Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 1 of 52

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA --------------------------------------------------------------------- X SHERYL WULTZ, et al., Plaintiffs, -againstMiscellaneous Docket No.: 13-1282 (RBW)

BANK OF CHINA LIMITED, Defendant, -againstRIVKA MARTHA MORIAH, et al., Intervenors-Plaintiffs,

Civil case number 11-1266 (SAS) pending in the United States District Court for the Southern District of New York

-againstTHE STATE OF ISRAEL, Movant. --------------------------------------------------------------------- X

INTERVENOR-PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO NON-PARTY STATE OF ISRAEL’S MOTION TO QUASH SUBPOENA

THE BERKMAN LAW OFFICE, LLC Counsel for the Intervenors-Plaintiffs 111 Livingston Street, Suite 1928 Brooklyn, New York 11201 (718) 855-3627

CADWALADER, WICKERSHAM & TAFT, LLP Counsel of record to the Intervenors as to state secrets and sovereign immunity issues 700 Sixth Street, N.W. Washington, D.C. 20001 202-862-2200 One World Financial Center New York, New York 10201 212-504-6000

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 2 of 52

TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ......................................................................................................... iii PRELIMINARY STATEMENT .....................................................................................................1 BACKGROUND AND STATEMENT OF THE CASE .................................................................3 ARGUMENT ...................................................................................................................................9 I.

ISRAEL’S MOTION TO QUASH SHOULD BE TRANSFERRED TO THE SOUTHERN DISTRICT OF NEW YORK .........................................................................9

II.

ISRAEL LACKS STANDING TO QUASH THE SUBPOENA AS IT IS NOT A PARTY AND HAS NOT INTERVENED ........................................................................10

III.

EVEN IF ISRAEL HAS STANDING TO RAISE OBJECTIONS ON BEHALF OF MR. SHAYA, ITS MOTION TO QUASH WAS NOT TIMELY FILED AND SHOULD BE REJECTED .................................................................................................12

IV.

MOVANT HAS FAILED TO MEET ITS BURDEN OF SHOWING THAT SOVEREIGN IMMUNITY PRECLUDES MR. SHAYA’S DEPOSITION ....................12

V.

A.

The Voluntary Deposition of a Former Official on Matters of Public Record Is Not Entitled to Sovereign Immunity Protection ....................................13

B.

Movant Waived Any Claim to Immunity by Affirmatively Disclosing Information to Pursue its Goals Through United States Courts ............................16

THERE IS NO STATE SECRET PROTECTION APPLICABLE TO MR. SHAYA’S DEPOSITION..................................................................................................20 A.

The State Secrets Privilege Only Protects Secrets of the United States ................20

B.

Any “State Secret Privilege” Was Lost When Movant Voluntarily Disclosed to Plaintiffs the Very Information it Now Claims Is Privileged ...........23

C.

Movant’s Invocation of the State Secrets Privilege Is Facially Deficient and the Amidror Declaration Should Be Stricken .................................................27

D.

The Balance of Interests Requires the Court to Uphold the Subpoena..................28

VI.

ISRAEL LACKS STANDING TO RAISE THE 100-MILE RULE .................................31

VII.

IF THE AMIDROR DOCUMENT IS NOT STRICKEN, INTERVENORPLAINTIFFS SHOULD BE PERMITTED TO CROSS-EXAMINE AMIDROR ...........32 A.

Amidror is a “Witness” Subject to the Federal Rules of Evidence........................33

-i-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 3 of 52

B.

Fifth Amendment Due Process Entitles Plaintiffs to Cross-Examine the Government’s Affiant and Overrides Sovereign Immunity...................................35

VIII.

ISRAEL IS NOT ENTITLED TO THE BENEFITS OF COMITY IF IT IS NOT WILLING TO RECIPROCATE ........................................................................................36

IX.

ISRAEL IS BARRED BY ESTOPPEL UNDER ISRAELI LAW FROM RENEGING ON ITS COMMITMENT TO PRODUCE UZI SHAYA AND OTHER EVIDENCE IN SUPPORT OF THIS CASE ......................................................38

CONCLUSION ..............................................................................................................................40

-ii-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 4 of 52

TABLE OF AUTHORITIES PAGE(S) CASES: Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 528 F.3d 934 (D.C. Cir. 2008) .................................................................................................17 Al-Aulaqi v. Obama, 727 F. Supp. 2d 1 (D.D.C. 2010) .............................................................................................21 Baker v. Booz Allen Hamilton, Inc., 358 F. App’x 476 (4th Cir. 2009) ............................................................................................39 Bareford v. Gen. Dynamics Corp., 973 F.2d 1138 (5th Cir. 1992) .................................................................................................21 Branch v. Hempstead Cty. Mem’l Hosp., 539 F. Supp. 908 (W.D. Ark. 1982).........................................................................................36 Brault v. Town of Milton, 527 F.2d 730 (2d Cir. 1975).....................................................................................................35 Brown v. Braddick, 595 F.2d 961 (5th Cir. 1979) ............................................................................................. 10-11 Burnett v. Al Baraka Inv. & Dev. Corp., 323 F. Supp. 2d 82 (D.D.C. 2004) ...........................................................................................21 Calhoun v. Cook, 487 F.2d 680 (5th Cir 1973) ....................................................................................................36 Califano v. Yamasaki, 442 U.S. 682 (1979) .................................................................................................................36 Carey v. Bahama Cruise Lines, 864 F.2d 201 (1st Cir. 1988) ....................................................................................................39 Coffin v. Sullivan, 895 F.2d 1206 (8th Cir.1990) ..................................................................................................32 Compagnie Francaise d’Assurance Pour le Commerce Exterieur v. Phillips Petrol. Co., 105 F.R.D. 16 (S.D.N.Y. 1984) ......................................................................................... 21-22 Davis v. Alaska, 415 U.S. 308 (1974) .................................................................................................................32

-iii-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 5 of 52

PAGE(S) Dist. of Colum. v. Int’l Distrib. Corp., 331 F.2d 817 (D.C. Cir. 1964) .................................................................................................38 Ellsberg v. Mitchell, 709 F.2d 51 (D.C. Cir. 1983) ...................................................................................................20 Fotso v. Rep. of Cameroon, No. 6:12 CV 1415-TC, 2013 WL 3006338 (D. Or. June 11, 2013) ........................................15 Ghana Supply Comm’n v. New Eng. Power Co., 83 F.R.D. 586 (D. Mass. 1979) ................................................................................................22 Giraldo v. Drummond Co., 808 F. Supp. 2d 247 (D.D.C. 2011), aff’d, 493 F. App’x 106 (D.C. Cir. 2012), cert. denied, 133 S. Ct. 1637 (2013) .................................................................................. 14-15 Giraldo v. Drummond Co., 493 F. App’x 106 (D.C. Cir. 2012), cert. denied, 133 S. Ct. 1637 (2013) ..............................16 Gotlin v. Lederman, 616 F. Supp. 2d 376 (E.D.N.Y. 2009), aff’d in part, vacated in part, 483 F. App’x 583 (2d Cir. 2012) (Summary Order) ................................................................28 Guralnick v. Sup. Ct. of N.J., 747 F. Supp. 1109 (D.N.J. 1990), aff’d, 961 F.2d 209 (3d Cir. 1992).....................................36 Harries v. United States, 350 F.2d 231 (9th Cir. 1965) ...................................................................................................36 In re Edelman, 295 F.3d 171 (2d Cir. 2002).....................................................................................................31 In re Grand Jury Subpoena dated Aug. 9, 2000, 218 F. Supp. 2d 544 (S.D.N.Y. 2002)..........................................................................21, 22, 23 In re Papandreou, 139 F.3d 247 (D.C. Cir. 1998) .................................................................................................23 In re Rhodes Cos., LLC, 475 B.R. 733 (D. Nev. 2012) ...................................................................................................10 In re Sealed Case (Espy), 121 F.3d 729 (D.C. Cir. 1997) .................................................................................................23

-iv-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 6 of 52

PAGE(S) In re Sealed Case (Horn), 494 F.3d 139 (D.C. Cir. 2007) ...........................................................................................21, 26 In re United States, 872 F.2d 472 (D.C. Cir. 1989) .................................................................................................21 In re Veiga, 746 F. Supp. 2d 27 (D.D.C. 2010) ...........................................................................................28 In re Yassai, 225 B.R. 478 (Bankr. C.D. Cal. 1998) .....................................................................................10 Ins. Corp. of Hanover v. Vantage Prop. Mgmt., LLC, No. 04-1012-CV-W-SOW, 2006 WL 1131759 (W.D. Mo. Apr. 25, 2006) ............................31 Jencks v. United States, 353 U.S. 657 (1957) .................................................................................................................24 Jenkins v. Anderson, 447 U.S. 231 (1980) .................................................................................................................34 Jones v. Wildgen, 320 F. Supp. 2d 1116 (D. Kan. 2004) ......................................................................................36 Kessler v. Best, 121 F. 439 (S.D.N.Y. 1903) ............................................................................................... 22-23 Larson v. Domestic & Foreign Com. Corp., 337 U.S. 682 (1949) ...........................................................................................................13, 14 Liberian E. Timber Corp. v. Gov’t of Rep. of Liberia, 650 F. Supp. 73 (S.D.N.Y. 1986), aff’d, 854 F.2d 1314 (2d Cir. 1987) ..................................18 Lidy v. Sullivan, 911 F.2d 1075 (5th Cir. 1990) .................................................................................................32 Matar v. Dichter, 563 F.3d 9 (2d Cir. 2009) ........................................................................................................15 Molerio v. FBI, 749 F.2d 815 (D.C. Cir. 1984) ...........................................................................................21, 26 Nat’l Lawyers Guild v. Att’y Gen., 96 F.R.D. 390 (S.D.N.Y. 1982) ............................................................................. 20-21, 24, 27

-v-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 7 of 52

PAGE(S) Nevels v. Hanlon, 656 F.2d 372 (8th Cir. 1981) ...................................................................................................35 Northrop Corp. v. McDonnell Douglas Corp., 751 F.2d 395 (D.C. Cir. 1984) ..................................................................................... 21, 26-27 Odhiambo v. Rep. of Kenya, 930 F. Supp. 2d 17 (D.D.C. 2013) ...........................................................................................17 Phila. Co. v. SEC, 175 F.2d 808 (D.C. Cir. 1948), vacated & remanded as moot (per jt. stip.), 337 U.S. 901 (1949) .................................................................................................................35 Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850 (2d Cir. 1997).....................................................................................................38 Reserve Solutions, Inc. v. Vernaglia, No. 05 Civ. 8622 VM RLE, 2006 WL 1788299 (S.D.N.Y. June 26, 2006) ............................11 Richardson v. Att’y Gen. of British V.I., No. CV 2008-144, 2013 WL 4494975 (D.V.I. Aug. 20, 2013) ...............................................15 Rosenberg v. Lashkar-e-Taiba, No. 10-CV-5381 DLI CLP, 2013 WL 5502851 (E.D.N.Y. Sept. 30, 2013) ...........................15 Roviaro v. United States, 353 U.S. 53 (1957) ...................................................................................................................24 Salem Vegas, L.P. v. Guanci, No. 2:12-CV-01892-GMN, 2013 WL 5493126 (D. Nev. Sept. 30, 2013) ..............................10 Samantar v. Yousuf, 560 U.S. 305 (2010) .....................................................................................................13, 16, 17 SEC v. Tucker, 130 F.R.D. 461 (S.D. Fla. 1990) ..............................................................................................11 Siderman de Blake v. Rep. of Arg., 965 F.2d 699 (9th Cir. 1992) ....................................................................................... 17-18, 19 Smith v. Ghana Com’l Bank, Ltd., No. CIV. 10-4655 DWF/JJK, 2012 WL 2930462 (D. Minn. June 18, 2012), report & recommendation adopted, No. CIV. 10-4655 DWF/JJK, 2012 WL 2923543 (D. Minn. July 18, 2012), aff’d, No. 12-2795 (8th Cir. Dec. 7, 2012).....................................15

