Court: Banks must release Sudanese funds in USS Cole lawsuit

By By LARRY NEUMEISTER 09.23.2015 news > US

NEW YORK (AP) — New York banks holding frozen Sudanese accounts must release assets to satisfy a $314 million judgment stemming from injuries to sailors in the USS Cole bombing, a federal appeals court said Wednesday.

The 2nd U.S. Circuit Court of Appeals in Manhattan rejected arguments that Sudanese officials were not properly alerted to the plaintiffs’ claims and that the assets of Sudan cannot be used to satisfy the judgment because the plaintiffs failed to get authorization from the Office of Foreign Assets Control or a statement from the Department of Justice.

A decision written by Circuit Judge Denny Chin said a 2012 default judgment by the U.S. District Court for the District of Columbia must be paid by the banks.

The ruling came in a lawsuit brought in 2010 by 15 injured sailors and three spouses. The lawsuit blamed the Oct. 12, 2000, attack on the USS Cole in Yemen on al-Qaida and Sudan, which it said provided material support to terrorists. The bombing killed 17 U.S. Navy sailors and injured dozens more.

The 2nd Circuit said it was sufficient that the lawsuit was served on the Sudanese minister of foreign affairs at the Sudanese Embassy in Washington. When no response to the lawsuit was made within 60 days, the default judgment was entered. The appeals ruling noted that Sudan failed to appear in court or contest the judgment after notification of it was sent to the Sudanese Embassy in April 2012. Sudan did not appeal until January 2014.

Although foreign states are usually immune to the jurisdiction of U.S. courts, an exception was made by Congress in 1996 so U.S. citizens could sue foreign states designed by the State Department as sponsors of terrorism.

Lawyers on each side did not immediately respond to requests for comment.

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