As I read

13

the defendant’s brief I think there are really only

14

two open issues of dispute. The first is whether Arab

15

Bank’s, I’ll call it Arab Bank-New York for simplicity

16

purposes, has to search for, in addition to the

17

individuals and entities listed in the complaint, an

18

additional 11 individuals and entities that were not

19

listed in the complaint by name, 9 individuals and 2

20

entities.

21

whether they should have the burden of searching for

22

variations and transliterations of the names of the

23

individuals and entities listed.

24
25

And the second issue still in dispute is

THE COURT:

Well, aren’t they also saying that

they don’t have any, that CAB didn’t have an account

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and that they just don’t have any documents?

3
4

MR. OSEN:

I don’t think that’s correct, Your

Honor.

5

THE COURT:

6

MR. OSEN:

Okay.
Arab Bank clearly does have

7

responsive records because we already have records

8

from Arab Bank-New York that involve Cairo Amman

9

Bank’s New York transactions. The question is, as they

10

frame it, is that they are not a correspondent bank

11

for CAB, which is true, but the transactions that we

12

have seen already are ones in which Arab Bank is the

13

correspondent bank for the other side of the

14

transaction. So, in any correspondent account

15

transactions there are at least four parts to it,

16

there’s the originator bank and its correspondent

17

bank, and the recipient bank’s correspondent bank, and

18

then the recipient bank, itself. So in a transaction,

19

and I can give you an example and present one to you

20

if that’s helpful, Arab Bank, for the sake of

21

argument, Arab Bank in Beirut or in Jordan has a

22

customer, sends a US dollar-denominated transaction to

23

a Cairo Amman Bank customer in the Palestinian

24

Territories; that transaction flows from Arab Bank in

25

Jordan, credited to Arab Bank’s correspondent account

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in New York, and then to, for example, Citibank as the

3

correspondent for CAB and then on to CAB in the

4

Palestinian Territories.

5

wire transfer.

6

That’s a typical sort of

So, we already have examples of Arab Bank

7

transactions for relevant entities and parties that,

8

where Arab Bank is the originating bank and,

9

therefore, the customer’s correspondent is Arab Bank-

10

New York and then the recipient is Cairo Amman Bank

11

with, in most of the cases we’ve seen Citibank as the

12

correspondent for Cairo Amman --

13

THE COURT:

So, the only examples, you’re

14

conceding then that the only examples that you’re

15

expecting to find are examples where a customer of

16

Arab Bank is originating the transaction?

17

MR. OSEN:

Technically, it doesn’t have to be

18

a customer of Arab Bank, Arab Bank could be the,

19

simply the correspondent for another bank but, yes,

20

there are going to be cases where the originator is

21

not Cairo Amman, but only the recipient is.

22
23
24
25

THE COURT:

So, you’re looking for

transactions where CAB is a recipient?
MR. OSEN:

Right, but where they are using, of

course, New York as the basis to receive the dollars.

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So, there are many examples of CAB receiving

3

transactions from say entities in Europe where it

4

doesn’t flow or at least we can’t see visibly that it

5

went through New York. Here, we’re talking about

6

transactions – definitionally because it’s Arab Bank-

7

New York – that flowed through Arab Bank-New York to

8

CAB in the territories.

9

THE COURT:

10

MR. OSEN:

Okay.
If it will help Your Honor, I can

11

give you an example that’s already in the public

12

record.

13

THE COURT:

14

MR. OSEN:

15

Sure.
Your Honor, with permission I’ll

approach.

16

THE COURT:

Yes.

17

THE CLERK:

Thank you.

18

MR. OSEN:

So, for the record, this is Bates

19

stamped AV-PL000016 and, again, also for the record,

20

Your Honor, the highlighting is done by counsel and

21

not in the original document.

22

THE COURT:

23

MR. OSEN:

Um-hmm.
So, this is a year 2000 transaction

24

for over $8,000 that was initiated by an individual

25

named Mr. Youssef El-Hayek (phonetic), he’s identified

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below as the originating party and --

3
4

THE COURT:

And he has an account at Arab

Bank.

5

MR. OSEN:

Presumably.

It’s not entirely

6

clear from this document whether he simply used Arab

7

Bank or had an account there but, in any event, he

8

used Arab Bank Amman as the originating bank to send

9

this transfer.

And the beneficiary is Ghazi Hamad, G-

10

H-A-Z-I, Hamad, who is a, the complaint alleges, a

11

prominent Hamas leader in the Gaza Strip and he had an

12

account at the credit bank, Cairo Amman Bank, with the

13

address listed there in Amman, Jordan. And the

14

transfer was credited, you can see four lines down,

15

through Citibank, that’s for their routing. So, the

16

transfer would have gone essentially from the books of

17

Arab Bank Jordan, which had an account with Arab Bank

18

New York, then the correspondent banking credit goes

19

to Citibank and then Citibank’s correspondent account

20

which Cairo Amman then credits the account holder

21

listed.

22
23
24
25

So, it’s this kind of transaction and others
like it that are of interest in -THE COURT:

Right, so this goes from this guy

in Amman, Jordan, he walks into Arab Bank, he says I

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want to send this money to Hamad, also in Jordan, and

3

the bank sends the money to its Arab Bank-New York,

4

which then sends it to Citibank New York, which then

5

sends it to the CAB account in Jordan of this guy,

6

Hamad, is that what you’re saying?

7

MR. OSEN:

8

THE COURT:

9

More or less, it’s really a -Are there any other steps in that,

four steps?

10

MR. OSEN:

Yeah, there are no additional

11

steps, I would just say that these are all sort of

12

book entries, correspondent banking is basically a

13

series of IOUs between the banks so there is really

14

never any money physically changing hands and a

15

correspondent banking example is just credits and

16

debits by the banks.

17

THE COURT:

18

MR. OSEN:

19

THE COURT:

20

MR. OSEN:

22

THE COURT:

24
25

And that’s standard -And you’re saying this is relevant

to jurisdiction?

21

23

Okay.

Sure.
Okay, why don’t we talk about

that?
MR. OSEN:

Well, because this is a

paradigmatic example of a funds transfer that

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purposely avails the use of the US and New York

3

correspondent banking system to effectuate the

4

transfer.

5

And just to frame it again --

THE COURT:

And how is CAB, the recipient,

6

fourth step along the line, how is the recipient

7

purposely availing itself of jurisdiction in New York

8

under your theory?

9

MR. OSEN:

It’s not, it’s not my theory, Your

10

Honor, it’s the Second Circuit and the New York Court

11

of Appeals in Licci. To just take this same

12

transaction and frame it in Licci terms, in that case

13

the bank was Lebanese Canadian Bank in Beirut, it was

14

receiving transfers to an organization called The

15

Martyrs Foundation in Lebanon and, again, the

16

transfers were going through Amex, in that case the

17

New York correspondent bank for LCB, for Lebanese

18

Canadian Bank, and were being credited to the account

19

of LCB in Beirut.

20
21

THE COURT:

of the transaction, isn’t that correct?

22

MR. OSEN:

23

THE COURT:

24
25

But in Licci, LCB was on both ends

No, Your Honor.
All right, so tell me why that’s

not the case.
MR. OSEN:

In Licci the only allegation was

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that LCB held accounts for The Martyrs Foundation and

3

received funds transfers through its New York

4

correspondent account.

5

of transfers.

6

THE COURT:

I believe the term was dozens

So, are you saying that in that

7

case there was another bank, could have been Arab Bank

8

that was an originating party, that all, that the

9

jurisdiction in Licci was based on receipt as part of

10

-- in the same way that you’re saying CAB received

11

donations or transfers?

12

MR. OSEN:

13

THE COURT:

Exactly the same, Your Honor.
Okay.

And that’s purposeful

14

availment by CAB under your theory because they open

15

themselves up to receiving US dollar transfers which

16

are predominantly only going through New York or is

17

that, is there a choice to get it from somewhere other

18

than through New York?

19

MR. OSEN:

Actually, that was discussed in

20

Licci and because in that case LCB, the bank in

21

question, chose to have correspondent banking accounts

22

in New York, in that case through American Express at

23

the time, it purposefully availed itself of the use of

24

the New York banking system. Actually, it was Mr.

25

Siegfried, I believe, who argued in Licci that LCB was

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merely the passive recipient of funds through its

3

correspondent account, wasn’t initiating the transfers

4

in question.

5

both the Second Circuit and the Court of Appeals,

6

rejected that distinction. Once you maintain a

7

correspondent banking account or accounts in New York

8

--

9

And the Court and the Court of Appeals,

THE COURT:

It means you’re open for business

10

for receiving US dollars wherever you are elsewhere in

11

the world.

12

MR. OSEN:

Well, it’s also, there’s an

13

additional component, you’re absolutely right, Your

14

Honor, but they’re also choosing to provide US dollar

15

denominated accounts to their customers. So, it’s not

16

a happenstance, the whole purpose of maintaining US

17

dollar denominated accounts overseas is to provide

18

that service to your clients and customers and if you

19

do that through US correspondent banking and US

20

correspondent bank accounts, you are purposefully

21

availing yourself of the New York and US banking

22

system.

23

THE COURT:

And presumably that helps the bank

24

get more customers who they want, who want US dollar

25

--

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MR. OSEN:

It’s certainly important to most

3

international banks, there are some – as Your Honor

4

noted, the Spetner case – where they don’t maintain a

5

direct correspondent accounting relationship but,

6

instead, use another foreign bank that does, that’s

7

the so-called nested account strategy. But for the

8

most part, most international banks try to maintain a

9

US correspondent account if they can.

10

THE COURT:

So, the example that you gave me

11

here involving Arab Bank and CAB, is not concerning

12

any nested accounts, this is just a straight out,

13

straight out transfer?

14

MR. OSEN:

15

THE COURT:

Correct, Your Honor.
Okay.