-vi-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 8 of 52

PAGE(S) Smith v. Socialist People’s Libyan Arab Jamahiriya, 101 F.3d 239 (2d Cir. 1996).....................................................................................................17 Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522 (1987) .................................................................................................................29 United States v. Am. Tel. & Tel. Co., 86 F.R.D. 603 (D.D.C. 1979).............................................................................................24, 27 United States v. Higginbotham, 539 F.2d 17 (9th Cir. 1976) .....................................................................................................34 United States v. Jones, 677 F. Supp. 238 (S.D.N.Y. 1988)...........................................................................................14 United States v. Reynolds, 345 U.S. 1 (1953) .....................................................................................................................21 Weiming Chen v. Ying-jeou Ma, No. 12 CIV. 5232 NRB, 2013 WL 4437607 (S.D.N.Y. Aug. 19, 2013) .................................15 Wultz v. Islamic Rep. of Iran, 755 F. Supp. 2d 1 (D.D.C. 2010), reconsidered in part, 762 F. Supp. 2d 18 (D.D.C. 2011) .............................................................................................1 Yousuf v. Samantar, 699 F.3d 763 (4th Cir. 2012), petition for cert. filed, 81 U.S.L.W. 3503 (U.S. Mar. 4, 2013) (No. 12-1078) ..........................................................................................14 Zinter Handling, Inc. v. GE Co., No. 04-CV-500, 2006 WL 3359317 (N.D.N.Y. Nov. 16, 2006) .............................................11 STATUTES & OTHER AUTHORITIES: 18 U.S.C. § 2339B .........................................................................................................................30 28 U.S.C.: § 1605(a)(1) .............................................................................................................................17 § 1746.......................................................................................................................................27

-vii-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 9 of 52

PAGE(S) Fed. R. Civ. P.: 43(c) ................................................................................................................................... 32-33 44.1...........................................................................................................................................39 45(c)(2) ....................................................................................................................................12 45(c)(3)(A) .........................................................................................................................12, 31 45(c)(3)(A)(ii) ..........................................................................................................................31 45(f)............................................................................................................................................9 45(f) advisory comm. notes (2013 Amend.) ..............................................................................9 Fed. R. Evid.: 607......................................................................................................................................33, 34 611(b) .......................................................................................................................................33 L. Civ. Rule 5.1(h)(2) ....................................................................................................................27 5 John Henry Wigmore, Evidence in Trials at Common Law § 1367 (James H. Chabourn ed., Little Brown 1974) ............................................................................................................32 8 Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. ¶ 2019 (1970) ..................... 20-21 9A Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc.: Civ. 3d § 2444 (2008 & Supp. 2013)................................................................................................................39 26 Charles Alan Wright et al., Fed. Prac. & Proc.: Evid 3d § 5665 (2008 & Supp. 2013)................................................................................................................24 Restatement (Second) of Foreign Relations Law (1965): § 66...........................................................................................................................................13 § 66 cmt. b, illus. 2...................................................................................................................13 Restatement (Third) of Foreign Relations Law § 442(1)(c) (1987) ...............................................29 Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters: art. 5 ................................................................................................................................... 37-38 art. 7 ................................................................................................................................... 37-38 art. 9 ................................................................................................................................... 37-38 art. 12 ................................................................................................................................. 37-38 Jules Epstein, Cross-Examination: Seemingly Ubiquitous, Purportedly Omnipotent, and “At Risk,” 14 Widener L. Rev. 427 (2009) .............................................................................32 Evan S. Benn, Weston Family Faces Frustration of Court Fight After Grief of Terror Bombing, Miami Herald, Aug. 22, 2013, available at http://www.miamiherald.com/2013/08/22/3580282/weston-family-facesfrustration.html.........................................................................................................................25

-viii-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 10 of 52

PAGE(S) Ronen Bergman, The Secret War With Iran: The 30-Year Clandestine Struggle Against The World’s Most Dangerous Power (Free Press 2008). ..........................................................4 Yohan Jeremy Bob, Does Israel Have a Legal Right to Block Testimony Against the Bank of China?, The Jerusalem Post, Nov. 18, 2013, at available at http://www.jpost.com/Diplomacy-and-Politics/Does-Israel-have-a-legal-right-toblock-testimony-against-the-Bank-of-China-332061 .................................................. 19, 28-29 Tova Dvorin, Shurat HaDin: Government Abandoning Terror Victims, Israel Nat’l News, Nov. 17, 2013, available at http://www.israelnationalnews.com/News/News.aspx /174102 ..............................................................................................................................18, 19 Josef Federman, Israeli Leader Faces Test in US Case Accusing Bank of China of Facilitating Militant Funding, Associated Press, Nov. 12, 2013, available at http://ca.news.yahoo.com/israeli-leader-faces-test-us-case-accusing-bank070143813.html .......................................................................................................................25 Amos Harel & Rutie Zuta, The Chinese Connection: A Jewish-American Family’s Quest to Find Those Responsible for Their Son’s Death, Haaretz, June 14, 2013, available at http://www.haaretz.com/weekend/week-s-end/1.529757 ..............................................19, 25 Charles Levinson, U.S. Court Case Tests Israeli Resolve, Wall St. J., June 21, 2013, available at http://online.wsj.com/news/articles/SB10001424127887324577904578559531016718 160............................................................................................................................................25 John Reed, Israeli Prime Minister Netanyahu Gets Flak for Yielding to China, Fin. Times, July 15, 2013, available at http://www.ft.com/cms/s/0/c99b9938-ed56-11e28d7c-00144feabdc0.html .....................................................................................................8, 18 Karl Vick, Netanyahu Accused of Favoring China Over Plaintiffs in U.S. Terrorism Case, Time, Dec. 17, 2013, available at http://world.time.com/2013/12/17/netanyahuaccused-of-favoring-china-over-plaintiffs-in-u-s-terrorism-case ..............................................5

-ix-

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 11 of 52

Intervenor-plaintiffs in this consolidated miscellaneous proceeding (the “Intervenors” and, together with the plaintiffs, “Plaintiffs”), respectfully submit this memorandum in opposition to the motion of non-party State of Israel (“Israel” or “Movant”), filed on November 15, 2013, to quash the deposition subpoena issued and served to Mr. Uzi Shaya on September 18, 2013. PRELIMINARY STATEMENT This litigation arises from several terrorist attacks in Israel which killed and injured multiple U.S. and Israeli Citizens. The core allegation is that the defendant Bank of China, Limited (“BOC”) knowingly allowed and facilitated transfers of funds on behalf of the Palestinian Islamic Jihad (“PIJ”) and Hamas, the terrorist organizations responsible for these attacks, and that BOC was negligent in failing to employ proper safeguards to prevent its wire transfer services from being used for such illicit means. See Wultz v. Islamic Rep. of Iran, 755 F. Supp. 2d 1 (D.D.C. 2010), reconsidered in part, 762 F. Supp. 2d 18 (D.D.C. 2011). The claims are proceeding in a number of interrelated cases in New York state and federal court (the “Underlying Litigation”).1 The genesis of the Underlying Litigation was information provided by the Israeli government relating to the BOC transfers, including account numbers and the names associated with those accounts, as well as dates of fund transfers and amounts of money moved. This

1

These cases include: Wultz v. Bank of China, No. 11-cv-1266 (SAS) (S.D.N.Y.); Moriah v. Bank of China 12-cv-1594 (S.D.N.Y.) (SAS); Elmaliach v. Bank of China, Index No. 102026/2009 (N.Y. Sup. Ct. N.Y. Cty.); Zamalloa v. Bank of China, Index No. 101244/2010 (N.Y. Sup. Ct. N.Y. Cty.); Rot v. Bank of China, Index No. 157475/2012 (N.Y. Sup. Ct. N.Y. Cty.); Viflic v. Bank of China, Index No. 651294/2013 (N.Y. Sup. Ct. N.Y. Cty.). The Wultz case was commenced in this Court before Chief Judge Lamberth as a claim against both BOC and Iran, but the claims against BOC were severed and transferred to the Southern District of New York. 1

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 12 of 52

information was provided by Israeli government officials to Ms. Nitsana Darshan-Leitner, an Israeli attorney who is well-known both in Israel and internationally for her representation of victims of terrorist attacks. Ms. Darshan-Leitner, together with qualified U.S. counsel, presently represents all the plaintiffs in these actions, other than the plaintiffs in Wultz v. Bank of China, No. 11-cv-1266 (SAS) (S.D.N.Y) whom she formerly represented at the time that case was filed. This information demonstrated that beginning in 2003, BOC provided extensive banking services to agents of Hamas and the PIJ, and thus knowingly enabled and facilitated the transfer of large sums of money to the Hamas terrorist leadership in Israel, the West Bank and the Gaza Strip, money that was used for planning, preparing for and executing terrorist attacks. The Israeli Government provided this information with the knowledge, hope, and expectation that it would be used by qualified counsel, on behalf of victims of terrorist attacks, to initiate civil proceedings against BOC before U.S. courts. Discussions between Ms. Darshan-Leitner and agents of the Israeli government concerning bringing civil litigation against the BOC began in approximately 2005. There were numerous meetings before the Israeli government granted permission and authorized its agents to assist with the civil actions. After several attempts at trying to convince the government of China and the BOC to close the terrorist accounts and to shut down this Hamas and PIJ funding pipeline proved unsuccessful, the Israeli government decided to utilize the U.S. courts to accomplish its objective. Encouraging and facilitating such civil proceedings became a significant part of Israel’s policy of fighting terrorism by targeting terrorist financing networks, including the specific BOC accounts used to fund the PIJ and Hamas. The information provided to Ms. Darshan-Leitner by the Israeli government was the critical link to substantiate Plaintiffs’ claims against BOC, and was at the time otherwise 2

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 13 of 52

completely unavailable to any of the parties or their counsel in the Underlying Litigation. It was subsequently set forth in numerous publicly-filed pleadings, and is summarized in Intervenors’ interrogatory responses, dated October 21, 2013, as follows: Since 2003, Nitsana Darshan-Leitner (hereinafter “Leitner”), Israeli counsel to the Plaintiffs, has attended between eighty to one-hundred meetings with Uzi Shaya and other employees of the Office of the Prime Minister of the State of Israel concerning the Bank of China’s provision of financial services to terrorist organizations. In the past two years, Leitner has met on several occasions with an attorney for the government of the State of Israel, employed by the Office of the Prime Minister of the State of Israel, to discuss coordinating the deposition testimony of Mr. Shaya. The purpose of these meetings was not to discuss the substance of Mr. Shaya’ or other agents’ testimony . . . Rather, the purpose and scope of those meetings was limited to discussing the actual conditions and circumstances surrounding Mr. Shaya’s anticipated appearance at a deposition. In June 2013, Leitner met with officials of the Ministry of Justice of the State of Israel and the Office of the Prime Minister of the State of Israel to discuss this litigation and Mr. Shaya’s anticipated testimony. That meeting focused on the assurances that Leitner had received from the Israeli government concerning Mr. Shaya’s and other agents’ testimony against the Bank of China in this litigation and the provision of evidence by Israel to establish liability. Also discussed, were the possible ways that Israel could solve the dilemma of allowing Israeli agents and former agents to testify in the Bank of China proceedings, while trying to withstand the massive diplomatic pressure being asserted by the Chinese government on Israel to prohibit the aforementioned testimony. Moriah Pls.’ Objections and Answers to Bank of China Limited’s Second Set of Interrogs., attached in full as Ex. T. BACKGROUND AND STATEMENT OF THE CASE Faced with unprecedented waves of suicide bombings and terrorist attacks being perpetrated by the Palestinian and Islamic terrorist organizations in the course of the Second

