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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Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document174 170 Filed Filed01/17/23 01/12/23 Page Page11of of82 1 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page21ofof82 40 EXHIBIT A Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page32ofof82 40 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: (212) 420-0771 Email: Transcription420@aol.com Proceedings recorded by electronic sound recording; Transcript produced by transcription service. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page43ofof82 40 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page54ofof82 40 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page65ofof82 40 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 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page76ofof82 40 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 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page87ofof82 40 1 6 2 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. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page98ofof82 40 1 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-1 174 Filed Filed01/17/23 01/12/23 Page Page109 of of 82 40 1 2 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 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page11 10ofof82 40 1 9 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page12 11ofof82 40 1 10 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page13 12ofof82 40 1 11 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page14 13ofof82 40 1 12 2 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 -- Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page15 14ofof82 40 1 2 13 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page16 15ofof82 40 1 14 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page17 16ofof82 40 1 2 15 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, Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page18 17ofof82 40 1 2 16 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page19 18ofof82 40 1 2 3 17 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page20 19ofof82 40 1 18 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page21 20ofof82 40 1 2 3 19 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. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page22 21ofof82 40 1 20 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page23 22ofof82 40 1 21 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page24 23ofof82 40 1 2 22 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page25 24ofof82 40 1 23 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page26 25ofof82 40 1 2 3 24 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page27 26ofof82 40 1 25 2 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. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page28 27ofof82 40 1 26 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page29 28ofof82 40 1 27 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page30 29ofof82 40 1 28 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page31 30ofof82 40 1 29 2 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? Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page32 31ofof82 40 1 30 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page33 32ofof82 40 1 31 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page34 33ofof82 40 1 32 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page35 34ofof82 40 1 33 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page36 35ofof82 40 1 34 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page37 36ofof82 40 1 35 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page38 37ofof82 40 1 36 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page39 38ofof82 40 1 37 2 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. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page40 39ofof82 40 1 2 38 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.) Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-1 174 Filed Filed01/17/23 01/12/23 Page Page41 40ofof82 40 1 39 2 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page421 of of 82 41 EXHIBIT B Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page432 of of 82 41 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: (212) 420-0771 Email: Transcription420@aol.com Proceedings recorded by electronic sound recording; Transcript produced by transcription service. Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page443 of of 82 41 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page454 of of 82 41 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page465 of of 82 41 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page476 of of 82 41 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page487 of of 82 41 1 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. Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page498 of of 82 41 1 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 Case Case 1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document 170-2 174 Filed Filed01/17/23 01/12/23 Page Page509 of of 82 41 1 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page51 10ofof82 41 1 9 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page52 11ofof82 41 1 10 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page53 12ofof82 41 1 11 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page54 13ofof82 41 1 12 2 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 -- Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page55 14ofof82 41 1 2 13 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page56 15ofof82 41 1 14 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page57 16ofof82 41 1 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page58 17ofof82 41 1 16 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page59 18ofof82 41 1 2 3 4 5 17 -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, Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page60 19ofof82 41 1 18 2 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? Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page61 20ofof82 41 1 19 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page62 21ofof82 41 1 2 20 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 -- Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page63 22ofof82 41 1 21 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page64 23ofof82 41 1 22 2 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, Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page65 24ofof82 41 1 23 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page66 25ofof82 41 1 24 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page67 26ofof82 41 1 2 25 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? Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page68 27ofof82 41 1 26 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page69 28ofof82 41 1 27 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page70 29ofof82 41 1 28 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page71 30ofof82 41 1 2 29 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. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page72 31ofof82 41 1 30 2 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, Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page73 32ofof82 41 1 31 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page74 33ofof82 41 1 32 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page75 34ofof82 41 1 33 2 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 Formatted: Font: Italic, Complex Script Font: Italic 6 date as to what’s going on in Miller and the Formatted: Font: Italic, Complex Script Font: Italic 7 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. Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page76 35ofof82 41 1 34 2 3 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 Formatted: Font: Italic, Complex Script Font: Italic The proposition that, oh, well, plaintiffs Formatted: Font: Italic, Complex Script Font: Italic Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page77 36ofof82 41 1 35 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page78 37ofof82 41 1 36 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page79 38ofof82 41 1 37 2 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 Formatted: Font: Italic, Complex Script Font: Italic Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page80 39ofof82 41 1 38 2 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 Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page81 40ofof82 41 1 39 2 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.) Case Case1:19-cv-00004-GHW-KHP 1:19-cv-00004-GHW-KHP Document Document170-2 174 Filed Filed01/17/23 01/12/23 Page Page82 41ofof82 41 1 40 2 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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