Okay, so you’ve already

16

subpoenaed or obtained documents from Arab Bank, in

17

other litigations they’ve conducted many, many, many

18

searches and now this is another litigation involving

19

some of the same plaintiffs seeking more information.

20

Why do you think you’re likely to find anything more

21

given the intense discovery that you’ve already

22

received and used in your pleading?

23

MR. OSEN:

It’s a good question, Your Honor,

24

let me walk through that for a moment. So, the list

25

that we have that we’ve moved to compel on are persons

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or entities that were not sought in Arab Bank

3

discovery in either the Linde or Miller cases.

4

the question is whether, first of all, whether those

5

specific requests which have not been the subject of

6

prior requests, may yield additional information.

7
8
9
10

And so

The Arab Bank litigation obviously has gone on
for, well now almost 20 years -THE COURT:
MR. OSEN:

Right.
So it’s very complicated and

11

there’s a lot of backstory to that, but most of the

12

requests in that case were not formulated in the way

13

they are here for a variety of reasons, one being that

14

they focused on primarily transfers to the Saudi

15

Committee for the Support of the Intifada Al-Quds,

16

they were not focused as this complaint is on the Arab

17

Liberation Front and payments by Saddam Hussein which

18

are featured here but not in that case.

19

there’s a different history going back to how

20

documents were produced in that case.

21

recall that in 2005 the Office of the Comptroller of

22

the Currency entered into a consent decree with Arab

23

Bank-New York which converted it from a branch to an

24

agency and so forth.

25

THE COURT:

Um-hmm.

And also,

Your Honor may

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MR. OSEN:

And so a lot of the dispute about

3

discovery of the New York branch in that case focused

4

on asking the defendant in that case to produce the

5

records it had produced to the OCC.

6

THE COURT:

7

MR. OSEN:

I see.
And so those requests were largely,

8

not exclusively, but largely framed around what

9

documents were given to the OCC and many records such

10

as the one I handed up to Your Honor were then

11

produced in response to that discovery dispute.

12

as a result of the way this process played out, the

13

names that appear in the motion to compel were not

14

specifically requested in that form back in 2006 when

15

this, when this dispute was resolved.

16
17

And

THE COURT: But yet they still yielded
documents.

18

MR. OSEN:

19

these documents --

20

THE COURT:

21

MR. OSEN:

Oh, it yielded documents because

Involving CAB.
Right, because they happened to

22

have been included in the documents that were produced

23

to the OCC.

24
25

THE COURT:

But you believe that the documents

you already have are sufficient to state jurisdiction,

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do you not?

3

MR. OSEN:

4

THE COURT:

I do -So why is there more, why is it

5

proportional to have even more, look for more, what

6

Arab Bank calls needle in a haystack, why is that

7

proportional?

8
9

MR. OSEN:

It’s proportional because sitting

here today we do not know what the basis for the

10

defendant’s motion on jurisdiction is. As far as we

11

can tell, Your Honor, it appears to be a motion for

12

reconsideration because, you know, just to give you

13

some of the statistics, the complaint that Your Honor

14

ruled on, there were 23 transactions alleged through

15

New York, sitting here today, setting aside the ones

16

that are disputed about whether they cleared through

17

New York, the ones that are undisputed, 114

18

transactions for over $6 million, and there are

19

actually more than that but that’s generally the

20

range, over 100 --

21
22
23
24
25

THE COURT:

One-hundred-and-fourteen don’t

involve nested accounts?
MR. OSEN:

Correct, or anything else, they’re

standard correspondent banking transactions -THE COURT:

The kind that the Second Circuit

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said in Licci were sufficient.
MR. OSEN:

Correct.

And as I read, and this

4

is more addressed to Mr. Siegfried, obviously, than

5

Arab Bank’s counsel, but as I read their proposed

6

motion, it’s a challenge to due process, not to

7

purposeful availment, but because we’re at a loss as

8

to what evidentiary issues are implicated by that

9

distinction in this case, we don’t know whether

10
11

there’s something we’re missing in this process.
THE COURT:

Well but that lack of knowledge, I

12

mean all you’re seeking are more of the same so if 114

13

-- 114 is more than 23, why is more of the same of

14

maybe, you know, a small handful of transactions that

15

you might find, why is that even, why is that going to

16

materially impact your opposition to a challenge,

17

whether it’s due process or purposeful availment?

18
19

MR. OSEN:

Well, there are two points to that,

Your Honor.

20

THE COURT:

21

MR. OSEN:

Um-hmm.
The first is that depending on

22

which person or entity there’s responsive records for,

23

it is at least theoretically possible that and, again,

24

I can’t speak for the defendant and what they intend

25

to do, but at least possible that their position is

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that there’s a qualitative distinction between

3

transfers made, for example, to or from the Holy Land

4

Foundation or other Hamas controlled entities, versus

5

transactions to Hamas leaders or those who are

6

implicated directly in violent activities.

7

Now Your Honor certainly didn’t hold that in

8

your report and recommendation, it’s nowhere in Licci,

9

but I think, I think that may be the argument, in

10

which case obviously having the additional records

11

could moot that point.

12

records which we’re seeking are relevant both

13

jurisdictionally and ultimately to merits discovery.

14

So even if Your Honor concluded today and said we’re

15

good on jurisdiction, there’s no need for more motion

16

practice on that, we would still at some point be

17

subpoenaing the same records because any evidence that

18

CAB provided material support, held accounts for,

19

processed funds transfers for Hamas leaders, for Hamas

20

controlled entities obviously goes straight to

21

liability.

22
23

THE COURT:

Secondly, to be clear, these

Okay.

Are there other points you

want to make before I hear from Arab Bank?

24

MR. OSEN:

25

THE COURT:

I think that’s it, Your Honor.
Okay, I’ll hear next from Arab

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Bank.
MR. LAWLER:

Good morning, Your Honor. In the

4

discussion that I just heard there were, I think most

5

of those, the transfers we’re talking about, have

6

nothing to do with Arab Bank-New York. They, I’m not

7

sure where the 114 number comes from but I don’t think

8

it has anything to do with Arab Bank-New York, I don’t

9

think Arab Bank-New York was involved in that.

10

The plaintiffs have identified 32 transactions

11

which they think, of the 15,600 transactions that were

12

produced in Linde and in Miller they’ve identified 32

13

that arguably involved in some way Arab Bank-New York.

14

And in our papers, and we can go into it further now,

15

we’ve said that 19 of those, I believe were, involved

16

so-called nesting which we believe the Court has said

17

are not relevant to the issue of jurisdiction. So now

18

we’re down to approximately 13 transactions out of,

19

again, 15,600.

20

So our, even if those 13 transactions turn out

21

in some way to have some relevance, we’re talking

22

about a miniscule .0083, I don’t even know, I’m not

23

sure how you say that percentage --

24

THE COURT:

25

MR. LAWLER:

Right.
But it’s miniscule.

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THE COURT:

Well, how do you address

3

counsel’s, plaintiffs’ counsel’s point that it was

4

only that miniscule, as relevant to this case, because

5

the documents produced were another matter and these

6

names that they’ve requested in their subpoena aren’t

7

the names that you were looking for?

8
9

MR. LAWLER:

I have a couple of responses to

that.

10

THE COURT:

11

MR. LAWLER:

Okay.
One, we’re talking about the very

12

same incidents that make up, in Linde and in Miller

13

the same events that took place. We are talking about

14

the vast majority, and I have to say I haven’t checked

15

to see if the individuals identified in Linde and

16

Miller are the same as people identified in the

17

current case in Averbach, but it’s all, it’s all the

18

same events and basically the same people. I don’t

19

know, I cannot say, tell the Court that I know that

20

they’re exactly the same but they have said that,

21

agreed in their request of the 40, and it’s not really

22

40, it’s really 160 -- 190 names --

23

THE COURT:

24

MR. LAWLER:

25

Because of all the variations?
Because of all the variations,

and it’s not just the 190 names, because if you, if

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you look at the variations of the individual names,

3

we’re talking about literally thousands of possible

4

permutations for all of these entities.

5

just 40 and it’s --

6

THE COURT:

It is not

Well, why couldn’t it just be cut

7

down by having a search for Cairo Amman Bank, isn’t

8

that, I mean why do you have to have all of these

9

names at all, why couldn’t you just search for Cairo

10

Amman Bank, that’s really, that’s the key --

11

MR. LAWLER:

12

THE COURT:

13
14

I don’t -Why would we get, why would there

be nothing?
MR. LAWLER:

Well, first of all, it’s

15

important, and we make a point and I’m sure, we had no

16

correspondent relationship with Cairo Amman Bank.

17

where the program that we’re searching and using to

18

search, is one that is 20, it’s almost 20 years old

19

and it has not been updated, it’s not been maintained.

20

And it’s hard to understand today what something, what

21

things were like 22 years ago as far as computers go

22

but it’s, we, I’m told we cannot just put in Cairo

23

Amman Bank and press a button and have any

24

transactions in which Cairo Amman Bank might have been

25

in a chain, whether it’s a nest, so-called nested

And

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chain or otherwise, I’m told that we can’t do that.

3

So it --

4

THE COURT:

So, CAB just comes up by virtue of

5

putting in different customers’ names, is that what

6

you’re saying?

7

MR. LAWLER:

Well I’m assuming what happened

8

is of the tens, probably hundreds of thousands of

9

documents that were produced in the other, in Linde

10

and Miller, they can because they’re probably --

11

THE COURT:

12

MR. LAWLER:

13

THE COURT:

14

MR. LAWLER:

15

THE COURT:

16

MR. LAWLER:

Like a Relativity database, yes.
A real database.
Yep.
They can put in a name -Right.
And they can put in Arab Bank

17

New-York and they know they can come up with any

18

transactions that involve Arab Bank-New York, I’m

19

assuming that, but I’m told that we don’t have the

20

ability to do that. And I should also just point out

21

our ability to do anything, now we can always get,

22

presumably we can get the third party or outside

23

vendor here, but currently Arab Bank-New York takes

24

about as much space as in the jury box. And there are

25

three employees, there will be two employees as of

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January 1 s t , the person who did, because one is

3

retiring, and the person who did the original work in

4

Linde passed away some time ago.