3

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 14 of 52

Intifada starting in 2000, the Israeli government initiated an official policy of vigorously acting to track, obstruct, and terminate the numerous paths and methods that the terrorist organizations, which targeted Israeli and Jewish targets worldwide, used to finance their criminal operations. According to the historian and author Dr. Ronen Bergman, the Counter-Terrorism Division in the Israeli Prime Minister’s office established a special unit charged with tracking and obstructing the terrorists’ financial operations. According to Bergman, this unit was called in Hebrew Tziltzal, (Hebrew for “Harpoon”).2 Harpoon was an official unit within Israel’s CounterTerrorism Bureau. After numerous discussions with Ms. Darshan-Leitner, the agents of the Harpoon unit recognized that civil lawsuits litigated in foreign court systems against banking and financial institutions could serve as a powerful means of deterring and obstructing terrorist financing and deterring banks from involvement with the terrorist organizations. See Decl. of Roy Cochavi (“Cochavi Decl.”), attached hereto as Ex. V, ¶¶ 2-3, 9. These suits could also impose a powerful financial deterrent on scofflaw banks engaged in transferring funds illegally, and would provide a measure of justice and compensation for the innocent victims of terrorism. Harpoon agents understood that such lawsuits, and the potential financial liability they could impose, extended their operational reach and were effective in compelling banks, such as BOC, to close existing terrorist bank accounts. Id. at ¶ 10. Ms. Darshan-Leitner worked closely with the Harpoon agents on several matters involving terrorist financing and the struggle to obstruct the movement of funds internationally. Id. Ms. Darshan-Leitner had received assurances that Harpoon agents would provide the evidence required for the successful handling of claims of this kind, including the relevant account numbers, particulars pertaining to the bank transfers via BOC, and the testimony of 2

Ronen Bergman, The Secret War With Iran: The 30-Year Clandestine Struggle Against The World’s Most Dangerous Power (Free Press 2008). 4

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 15 of 52

Israeli agents to substantiate the facts that justify the imposition of liability on the BOC. Id. at ¶¶ 12-20; see also Karl Vick, Netanyahu Accused of Favoring China Over Plaintiffs in U.S. Terrorism Case, Time, Dec. 17, 2013, available at http://world.time.com/2013/12/17/netanyahuaccused-of-favoring-china-over-plaintiffs-in-u-s-terrorism-case, attached hereto as Ex. U. Ms. Darshan-Leitner informed the Harpoon agents that legal proceedings against the BOC were likely to involve considerable financial costs and extensive effort to overcome the complex problems which were expected to emerge in the course of the handling of multiple lawsuits over an extended period of many years in a number of judicial forums. Cochavi Decl., Ex. V at ¶ 15. Also at play was and considerable emotional investment by the individual plaintiffs, the innocent victims of the underlying terrorist attacks. Ms. Darshan-Leitner informed the Harpoon agents that she and her co-counsel colleagues could not afford to embark on a costly, complex, and protracted legal proceeding against the BOC, and did not wish to create false expectations on the part of the plaintiffs for the successful prosecution of the claims, if ultimately they were compelled to withdraw the claims or lose them by reason of the lack of admissible evidence required to establish the liability of the BOC. Id. Ms. Darshan-Leitner made it quite clear to the Israeli government that in the event of their being forced to withdraw the claims, or even in the event of losing the suits due to lack of evidence, there could be significant consequences for the plaintiffs and their counsel. Id. Ms. Darshan-Leitner made clear to the Israeli government that providing plaintiffs’ attorneys with the evidence that they required was a condition precedent for filing suit against BOC and that this requirement was insisted upon by both Ms. Darshan-Leitner and her cocounsel, and by the would-be plaintiffs, in view of the fact that these plaintiffs were victims of terrorism or families of victims, and as such had already undergone significant suffering. She

5

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 16 of 52

warned the Israeli government that there was no justification for pointlessly aggravating their wounds and fostering vain hopes which could not be realized. Id. Harpoon agents promised to confer on the matter with their superiors and to give a substantive response following extensive examination of all aspects of the matter by the relevant governmental bodies. The Harpoon agents subsequently returned to Ms. Darshan-Leitner and informed her that following consideration of the matter by the competent authorities in the Prime Minister’s office, they had concluded that plaintiffs’ conditions were acceptable. Id. at ¶ 17. At the first stage the Israeli Government agreed to provide particulars concerning the relevant bank accounts and certain bank transactions. Id. at ¶ 20. It would later provide the testimony of an intelligence agent, Uzi Shaya, to substantiate the alleged facts. Id. at ¶ 22-23. In reliance on, and exclusively by reason of this official undertaking, Ms. DarshanLeitner and her U.S. co-counsel, commenced the filing of the suits against BOC in various appropriate jurisdictions on behalf of her numerous terrorist victim clients. Id. at ¶ 20. Suits were filed in the names of dozens of victims, families of victims and relatives of victims, all of whom had been harmed in attacks perpetrated by Hamas and the PIJ. Id. Israel has been an active participant and a facilitator in the preparation of the Underlying Litigation from the beginning. Indeed, Israel instigated and encouraged this litigation, and without the specific information that Israel provided to Ms. Darshan-Leitner, including the account numbers for the accounts at issue, the Underlying Litigation could not have and never would have started. Moreover, had Ms. Darshan-Leitner not been promised the full support and continuous cooperation of the Israeli government that she absolutely insisted upon before commencing the Underlying Litigation, the lawsuit would not have been brought. As such, at every stage of these civil actions, over a period of more than six years including pre-filing

6

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 17 of 52

investigations, Ms. Darshan-Leitner met with and updated agents of the Israeli government concerning their development and progress. After the Wultz and Elmaliach cases had been commenced, and the defendant BOC moved to dismiss, Israel authorized Shlomo Matalon, a former Department Head in the Office of the Prime Minister, to provide a declaration substantiating the claims asserted in this case. Id. at ¶ 20. With the full advance knowledge of the Israeli government, the Matalon declaration was prepared and executed and publicly filed in opposition to BOC’s motion to dismiss. See Decl. of Shlomo Matalon, May 16, 2009 (“Matalon Decl. of 2009”), attached hereto as Ex. B. Thus, Israel has been an active participant in this litigation from before its inception, and has provided crucial information that has brought the case to its present phase. The Underlying Litigation has now arrived at the point where facts conveyed sotto voce or in a declaration will not suffice, and it is necessary to substantiate the factual allegations by the live testimony of a witness with first-hand knowledge. That witness, upon information and belief, is Uzi Shaya. Ms. Darshan-Leitner has met with attorneys from Israel’s National Security Council and negotiated the terms and safeguards required for Mr. Shaya to be enabled to appear for a deposition on behalf of the plaintiffs in these actions. Id. at ¶ 22-24. Following the conclusion of an agreement with the National Security Council, Mr. Shaya himself sent a letter to counsel for the parties to the Underlying Litigation on March 20, 2013, outlining the terms and safeguards that he required in order to testify. See Letter from Uzi Shaya, Mar. 20, 2013 (the “1st Shaya Letter”), attached hereto as Ex. E. Essentially, Mr. Shaya’s stated position is that if he is permitted to appear and testify he would do so under the active supervision of the Southern District of New York under conditions ensuring that the scope of the deposition does not stray beyond what was agreed upon between Ms. Darshan-Leitner and the attorneys of the National 7

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 18 of 52

Security Council See id.; Order of Shira A. Scheindlin, Nov. 15, 2013, Wultz v. Bank of China, No. 1:11-cv-01266 (SAS) (S.D.N.Y.), Dkt. No. 394 (“Scheindlin Order”) (setting terms and conditions for Mr. Shaya’s testimony). Thus, until very recently, Ms. Darshan-Leitner’s interlocutors in the Israeli government agreed that Mr. Shaya could testify, albeit with certain restrictions. Unfortunately, in recent months, elements within the Israeli government have had a change of heart, apparently due to extreme diplomatic pressure from the Chinese government that this case against BOC—which is owned by the Chinese government—be made to “go away.” See John Reed, Israeli Prime Minister Netanyahu Gets Flak for Yielding to China, Fin. Times, July 15, 2013, available at http://www.ft.com/cms/s/0/c99b9938-ed56-11e2-8d7c-00144feabdc0.html, attached hereto as Ex. I. Now, at the eleventh hour, the information that Mr. Shaya was slated to testify about has been deemed a matter of national security—notwithstanding that this same information was already revealed to Ms. Darshan-Leitner, publicly disclosed in the Matalon Declaration, see Ex. B, has received wide-spread media coverage internationally since the commencement of the Underlying Litigation, and relates to wire transfers that took place between five and ten years ago, accounts that have since been closed, and an “operation” that has long since ended. Concerned that Mr. Shaya was being pressured not to testify, on September 18, 2013 counsel for the Wultz plaintiffs served him with a subpoena when he was traveling in Washington, D.C. See State of Israel’s Mot. to Quash, Dkt. No. 1 (hereinafter, “Mov. Br.”), Ex. A. Upon agreement between the Wultz’ and BOC’s counsel and Judge Scheindlin, the deposition location was moved to New York, to be conducted in Judge Scheindlin’s courtroom, with Judge Scheindlin herself presiding. See Scheindlin Order, supra. Upon information and belief Mr. Shaya still personally agrees to testify at the deposition. Tellingly, he has not moved to quash the subpoena, and indeed has not raised any formal 8

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 19 of 52

objection to appearing in any forum. The State of Israel has, however, filed a motion to quash, notwithstanding that it is not a party to this case, is not affected by the subpoena, and has not moved to intervene in this proceeding. This Court subsequently stayed the deposition, pending the disposition of the State of Israel’s motion. See Dkt. No. 5. ARGUMENT I.

ISRAEL’S MOTION TO QUASH SHOULD BE TRANSFERRED TO THE SOUTHERN DISTRICT OF NEW YORK Under the new Federal Rule of Civil Procedure 45(f), which took effect on December 1,

2013, this Court should transfer Israel’s motion to quash to the Southern District of New York. The new Rule 45(f) provides: Transferring a Subpoena-Related Motion. When the court where compliance is required did not issue the subpoena, it may transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances. Fed. R. Civ. P. 45(f); see also Fed. R. Civ. P. 45(f) advisory comm. notes (2013 Amend.) (“Rule 45(f) provides authority for the court where subpoena-related motions are made to transfer the motion to the court where the action is pending”). Judge Scheindlin in the Southern District of New York has presided over and closely supervised the Wultz and Moriah cases, which are consolidated for discovery purposes, for years. She has written 15 opinions in this case and is deeply involved with all aspects of discovery. For the proposed deposition of Mr. Shaya, as planned prior to this Court’s stay, Judge Scheindlin was to provide her courtroom and her personal supervision, as well as carefully delineated parameters including who may access the proceeding and how long each party would be entitled to pose questions. See Scheindlin Order, supra. These measures ensure that the questioning does not stray into inappropriate matters. For these reasons and those stated in Intervenors’ separately 9

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 20 of 52

filed motion dated December 2, 2013, seeking transfer of this proceeding to the Southern District of New York, see Dkt. Nos. 13, 16, the Court should transfer Israel’s motion to quash for disposition by Judge Scheindlin. II.

