WASHINGTON – The Supreme Court heard oral arguments Monday for BLOM Bank SAL v. Honickman, which focused on how high the bar should be to reopen a case after a ruling had been made.
The case before the court will act as a guidepost for deciding when to consider undoing a final judgment. The high court heard arguments about what would count as extraordinary circumstances and warrant overturning a verdict.
In 2019, Honickman, who represents victims of Hamas terrorist attacks between 2001 and 2003, sued BLOM Bank for allegedly aiding and abetting terrorism by providing financial services to Hamas affiliates. This allegedly would have violated the Justice Against Sponsors of Terrorism Act. A U.S. District Court dismissed Honickman’s case because Honickman failed to provide sufficient evidence that the bank was “generally aware” of their role in illegal activities.
While the district court offered Honickman the option to revise the complaint, their lawyers declined and appealed the decision instead, stating that the court required an incorrect, unmeetable amount of evidence to prove the bank’s involvement in terrorism. The 2nd U.S. Circuit Court of Appeals affirmed the district court’s dismissal that there was insufficient evidence to prove BLOM Bank was aware of the customers’ connections to Hamas. However, the 2nd Circuit said the district court applied an incorrect legal standard for determining aiding and abetting.
Upon return to the district court, Honickman’s attempt to bring forth a revised complaint was denied. The district court stated there were no “extraordinary circumstances” at play that would warrant a new judgment. Honickman appealed the district court’s decision once more. Overturning the lower court’s decision, the appeals court sided with Honickman. The appeals court decided that the district court had been too strict and Honickman should be allowed to amend their complaint when “justice so requires.”
During oral arguments at the Supreme Court, Michael McGinly, the lawyer for BLOM Bank, argued that reconsidering the decided verdict on the case “diluted the stringent standard” used when determining whether to overturn a decided judgment. Additionally, McGinly asserted Honickman already had multiple opportunities to rework their claim but decided not to.
“What we’re doing is saying the party doesn’t get an opportunity at a dress rehearsal,” McGinly said.
However, Justice Kentanji Brown Jackson expressed concern about the bank’s argument that Honickman had other chances to revise their complaint. She worried this line of reasoning would punish those who appeal the court’s decision instead of first amending their claim to fit within the lower court’s legal standards.
“I think that burdens the right to appeal in a way that is not exactly how these rules should be read,” she said.
Other justices focused on the 2nd Circuit’s assertion that two principles, the strong requirement for overturning final decisions and the allowance of amendments when justice requires it, needed to be considered hand in hand by the district court.
Justices Neil Gorsuch and Elena Kagan questioned McGinly about the necessity of the 2nd Circuit’s balancing act. The justices asked whether only considering the preference to uphold final judgments alone would be enough to allow for amendments in necessary situations.
McGinly said “extraordinary circumstances” would permit revisions in certain cases, and this standard alone should dictate which cases get reopened after a final decision.
Michael Radine, the lawyer for Honickman, chose not to strongly advocate in favor of the 2nd Circuit’s ruling about balancing a judgment as final with the need for amendments to guarantee justice. Instead, Radine focused on how this case fell within the “extraordinary circumstances” required for voiding a judgment.
“It’s fundamentally unfair to lay the consequences of confusion (of the applicable legal standards) at the plaintiff’s doorstep,” Radine said.
Justices questioned Radine about his assertion that this case qualified as “extraordinary circumstances.” They asked if the rule that freely allowed amendments could then be ignored.
Radine reaffirmed that Honickman’s right to amend their complaint and reopen the case was justified by “extraordinary circumstances” alone. He asserted that the preference for judgments to remain final already took into account the need for justice to be served.
The high court’s ruling could impact the future of counter-terrorism litigation. Therefore, the court’s decision could determine how much flexibility terrorism victims would have to appeal those standards while preserving their future right to revise their complaints when the correct legal standard was determined.
“After the October 7 attacks, American victims of the Hamas massacres will be returning to courts. Terrorism cases are unique and challenging cases, and the law should enable them to make their cases as best they can, not slam the courtroom door shut before they’ve had that chance,” Radine wrote to Medill News Service prior to the hearing.
The court is expected to release a decision on the case later this year.