5

THE COURT:

And what about, what about, I

6

understand your arguments that this isn’t proportional

7

in part because of the costs and burdens --

8

MR. LAWLER:

9

THE COURT:

Yes.
On your client, which has got

10

three employees working with this rickety old system,

11

what if the, what if the costs were shifted and

12

plaintiffs bore the cost of this search, is that

13

something that would be acceptable to your client?

14
15

MR. LAWLER:

I don’t know the answer to that,

Your Honor.

16

THE COURT:

17

mean just the dollar costs?

18

Do you know what the costs are, I

MR. LAWLER:

I do not know. I do not know the

19

answer to that. The -- what else, I think, unless the

20

Court has additional questions I think that I’ve made

21

the points. I mean we have tried, we have tried to put

22

forth what we believe are reasonable accommodations

23

and solutions here --

24
25

THE COURT:

Right, so you’re thinking doing

fewer, you would be willing to do something by doing

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fewer variations in the names.
MR. LAWLER:

Fewer variations and any

4

transfers that were made outside of Palestine or

5

Jordan or Israel would not, would not be included.

6

What we have already produced has, we would not have

7

to reproduce it.

8

THE COURT:

9

MR. LAWLER:

Okay.
I think actually, I think that

10

plaintiffs agree to that. But the, so variations that

11

-- oh, if they’re not named, and if entities are not

12

named in the complaint then we would also not be

13

required to search for those.

14

THE COURT:

Okay, thank you. Mr. Osen, why

15

aren’t the suggestions that Arab Bank has suggested

16

reasonable and what about this issue of cost shifting,

17

what’s your position on that

18

MR. OSEN:

Taking the first issue, we agreed

19

with the bank that they could limit their search to

20

CAB Palestine, Jordan. I think at one point they had a

21

branch in Lebanon, but certainly to those

22

jurisdictions.

23

THE COURT:

24

MR. OSEN:

25

Palestine, Jordan and Lebanon?
Right, so we had no issue with that

and we also agreed in principle to try and reduce the

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number of transliteration variables although even with

3

the ones that were produced there sometimes the same

4

party is spelled differently --

5

THE COURT:

6

MR. OSEN:

In the same document.
By the same bank because each time

7

they’re entering the data they’re transliterating it

8

from Arabic so it depends on who is typing in the word

9

Mohammad for example, it could be spelled with a U or

10

an O an E at the end or an A.

11

solution to that, but we’ve offered to work with them

12

on that. The one thing that is at the crux of this

13

dispute is that we didn’t want to be limited to

14

individuals or entities listed in the complaint --

15

THE COURT:

16

MR. OSEN:

So, there is no perfect

Well why shouldn’t you be?
Because that’s not the limits of

17

Rule 26 discovery and, for example, just to give you a

18

concrete one, the, let me get this in front of me --

19

THE COURT:

Well, if you were limited to the

20

people and entities named in the second amended

21

complaint, how many would that be?

22

MR. OSEN:

23

THE COURT:

24
25

Twenty-nine.
Twenty-nine and plus the alternate

spellings which would -MR. OSEN:

Right.

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THE COURT:

3

MR. OSEN:

4

THE COURT:

5
6

Increase that at least three-fold.
Correct.
Right?

Okay, and why isn’t, why

wouldn’t that be sufficient and proportional?
MR. OSEN:

Well, let me give you an example.

7

One of the names here, three of them, of those who are

8

not listed by name in the complaint, are individuals

9

who are part of leadership of the Arab Liberation

10
11

Front which was Saddam Hussein’s -THE COURT:

Yes, but why does that matter if

12

those people don’t have accounts with CAB? I mean

13

there’s not, there’s -- you don’t have any knowledge

14

as to whether or not these other people or entities

15

have any relationship with CAB, isn’t that correct?

16

Isn’t it just a fishing expedition as to whether or

17

not, maybe possibly some of these people who are

18

named, you’re going to discover some terrorists that

19

you know maybe got a transfer of money from CAB, you

20

don’t know it, but maybe Arab Bank if they produce

21

thousands and thousands and thousands and thousands of

22

transactions you’ll find one, isn’t that really what

23

you’re trying to do?

24
25

MR. OSEN:

No, Your Honor, the Arab Liberation

Front distributed checks and payments to the families

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of suicide bombers through Cairo Amman Bank, that’s in

3

the complaint, and we have evidence to support that.

4

The Arab Liberation Front operated both formally as an

5

entity to the extent it was one, and through its

6

leadership, which is how most, if not all, terrorist

7

organizations do.

8

plausible and reasonable to assume that when Cairo

9

Amman Bank provided services to Saddam Hussein’s Arab

And so, therefore, it is completely

10

Liberation Front, they did so through and with the

11

instructions of the senior leaders of ALF. I don’t

12

know whether it was those three individuals or it was

13

Mr. Rakad Salem, the head of the ALF, but it’s not a

14

fishing expedition, it’s ordinary routine discovery.

15

One more point, Your Honor, about cost

16

shifting. To be clear, with the exception of the ALF

17

individuals, everybody on that list is someone we

18

could serve a document request in Miller tomorrow and

19

the bank would be obligated to do the same searches

20

and for all I know, as Your Honor mentioned

21

Relativity, for all I know, all of the materials

22

belonging to Arab Bank-New York that are relevant are

23

sitting in a Relativity database by Arab Bank’s

24

counsel. So it may very well be that the individual

25

left in their office does not have the capability to

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search their systems anymore, but Arab Bank, which is

3

actively litigating a case in the Eastern District of

4

New York and which has to respond to these very same

5

kinds of requests as a non-third party, as a party to

6

the proceeding, would and will have to produce the

7

same records in that case.

8
9
10

THE COURT:

Well, what is the status of

discovery in those cases?
MR. OSEN:

The status of discovery is it’s

11

ongoing, there’s a pending motion to compel on bank

12

secrecy but otherwise discovery proceeds in that case.

13

So we could serve a document request tomorrow on Arab

14

Bank New York, actually we’d serve it obviously on Mr.

15

Siegfried and counsel, they would then have to make an

16

argument to the Court that unlike the thousands of

17

other records they’ve produced, somehow these are less

18

relevant than the others they have produced records

19

and just to take a name at random, these are senior

20

Hamas leaders, that request is going to be responded

21

to and they are going to search records for it.

22

So, what we could do is serve that request and

23

then when the documents are produced under the

24

protective order, introduce them here under seal in

25

this case. It’s just a different way of coming to the

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same result, we think it’s appropriate to do so

3

because of the discovery deadline in this case.

4

served discovery when Your Honor directed it to third

5

parties back in the summer and that’s why we’re here

6

today. But we would get these same records. We won’t

7

get them obviously --

8
9

THE COURT:

We

Well shouldn’t there be some

limiting principle on these 190 names and all of the

10

variations, I mean that has thousands of possible

11

permutations, wouldn’t you accept some limitation on

12

that?

13

MR. OSEN:

14

THE COURT:

15

MR. OSEN:

THE COURT:

19

MR. OSEN:

THE COURT:

22

MR. OSEN:

24
25

Resulting in how many?
I think we were able to cut off

about 50 or 60, I don’t recall.

21

23

We went through the list and tried

to cull variations --

18

20

Well, what do you think is a

reasonable limitation?

16
17

Of course --

Leaving how many permutations?
We didn’t do a count on it, Your

Honor.
THE COURT:

Still thousands?

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MR. OSEN:

It’s not thousands, Your Honor,

3

that’s not correct, it’s probably, if you count it all

4

up it’s probably close to 300. But look, I don’t know

5

how to search their systems. It may very well be, Your

6

Honor, that if you type in, for example, a last name

7

like the one we have here for Mohammad Taha, that if

8

you search Taha there aren’t many spellings of Taha,

9

it’s a fairly straightforward one.

10

Sorry, the one you

have --

11

THE COURT:

12

MR. OSEN:

I have Hayek.
Is Ghazi Hamad.

So, on this name,

13

the variations are pretty limited, the only possible

14

variation I could think of off the top are Ghazi with

15

an R or Hamed with an E, but that’s just the nature of

16

this process and it’s a process that Arab Bank has

17

undertaken hundreds of times, maybe thousands of times

18

in the course of the Linde and Miller litigation.

19

So, there’s no doubt that there’s a burden,

20

it’s a burden we encounter with every bank when we’re

21

dealing with Arabic transliteration, but that’s

22

intrinsic, that’s not the plaintiffs’ fault, that’s

23

just the way --

24
25

THE COURT:

But plaintiffs have to deal with

Rule 26 and Rule 45 which does cabin discovery to

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things that are relevant to the claims and defenses

3

and proportional to the needs of the case.

4

MR. OSEN:

5

THE COURT:

Absolutely.
And so in terms of the cost

6

shifting I don’t think that you finished your answer

7

on why shouldn’t costs be shifted or at least shared?

8
9
10

MR. OSEN:

Because Arab Bank through its

counsel can and will do these searches regardless.
THE COURT:

How do you know that? In the other

11

case you have, first of all, here the Court is bound

12

by the Rule 45 constraint which is somewhat more

13

protective of a nonparty. I understand that in Linde

14

and Miller, Arab Bank is a direct party but still why

15

would these names be relevant in that case if you

16

didn’t search for those names before in that case?

17

MR. OSEN:

Because, Your Honor, they weren’t

18

searched due to the fact that the requests were formed

19

and formulated in the context of the dispute over OCC

20

production. So we’re perfectly content if Your Honor

21

says to us why don’t you serve, I’m not going to, I’m

22

not going to compel them in this case, serve your

23

document request in Miller if you so choose, any

24

documents you get in response to that you can then do

25

what you’ve done previously with other documents

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previously produced by Arab Bank which is to say

3

they’ll be subject to the protective order, you’ll

4

produce them to CAB in this case. That’s fine with us.