ISRAEL LACKS STANDING TO QUASH THE SUBPOENA AS IT IS NOT A PARTY AND HAS NOT INTERVENED A party that objects to a subpoena but is not itself a party to the litigation or to the

subpoena must move to intervene if it wishes to quash the subpoena. Salem Vegas, L.P. v. Guanci, No. 2:12-cv-01892-GMN, 2013 WL 5493126, at *1 (D. Nev. Sept. 30, 2013) (holding that a former party could not move to quash a subpoena that it was not subject to); In re Yassai, 225 B.R. 478, 480-81 (Bankr. C.D. Cal. 1998) (“If the drafters of the FRCP had intended FRCP 45(c)(3)(A) to apply to parties who are not directly subject to the subpoena, they would have so stated.”) (tentatively distinguishing between motions brought pursuant to Rule 45(c)(3)(A) and Rule 45(c)(3)(B)3); In re Rhodes Cos., LLC, 475 B.R. 733, 739-40 (D. Nev. 2012) (same) (holding that even a party cannot move to quash a subpoena under Rule 45(c)(3)(A) where the party is not “subject to subpoena”); Brown v. Braddick, 595 F.2d 961, 967 (5th Cir. 1979) (“The moving party has not carried its burden. First, one of the persons subpoenaed, Grainger, is not a party to the interference proceeding and has not joined in the request for a stay. Braddick and Lindsey do not have standing to raise the issue of Grainger’s amenability to the compulsory process of the district court since they are not in possession of the materials subpoenaed and have 3

Plaintiffs disagree with the scope of the Yassai Court’s distinction between motions brought pursuant to Rule 45(c)(3)(A) and Rule 45(c)(3)(B) and believe that a nonparty movant that seeks to protect the interests of another lacks standing under either statute. But further discussion of that issue is unnecessary here, given that it is clear that Israel has moved pursuant only to Rule 45(c)(3)(A). While the motion itself refers to simply “Federal Rule of Civil Procedure 45(c)(3),” (Mov. Br. at 1), its memorandum in support has numerous citations to Rule 45(c)(3)(A) and no citations to Rule 45(c)(3)(B). (See Mov. Br. at 15 (“The language of Rule 45 is mandatory….”), 21-23). 10

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 21 of 52

not alleged any personal right or privilege with respect to the materials subpoenaed”) (emphasis added); see also SEC. v. Tucker, 130 F.R.D. 461, 462 (S.D. Fla. 1990) (reaching the same result under Rule 26(c)). Israel lacks standing to move to quash the subpoena and its attempt to do so must be denied. Israel claims support for the contrary position in primary reliance on an unpublished decision from the Northern District of New York, Zinter Handling, Inc. v. GE Co., No. 04-cv500, 2006 WL 3359317, at *2 (N.D.N.Y. Nov. 16, 2006), which stated, without any analysis, that a nonparty has standing to quash a subpoena whenever that nonparty has an “interest in the privacy and confidentiality” of the documents requested to be produced. Zinter Handling, in turn, relies on just one case: another unreported decision, Reserve Solutions, Inc. v. Vernaglia, No. 05 CIV. 8622 VM RLE, 2006 WL 1788299, at *2 (S.D.N.Y. June 26, 2006). Moreover, Zinter Handling badly misapplied Reserve Solutions. The latter case held that a party has standing to move to quash a subpoena when it has a “personal privacy right” in the records being sought. It should be obvious that a party may have standing to quash where a nonparty would not. Yet Zinter Handling applied Reserve Solutions as if unaware of the fact that the cases were dramatically different. Further, even if Zinter Holder were correct—it is not, as Intervenors’ cases cited supra make clear—a rule that permits a nonparty to object to the surrender of documents that it has an interest in cannot be extended to permit a nonparty to prevent another nonparty from testifying entirely about his personal knowledge. For these reasons and those stated in Intervenors’ separately filed motion dated December 2, 2013, seeking to strike Israel’s motion to quash for lack of standing since it has not intervened, see Dkt. Nos. 13, 16, the Court should deny Israel’s motion to quash.

11

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 22 of 52

III.

EVEN IF ISRAEL HAS STANDING TO RAISE OBJECTIONS ON BEHALF OF MR. SHAYA, ITS MOTION TO QUASH WAS NOT TIMELY FILED AND SHOULD BE REJECTED Rule 45(c)(2) provides that an “objection [to a subpoena] must be served before the

earlier of the time specified for compliance or 14 days after the subpoena is served.” Fed. R. Civ. P. 45(c)(2). Rule 45(c)(3), however, applies, on its terms, only upon “timely motion.” Fed. R. Civ. P. 45(c)(3)(A). The Shaya subpoena was served on September 18, 2013 and required Mr. Shaya’s appearance on November 25, 2013. (Mov. Br., Ex. A.) Accordingly, Mr. Shaya had 14 days—until October 2, 2013—to object to the subpoena. The story of Mr. Shaya’s being served with a subpoena appeared prominently in the Israeli media and Israel was fully aware that it had occurred. As such, even if Israel had authority to stand in Mr. Shaya’s shoes and raise an objection on his behalf (a doubtful proposition), it had until October 2 to do so. But Israel did not file or serve the instant motion to quash until November 15, 2013—44 days late. Its motion must be denied as untimely. IV.

MOVANT HAS FAILED TO MEET ITS BURDEN OF SHOWING THAT SOVEREIGN IMMUNITY PRECLUDES MR. SHAYA’S DEPOSITION Movant contends that the subpoena must be quashed because Mr. Shaya has testimonial

immunity as a former foreign government official. See Mov. Br. at 6. This argument is misplaced. The question here is whether the sovereignty of Israel is somehow violated if a federal court permits the voluntary deposition of a former official concerning matters of public record. None of Israel’s cases address that question. Movant glosses over key facts that make clear that this case does not concern Israel’s sovereignty, and implicates neither statutory nor common law sovereign immunity doctrine. The immunity shield is also inappropriate here because Israel has affirmatively directed the information sought through Mr. Shaya’s deposition

12

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 23 of 52

into publicly-filed pleadings in U.S. courts for the purpose of supporting this litigation, waiving any claim to immunity that it might otherwise have had. A.

The Voluntary Deposition of a Former Official on Matters of Public Record Is Not Entitled to Sovereign Immunity Protection

Movant’s sovereign immunity is not implicated here because allowing Mr. Shaya to testify voluntarily will require Movant neither to take any action, nor pay any money. Claims of sovereign immunity based on the conduct of former foreign officials like Mr. Shaya are governed exclusively by common law, and are narrower in scope than status-based immunities. See Samantar v. Yousuf, 560 U.S. 305, 320, 325 (2010). Conduct-based immunity extends to state officials and applies “with respect to acts performed in [their] official capacity if the effect of exercising jurisdiction would be to enforce a rule of law against the state.” Id. at 322 (quoting Restatement (Second) of Foreign Relations Law § 66 (1965) (internal punctuation omitted). The Restatement clarifies that claims against officials enforce a rule of law against the state when enforcing the judgment on such claims would compel or enjoin state action or cause the state to pay damages. See id. § 66 cmt. b, illus. 2; accord Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 687 (1949). Israel is not a party to this litigation. See Letter from John Bellinger, Attorney for Movant, to Robert Tolchin, Attorney for the Moriah plaintiffs (Dec. 4, 2013), Ex. A. Israel is not being asked by this Court or by the Southern District of New York to do anything. Israel offers no authority for the proposition that its sovereign immunity is somehow challenged by a deposition subpoena to a willing foreign subject (a private party not presently employed by the State) to appear for a deposition. Mr. Shaya is not a party to this litigation, and is no longer an employee or officer of Israel. Nothing about his voluntary deposition touches on Israel’s sovereignty. 13

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 24 of 52

The Plaintiffs seek to depose Mr. Shaya regarding facts in the public domain, so the subpoena for his deposition cannot be seen as a proxy for eliciting testimony from Israel or causing Israel to relinquish vital information that belongs to it. Courts allow suit against government officials to proceed as long as “[t]he judgment sought will not require action by the sovereign or disturb the sovereign’s property.” Larson, 337 U.S. at 687 (1949) (noting that the question of immunity turns on whether a suit seeking either damages or specific relief from an official will cause the state to pay those damages or compel the state to provide that specific relief). Information in the public domain is not as a rule property of a state. See, e.g., United States v. Jones, 677 F. Supp. 238, 241 nn.3-4 (S.D.N.Y. 1988). The subject of Mr. Shaya’s deposition was duly made public by Movant through its Harpoon agents and the authorized declaration its former officer, Shlomo Matalon. See Matalon Decl. of 2009, Ex. B ¶ 8. Already having allowed this information to become public, Israel has relinquished its legal interest in it. The inappropriateness of immunity in this context is confirmed by the fact that there has been no suggestion of immunity (“SOI”) from the State Department. While the view of the State Department regarding foreign official immunity would not be dispositive either way, see Yousuf v. Samantar, 699 F.3d 763, 773 (4th Cir. 2012), petition for cert. filed, 81 U.S.L.W. 3503 (U.S. Mar. 4, 2013) (No. 12-1078), the lack of an SOI at this point in the proceeding is consistent with Intervenors’ position that Israel’s sovereignty is not implicated by the proposed deposition of Mr. Shaya. Movant has pointed to no cases extending the doctrine of foreign sovereign immunity to quash the voluntary deposition of a former official in the absence of an SOI. All cases cited by Movant in support of its position are readily distinguishable. In Giraldo v. Drummond Co., 808 F. Supp. 2d 247 (D.D.C. 2011), aff’d, 493 F. App’x 106 (D.C. Cir. 2012), cert. denied, 133 S. Ct. 1637 (2013), a case that Movant calls “strikingly similar”, see Mov. Br. at 6, this Court 14

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 25 of 52

disallowed the compelled testimony of the former President of Colombia, Alvaro Uribe, regarding alleged war crimes that he may have known about or even sanctioned while in office. 808 F. Supp. 2d at 248. Unlike here, the information sought was not in the public domain, Uribe vigorously challenged the subpoena, and he could have faced personal civil exposure in a subsequent action if the court determined that he was not immune from suit. Id. at 248-49. Also, in that matter the State Department had issued an SOI taking the position that Uribe was immune. See id. at 249-50. And even in those circumstances, the Court drew the contours of the immunity carefully, suggesting that Uribe could be deposed regarding “information unrelated to acts taken or obtained in [his] official capacity.” Id. at 251. This reticence to apply sovereign immunity too liberally is particularly appropriate here because the mere provision of testimony is materially different from the risk of a rule of law being enforced against a sovereign. Movant’s other cases present circumstances likewise distinct from the facts at bar. See Richardson v. Att’y Gen. of British V.I., No. CV 2008-144, 2013 WL 4494975 (D.V.I. Aug. 20, 2013) (suit against current official, who was a named defendant); Weiming Chen v. Ying-jeou Ma, No. 12 CIV. 5232 NRB, 2013 WL 4437607 (S.D.N.Y. Aug. 19, 2013) (same) , reconsidered in part, 762 F. Supp. 2d 18 (D.D.C. 2011); Smith v. Ghana Com’l Bank, Ltd., No. CIV. 10-4655 DWF/JJK, 2012 WL 2930462 (D. Minn. June 18, 2012), report & recommendation adopted, No. CIV. 10-4655 DWF/JJK, 2012 WL 2923543 (D. Minn. July 18, 2012), aff’d, No. 12-2795 (8th Cir. Dec. 7, 2012) (same); Fotso v. Rep. of Cameroon, No. 6:12 CV 1415-TC, 2013 WL 3006338 (D. Or. June 11, 2013) (same); Rosenberg v. Lashkar-e-Taiba, No. 10-CV-5381 DLI CLP, 2013 WL 5502851 (E.D.N.Y. Sept. 30, 2013) (finding in that context that the State Department’s SOI was dispositive and surrendering jurisdiction); Matar v. Dichter, 563 F.3d 9, 15 (2d Cir. 2009) (same). That Movant fails to cite a case on point is unsurprising, because the

15

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 26 of 52

facts and circumstances surrounding the voluntary deposition of Mr. Shaya simply do not implicate Movant’s sovereignty. This Court should exercise its discretion and find no immunity because Mr. Shaya is willing to provide testimony, and Israel’s sovereign interests are not involved in any way. Movant contends that a presumption of testimonial immunity applies even in the absence of an SOI. See Mov. Br. at 13. The Supreme Court expressly rejected this approach and endorsed the long-standing common law rule that, “in the absence of recognition of the immunity by the Department of State, a district court had authority to decide for itself whether all the requisites for such immunity exist[].” Samantar, 560 U.S. 305 at 311. In support of its position, Movant posits that “in the absence of contrary guidance from the Executive branch, a district court may properly dismiss a suit against a foreign official if the suit challenges acts taken exercising the powers of the official’s office.” See Mov. Br. at 13 (quoting the brief for the United States as Amicus Curiae Supporting Appellee in Giraldo v. Drummond Co., 493 F. App’x 106 (D.C. Cir. 2012), cert. denied, 133 S. Ct. 1637 (2013) (emphasis added by Movant). But even this statement supports the position that immunity is not appropriate here, because nothing in the subpoena for Mr. Shaya’s deposition—nor indeed in the Underlying Litigation—“challenges acts” of either Mr. Shaya or the Israeli government. Israel’s sovereignty is simply not implicated on these facts. B.

