Case of the Day: Moriah v. Bank of China

The case of the day is Moriah v. Bank of China (S.D.N.Y. 2015). The case is related to Wultz v. Bank of China, which we saw in May 2013 and November 2012. The case involves a 2006 suicide bombing in Tel Aviv. The Bank of China is alleged to be liable under the Anti-terrorism Act and for negligence. Today’s installment involves some back-room politics that reflect the awkardness, for the Israeli government, of the claims against the Bank of China given Israel’s diplomatic relations with China.

In the Wultz case, the plaintiffs had sought to take the testimony of Uzi Shaya, a former Israeli national security officer. Israel was initially cooperative but later withdrew its support for allowing Shaya’s deposition to go forward. The plaintiffs claim that the reason for the Israeli change of heart was political pressure from China. They claim that Joseph Ciechanover had contacted their lawyer on behalf of Prime Minister Netanyahu “in an attempt to broker a settlement of the lawsuit against BOC,” and that during the call, Ciechanover had said that “Israel’s diplomatic relationship with China was the reason that Israel had rescinded its authorization for Shaya to testify and that he had been asked by Netanyahu to try to negotiate a settlement of the case to avoid further embarrassment for Israel.”

The court issued an order to show cause why a subpoena to Ciechanover should not issue. Ciechanover responded that he was a “senior advisor to the Government of Israel” responsible for “advising and assisting the Office of the Prime Minister of Israel as needed on a range of sensitive issues affecting the State of Israel, some of which relate to Israel’s national security or diplomatic relations.” He explained that the Prime Minister’s office asked him to call counsel for the parties to ask whether they would “be amenable to an out-of-court resolution of the lawsuit—specifically, by referring the matter to arbitration.” He said that the plaintiffs’ lawyer told him he thought the Bank would not be amenable and that the call lasted less than five minutes. He claimed testimonial immunity as an agent of the Israeli government.

The court allowed the plaintiffs to propound written interrogatories to Ciechanover to determine whether or not he was an agent of the Israeli government. He answered a few but refused to answer most, and the plaintiffs moved to compel further answers or else his deposition.

The question of common law immunity was governed by Samantar v. Yousuf. The issue could have been disposed of quickly if Israel had requested a suggestion of immunity from the State Department. (Actually, Israel could have made such a request, but if it did, the State Department didn’t act on it). For a suggestion of immunity is more or less dispositive. Instead, the court had to decide for itself whether Ciechanover was asserting immunity on account of “official acts performed within the scope of his duty” and whether enforcement of the subpoena would lead to “enforcing a rule of law against the state.” The underlying question for the court is whether immunity exists under the State Department’s established policies regarding immunity.

There was little question that Ciechanover satisfied this test given the evidence. The plaintiffs suggested that in fact the government of Israel had gone out of its way to distance itself from the overture to the plaintiffs by turning to Ciechanover rather than to a governmental official. But this was unpersuasive: the call to Ciechanover had come from Israel’s National Security Advisor, and it was clear that Ciechanover was acting as Israel’s agent when he carried out the Advisor’s request and then reported back. Moreover, enforcement of the subpoena would lead to enforcement of a rule of law against Israel, since the whole point of the exercise was to look into diplomatic pressure that China supposedly had exerted on Israel. Thus the court held that Ciechanover’s testimony could not be compelled.

2 responses to “Case of the Day: Moriah v. Bank of China”

  1. A helpful reference, Ted. I was reading through the Northern District Court of California ruling in WhatsApp v NSO (Pegasus), which fleetingly referred to Moriah v Bank of China and the Wultz cases. I then happened to find your reference to the latter on your blog. The WhatsApp v NSO case raises the matter of derivative sovereign immunity. I understand that NSO has moved to the US Supreme Court for certiorari. The case involves intriguing topics such as foreign sovereigns’ national security needs and cyber intelligence. In Spain, just a few days ago, Catalan separatist leaders alleged that the Spanish government unlawfully spied on them and sued NSO over Pegasus interception software. The question of the tension between national security needs and the fundamental right of privacy has been carefully examined by the ECtHR. I hope I will be able to post something on the matter on Linkedin sometime soon.

    1. Ted Folkman

      Thanks Alessandro! I would not hold out very much hope for a cert. grant in the NSO grant, if for no other reason than the vehicle difficulties Bill Dodge noted in his recent post at the Transnational Litigation Blog. I look forward to your post on LinkedIn.

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