5

The result is the same, it’s just procedurally a

6

question of timing. This all came about because we

7

were in jurisdictional discovery and we served third

8

party requests. You know, if I had to do it all over

9

again, I would have just served a document request for

10

the relevant records, I might lose a couple for the

11

ALF, but otherwise I’m going to get those records, and

12

then I’d just transfer them over.

13

THE COURT:

Okay, so let me ask Arab Bank if

14

you have any responses to or additional things that

15

you’d like to add based on the conversation I’ve just

16

had with plaintiffs’ counsel?

17

MR. LAWLER:

What I heard Mr. Osen say in

18

response to your question was really confirmation that

19

this is a fishing expedition. This is, he’s thrown out

20

the names of a lot of bad people in the hopes that

21

perhaps they will, they will come up in the search.

22

With respect to the, what’s going on in

23

Miller, I’m going to defer to, because I’m not up to

24

date as to what’s going on in Miller and the

25

discovery, it’s, as I understand it there is some

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restriction on what they, what they can do, but I’m

3

going to ask Mr. Siegfried to respond to that because

4

I’m really not up to date.

5

THE COURT:

All right, so although CAB doesn’t

6

necessarily have standing to contest this subpoena, I

7

would like to hear an update on and a response, to the

8

extent you have better knowledge of what’s going on in

9

Miller and Linde and plaintiffs’ position that these

10

same requests can be served in that, in those cases

11

and obtained that way.

12

MR. SIEGFRIED:

13

answer that question --

14

THE COURT:

15

MR. SIEGFRIED:

16
17

Thank you, Your Honor, I will

Yep.
But lest my memory forget, I’d

just like to make a couple of comments.
THE COURT:

All right, and keep it, I do have

18

to leave by ten so, I mean by eleven, so, yes, keep it

19

short, thanks.

20
21

MR. SIEGFRIED:

Very short. I understand that

Your Honor now has inherited the Kaplan case

22

THE COURT:

Yes.

23

MR. SIEGFRIED:

And the Court is familiar with

24

it, and I’m not surprised by your comment about what

25

were the transactions in Kaplan because you are

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absolutely correct, one of the main arguments made by

3

the plaintiffs’ counsel in the jurisdictional argument

4

was that LCB actually took dollars, Lebanese dollars

5

and routed them through New York to come back to LCB

6

and, therefore, they were originating transfers. And I

7

think in both Spetner and in Vasquez, if I recall

8

correctly, there is a more extensive discussion about

9

passive receipt, I just wanted to say that.

10

It is also the case, having lived through

11

Linde and Miller discovery, that it is an

12

extraordinary task to try to produce documents off of

13

this software. I think it was very wise for counsel to

14

say he couldn’t estimate the cost because I will tell

15

you it is a very expensive proposition because of the

16

limitations on the ability to search which ends up

17

driving everything to be a hand viewed situation.

18

The proposition that, oh, well, plaintiffs

19

could have just simply served another document

20

request, well I believe that might technically be true

21

but the magistrate judge there required the parties to

22

complete their document discovery and the motion is

23

tied up on issues in that case of bank secrecy and

24

issue, frankly, that you have more indirectly, or

25

maybe you have directly raised here, namely the

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relevancy of a number of these names. So it’s true, I

3

guess, if the Court would even entertain a document

4

demand at this point, that they can add 10 names, 20

5

names, 30 names which will then end up in the same

6

question as to the relevancy of those names. And the

7

discovery in that case was not limited to some OCC

8

related documents, the discovery in that case was

9

actually broader than the discovery in this case

10

because there were claims involving funding not just

11

of the Hamas attacks that are the same attacks as

12

here, there were claims about funding other attacks.

13

And it wasn’t limited to a particular bank, it was any

14

transfer that touched upon Arab Bank and actually Mr.

15

Osen started with an example of that.

16

– the fact that, I think, it’s actually telling that

17

when you do a broader request that isn’t limited to a

18

specific bank, and basically would require Arab Bank

19

to produce everything in terms of the universe of

20

banks that could possibly have been involved and

21

touched a transfer somewhere along the lines, you have

22

all of these 13 or 19 transactions. So --

23

THE COURT:

So you actually

And is that, I’m just speculating,

24

and I don’t know whether you would agree that if that

25

search was so broad that it would cover many, the

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reason why so few transactions came up involving CAB

3

was that CAB had its own correspondent bank at the

4

time?

5

MR. SIEGFRIED:

Well they have now, plaintiffs

6

have now conceded that Arab Bank-New York was not a

7

correspondent bank of CAB.

8

THE COURT:

Right.

9

MR. SIEGFRIED:

So, therefore, to the extent

10

Arab Bank-New York had to produce documents in Linde

11

and Miller, it wasn’t that it looked at any particular

12

bank, it looked at all names and wherever those,

13

wherever those transactions might have originated from

14

or the recipients have been receiving them or the

15

beneficiaries, it had to do that.

16

So I think the needle in a haystack point is

17

exactly, is exactly -- is exactly right and I think

18

there’s a very good reason that Mr. Osen has not

19

served a document request to try to reopen at this

20

point discovery in Arab Bank, Miller. Although

21

listening to him I think it raises some concern, if I

22

put a different hat on for a second, that this idea of

23

using one Court to obtain discovery that may then be

24

used in another case is concerning. But I come back to

25

your point which is the proportionality of the

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request, your point that if they don’t think, and they

3

may perhaps are realizing it, that they don’t have a

4

good jurisdictional argument based upon what they’ve

5

already produced, then the fact that they can get 5

6

more, or 10 more, or 15 more of the same transactions

7

doesn’t really advance the ball. Our concern, putting

8

my CAB hat back on, is that we are at the end of

9

discovery and we would like to get, start moving

10

forward with this motion and, therefore, we’d hope

11

that Your Honor would grant the request --

12

THE COURT:

Okay.

13

MR. SIEGFRIED:

14

THE COURT:

Requested by ABNY.

All right, because I have

15

something that I have to do at eleven I’m going to end

16

the conference now, I want to thank everybody for

17

their arguments, I’m going to take it under

18

advisement. And depending on the outcome, to the

19

extent a schedule needs to be slightly adjusted I can,

20

I can do that.

21

All right, thank you, everyone --

22

MR. LAWLER:

23

MR. SIEGFRIED:

24
25

Thank you very much, Your Honor.
Your Honor, can I ask one

question?
THE COURT:

Sure.

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MR. SIEGFRIED:

I thought one of the things

3

that you wanted, and I realize we’re not going to do

4

it today, but one of the issues I think that we had

5

here was setting up, that you wanted a conference to

6

discuss the motion or the form of the motion --

7

THE COURT:

8

MR. SIEGFRIED:

9
10

Right.
And I don’t know we have

another date -THE COURT:

Right, so after this, because I

11

have, I’m just mindful of the time, I will set up

12

another conference. I am going to ask though that you

13

all meet and confer about, since plaintiffs have said

14

they don’t really understand the basis for your

15

motion, that you, that they think it’s a motion for

16

reconsideration, I don’t understand that to be the

17

basis of your motion. But you’re here now together,

18

you can use my jury room, if you would just have a

19

communication about that and just be better informed

20

about what that is going to involve, I think that can

21

only inure to everybody’s benefit, so I’d ask that you

22

have that conversation, okay?

23
24
25

Thank you, everyone.

(Whereupon the matter was adjourned.)

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C E R T I F I C A T E

3
4

I, Carole Ludwig, certify that the foregoing

5

transcript of proceedings in the United States

6

District Court, Southern District of New York,

7

Averbach, et al. versus Cairo Amman Bank, Docket No.

8

19cv0004, was prepared using digital electronic

9

transcription equipment and is a true and accurate

10

record of the proceedings.

11
12
13
14
15

Signature

16
17
18
19
20
21
22
23
24
25

___________________
CAROLE LUDWIG

Date:

December 27, 2022

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EXHIBIT B

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
In re:

:

Docket #19cv0004
: 19-cv-00004-GHW-KHP

AVERBACH, et al.,
Plaintiffs,
- against -

:
:

CAIRO AMMAN BANK,
Defendant.

: New York, New York
December 13, 2022
:

------------------------------------- :
PROCEEDINGS BEFORE
THE HONORABLE KATHARINE H. PARKER,
UNITED STATES MAGISTRATE JUDGE
APPEARANCES:
For Plaintiffs:

OSEN LLC
BY: GARY OSEN, ESQ.
DINA GIELCHINSKY, ESQ.
190 Moore Street, Suite 272
Hackensack, New Jersey 07601

For Defendant:

DLA PIPER US LLP
BY: JONATHAN SIEGFRIED, ESQ.
ANDREW PECK, ESQ.
1251 Avenue of the Americas
New York, New York 10020

For Third Party
Defendants:

WHITMAN BREED ABBOTT & MORGAN LLC
BY: RICHARD LAWLER, ESQ.
MICHAEL THOMASON, ESQ.
500 West Putnam Avenue
Greenwich, Connecticut 06930

Transcription Service:

Carole Ludwig, Transcription Services
155 East Fourth Street #3C
New York, New York 10009
Phone: [phone]
Email: [e-mail]

Proceedings recorded by electronic sound recording;
Transcript produced by transcription service.

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INDEX
E X A M I N A T I O N S
Witness

Direct

Cross

ReDirect

ReCross

None
E X H I B I T S
Exhibit
Number
None

Description

ID

In

Voir
Dire

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1
2

3
THE CLERK:

Calling case 19cv004, Averbach

3

versus Cairo Amman Bank.

4

for the plaintiffs, please make your appearance for

5

the record.