Movant Waived Any Claim to Immunity by Affirmatively Disclosing Information to Pursue its Goals Through United States Courts

Sovereign immunity does not apply in case, and Movant has waived any claim that it does by affirmatively disclosing the information on which Mr. Shaya would be deposed in order to pursue its fight against terrorist financing through the U.S. courts. Movant intentionally benefitted from the commencement of the Underlying Litigation as a means to target specific

16

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 27 of 52

BOC accounts used to fund the PIJ and Hamas. Indeed, the Hamas and PIJ bank accountants were only closed after plaintiffs filed the instant civil actions against BOC. Waiver applies where a foreign state has taken an act that objectively can be interpreted as exhibiting intent to waive immunity, or that forfeits its right to immunity, irrespective of whether it has intended to do so. See Smith v. Socialist People’s Libyan Arab Jamahiriya, 101 F.3d 239, 243 (2d Cir. 1996) (“Congress primarily expected courts to hold a foreign state to an implied waiver of sovereign immunity by the state’s actions in relation to the conduct of litigation”).4 This Court has recognized that waiver may be appropriate where based on acts by the foreign state related to the “conduct of litigation.” Odhiambo v. Rep. of Kenya, 930 F. Supp. 2d 17, 24 (D.D.C. 2013) (recognizing implied waiver per Smith, but declining to find waiver on the facts) (citing Smith, 101 F.3d at 244). Thus, a sovereign waives its immunity when it enlists the involvement of courts in the United States in matters related to the litigation in which the state has asserted immunity. See Siderman de Blake v. Rep. of Arg., 965 F.2d 699, 721 (9th Cir. 1992). In Siderman, a case cited favorably in this Circuit, e.g. Agudas Chasidei Chabad of U.S. v. Russian Fed., 528 F.3d 934, 941-42 (D.C. Cir. 2008), Argentina had requested the assistance of a state court in order to serve process on the plaintiff in connection with criminal proceedings against the plaintiff pending in Argentina. Siderman de Blake, 965 F.2d at 722. The court concluded that this evidenced a waiver of immunity with respect to Siderman’s claims of 4

Smith was decided under the FSIA. Prior to the Supreme Court’s 2010 decision in Samantar, most courts analyzed sovereign immunity claims under the Foreign Sovereign Immunities Act (“FSIA”), which provides for waiver where “the foreign state has waived its immunity either explicitly or by implication . . . .” 28 U.S.C. § 1605(a)(1). While FSIA cases may be instructive, Plaintiffs are not limited to the narrowly applied categories of waiver traditionally recognized under the FSIA, see Samantar, 560 U.S at 325, nor has Movant argued that they are. 17

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 28 of 52

persecution, reasoning that the waiver was implied from Argentina’s use of U.S. courts in connection with the conduct for which Siderman sought redress. Id.; see also Liberian E. Timber Corp. v. Gov’t of Rep. of Liberia, 650 F. Supp. 73, 76 (S.D.N.Y. 1986) (holding that Liberia waived its claim of immunity because it “clearly contemplated the involvement of the courts of any of the Contracting States, including the United States” when it signed onto the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States), aff’d, 854 F.2d 1314 (2d Cir. 1987). Movant waived any immunity from process of U.S. courts in connection with the Underlying Litigation when it affirmatively sought to use the Plaintiffs as proxies in an effort to shut down BOC accounts involved in financing terrorist attacks within its borders. This was a critical part of Movant’s national security strategy. See Ex. V (Cochavi Decl.), ¶¶ 6, 10; In fact, it was the only option remaining to stop the flow of funds to terrorists through BOC. Direct talks with the Chinese government, BOC’s owner, had failed to bring about the accounts’ closure. See Ex. B (Matalon Decl. of 2009) ¶ 9. BOC has no presence in Israel against which Movant could take action. The most direct and effective route to closing the terrorist-linked accounts was through a civil suit in the U.S.. Movant effectively initiated the Underlying Litigation when it approached the victims of several terror attacks and asked them to bring legal claims against BOC under U.S. anti-terrorism laws. See Ex. V (Cochavi Decl.), ¶¶ 10-11. Movant made no secret of its aim to impede terrorist financing by supporting civil actions in U.S. courts.5 It wanted the BOC accounts closed at all costs. 5

See Tova Dvorin, Shurat HaDin: Government Abandoning Terror Victims, Israel Nat’l News, Nov. 17, 2013, available at http://www.israelnationalnews.com/News/News.aspx/174102, attached as Ex. H; John Reed, Israeli Prime Minister Netanyahu Gets Flak For Yielding to China, Ex. I. 18

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 29 of 52

In filing lawsuits naming BOC as a defendant, Plaintiffs relied entirely on information provided by Movant about the involvement of BOC accounts in funding PIJ and Hamas, information which was not otherwise available. Id. at ¶ 11. As a result, before filing, Plaintiffs had insisted on promises from Movant that it would provide evidentiary support as needed throughout the case. The decision to provide those promises was made at the highest levels of the Israeli government.6 Movant also initially agreed to provide plaintiffs with access to Mr. Shaya, although it later reneged on this promise. Matalon Decl. of 2009, Ex. B. 7 By enlisting both American and Israeli plaintiffs to file this claim and further Movant’s goals in fighting terrorism, and by providing material assistance to the Underlying Litigation, Movant “not only envisioned United States court participation . . . but by its actions deliberately implicated [United States courts by soliciting such participation].” Siderman de Blake, 965 F.2d at 721-22. Movant received the benefit of its bargain shortly after the commencement of the Underlying Litigation when the BOC accounts in question were closed.8 It should not be allowed at this late date to go back on its promise and stop Mr. Shaya’s deposition from going forward.

6

See Tova Dvorin, Shurat HaDin: Government Abandoning Terror Victims, Ex. H; Karl Vick, Netanyahu Accused of Favoring China Over Plaintiffs in U.S. Terrorism Case, Ex. U. 7 See also Yohan Jeremy Bob, Does Israel Have a Legal Right to Block Testimony Against the Bank of China?, The Jerusalem Post, Nov. 18, 2013, at http://www. jpost.com/Diplomacy-and-Politics/Does-Israel-have-a-legal-right-to-block-testimony-againstthe-Bank-of-China-332061, attached as Ex. J. 8 See Amos Harel & Rutie Zuta, The Chinese Connection: A Jewish-American Family’s Quest to Find Those Responsible For Their Son’s Death, Haaretz, June 14, 2013, available at http://www.haaretz.com/weekend/week-s-end/1.529757, attached as Ex. M (stating that accounts were in use through 2008). 19

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 30 of 52

V.

THERE IS NO STATE SECRET PROTECTION APPLICABLE TO MR. SHAYA’S DEPOSITION No United States court has ever extended the state secrets privilege, in the name of

comity or otherwise, to protect the alleged state secrets of a foreign sovereign. The privilege has only been invoked by the U.S. executive to safeguard domestic national security and has been honored by the courts out of the principle of separation of powers, a duty courts do not owe to foreign governments. Moreover, any state secrets privilege that might otherwise exist is nullified when the information at issue is voluntarily publicized by the state, as has been done by Movant in this case. Plaintiffs appreciate that governments require a degree of protection from disclosure of secret information that is vital to anti-terrorism efforts, and agree that all responsible nations should be able to fight terrorism without compromising their national security or the security of individual officers. In this case, however, there is no risk of breaching these principles because the substance of the information about which Mr. Shaya would testify is already in the public record. Because the aim of the Shaya deposition is solely to verify public information, and because doing so is indispensable to plaintiffs’ case, the motion to quash must be denied. A.

The State Secrets Privilege Only Protects Secrets of the United States

The state secrets privilege is not implicated by the subpoena for Mr. Shaya’s deposition because the privilege does not protect the secrets of foreign sovereigns. The state secrets privilege is a common law evidentiary rule that may be invoked by the “United States . . . [in order to] block discovery in a lawsuit of any information that, if disclosed, would adversely affect national security.” Ellsberg v. Mitchell, 709 F.2d 51, 56 (D.C. Cir. 1983); see also Nat’l Lawyers Guild v. Att’y Gen., 96 F.R.D. 390, 394-95 (S.D.N.Y. 1982) (“The state secrets privilege . . . protects information not officially disclosed to the public concerning the national defense or the international relations of the United States.”) (quoting 8 Charles Alan Wright &

20

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 31 of 52

Arthur R. Miller, Fed. Prac. & Proc. ¶ 2019 at 158 (1970)). The privilege should not be invoked lightly. United States v. Reynolds, 345 U.S. 1, 7 (1953). To extend the state secrets privilege to a foreign nation would be novel. See In re Grand Jury Subpoena dated Aug. 9, 2000, 218 F. Supp. 2d 544, 560 (S.D.N.Y. 2002). Movant admits that no U.S. court has allowed a foreign government to assert the state secrets privilege, see Mov. Br. at 17, n.9, and Intervenors have found none. Indeed, nearly every case cited by Movant involves an invocation of the privilege by the United States or one of its agencies. See Northrop Corp. v. McDonnell Douglas Corp., 751 F.2d 395 (D.C. Cir. 1984) (Department of Defense); In re United States, 872 F.2d 472 (D.C. Cir. 1989) (Attorney General); Reynolds, 345 U.S. 1 (U.S. Air Force); Al-Aulaqi v. Obama, 727 F. Supp. 2d 1 (D.D.C. 2010) (President, Secretary of Defense, and Director of the CIA); In re Sealed Case (Horn), 494 F.3d 139 (D.C. Cir. 2007) (United States); Molerio v. FBI., 749 F.2d 815 (D.C. Cir. 1984) (same); Burnett v. Al Baraka Inv. & Dev. Corp., 323 F. Supp. 2d 82 (D.D.C. 2004) (same); Bareford v. Gen. Dynamics Corp., 973 F.2d 1138 (5th Cir. 1992) (same). Very good reasons support the general refusal of U.S. courts to recognize a state secrets privilege for foreign governments. First, the purpose of the privilege is to protect U.S. national security. See In re Sealed Case (Horn), 494 F.3d at 142 (disclosure must be “inimical to the national security”). As in this case, disclosure of a purported “state secret” of a foreign government would not be so generally inimical to U.S. national security as to justify a per se rule imposing such an absolute privilege. Reynolds, 345 U.S. at 7. Second, the legal basis for the privilege is rooted in separation of powers—something not implicated here. See In re Grand Jury Subpoena, 218 F. Supp. 2d at 553; Compagnie Francaise d’Assurance Pour le Commerce Exterieur v. Phillips Petrol. Co., 105 F.R.D. 16, 25 (S.D.N.Y. 1984) (rejecting assertion of the state secrets privilege over information affecting international relations of France as outside the 21

