July 15, 2015
This column reports on several significant, representative decisions handed down recently in the U.S. District Court for the Eastern District of New York. Judge Frederic Block denied a father's Hague Convention petition for the return of his children to Poland. With minor exception, Judge Brian M. Cogan denied motions by defendant Arab Bank, LLC, in the wake of a jury verdict finding it liable for numerous acts of terrorism. And Judge Jack B. Weinstein declined to enforce choice-of-forum provisions found in defendant company's online agreements.
In Gwiazdowski v. Gwiazdowska, 14 CV 1482 (EDNY, April 3, 2015), Judge Block denied a father's petition for the return of his two minor children from New York to Poland pursuant to the Hague Convention on the Civil Aspects of International Child Abduction, where the children are now "settled" in their new environment with their mother.
In February 2014 Cezary Gwiazdowski brought this petition pursuant to the Hague Convention as implemented in the United States by the International Child Abduction Remedies Act, 22 U.S.C. §9011-11. Cezary sought the return of his two sons, now 10 and 8, who have resided in Queens since April 2011 with respondent Anetta Gwiazdowska—their mother and Cezary's wife.
After an evidentiary hearing, the court made detailed findings. In essence, Cezary and Anetta met in Poland in 1996, when they were both studying to become physicians. They married in 2003, and their sons were born in Poland. In April 2011 Anetta left Poland with the children and moved into her mother's house in Queens. Without informing Cezary in advance, she simply left one day while he was at work. Cezary held out hope that his family would return, but in early 2012 Anetta told him of her intention to stay in New York and file for divorce.
Cezary consulted a lawyer. He and his wife both filed custody petitions in Family Court. Under Article 16 of the Hague Convention, the Family Court was supposed to defer decision on custody until Cezary's Hague Convention petition was decided. Nevertheless, in December 2014 the Family Court awarded custody to Anetta with visitation rights for Cezary.
Anetta's removal of the children from Poland was "likely wrongful under the Hague Convention." Slip op. 7. But Cezary waited nearly three years to file his Hague Convention petition. If such a petition is filed more than one year after a wrongful removal, respondent may assert as an affirmative defense that the removed child "is now settled in its new environment." Hague Convention, Article 12.
Anetta met her burden in this regard, as Block determined based on an analysis of the relevant factors—the age of the children, the stability of their residence in Queens, their attendance at school and church, respondent's finances and employment, and the immigration status of respondent and the children. As to financial stability, "Anetta testified that her mother and stepfather, who collectively earn $200,000 a year, significantly contribute to the children's expenses." Slip op. 10.
The court summarized its conclusion:
The children have a stable home environment and a solid group of friends, and they regularly attend church and school here. While there is some uncertainty about Anetta's financial ability and about the children's future immigration status, all of the factors point to the fact that the children have "become so settled in [their] new environment that repatriation [is] not…in [their] best interest." [citation omitted]
Slip op. 11-12.
Because there was no evidence that, in relocating, Anetta had been motivated to seek a jurisdiction more favorable to her custody claims, the court saw no reason to exercise its discretion in Cezary's favor.
Nor did the Family Court's failure to defer its custody order pending adjudication of the federal petition require the custody order to be vacated. Given the denial of Cezary's petition here, "vacating the custody order now would simply be an academic exercise[,]" compelling the parties to return to Family Court and inflicting a "needless financial and emotional burden upon Anetta" with a "deleterious effect" on the children. Slip op. 13-14.
In Linde v. Arab Bank, Judge Cogan denied, in major part, defendant Arab Bank's motion for judgment as a matter of law under Federal Rule of Civil Procedure 50 and denied its motions for a new trial and for certification of an interlocutory appeal, after a jury verdict finding defendant liable under the Anti-Terrorism Act (ATA) for 24 terrorist attacks in Israel and the Palestinian Territories between 2000 and 2005.