6

MR. GARY OSEN:

Beginning with the counsel

Good morning, Your Honor, this

7

is Gary Osen from Osen LLC, together with my

8

colleague, Dina Gielchinsky, on behalf of the

9

plaintiffs.

10

THE COURT:

Okay, nice to see you.

11

THE CLERK:

And counsel for the defendants,

12
13

please make your appearance for the record.
MR. JONATHAN SIEGFRIED:

Good morning, Your

14

Honor, Jonathan Siegfried for DLA, along with my

15

colleague, Andrew Peck.

16

THE COURT:

Hello.

17

THE CLERK:

And counsel for the third party

18
19

defendants, please make your appearance.
MR. RICHARD LAWLER:

Good morning, Your Honor,

20

Richard Lawler, Whitman Breed Abbott & Morgan, for

21

Arab Bank New York, and Michael Thomason, good

22

morning, Your Honor.

23

THE COURT:

Good morning.

Okay, welcome,

24

everyone. The principal purpose of today’s proceeding

25

I think is to address the subpoena and the motion to

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1

4

2

compel that plaintiffs have filed seeking certain

3

information from Arab Bank.

4

was talk about that motion, hear from plaintiffs on

5

that and then I’ll hear from Arab Bank’s counsel who

6

are here today. I did read the Spetner case which was

7

cited in the, in the briefs, but the principal thing

8

that I want plaintiffs to address is why what you are

9

seeking is proportional to the needs of the case and,

And what I wanted to do

10

of course, any other points that you want to raise.

11

So I’ll hear first from plaintiffs’ counsel.

12

MR. OSEN:

Thank you, Your Honor.

As I read

13

the defendant’s brief I think there are really only

14

two open issues of dispute. The first is whether Arab

15

Bank’s, I’ll call it Arab Bank- New York for

16

simplicity purposes, has to search for, in addition to

17

the individuals and entities listed in the complaint,

18

an additional 11 individuals and entities that were

19

not listed in the complaint by name, 9 individuals and

20

2 entities.

21

whether they should have the burden of searching for

22

variations and transliterations of the names of the

23

individuals and entities listed.

24
25

And the second issue still in dispute is

THE COURT:

Well, aren’t they also saying that

they don’t have any, that CAB didn’t have an account

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1
2

5
and that they just don’t have any documents?

3
4

MR. OSEN:

I don’t think that’s correct, Your

Honor.

5

THE COURT:

6

MR. OSEN:

Okay.
Arab Bank clearly does have

7

responsive records because we already have records

8

from Arab Bank- New York that involve Cairo Amman

9

Bank’s New York transactions. The question is, as they

10

frame it, is that they are not a correspondent bank

11

for CAB, which is true, but the transactions that we

12

have seen already are ones in which Arab Bank is the

13

correspondent bank for the other side of the

14

transaction,. So, in any correspondent account

15

transactions there are at least four parts to it,

16

there’s the originator bank and its correspondent

17

bank, and the recipient bank’s correspondent bank, and

18

then the recipient bank, itself. So in a transactions,

19

and I can give you an example and present one to you

20

if that’s helpful , Arab Bank, for the sake of

21

argument, Arab Bank in Beirut or in Jordan has a

22

customer, sends a US dollar- denominated transaction

23

to a Cairo Amman Bank customer in the Palestinian

24

Tterritories;, that transaction flows from Arab Bank

25

in Jordan, credited to Arab Bank’s correspondent

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6

2

account in New York, and then to, for example,

3

Citibank as the correspondent for CAB and then on to

4

CAB in the Palestinian Tterritories.

5

sort of wire transfer.

6

That’s a typical

So, we already have examples of Arab Bank

7

transactions for relevant entities and parties that,

8

where Arab Bank is the originating bank and,

9

therefore, the customer’s correspondent is Arab Bank-

10

New York and then the recipient is Cairo Amman Bank

11

with, in most of the cases we’ve seen Citibank as the

12

correspondent for Cairo Amman --

13

THE COURT:

So, the only examples, you’re

14

conceding then that the only examples that you’re

15

expecting to find are examples where a customer of

16

Arab Bank is originating the transaction?

17

MR. OSEN:

Technically, it doesn’t have to be

18

a customer of Arab Bank, Arab Bank could be the,

19

simply the correspondent for another bBank but, yes,

20

there are going to be cases where the originator is

21

not Cairo Amman, but only the recipient is.

22
23
24
25

THE COURT:

So, you’re looking for

transactions where CAB is a recipient?
MR. OSEN:

Right, but where they are using, of

course, New York as the basis to receive the dollars.

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7

2

So, there are many examples of CAB receiving

3

transactions from say entities in Europe where it

4

doesn’t flow or at least we can’t see visibly that it

5

went through New York. Here, we’re talking about

6

transactions – definitionally because it’s Arab Bank-

7

New York –, that flowed through Arab Bank- New York to

8

CAB in the territories.

9

THE COURT:

10

MR. OSEN:

Okay.
If it will help Your Honor, I can

11

give you an example that’s already in the public

12

record.

13

THE COURT:

14

MR. OSEN:

15

Sure.
Your Honor, with permission I’ll

approach.

16

THE COURT:

Yes.

17

THE CLERK:

Thank you.

18

MR. OSEN:

So, for the record, this is Bates

19

stamped AV-PL000016 and, again, also for the record,

20

Your Honor, the highlighting is done by counsel and

21

not in the original document.

22

THE COURT:

23

MR. OSEN:

Um-hmm.
So, this is a year 2000 transaction

24

for over $8,000 that was initiated by an individual

25

named Mr. Youssef El-Hayek (phonetic), he’s identified

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8
below as the originating party and --

3
4

THE COURT:

And he has an account at Arab

Bank.

5

MR. OSEN:

Presumably.

It’s not entirely

6

clear from this document whether he simply used Arab

7

Bank or had an account there but, in any event, he

8

used Arab Bank Amman as the originating bank to send

9

this transfer.

And the beneficiary is Ghazi Hamad, G-

10

H-A-Z-I, Hamad, who is a, the complaint alleges, a

11

prominent Hamas leader in the Gaza Strip and he had an

12

account at the credit bank, Cairo Amman Bank, with the

13

address listed there in Amman, Jordan. And the

14

transfer was credited, you can see four lines down,

15

through Citibank, that’s for their routing. So, the

16

transfer would have gone essentially from the books of

17

Arab Bank Jordan, which had an account with Arab Bank

18

New York, then the correspondent banking credit goes

19

to Citibank and then Citibank’s correspondent account

20

with which Cairo Amman then credits the account holder

21

listed.

22
23
24
25

So, it’s this kind of transaction and others
like it that are of interest in -THE COURT:

Right, so this goes from this guy

in Amman, Jordan, he walks into Arab Bank, he says I

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want to send this money to Hamad, also in Jordan, and

3

the bank sends the money to its Arab Bank- New York,

4

which then sends it to Citibank New York, which then

5

sends it to the CAB account in Jordan of this guy,

6

Hamad, is that what you’re saying?

7

MR. OSEN:

8

THE COURT:

9

More or less, it’s really a -Are there any other steps in that,

four steps?

10

MR. OSEN:

Yeah, there are no additional

11

steps, I would just say that these are all sort of

12

book entries, correspondent banking is basically a

13

series of IOUs between the banks so there is really

14

never any money physically changing hands and a

15

correspondent banking example is just credits and

16

debits by the banks.

17

THE COURT:

18

MR. OSEN:

19

THE COURT:

20

MR. OSEN:

22

THE COURT:

24
25

And that’s standard -And you’re saying this is relevant

to jurisdiction?

21

23

Okay.

Sure.
Okay, why don’t we talk about

that?
MR. OSEN:

Well, because this is a power

dynamicparadigmatic example of a funds transfer that

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purposely avails the use of the US and New York

3

correspondent banking system to effectuate the

4

transfer.

5

And just to frame it again --

THE COURT:

And how is CAB, the recipient,

6

fourth step along the line, how is the recipient

7

purposely availing itself of jurisdiction in New York

8

under your theory?

9

MR. OSEN:

It’s not, it’s not my theory, Your

10

Honor, it’s the Second Circuit and the New York Court

11

of Appeals in Licci., Tto just take this same

12

transaction and frame it in Licci terms, in that case

13

the bank was Lebanese Canadian Bank in Beirut, it was

14

receiving transfers to an organization called The

15

Martyrs Foundation in Lebanon and, again, the

16

transfers were going through Amex, in that case the

17

New York correspondent bank for LCB, for Lebanese

18

Canadian Bank, and were being credited to the account

19

of LCB in Beirut.

20
21

THE COURT:

of the transaction, isn’t that correct?

22

MR. OSEN:

23

THE COURT:

24
25

But in Licci, LCB was on both ends

No, Your Honor.
All right, so tell me why that’s

not the case.
MR. OSEN:

In Licci the only allegation was

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that LCB held accounts for The Martyrs Foundation and

3

received funds transfers through its New York

4

correspondent account.

5

of transfers.

6

THE COURT:

I believe the term was dozens

So, are you saying that in that

7

case there was another bank, could have been Arab Bank

8

that was an originating party, that all, that the

9

jurisdiction in Licci was based on receipt as part of

10

-- in the same way that you’re saying CAB received

11

donations or transfers?

12

MR. OSEN:

13

THE COURT:

Exactly the same, Your Honor.
Okay.

And that’s purposeful

14

availment by CAB under your theory because they open

15

themselves up to receiving US dollar transfers which

16

are predominantly only going through New York or is

17

that, is there a choice to get it from somewhere other

18

than through New York?

19

MR. OSEN:

Actually, that was discussed in

20

Licci and because in that case LCB, the bank in

21

question, chose to have correspondent banking accounts

22

in New York, in that case through American Express at

23

the time, it purposefully availed itself of the use of

24

the New York banking system. Actually, it was Mr.

25

Siegfried, I believe, who argued in Licci that LCB was

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merely the passive recipient of funds through its

3

correspondent account, wasn’t initiating the transfers

4

in question.