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 32 of 52

privilege’s scope, and noting that the “state secrets privilege . . . should be narrowly construed to permit the broadest possible discovery consistent with the purposes of the privilege . . . [which is] premised on a concern that any release of confidential government information to a coordinate and equal branch of government would offend the principle of separation of powers and be detrimental to the public interest”). In In re Grand Jury Subpoena, the Southern District of New York expressly rejected an assertion of the privilege by a foreign government, noting that “the contours of the privilege for state secrets are narrow, and have been so defined in accord with uniquely American concerns for democracy, openness, and separation of powers.” 218 F. Supp. 2d at 560. As that Court reasoned, it “makes little sense” to afford state secrets protection to foreign governments, because there is no separation of powers concern between the United States judiciary and foreign sovereigns. Id. Both the purpose and legal underpinnings of the state secrets privilege make clear that it is not available to a foreign sovereign in U.S. courts. Movant asserts that certain decisions of U.S. courts, while not finding that the privilege applies to foreign sovereigns, have assumed that it does. Mov. Br. at 17, n.9. But these cases provide Movant no help. For example, in Ghana Supply Commission v. New England Power Co., 83 F.R.D. 586, 590 (D. Mass. 1979), the court did not even consider a claim of state secrets privilege, but rather considered Ghana’s claim to executive privilege and concluded that the government had “waived any privilege it might have otherwise had to prevent disclosure of information” by instituting the lawsuit through the Ghana Supply Commission, which the Court found to be an agent of the Ghanian government. Id. at 592, 594.9

9

Movant also cites Phillips Petroleum, in which the court in fact refused to extend the privilege to the French government, 105 F.R.D. at 25, and Kessler v. Best, a case that predates by fifty years the Supreme Court’s definitive establishment of the contours of the state secrets 22

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 33 of 52

Movant’s appeal to comity must also be rejected. It argues that In re Papandreou, 139 F.3d 247, 254 (D.C. Cir. 1998), and In re Grand Jury Subpoena, 218 F. Supp. 2d at 553 demonstrate that it is entitled to assert the state secrets privilege to the same extent as the U.S. executive. See Mov. Br. at 16-17. This claim is unavailing because neither case cited actually considered the question. In re Papandreou was decided on the basis of diplomatic immunity, which the court observed “has special characteristics beyond those of ordinary privilege.” 139 F.3d at 251. The matter did not implicate claims of state secrets, and the court in any case was willing to allow the depositions upon a showing of need. See id. at 250. In re Grand Jury Subpoena is even less favorable to Movant’s claim. To the extent that case considered comity, it did so in dicta in the context of a claim to executive privilege that it ultimately rejected. 218 F. Supp. 2d at 552 (quoting In re Sealed Case (Espy), 121 F.3d 729, 737 (D.C. Cir. 1997)). And as noted above, the Grand Jury Subpoena court expressly rejected the notion that a foreign sovereign can avail itself of the state secrets privilege, observing that no U.S. court has ever expanded the privilege beyond the executive branch of the United States. Id. at 559-60. Movant points to no court in which a foreign government has successfully asserted a state secrets privilege, pursuant to comity principles or otherwise, and provides no reason why this Court should be the first to do so. B.

Any “State Secret Privilege” Was Lost When Movant Voluntarily Disclosed to Plaintiffs the Very Information it Now Claims Is Privileged

Apart from the fact that Movant holds no state secrets privilege to begin with, it waived and destroyed any claim to such a privilege when it affirmatively disclosed the very information that Plaintiffs seek to discover through Mr. Shaya’s deposition. Mr. Shaya has personal privilege, and addressed a claim of “privilege[] by statute and by treaty”—neither of which are relevant here. 121 F. 439, 439 (S.D.N.Y. 1903). 23

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 34 of 52

knowledge of those facts. The purpose of his deposition is not to discover additional evidence, but merely to obtain his first-hand account of facts already in the record in order to overcome potential hearsay challenges. The Supreme Court has explained that “[o]nce the defendant learns the state secret . . . the underlying basis for the privilege disappear[s] . . . . Thus, . . . the preservation of these privileges is dependent upon nondisclosure of the privileged evidence. . . .” Jencks v. United States, 353 U.S. 657, 675 (1957) (Burton, J., concurring); see also United States v. Am. Tel. & Tel. Co., 86 F.R.D. 603, 628 (D.D.C. 1979). (“A government privilege is waived by the Government’s voluntary disclosure of the materials which it protects . . . .”); accord Nat’l Lawyers Guild, 96 F.R.D. at 402 (citing Roviaro v. United States, 353 U.S. 53, 60 (1957)). “With the state secrets privilege, the determination of its secrecy is made as of the time of trial, not at some time in the past. Hence, if the matter has been disclosed, it is not a ‘secret’ and there is no privilege.” 26 Charles Alan Wright et al., Fed. Prac. & Proc. Evid. 3d § 5665 (2008 & Supp. 2013). The information about which Mr. Shaya can provide personal, firsthand testimony primarily concerns meetings between Israeli and Chinese officials. See Cochavi Decl., Ex. V, ¶ 25. This information has long been in the public record through the duly authorized and publiclyfiled declaration of former Israeli security official Matalon, see id.; Ex. B, submitted in support of the Plaintiffs in connection with this very case. See Wultz, supra, Pl. Wultz’s Mem. In Opp’n to Def’s Mot. To Dismiss First Am. Cmpl., Ex A. Matalon provided detailed information to support the allegation that BOC knowingly facilitated the transfer of millions of dollars between PIJ and Hamas leaders in Iran and Syria and PIJ and Hamas operatives in the West Bank and Gaza Strip. Ex. B ¶¶ 4-9. He disclosed the numbers of the BOC accounts used by PIJ and Hamas (the “Shurafa Accounts”), as well as dates of fund transfers, and amounts of money transferred 24

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 35 of 52

through those accounts. Id. ¶¶ 5, 7. Matalon also averred that Israeli officials met with Chinese officials in April of 2005 and informed Chinese officials that BOC was facilitating transfers of funds between PIJ and Hamas leadership and PIJ and Hamas operatives. Id. ¶ 8. He further attested that BOC continued to knowingly transfer funds for PIJ and Hamas following this meeting. Id. ¶ 9. Mr. Shaya was a direct witness to these events, and Plaintiffs require his deposition so that he can confirm the truth of these statements based on his own personal knowledge. This is critical to overcoming any potential hearsay issues in the Matalon declaration as to these key allegations, namely, that BOC was on notice that PIJ and Hamas were using BOC accounts to move funds and sponsor acts of terror. Id. ¶ 8. The above information has also been made public in other case documents. See Moriah, supra, Moriah Compl. ¶¶ 30, 38; Moriah Pls.’ Objections and Answers to Def. Bank of China Limited’s Second Set of Interrogs., No. 12-cv-1594 (S.D.N.Y.) at 10-12 (served Oct. 21, 2013), Ex. T, and mass-circulation newspapers and other international media outlets.10 As described above, Movant affirmatively put this and other information into the public record in the United States as a means to support the Plaintiffs’ lawsuit against the BOC and thereby achieve its objective of closing BOC accounts determined to be used in the transfer of assets to active

10

See, e.g., Charles Levinson, U.S. Court Case Tests Israeli Resolve, Wall St. J., June 21, 2013, available at http://online.wsj.com/news/articles/SB10001424127887324577904578559531 016718160, attached as Ex. K; Josef Federman, Israeli Leader Faces Test in US Case Accusing Bank of China of Facilitating Militant Funding, Associated Press, Nov. 12, 2013, available at http://ca.news.yahoo.com/israeli-leader-faces-test-us-case-accusing-bank-070143813.html, attached as Ex. L; Amos Harel & Rutie Zuta, The Chinese Connection: A Jewish-American Family’s Quest to Find Those Responsible for Their Son’s Death, Ex. M; Evan S. Benn, Weston Family Faces Frustration of Court Fight After Grief of Terror Bombing, Miami Herald, Aug. 22, 2013, available at http://www.miamiherald.com/2013/08/22/3580282/weston-family-facesfrustration.html, attached as Ex. N. 25

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 36 of 52

terrorist groups. Id. This repeated, voluntary disclosure has destroyed and waived any claim that the state secret privilege protects disclosure of this information. Nor will the deposition expose other information. As noted above, per an order of the Southern District of New York, the deposition is to be held under court supervision and proceed according to carefully delineated parameters. See Scheindlin Order, supra. These measures will ensure that the questioning does not stray into inappropriate matters, and any remaining concerns may be addressed through additional orders further developing appropriate deposition procedures, or through Judge Scheindlin’s direct supervision. In any case, the information sought from Mr. Shaya does not in substance merit treatment as state secrets. “[T]he validity of the government’s assertion must be judicially assessed.” Molerio, 749 F.2d at 822. “[T]he district court must scrutinize the claim of privilege more carefully when the plaintiff has ‘made a compelling showing of need for the information in question.’” In re Sealed Case (Horn), 494 F.3d at 144. First, not only has the information concerning Mr. Shaya’s contacts with the Chinese government already been disclosed, it is completely stale. There has been no assertion that it relates to any ongoing investigation— indeed, the accounts at issue were shut down within a short time of the commencement of the lawsuit. Second, over the course of multiple meetings, upon information and belief, Mr. Shaya had contact with non-security and non-diplomatic personnel in the Chinese government. Upon information and belief, these meetings were not subject to any security measures, and involved officials not involved in national security work. Plainly, no state secret privilege could attach to such meetings. Movant’s own authority defeats its position. It states that “state secrets doctrine shields from disclosure information (usually in the exclusive possession of the Executive Branch) that is ‘vital to the nation’s security or diplomatic relations.’” Mov. Br. at 16 (quoting Northrop, 751 26

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 37 of 52

F.3d at 399). Thus, even if comity applied here, Movant’s own position makes clear that it would not require the Court to attach the state secrets privilege to the proposed deposition, because the deposition is to include only subjects that are already in the public record, and not in the “exclusive possession” of the government. Movant has failed to explain why such information is “vital to the nation’s security or diplomatic relations.” Northrop, 751 F.3d at 399. Thus whatever the Court thinks of Movant’s invitation to accord Israel “at least the same degree of protection when its national security interests are similarly jeopardized,” Mov. Br. at 16, those interests are not at risk here. C.

Movant’s Invocation of the State Secrets Privilege Is Facially Deficient and the Amidror Declaration Should Be Stricken

Movant’s assertion of the privilege must also be rejected because it is not properly lodged. As Movant concedes, certain procedural requirements must be met to invoke the privilege. See Mov. Br. at 16 n.8. Among them, the invocation must be made by a “formal claim of privilege.” Am. Tel. & Tel., 86 F.R.D. at 605. This is generally accomplished by affidavit, see, e.g., Nat’l Lawyers Guild, 96 F.R.D. at 397, but unsworn declarations from persons outside the U.S. may be acceptable in a U.S. court where attested as true “under penalty of perjury under the laws of the United States . . .” 28 U.S.C § 1746; accord L. Civ. R. 5.1(h)(2). Exhibit B to Israel’s memorandum in support is a document styled “Declaration of Major General Yaacov Amidror” (the “Amidror Document”), which purports to be the statement of the Israeli national security advisor. See Mov. Br., Ex. B. By its plain terms, it is not a statement sworn under oath. Nor does it meet the statutory requirements for unsworn declarations because it contains no statement that it was made under penalty of perjury under United States law. These are not just formal shortcomings; they undermine the very credibility of the document, and by extension the credibility of any legal process that relies upon the document. These failures 27

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 38 of 52

require the court to reject the Amidror Document. See In re Veiga, 746 F. Supp. 2d 27, 37 (D.D.C. 2010); Gotlin v. Lederman, 616 F. Supp. 2d 376, 389 n.7 (E.D.N.Y. 2009), aff’d in part, vacated in part on other grounds, 483 F. App’x 583 (2d Cir. 2012) (Summary Order). This renders Israel’s invocation of the state secrets privilege unsupported and inoperative as a basis for quashing the subpoena. D.

