Bank Liability Under the Antiterrorism Act: The Mental State Requirement Under § 2333(a)

By Olivia G. Chalos

Abstract

Terrorism is at the forefront of international concern.  The United States devotes tremendous resources to disrupt terrorist networks, but the fight against terrorism continues to involve countless fronts.  Since September 11, 2001, financial institutions have emerged as an increasingly popular target in efforts to cut off the flow of material support to terrorist organizations abroad.  Civil claims continue to be filed against banks, in part because of their “deep pockets.”  These claims generally allege that the banks provided material support to terrorist groups through the provision of financial services.

The potential for large civil judgments against banks under the Antiterrorism Act (ATA), however, remains problematic in practice.  Inconsistency in the interpretation and application of ATA civil liability limits the statute’s effectiveness.  It encourages forum shopping and creates the potential for disparate judgments depending on the court where an action is filed.

This Note specifically addresses the jurisdictional split on the mental state requirement necessary to hold a defendant liable under the ATA.  This Note explores the current judicial interpretations of the statute and concludes that, as the statute stands, the Second Circuit best interprets the mental state requirement for § 2333(a) claims predicated on a violation of material support laws.  This Note proposes, however, that Congress should amend the ATA to clarify the state-of-mind requirement and should only allow for a cause of action where a bank manifests heightened culpability through intentional wrongdoing in the provision of financial services to foreign terrorist organizations.