5

both the Second Circuit and the Court of Appeals,

6

rejected that distinction. Once you maintain a

7

correspondent banking account or accounts in New York

8

--

9

And the Court and the Court of Appeals,

THE COURT:

It means you’re open for business

10

for receiving US dollars wherever you are elsewhere in

11

the world.

12

MR. OSEN:

Well, it’s also, there’s an

13

additional component, you’re absolutely right, Your

14

Honor, but they’re also choosing to provide US dollar

15

denominated accounts to their customers. So, it’s not

16

a happenstance, the whole purpose of maintaining US

17

dollar denominated accounts overseas is to provide

18

that service to your clients and customers and if you

19

do that through US correspondent banking and US

20

correspondent bank accounts, you are purposefully

21

availing yourself of the New York and US banking

22

system.

23

THE COURT:

And presumably that helps the bank

24

get more customers who they want, who want US dollar

25

--

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MR. OSEN:

It’s certainly important to most

3

international banks, there are some – as Your Honor

4

noted, the Spetner case –, where they don’t maintain a

5

direct correspondent accounting relationship but,

6

instead, use another foreign bank that does, that’s

7

the so-called nested account strategy. But for the

8

most part, most international banks try to maintain a

9

US correspondent account if they can.

10

THE COURT:

So, the example that you gave me

11

here involving Arab Bank and CAB, is not concerning

12

any nested accounts, this is just a straight out,

13

straight out transfer?

14

MR. OSEN:

15

THE COURT:

Correct, Your Honor.
Okay.

Okay, so you’ve already

16

subpoenaed or obtained documents from Arab Bank, in

17

other litigations they’ve conducted many, many, many

18

searches and now this is another litigation involving

19

some of the same plaintiffs seeking more information.

20

Why do you think you’re likely to find anything more

21

given the intense discovery that you’ve already

22

received and used in your pleading?

23

MR. OSEN:

It’s a good question, Your Honor,

24

let me walk through that for a moment. So, the list

25

that we have that we’ve moved to compel on are persons

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or entities that were not sought in Arab Bank

3

discovery in either the Lindey or Miller cases.

4

so the question is whether, first of all, whether

5

those specific requests which have not been the

6

subject of prior requests, may yield additional

7

information.

8
9

And

The Arab Bank litigation obviously has gone on
for, well now almost 20 years --

10

THE COURT:

11

MR. OSEN:

Right.
So it’s very complicated and

12

there’s a lot of backstory to that, but most of the

13

requests in that case were not formulated in the way

14

they are here for a variety of reasons, one being that

15

they focused on primarily transfers to the Saudi

16

Committee for the Ssupport of the Intifada Al-Quds,

17

they were not focused as this complaint is on the Arab

18

Liberation Front and payments by Saddam Hussein which

19

are featured here but not in that case.

20

there’s a different history going back to how

21

documents were produced in that case.

22

recall that in 2005 the Office of the Comptroller of

23

the Currency entered into a consent decree with Arab

24

Bank- New York which converted it from a branch to an

25

agency and so forth.

And also,

Your Honor may

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15

2

THE COURT:

3

MR. OSEN:

Um-hmm.
And so a lot of the dispute about

4

discovery of the New York branch in that case focused

5

on asking the defendant in that case to produce the

6

records it had produced to the OCC.

7

THE COURT:

8

MR. OSEN:

9

I see.
And so those requests were largely,

not exclusively, but largely framed around what

10

documents were given to the OCC and many records such

11

as the one I handed up to Your Honor were then

12

produced in response to that discovery dispute.

13

as a result of the way this process played out, the

14

names that appear in the motion to compel were not

15

specifically requested in that form back in 2006 when

16

this, when this dispute was resolved.

17
18

And

THE COURT: But yet they still yielded
documents.

19

MR. OSEN:

20

these documents --

21

THE COURT:

22

MR. OSEN:

Oh, it yielded documents because

Involving CAB.
Right, because they happened to

23

have been included in the documents that were produced

24

to the OCC.

25

THE COURT:

But you believe that the documents

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you already have are sufficient to state jurisdiction,

3

do you not?

4

MR. OSEN:

5

THE COURT:

I do -So why is there more, why is it

6

proportional to have even more, look for more, what

7

Arab Bank calls needle in a haystack, why is that

8

proportional?

9

MR. OSEN:

It’s proportional because sitting

10

here today we do not know what the basis for the

11

defendant’s motion on jurisdiction is. As far as we

12

can tell, Your Honor, it appears to be a motion for

13

reconsideration because, you know, just to give you

14

some of the statistics, the complaint that Your Honor

15

ruled on, there were 23 transactions alleged through

16

New York, sitting here today, setting aside the ones

17

that are disputed about whether they cleared through

18

New York, the ones that are undisputed, 114

19

transactions for over $6 million, and there are

20

actually more than that but that’s generally the

21

range, over 100 --

22
23
24
25

THE COURT:

One-hundred-and-fourteen don’t

involve nested accounts?
MR. OSEN:

Correct, or anything else,

they’re’s standard correspondent banking transactions

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-THE COURT:

The kind that the Second Circuit

said in Licci were sufficient.
MR. OSEN:

Correct.

And as I read, and this

6

is more addressed to Mr. Siegfried, obviously, than

7

Arab Bank’s counsel, but as I read their proposed

8

motion, it’s a challenge to due process, not to

9

purposeful availment, but because we’re at a loss as

10

to what evidentiary issues are implicated by that

11

distinction in this case, we don’t know whether

12

there’s something we’re missing in this process.

13

THE COURT:

Well but that lack of knowledge, I

14

mean all you’re seeking are more of the same so if 114

15

-- 114 is more than 23, why is more of the same of

16

maybe, you know, a small handful of transactions that

17

you might find, why is that even, why is that going to

18

materially impact your opposition to a challenge,

19

whether it’s due process or purposeful availment?

20
21

MR. OSEN:

Well, there are two points to that,

Your Honor.

22

THE COURT:

23

MR. OSEN:

Um-hmm.
The first is that depending on

24

which person or entity there’s responsive records for,

25

it is at least theoretically possible that and, again,

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I can’t speak for the defendant and what they intend

3

to do, but at least possible that their position is

4

that there’s a qualitative distinction between

5

transfers made, for example, to or from the Holy Land

6

Foundation or other Hamas controlled entities, versus

7

transactions to Hamas leaders or those who are

8

implicated directly in violent activities.

9

Now Your Honor certainly didn’t hold that in

10

your report and recommendation, it’s nowhere in Licci,

11

but I think, I think that may be the argument, in

12

which case obviously having the additional records

13

could moot that point.

14

records which we’re seeking are relevant both

15

jurisdictionally and ultimately to merits discovery.

16

So even if Your Honor concluded today and said we’re

17

good on jurisdiction, there’s no need for more motion

18

practice on that, we would still at some point be

19

subpoenaing the same records because any evidence that

20

CAB provided material support, held accounts for,

21

processed funds transfers for Hamas leaders, for Hamas

22

controlled entities obviously goes straight to

23

liability.

24
25

THE COURT:

Secondly, to be clear, these

Okay.

Are there other points you

want to make before I hear from Arab Bank?

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MR. OSEN:

3

THE COURT:

4

I think that’s it, Your Honor.
Okay, I’ll hear next from Arab

Bank.

5

MR. LAWLER:

Good morning, Your Honor. In the

6

discussion that I just heard there were, I think most

7

of those, the transfers we’re talking about, have

8

nothing to do with Arab Bank- New York. T, they, I’m

9

not sure where the 114 number comes from but I don’t

10

think it has anything to do with Arab Bank- New York,

11

I don’t think Arab Bank- New York was involved in

12

that.

13

The plaintiffs have identified 32 transactions

14

which they think, of the 15,600 transactions that were

15

produced in Lindey and in Miller they’ve identified 32

16

that arguably involved in some way Arab Bank- New

17

York. And in our papers, and we can go into it further

18

now, we’ve said that 19 of those, I believe were,

19

involved so-called nesting which we believe the Court

20

has said are not relevant to the issue of

21

jurisdiction. So now we’re down to approximately 13

22

transactions out of, again, 15,600.

23

So our, even if those 13 transactions turn out

24

in some way to have some relevance, we’re talking

25

about a miniscule .0083, I don’t even know, I’m not

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sure how you say that percentage --

3

THE COURT:

4

MR. LAWLER:

5

THE COURT:

Right.
But it’s miniscule.
Well, how do you address

6

counsel’s, plaintiffs’ counsel’s point that it was

7

only that miniscule, as relevant to this case, because

8

the documents produced were another matter and these

9

names that they’ve requested in their subpoena aren’t

10

the names that you were looking for?

11
12

MR. LAWLER:

I have a couple of responses to

that.

13

THE COURT:

14

MR. LAWLER:

Okay.
One, we’re talking about the very

15

same incidents that make up, in Lindey and in Miller

16

the same events that took place. We are talking about

17

the vast majority, and I have to say I haven’t checked

18

to see if the individuals identified in Lindey and

19

Miller are the same as people identified in the

20

current case in Averbach, but it’s all, it’s all the

21

same events and basically the same people. I don’t

22

know, I cannot say, tell the Court that I know that

23

they’re exactly the same but they have said that,

24

agreed in their request of the 40, and it’s not really

25

40, it’s really 160 -- 190 names --

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THE COURT:

3

MR. LAWLER:

Because of all the variations?
Because of all the variations,

4

and it’s not just the 190 names, because if you, if

5

you look at the variations of the individual names,

6

we’re talking about literally thousands of possible

7

permutations for all of these entities.