The Balance of Interests Requires the Court to Uphold the Subpoena

Weighing the interests of comity against the interests of the Plaintiffs strongly militates in favor of enforcing the subpoena. Mr. Shaya is a first-hand witness that Movant had promised to make available, and his testimony is critical for Plaintiffs to prove their underlying allegations that Bank of China had knowledge that its accounts were being used to fund terrorist activities. His deposition will be limited to confirming facts that Movant has already publicly disclosed. And yet, movant asserts that comity precludes the deposition, and that Mr. Shaya’s testimony would violate Israeli law prohibiting the disclosure of restricted information. See Mov. Br. at 19. Movant is wrong. As an initial matter, it is not at all clear that Mr. Shaya’s deposition would run afoul of Israeli law because the information sought has already been disclosed with proper authorization from the highest echelons of the Israeli government. Moreover, Israeli officials—indeed, even Uzi Shaya—have been permitted to provide testimony on numerous occasions in support of this and other civil actions. See Decl. of Uzi Shaya, attached hereto as Ex. D; Matalon Decl. of 2009, Ex. B; Decl. of Shlomo Matalon, Apr. 19, 2007 (“Matalon Decl. of 2007”), attached hereto as Ex. C.11 Given this precedent, it is not at all clear that Israeli law would penalize Mr. Shaya’s 11

In addition, other government officials have been permitted to testify in the U.S., as reported in the Jerusalem Post: “Former high-level government agent Reuven Paz testified in around half-a-dozen proceedings in the US against Iran prior to 2002, according to an affidavit that he filed in a federal court in Washington. According to Shurat Hadin, he testified in a 28

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 39 of 52

deposition. This is particularly so given that Israel previously provided Plaintiffs with all of the information on which Mr. Shaya would be asked to testify and authorized Mr. Shaya’s testimony. See Cochavi Decl. sec. B-D, and Point IX, infra. As Movant concedes, whether Mr. Shaya’s obligations pursuant to this Court’s subpoena would conflict with Israeli law is in any case not dispositive. See Mov. Br. at 19. Given the facts of this case, even if there were a conflict with Israeli law, it would not support Movant’s position. When a deponent’s obligation to provide testimony in a United States court may result in a violation of foreign law, courts must weigh the following comity factors to determine whether to allow the testimony: “(1) the importance to the litigation of the documents or other information requested; (2) the degree of specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and (5) the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located.” Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 544 n.28 (1987) (adopting the balancing test proposed by Restatement (Third) of Foreign Relations Law § 442(1)(c)(1987)). Mr. Shaya’s deposition is essential to Plaintiffs’ case. Indeed, Judge Scheindlin described whether or not Shaya would be permitted to testify as potentially “a make-or-break decision for this case . . . [b]ecause this may be the only person who really has the knowledge as to what transpired at the meeting.” Wultz, supra, Tr. Jul. 19, 2013, attached hereto as Ex. O, p. 7. To prevail on the merits as to certain claims, plaintiffs must show that BOC knowingly provided its services to terrorist organizations and that the funds it transferred were being used to finance number of proceedings following 2002 as well.” Yohan Jeremy Bob, Does Israel Have a Legal Right to Block Testimony Against the Bank of China?, Ex. J. 29

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 40 of 52

terrorist attacks. See 18 U.S.C. § 2339B. Mr. Shaya was one of a handful of participants in several meetings with Chinese officials, wherein the Chinese government, which owns and controls BOC, was put on notice of the use of BOC accounts to finance terrorist groups. See Section [V(B)], supra, and [V(D)], infra. Plaintiffs will be unlikely to prevail on the merits of those claims without properly verifying, through Mr. Shaya, this already public information. This weighs heavily in favor of enforcing the subpoena. The narrow, specific scope of information sought—the first-hand testimony about specific events already in the record—also tips the scales in favor of enforcing the subpoena. The subpoena should not be quashed simply because it seeks information that did not originate in the U.S., because the Israeli government specifically disclosed this information with the knowledge and intention that it be used in support of the Underlying Litigation in U.S. courts. Israel’s support has been the sine qua non of this litigation, and no alternative means exist to obtain the relevant testimony. Mr. Shaya is one of a small handful of Israeli government officials that attended the meetings with Chinese officials regarding the Shurafa accounts. To prove their case, Plaintiffs need corroborating testimony from him or one of the other current or former Israeli officials that were present when China was put on notice of terrorist financing activity in BOC accounts, and Mr. Shaya is best positioned given his history with the case and willingness to testify in the United States. See 1st Shaya Ltr., Ex. E. He has also been provided with the financial means to do so. See Mov. Br., Ex. A (enclosing funds for travel expenses). Obtaining his testimony will not be a burden to him or to Israel. Moreover, since Mr. Shaya is a former official and the subpoena does not seek information directly from the Israeli government, Shaya’s complying with the subpoena will not cause Israel any material hardship or subject it to any “unfair or abusive discovery.” See Mov. Br. at 20. Israeli sovereign interests will not be undermined by permitting Mr. Shaya’s 30

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 41 of 52

deposition, because the information plaintiffs seek is already public and poses no threat to Israel’s national security. VI.

ISRAEL LACKS STANDING TO RAISE THE 100-MILE RULE Even if the Israel had standing to bring a Rule 45(c)(3)(A) motion, and even if its motion

were timely, Israel does not have standing to object to a subpoena on the ground that it “requires a person who is neither a party nor a party’s officer to travel more than 100 miles.” Fed. R. Civ. P. 45(c)(3)(A)(ii). That provision is intended to protect against imposing excessive burdens upon non-parties.12 In re Edelman, 295 F.3d 171, 178 (2d Cir. 2002) (“The purpose of the 100 mile exception is to protect such witnesses from being subjected to excessive discovery burdens in litigation in which they have little or no interest.”). The burden belongs to the witness, not to a third party that suffers no harm as a result of a supposedly excessive burden placed upon a consenting party. Ins. Corp. of Hanover v. Vantage Prop. Mgmt., LLC, No. 04-1013-CV-WSOW, 2006 WL 1131759, at *1 (W.D. Mo. Apr. 25, 2006). As noted, Mr. Shaya’s failure to raise objections on the ground of undue burden appears to have been intentionally waived. Mr. Shaya did not object to being deposed in Washington and agreed to move the deposition to New York. Along with the subpoena he was provided with a check for $3,140 to cover, inter alia, his travel expenses, see Mov. Br. Ex. A, and was apparently prepared to make the trip until this court stayed the deposition. Accordingly, even if the subpoena runs afoul of Rule 45(c)(3)(A)(ii), that objection needed to be timely raised by Mr. Shaya. Mr. Shaya has not raised it, and is therefore waived.

12

Israel might object to this characterization on the ground that Rule 45(c)(3)(A)(iv) expressly protects against “undue burden” and subsection (ii) should not be interpreted as redundant with subsection (iv). But subsection (iv) is simply a catchall intended to reach undue burdens not covered by subsections (i)-(iii). Subsection (ii) codifies 100 miles as the dividing line between that which is an “undue burden” and that which is not. Fed. R. Civ. P. 45(c)(3)(A). 31

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 42 of 52

VII.

IF THE AMIDROR DOCUMENT IS NOT STRICKEN, INTERVENOR-PLAINTIFFS SHOULD BE PERMITTED TO CROSS-EXAMINE AMIDROR The Amidror Document purports to state facts material to the substantive resolution of

the instant motion to quash. These facts cannot and should not be accepted just because they are stated. It is the fundamental nature of our adversarial system of justice that no statement may be accepted as true unless it is subjected to cross-examination, “the greatest legal engine ever invented for the discovery of the truth.” 5 John Henry Wigmore, Evidence in Trials at Common Law § 1367 at 32 (James H. Chabourn ed., Little Brown 1974); see generally Davis v. Alaska, 415 U.S. 308, 316 (1974) (“Cross-examination is the principal means by which the believability of a witness and the truth of his testimony are tested”); Jules Epstein, Cross-Examination: Seemingly Ubiquitous, Purportedly Omnipotent, and “At Risk,” 14 Widener L. Rev. 427, 430-34 (2009) (discussing the historical roots of the right to cross-examination and asserting that “as to all witnesses who actually testify, and to at least a core aspect of hearsay, cross-examination is the sine qua non of the adversary adjudicative process”). Before the statements contained in the Amidror Documents are considered by this Court, Intervenors should be afforded the right to question Mr. Amidror and to introduce contrary evidence. See, e.g.. Fed. R. Evid. 607 (granting “any party” the authority to impeach a witness); see also Coffin v. Sullivan, 895 F.2d 1206, 1212 (8th Cir.1990); (finding that the Due Process Clause of the Federal Constitution can create an absolute right to cross examination under certain circumstances); Lidy v. Sullivan, 911 F.2d 1075, 1077 (5th Cir. 1990) (same). Israel’s motion to quash, like all motions supported solely by affidavit testimony, is governed by Rule 43(c), which provides:

32

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 43 of 52

Evidence on a Motion. When a motion relies on facts outside the record, the court may hear the matter on affidavits or may hear it wholly or partly on oral testimony or on depositions. Fed. R. Civ. P. 43(c). Rule 43(c) expressly authorizes the Court to direct that motions raising factual issues be heard on oral testimony—including of course cross-examination either in court or at depositions. By filing a motion relying on factual averments by a witness, Israel has subjected itself to the discretion of the Court to allow deposition or cross-examination of that witness. Israel cannot have it both ways: it cannot come before the court by filing a motion making factual averments, and at the same time argue that it is not subject to the authority explicitly granted this Court by Rule 43(c) to order that the motion be heard on oral testimony or depositions. A.

Amidror is a “Witness” Subject to the Federal Rules of Evidence

By submitting sworn testimony in this action, the Israel has subjected itself and its affiant to the far-reaching authority of this Court pursuant to the Federal Rules of Evidence. Numerous provisions of the FRE apply to any and every “witness,” without distinction. Thus, while perhaps Israel may not be a “person” within the meaning of Rule 45, there is no question that the Israel’s affiant is a “witness” within the meaning of the relevant provisions of the Federal Rules of Evidence. For example, Fed. R. Evid. 607 provides that: “The credibility of a witness may be attacked by any party, including the party calling the witness.” Fed. R. Evid. 607. Likewise, Fed. R. Evid. 611 provides that the Court has authority and control over “the mode and order of interrogating witnesses and presenting evidence” including “Scope of cross examination.” Fed. R. Evid. 611(b). Amidror is a “witness” within the meaning of Fed. R. Evid. 607 and 611, and he is subject to the terms of those provisions. Thus, the Court has the authority to compel Israel to 33

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 44 of 52

produce its affiant in order to allow plaintiffs to exercise their right under Fed. R. Evid. 607 to challenge his credibility through cross-examination, and the Court has control over the “mode and order” of the government affiant’s cross-examination. Additionally and/or alternatively, the government’s position is analogous to that of an individual who elects to waive constitutional immunity from self-incrimination by voluntarily agreeing to testify. The Supreme Court has explained the rationale underlying the rule that voluntary testimony constitutes a waiver of a constitutional privilege against self-incrimination, as follows: Once a defendant decides to testify, the interests of the other party and regard for the function of courts of justice to ascertain the truth become relevant, and prevail in the balance of considerations determining the scope and limits of the privilege against self-incrimination. Jenkins v. Anderson, 447 U.S. 231, 238 (1980) (internal quotes and brackets omitted). See also United States v. Higginbotham, 539 F.2d 17, 24 (9th Cir. 1976) (“It is not a reasonable argument to say that the Fifth Amendment gives . . . a defendant . . . an immunity to cross-examination on the matters he himself puts in dispute by his testimony”). The identical rationale applies here: once Israel decided to introduce testimony in support of its motion, “the interests of the other party and regard for the function of courts of justice to ascertain the truth become relevant and prevail” over and trump any claim by Israel that it would rather Amidror not be cross-examined. Indeed, since this rationale is sufficient to trump the black-letter 5th Amendment protections of a defendant who has elected to testify, it is a fortiori sufficient to override the merely doctrinal bar of sovereign immunity or purported state secret privilege, when, as here, Israel has elected to submit testimony.