At trial plaintiff presented evidence through experts that (1) Hamas was a terrorist organization, (2) Hamas had been involved in terrorist attacks in Israel and the Palestinian Territories during the Second Intifada, (3) senior members of Hamas had accounts at Arab Bank, (4) charities known to be affiliated with and controlled by Hamas had accounts at Arab Bank, (5) many millions of dollars in transfers had been made from accounts at Arab Bank to known terrorists and families of suicide bombers, (6) financial auditors had been unable to examine defendant's account files because it refused to produce them in discovery, (7) defendant was aware that its clients were on designation lists at the U. S. Office of Foreign Asset Control (OFAC), and (8) after finding out that their clients were on the OFAC list, Arab Bank transferred their money back to them.
Defendant's witnesses (1) emphasized the negative impact the Second Intifada had had on Arab Bank's business, (2) detailed defendant's compliance with Palestinian Monetary Authority regulations, (3) explained defendant's compliance policies and software and the central role of the OFAC list in compliance procedures, and (4) stated that Arab Bank's sole responsibility was to check accounts against the OFAC list. The court pointed out the many instances in which defendant's witnesses were undermined by cross-examination.
Earlier in the case Judge Nina Gershon had issued a sanctions order following Arab Bank's failure to comply with a discovery order. Pursuant to the sanctions order, Cogan gave a permissive adverse inference instruction and precluded defendant from using any evidence that would have been clarified by the withheld documents and other evidence. Slip op. 25. Yet, as Cogan concluded, the sanctions order was not a critical factor in the case. What made the most impact was the hole left by the evidence that had not been provided in discovery. Slip op. 35.
As the court also found, giving material support to a terrorist organization through the provision of financial services constituted an "act of international terrorism" under the ATA, because defendant knew that it was providing financial support to Hamas and that Hamas was a foreign terrorist organization. As to causation, the jury charge given here, focusing "solely on whether defendant's acts were a substantial factor in causing plaintiffs' injuries, and whether such injuries were a foreseeable result of those acts" was correct. Slip op. 53. The court rejected defendant's contention that "but for" causation was required under the ATA. Such a requirement, moreover, would make proving causation impossible, thereby thwarting Congress' intent to impede terrorism. Slip op. 50, 53.
Finally, the evidence was sufficient. Plaintiffs showed that money went into the accounts of Hamas operatives and affiliates, terrorist attacks occurred following deposits of money into the accounts, and Hamas was responsible for 22 of 24 attacks. As the court observed:
[P]laintiffs provided evidence that defendant maintained accounts for senior Hamas leaders, and Hamas-controlled charities, and facilitated Saudi Committee payments to Hamas charities, Hamas prisoners, and the families of Hamas suicide bombers, all during the extreme violence of the Second Intifada. It was reasonable for the jury to consider the totality of this evidence and to conclude that defendant acted knowingly.
Slip op. 66 (emphasis in original).
Cogan granted defendant's Rule 50 motion as to two of the 24 attacks, concluding that plaintiff had not established a sufficient link between those two attacks and Hamas. Slip op. 58, 94.
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Plaintiffs each signed up for Gogo's service for use during air travel. Each alleged that he signed up for one month and was auto-renewed, without notice, for several months thereafter.
Weinstein also denied Gogo's challenge to plaintiffs' standing. Gogo had repaid Welsh, without notice to his counsel, after it was "put on notice that he would be the named plaintiff in a federal class action complaint." Berkson was reimbursed for the disputed charges by his credit card company, a non-party. Slip op. 80-81. Gogo could not rely on Berkson's repayment by a non-party, and Gogo would not be allowed to "pick off" Welsh as class plaintiff, especially when its payment was made in violation of the "no contact" rule. Slip op. 70-82.
Harvey M. Stone and Richard H. Dolan are partners at Schlam Stone & Dolan. Bennette D. Kramer, a partner of the firm, assisted in the preparation of the article.