8

just 40 and it’s --

9

THE COURT:

It is not

Well, why couldn’t it just be cut

10

down by having a search for Cairo Amman Bank, isn’t

11

that, I mean why do you have to have all of these

12

names at all, why couldn’t you just search for Cairo

13

Amman Bank, that’s really, that’s the key --

14

MR. LAWLER:

15

THE COURT:

16
17

I don’t -Why would we get, why would there

be nothing?
MR. LAWLER:

Well, first of all, it’s

18

important, and we make a point and I’m sure, we had no

19

correspondent relationship with Cairo Amman Bank.

20

where the program that we’re searching and using to

21

search, is one that is 20, it’s almost 20 years old

22

and it has not been updated, it’s not been maintained.

23

And it’s hard to understand today what something, what

24

things were like 22 years ago as far as computers go

25

but it’s, we, I’m told we cannot just put in Cairo

And

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Amman Bank and press a button and have any

3

transactions in which Cairo Amman Bank might have been

4

in a chain, whether it’s a nest, so-called nested

5

chain or otherwise, I’m told that we can’t do that.

6

So it --

7

THE COURT:

So, CAB just comes up by virtue of

8

putting in different customers’ names, is that what

9

you’re saying?

10

MR. LAWLER:

Well I’m assuming what happened

11

is of the tens, probably hundreds of thousands of

12

documents that were produced in the other, in Lindey

13

and Miller, they can because they’re probably --

14
15

THE COURT:

Like a relativity Relativity

database, yes.

16

MR. LAWLER:

17

THE COURT:

18

MR. LAWLER:

19

THE COURT:

20

MR. LAWLER:

A real database.
Yep.
They can put in a name -Right.
And they can put in Arab Bank

21

New- York and they know they can come up with any

22

transactions that involve Arab Bank- New York, I’m

23

assuming that, but I’m told that we don’t have the

24

ability to do that. And I should also just point out

25

our ability to do anything, now we can always get,

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presumably we can get the third party or outside

3

vendor here, but currently Arab Bank- New York takes

4

about as much space as in the jury box. And there are

5

three employees, there will be two employees as of

6

January 1 s t , the person who did, because one is

7

retiring, and the person who did the original work in

8

Lindey passed away some time ago.

9

THE COURT:

And what about, what about, I

10

understand your arguments that this isn’t proportional

11

in part because of the costs and burdens --

12

MR. LAWLER:

13

THE COURT:

Yes.
On your client, which has got

14

three employees working with this rickety old system,

15

what if the, what if the costs were shifted and

16

plaintiffs bore the cost of this search, is that

17

something that would be acceptable to your client?

18
19

MR. LAWLER:

I don’t know the answer to that,

Your Honor.

20

THE COURT:

21

mean just the dollar costs?

22

MR. LAWLER:

Do you know what the costs are, I

I do not know. I do not know the

23

answer to that. The -- what else, I think, unless the

24

Court has additional questions I think that I’ve made

25

the points. I mean we have tried, we have tried to put

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forth what we believe are reasonable accommodations

3

and solutions here --

4

THE COURT:

Right, so you’re thinking doing

5

fewer, you would be willing to do something by doing

6

fewer variations in the names.

7

MR. LAWLER:

Fewer variations and any

8

transfers that were made outside of Palestine or

9

Jordan or Israel would not, would not be included.

10

What we have already produced has, we would not have

11

to reproduce it.

12

THE COURT:

13

MR. LAWLER:

Okay.
I think actually, I think that

14

plaintiffs agree to that. But the, so variations that

15

-- oh, if they’re not named, and if entities are not

16

named in the complaint then we would also not be

17

required to search for those.

18

THE COURT:

Okay, thank you. Mr. Osen, why

19

aren’t the suggestions that Arab Bank has suggested

20

reasonable and what about this issue of cost shifting,

21

what’s your position on that

22

MR. OSEN:

Taking the first issue, we agreed

23

with the bank that they could limit their search to

24

CAB Palestine, Jordan., I think at one point they had

25

a branch in Lebanon, but certainly to those

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jurisdictions.

3

THE COURT:

4

MR. OSEN:

Palestine, Jordan and Lebanon?
Right, so we had no issue with that

5

and we also agreed in principle to try and reduce the

6

number of transliteration variables although even with

7

the ones that were produced there sometimes the same

8

party is spelled differently --

9
10

THE COURT:
MR. OSEN:

In the same document.
By the same bank because each time

11

they’re entering the data they’re transliterating it

12

from Arabic so it depends on who is typing in the word

13

Mohammad for example, it could be spelled with a U or

14

an O an E at the end or an A.

15

solution to that, but we’ve offered to work with them

16

on that. The one thing that is at the crux of this

17

dispute is that we didn’t want to be limited to

18

individuals or entities listed in the complaint --

19

THE COURT:

20

MR. OSEN:

So, there is no perfect

Well why shouldn’t you be?
Because that’s not the limits of

21

Rule 26 discovery and, for example, just to give you a

22

concrete one, the, let me get this in front of me --

23

THE COURT:

Well, if you were limited to the

24

people and entities named in the second amended

25

complaint, how many would that be?

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MR. OSEN:

3

THE COURT:

4

MR. OSEN:

6

THE COURT:

7

MR. OSEN:

8

THE COURT:

10

Twenty-nine and plus the alternate

spellings which would --

5

9

Twenty-nine.

Right.
Increase that at least three-fold.
Correct.
Right?

Okay, and why isn’t, why

wouldn’t that be sufficient and proportional?
MR. OSEN:

Well, let me give you an example.

11

One of the names here, three of them, of those who are

12

not listed by name in the complaint, are individuals

13

who are part of leadership of the Arab Liberation

14

Front which was Saddam Hussein’s --

15

THE COURT:

Yes, but why does that matter if

16

those people don’t have accounts with CAB? I mean

17

there’s not, there’s -- you don’t have any knowledge

18

as to whether or not these other people or entities

19

have any relationship with CAB, isn’t that correct?

20

Isn’t it just a fishing expedition as to whether or

21

not, maybe possibly some of these people who are

22

named, you’re going to discover some terrorists that

23

you know may be got a transfer of money from CAB, you

24

don’t know it, but maybe Arab Bank if they produce

25

thousands and thousands and thousands and thousands of

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transactions you’ll find one, isn’t that really what

3

you’re trying to do?

4

MR. OSEN:

No, Your Honor, the Arab Liberation

5

Front distributed checks and payments to the families

6

of suicide bombers through Cairo Amman Bank, that’s in

7

the complaint, and we have evidence to support that.

8

The Arab Liberation Front operated both formerly

9

formally as an entity to the extent it was one, and

10

through its leadership, which is how most, if not all,

11

terrorist organizations do.

12

completely plausible and reasonable to assume that

13

when Cairo Amman Bank provided services to Saddam

14

Hussein’s Arab Liberation Front, they did so through

15

and with the instructions of the senior leaders of

16

ALF. I don’t know whether it was those three

17

individuals or it was Mr. Rakad Salem, the head of the

18

ALF, but it’s not a fishing expedition, it’s ordinary

19

routine discovery.

20

And so, therefore, it is

One more point, Your Honor, about cost

21

shifting. To be clear, with the exception of the ALF

22

individuals, everybody on that list is someone we

23

could serve a document request in Miller tomorrow and

24

the bank would be obligated to do the same searches

25

and for all I know, as Your Honor mentioned

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Rrelativity, for all I know, all of the materials

3

belonging to Arab Bank- New York that are relevant are

4

sitting in a Rrelativity database by Arab Bank’s

5

counsel. So it may very well be that the individual

6

left in their office does not have the capability to

7

search their systems anymore, but Arab Bank, which is

8

actively litigating a case in the Eastern District of

9

New York and which has to respond to these very same

10

kinds of requests as a non-third party, as a party to

11

the proceeding, would and will have to produce the

12

same records in that case.

13
14
15

THE COURT:

Well, what is the status of

discovery in those cases?
MR. OSEN:

The status of discovery is it’s

16

ongoing, there’s a pending motion to compel on bank

17

secrecy but otherwise discovery proceeds in that case.

18

So we could serve a document request tomorrow on Arab

19

Bank New York, actually we’d serve it obviously on Mr.

20

Siegfried and counsel, they would then have to make an

21

argument to the Court that unlike the thousands of

22

other records they’ve produced, somehow these are less

23

relevant than the others, they have produced records

24

and just to take a name at random, these are senior

25

Hamas leaders, that request is going to be responded

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to and they are going to search records for it.

3

So, what we could do is serve that request and

4

then when the documents are produced under the

5

protective order, introduce them here under seal in

6

this case. It’s just a different way of coming to the

7

same result, we think it’s appropriate to do so

8

because of the discovery deadline in this case.

9

served discovery when Your Honor directed it to third

We

10

parties back in the summer and that’s why we’re here

11

today. But we would get these same records. We won’t

12

get them obviously --

13

THE COURT:

Well shouldn’t there be some

14

limiting principle on these 190 names and all of the

15

variations, I mean that has thousands of possible

16

permutations, wouldn’t you accept some limitation on

17

that?

18

MR. OSEN:

19

THE COURT:

20
21
22

Well, what do you think is a

reasonable limitation?
MR. OSEN:

We went through the list and tried

to cull variations --

23

THE COURT:

24

MR. OSEN:

25

Of course --

Resulting in how many?
I think we were able to cut off

about 50 or 60, I don’t recall.

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THE COURT:

3

MR. OSEN:

4

Leaving how many permutations?
We didn’t do a count on it, Your

Honor.

5

THE COURT:

Still thousands?

6
7

MR. OSEN:

It’s not thousands, Your Honor,

8

that’s not correct, it’s probably, if you count it all

9

up it’s probably close to 300. But, look, I don’t know

10

how to search their systems. It may very well be, Your

11

Honor, that if you type in, for example, a last name

12

like the one we have here for Mohammad Taha, that if

13

you search Taha there aren’t many spellings of Taha,

14

it’s a fairly straightforward one.

15

have --

16

THE COURT:

17

MR. OSEN:

Sorry, the one you

I have Hayek.
Is Ghazi Hamad.