34

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 45 of 52

B.

Fifth Amendment Due Process Entitles Plaintiffs to Cross-Examine the Government’s Affiant and Overrides Sovereign Immunity

Israel takes the position that it can both introduce testimony into any judicial proceedings it chooses and simultaneously block the affected parties from challenging that testimony through cross-examination. No authority for such a remarkable position exists. As the D.C Circuit emphasized long ago: It is elementary . . . in our system of law that adjudicatory action cannot be validly taken by any tribunal, whether judicial or administrative, except upon a hearing wherein each party shall have opportunity to know of the claims of his opponent, to hear the evidence introduced against him, to cross-examine witnesses, to introduce evidence in his own behalf, and to make argument. This is a requirement of the due process clause of the Fifth Amendment of the Constitution. Phila. Co. v. SEC, 175 F.2d 808 (D.C. Cir.) (emphasis added), vacated and remanded as moot, 339 U.S. 901 (1949). Indeed, ensuring Due Process, including exercise of the right of cross-examination, goes to the very raison d’être of the courts: The court’s function is to assure that no party will be deprived of property without satisfying the fundamentals of due process, including the requirement that the defendant be furnished with notice and a statement of the claim against him and the opportunity to prepare and present a defense, a hearing, the right to confront and cross-examine witnesses, and findings. Brault v. Town of Milton, 527 F.2d 730, 738-39 (2d Cir. 1975) (emphasis added). It is fundamental to Due Process that a litigant have an opportunity to be confronted with all adverse evidence and to have the right to cross-examine available witnesses. Nevels v. Hanlon, 656 F.2d 372, 376 (8th Cir. 1981) (emphasis added). Similarly, “[M]inimum procedural due process requires adequate notice of a hearing at which an opportunity will be afforded the parties to present sworn testimony and to cross-examine witnesses who sponsor opposing 35

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 46 of 52

views.” Calhoun v. Cook, 487 F.2d 680, 683 (5th Cir 1973) (emphasis added); see also, e.g., Jones v. Wildgen, 320 F. Supp. 2d 1116, 1128 (D. Kan. 2004) (“Absent specific statutory language to the contrary” a hearing includes “the right to . . . cross-examine adverse witnesses and contest adverse findings”) (citing Califano v. Yamasaki, 442 U.S. 682 (1979)); Guralnick v. Sup. Ct. of N.J., 747 F. Supp. 1109, 1113 (D.N.J. 1990) (Due Process “provides the right to confront and cross-examine witnesses prior to the deprivation of a life, liberty or property interest”), aff’d, 961 F. 2d 209 (3d Cir. 1992); Branch v. Hempstead Cty. Mem’l Hosp., 539 F. Supp. 908 (W.D. Ark. 1982) (While no particular form of hearing procedure is required to comport with procedural due process, the right to confront and cross-examine witnesses must be present); Harries v. United States, 350 F.2d 231, 234 (9th Cir. 1965) (“The right to cross examine a witness is fundamental in our judicial system”). The Court should not make factual determinations absent an opportunity for the parties to probe them. VIII. ISRAEL IS NOT ENTITLED TO THE BENEFITS OF COMITY IF IT IS NOT WILLING TO RECIPROCATE On June 26, 2013, the Southern District of New York issued a request to the State of Israel pursuant to the Hague Convention. See Endorsed Letter of Gabriel W. Gorenstein, M.J., June 26, 2013, Wultz v. Bank of China, No. 1:11-cv-01266 (SAS) (S.D.N.Y.), Dkt. No. 276 (“June Hague request”). On July 2 and July 22, Judge Scheindlin sent letters to Israel requesting a statement inquiring when Israel anticipates responding to the June Hague request. See Letter from Shira A. Scheindlin to Gil Avriel, Legal Advisor at the Israeli National Security Council (July 2, 2013), attached as Ex. P; Letter from Shira A. Scheindlin to Yitzchak Blum, Deputy Director at the Israeli Department of International Affairs (July 22, 2013), attached as Ex. Q. Israel responded in letters dated July 22 and August 16, 2013, informing Judge Scheindlin that it 36

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 47 of 52

was still reviewing the request and would offer more detail later. See Letter from Yitzchak Blum, Deputy Director at the Israeli Department of International Affairs, to Shira A. Scheindlin (July 12, 2013), attached as Ex. R; Letter from Ayelet Levi, First Deputy to the Israeli State Attorney, to Shira A. Scheindlin (Aug. 16, 2013), attached as Ex. S; Judge Scheindlin sent another letter on September 27 to inform Israel of the pending deposition of Mr. Uzi Shaya, which was then scheduled for November 25. Wultz, supra, Dkt. No. 337. As far as the Intervenors are aware, Israel has never responded to this last letter and has still not provided Judge Scheindlin with a more definite date of its anticipated response to the Hague request. At the time of this writing, nearly six months have passed since the Southern District sent the Hague request to Israel and nearly a month has passed since the original scheduled date of Mr. Shaya’s deposition. Not only has Israel not offered a substantive response, it has not even indicated whether it will respond. The Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (“Hague Convention”) provides: If the Central Authority [of the receiving state] considers that the request does not comply with the provisions of the present Convention, it shall promptly inform the authority of the State of origin which transmitted the Letter of Request, specifying the objections to the Letter. * * * The requesting authority shall, if it so desires, be informed of the time when, and the place where, the proceedings will take place, in order that the parties concerned, and their representatives, if any, may be present. * * * A Letter of Request shall be executed expeditiously. * * * The execution of a Letter of Request may be refused only to the extent that -(a) in the State of execution the execution of the Letter does not fall within the functions of the judiciary; or (b) the State addressed considers that its sovereignty or security would be prejudiced thereby.* * * 37

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 48 of 52

Hague Convention arts. 5, 7, 9, 12. It makes clear that Israel is not free to ignore the June Hague request or the letters sent by Judge Scheindlin requesting to be informed of the date on which Israel anticipates issuing its formal response. If Israel wishes not to respond to the June Hague request, it may do so, as long as its reasons for not responding fit within those permissible excuses specified in the Hague Convention. Israel may not, however, hold the June Hague request indefinitely without response. Despite its failure to comply with its treaty obligations and the June Hague request, Israel now requests “comity” from this Court. Mov. Br. at 16-17, 19, 21. Israel is not abiding by the terms of a multilateral treaty that it signed, along with the United States, dealing with the very subject matter on which it now seeks this court’s intervention. Israel refuses to respond to a duly executed Hague request and simultaneously seeks “comity” in its effort to quash the deposition that is the subject of the Hague request. Its appeal for comity should be denied. See Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850, 854 (2d Cir. 1997) (“Although courts in this country have long recognized the principles of international comity and have advocated them in order to promote cooperation and reciprocity with foreign lands, comity remains a rule of practice, convenience, and expediency rather than of law”) (emphasis added; internal quotation marks omitted); cf. Dist. of Colum. v. Int’l Distrib. Corp., 331 F.2d 817, 820 (D.C. Cir. 1964) (referring to “comity” as synonymous with “reciprocity”). IX.

ISRAEL IS BARRED BY ESTOPPEL UNDER ISRAELI LAW FROM RENEGING ON ITS COMMITMENT TO PRODUCE UZI SHAYA AND OTHER EVIDENCE IN SUPPORT OF THIS CASE In addition to the foregoing arguments made under U.S. law, Israel’s motion raises issues

of Israeli law, specifically whether the commitment by the Israeli government to provide

38

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 49 of 52

evidence to support this case, including the testimony of Uzi Shaya is a binding and enforceable obligation. Rule 44.1 authorizes courts to conduct their own independent research to determine foreign law but it imposes no duty upon them to do so. Fed. R. Civ. P. 44.1; see also Carey v. Bahama Cruise Lines, 864 F.2d 201, 205 (1st Cir. 1988). Thus, “the party claiming foreign law applies carries both the burden of raising the issue that foreign law may apply in an action and the burden of proving foreign law to enable the district court to apply it in a particular case.” Baker v. Booz Allen Hamilton, Inc., 358 F. App’x 476, 481 (4th Cir. 2009). Written or oral expert testimony and extracts from various kinds of foreign legal materials remains the basic mode of proving foreign law. 9A Charles Alan Wright & Alan R. Miller, Fed. Prac. & Proc.: Civ. 3d § 2444 (2008 & Supp. 2013). Intervenors are filing herewith the declaration of Roy Cochavi, a member of the Israeli Bar, who describes the Israeli law applicable to this situation and analyzes this case under that Israeli law. Mr. Cochavi concludes that the commitment of the Israeli government to support this case, which they instigated in the first place, and specifically the commitment to make Uzi Shaya available for testimony in this case, is an enforceable contract under Israeli law. He concludes that: a) The undertaking given by the State of Israel to provide Darshan-Leitner and the Plaintiffs with the evidence required by them for purposes of conducting the claims against BOC and the specific undertaking to enable the testimony of Uzi Shaya (both as part of the broader undertaking and independently) are of legally binding effect in Israeli Law; this is the case both in terms of a governmental promise, by force estoppel against an authority, and as a governmental contract between Darshan-Leitner and the plaintiffs on the one hand, and the State of Israel, on the other hand.

39

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 50 of 52

b) The aforementioned undertakings are legally binding not only on the level of the relations between the State of Israel and Darshan-Leitner, but also on the level of the relations between the State of Israel and the plaintiffs who are represented by Darshan-Leitner in terms of a governmental promise, by force of estoppel against an authority, and by force of a governmental contract between the State of Israel and the plaintiffs (by way of their attorneys), and alternatively as a contract in favor of a third party, inasmuch as the plaintiffs are a third party (irrespective of whether one relates to the specific undertaking as one which stems from a broader undertaking, or if one relates to the specific undertaking as an independent undertaking, standing it its own right). c) By force of these undertakings (in other words, the broader undertaking and the more specific one deriving therefrom), it is possible to force the State of Israel, under Israeli Law, to enable the testimony of Uzi Shaya in accordance with the conditions agreed upon and stipulated in Shaya’s letter of March 20, 2013 (both if one relates to the specific undertaking as stemming from the broader undertaking, and if one relates to the specific undertaking as an independent undertaking in its own right). Cochavi Delc., ¶ 54. Israel should not be permitted to seek relief from this Court that is contrary to its own law and would have the effect of this Court putting its imprimatur on the violation of binding commitments enforceable under Israeli law. CONCLUSION For the foregoing reasons and those to be discussed at oral argument, the State of Israel’s motion to quash the third party subpoena of Mr. Uzi Shaya should be denied.

40

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 51 of 52

Dated: Brooklyn, New York December 17, 2013 Respectfully submitted, THE BERKMAN LAW OFFICE, LLC Counsel for the Intervenors-Plaintiffs by: Robert J. Tolchin (D.C. Bar #NY0088) 111 Livingston Street, Suite 1928 Brooklyn, New York 11201 (718) 855-3627 [email protected] CADWALADER, WICKERSHAM & TAFT, LLP Counsel of record to the Intervenors as to state secrets and sovereign immunity issues by:

s/ Kenneth L. Wainstein Kenneth L. Wainstein (D.C. Bar #451058)

700 Sixth Street, N.W. Washington, D.C. 20001 202-862-2200 [email protected] Solomon Shinerock One World Financial Center New York, New York 10201 212-504-6000 [email protected]

USActive 29780578.4

Case 1:13-mc-01282-RBW Document 21 Filed 12/17/13 Page 52 of 52

CERTIFICATE OF SERVICE I hereby certify on December 17, 2013, a copy of the within Memorandum in Opposition and Declaration of Roy Cochavi, together with the exhibits annexed thereto, was served via United States District Court ECF filing system on all counsel of record.

USActive 29780578.4