So, on this name,

18

the variations are pretty limited, the only possible

19

variation I could think of off the top are Ghazi with

20

an R or Ahkmed Hamed with an E, but that’s just the

21

nature of this process and it’s a process that Arab

22

Bank has undertaken hundreds of times, maybe thousands

23

of times in the course of the Lindey and Miller

24

litigation.

25

So, there’s no doubt that there’s a burden,

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it’s a burden we encounter with every bank when we’re

3

dealing with Arabic transliteration, but that’s

4

intrinsic, that’s not the plaintiffs’s fault, that’s

5

just the way --

6

THE COURT:

But plaintiffs have to deal with

7

Rule 26 and Rule 45 which does cabin discovery to

8

things that are relevant to the claims and defenses

9

and proportional to the needs of the case.

10

MR. OSEN:

11

THE COURT:

Absolutely.
And so in terms of the cost

12

shifting I don’t think that you finished your answer

13

on why shouldn’t costs be shifted or at least shared?

14
15
16

MR. OSEN:

Because Arab Bank through its

counsel can and will do these searches regardless.
THE COURT:

How do you know that? In the other

17

case you have, first of all, here the Court is bound

18

by the Rule 45 constraint which is somewhat more

19

protective of a nonparty. I understand that in Lindey

20

and Miller, Arab Bank is a direct party but still why

21

would these names be relevant in that case if you

22

didn’t search for those names before in that case?

23

MR. OSEN:

Because, Your Honor, they weren’t

24

searched due to the fact that the requests were formed

25

and formulated in the context of the dispute over OCC

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production. So we’re perfectly content if Your Honor

3

says to us why don’t you serve, I’m not going to, I’m

4

not going to compel them in this case, serve your

5

document request in Miller if you so choose, any

6

documents you get in response to that you can then do

7

what you’ve done previously with other documents

8

previously produced by Arab Bank which is to say

9

they’ll be subject to the protective order, you’ll

10

produce them to CAB in this case. T, that’s fine with

11

us. The result is the same, it’s just procedurally a

12

question of timing. This all came about because we

13

were in jurisdictional discovery and we served third

14

party requests. You know, if I had to do it all over

15

again, I would have just served a document request for

16

the relevant records, I might lose a couple for the

17

ALF, but otherwise I’m going to get those records, and

18

then I’d just transfer them over.

19

THE COURT:

Okay, so let me ask Arab Bank if

20

you have any responses to or additional things that

21

you’d like to add based on the conversation I’ve just

22

had with plaintiffs’ counsel?

23

MR. LAWLER:

What I heard Mr. Osen say in

24

response to your question was really confirmation that

25

this is a fishing expedition. This is, he’s thrown out

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the names of a lot of bad people in the hopes that

3

perhaps they will, they will come up in the search.

4

With respect to the, what’s going on in

5

Miller, I’m going to defer to, because I’m not up to

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6

date as to what’s going on in Miller and the

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discovery, it’s, as I understand it there is some

8

restriction on what they, what they can do, but I’m

9

going to ask Mr. Siegfried to respond to that because

10
11

I’m really not up to date.
THE COURT:

All right, so although CAB doesn’t

12

necessarily have standing to contest this subpoena, I

13

would like to hear an update on and a response, to the

14

extent you have better knowledge of what’s going on in

15

Miller and Lindey and plaintiffs’ position that these

16

same requests can be served in that, in those cases

17

and obtained that way.

18

MR. SIEGFRIED:

19

answer that question --

20

THE COURT:

21

MR. SIEGFRIED:

22
23

Thank you, Your Honor, I will

Yep.
But lest my memory forget, I’d

just like to make a couple of comments.
THE COURT:

All right, and keep it, I do have

24

to leave by ten so, I mean by eleven, so, yes, keep it

25

short, thanks.

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MR. SIEGFRIED:

Very short. I understand that

Your Honor now has inherited the Kaplan case

4

THE COURT:

5

MR. SIEGFRIED:

Yes.
And the Court is familiar with

6

it, and I’m not surprised by your comment about what

7

were the transactions in Kaplan because you are

8

absolutely correct, one of the main arguments made by

9

the plaintiffs’s counsel in the jurisdictional

10

argument was that LCB actually took dollars, Lebanese

11

dollars and routed them through New York to come back

12

to LCB and, therefore, they were originatinged

13

transfers. And I think in both Spetner and in Vasquez,

14

if I recall correctly, there is a more extensive

15

discussion about passive receipt, I just wanted to say

16

that.

17

It is also the case, having lived through

18

Lindey and Miller discovery, that it is an

19

extraordinary task to try to produce documents off of

20

this software. I think it was very wise for counsel to

21

say he couldn’t estimate the cost because I will tell

22

you it is a very expensive proposition because of the

23

limitations on the ability to search which ends up

24

driving everything to be a hand viewed situation.

25

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The proposition that, oh, well, plaintiffs

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could have just simply served another document

3

request, well I believe that might technically be true

4

but the magistrate judge there requiredmoved the

5

parties to complete their document discovery and the

6

motion that is one of the motions which is tied up on

7

issues in that case of bank secrecy, involves and

8

issue, frankly, that you have more indirectly, or

9

maybe you have directly raised here, namely the

10

relevancy of a number of these names. So it’s true, I

11

guess, if the Court would even entertain a document

12

demand at this point, that they can add 10 names, 20

13

names, 30 names which will then end up in the same

14

question as to the relevancy of those names. aAnd the

15

discovery in that case was not limited to some OCC

16

related documents, the discovery in that case was

17

actually broader than the discovery in this case

18

because there were claims involving funding not just

19

of the Hamas attacks that are the same attacks as

20

here, there were claims about funding other attacks.

21

aAnd it wasn’t limited to a particular bank, it was

22

any transfer that touched upon Arab Bank and actually

23

Mr. Osen started with an example of that.

24

actually –,. tThe fact that, I think, it’s actually

25

telling that when you do a broader request that isn’t

So you

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limited to a specific bank, and basically would

3

require Arab Bank to produce everything in terms of

4

the universe of banks that could possibly have been

5

involved and touched a transfer somewhere along the

6

lines, you have all of these 13 or 19 transactions. So

7

--

8
9

THE COURT:

And is that, I’m just speculating,

and I don’t know whether you would agree that if that

10

search was so broad that it would cover many, the

11

reason why so few transactions came up involving CAB

12

was that CAB had its own correspondent bank at the

13

time?

14

MR. SIEGFRIED:

Well they have now, plaintiffs

15

have now conceded that Arab Bank- New York was not a

16

correspondent bank of CAB.

17

THE COURT:

Right.

18

MR. SIEGFRIED:

So, therefore, to the extent

19

Arab Bank- New York had to produce documents in Lindey

20

and Miller, it wasn’t that it looked at any particular

21

bank, it looked at all names and wherever those,

22

wherever those transactions might have originated from

23

or the recipients have been receiving them or the

24

beneficiaries, it had to do that.

25

So I think the needle in a haystack point is

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exactly, is exactly -- is exactly right and I think

3

there’s a very good reason that Mr. Osen has not

4

served a document request to try to reopen at this

5

point discovery in Arab Bank, Miller,. aAlthough

6

listening to him I think it raises some concern, if I

7

put a different hat on for a second, that this idea of

8

using one Court to obtain discovery that may then be

9

used in another case is concerning. but But I come

10

back to your point which is the proportionality of the

11

request, your point that if they don’t think, and they

12

may perhaps are realizing it, that they don’t have a

13

good jurisdictional argument based upon what they’ve

14

already produced, then the fact that they can get 5

15

more, or 10 more, or 15 more of the same transactions

16

doesn’t really advance the ball. Our concern, putting

17

my CAB hat back on, is that we are at the end of

18

discovery and we would like to get, start moving

19

forward with this motion and, therefore, we’d hope

20

that Your Honor would grant the request --

21

THE COURT:

Okay.

22

MR. SIEGFRIED:

23

THE COURT:

Requested by ABNY.

All right, because I have

24

something that I have to do at eleven I’m going to end

25

the conference now, I want to thank everybody for

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their arguments, I’m going to take it under

3

advisement. And depending on the outcome, to the

4

extent a schedule needs to be slightly adjusted I can,

5

I can do that.

6

All right, thank you, everyone --

7

MR. LAWLER:

8

MR. SIEGFRIED:

9

Thank you very much, Your Honor.
Your Honor, can I ask one

question?

10

THE COURT:

Sure.

11

MR. SIEGFRIED:

I thought one of the things

12

that you wanted, and I realize we’re not going to do

13

it today, but one of the issues I think that we had

14

here was setting up, that you wanted a conference to

15

discuss the motion or the form of the motion --

16

THE COURT:

17

MR. SIEGFRIED:

18
19

Right.
And I don’t know we have

another date -THE COURT:

Right, so after this, because I

20

have, I’m just mindful of the time, I will set up

21

another conference. I am going to ask though that you

22

all meet and confer about, since plaintiffs haves said

23

they don’t really understand the basis for your

24

motion, that you, that they think it’s a motion for

25

reconsideration, I don’t understand that to be the

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basis of your motion. But you’re here now together,

3

you can use my jury room, if you would just have a

4

communication about that and just be better informed

5

about what that is going to involve, I think that can

6

only inure to everybody’s benefit, so I’d ask that you

7

have that conversation, okay?

8
9
10

Thank you, everyone.

(Whereupon the matter was adjourned.)

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C E R T I F I C A T E

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4

I, Carole Ludwig, certify that the foregoing

5

transcript of proceedings in the United States

6

District Court, Southern District of New York,

7

Averbach, et al. versus Cairo Amman Bank, Docket No.

8

19cv0004, was prepared using digital electronic

9

transcription equipment and is a true and accurate

10

record of the proceedings.

11
12
13
14
15

Signature

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17
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19
20
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___________________
CAROLE LUDWIG

Date:

December 27, 2022